Message: Castle Gold - Full page article
| Monday, October 20, 2008 | |
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Castle Gold - Full page article in the October Issue of Resource World Magazine Castle Gold achieves commercial production at El Castillo Plans call for expanded production Resource World Magazine - October 2008 by Frances McInnis When a junior mining company overcomes the obstacles to achieving commercial production, those in the industry sit up and take notice. In just a few years, Castle Gold Corp. [CSG-TSXV] has reached that milestone, not just once with its 50% owned El Sastre Gold Mine in Guatemala, but twice with the recent announcement that its primary asset - the 100%-owned El Castillo Gold Mine located an hour north of the capital in Mexico's Durango State - achieved commercial production as of July 1, 2008. The company began pre-production activities on the site in July 2007 and completed construction of a processing plant in December of that year. The El Castillo Mine maintained a pre-production status until the open pit, heap-leach operation was producing at an output level of over 15,000 oz/year (1,250 oz/month). El Castillo was short of this mark in the first quarter of 2008, producing 2,632 ounces over those three months. In the second quarter, however, the mine produced 4,692 ounces, surpassing the required rate; therefore, as of July 1, the commissioning stage of production was deemed complete and the company will now begin reporting quarterly financial results of operations. Darren Koningen, Vice President Project Development for Castle Gold, commented, "We're very pleased with how the ramp-up to commercial production has gone at Castillo... Having attained commercial production rates over a sustainable period we're already planning for improved performance going forward." Indeed, the company has already begun a first phase of production growth and expects to achieve an annualized gold production rate of 25,000-30,000 ounces at the mine by early next year. By the second half of 2009, Castle Gold hopes to be producing at a rate of 50,000 oz/year over a 10-year mine life. According to a recent press release, capital requirements for expanded production (aside from working and sustainable capital) would be minor, since the mine relies on contract mining and crushing, and the plant and ponds can accommodate additional leaching. An updated NI 43-101 report prepared by Daniel C. Leroux of A.C.A. Howe International Ltd. states that the in-pit proven and probable reserves stand at 46,800,000 tonnes at an average grade of 0.5 grams gold/tonne, representing 752,000 ounces of gold. At a cut-off grade of 0.15 grams gold/tonne, measured and indicated resources total 94,300,000 tonnes with an average grade of 0.39 grams gold/tonne, representing 1,177,344 ounces of gold. The July 31 report also identifies opportunity to further increase resources and reserves through both infill drilling within current pit limits, and step-out drilling to the west and the south. The NI 43-101 report also contains several recommendations whereby the Castillo Mine might improve operating efficiencies. These include evaluating the possibility of using a steeper pit wall angle which could reduce mine strip ratios; installing a screening plant ahead of the crushing system; completing leach tests on numerous ore samples to better understand the variations in recoveries by rock/mineral types and optimal reagent additions; and assessing the potential for ore transport conveyors and alternate future leach pad locations to minimize transport costs. In addition to El Castillo, Castle Gold holds a 50% interest in the El Sastre Gold Mine in central Guatemala, which began operations August 2006. Currently, this property produces 12,000 ounces gold/year, with proven and probable resources of 868,000 tonnes grading 2.45 grams gold/tonne. The company continues to advance exploration work at the nearby El Arenal Project less than one kilometre from the El Sastre Mine. Castle Gold is also advancing the 100%-owned La Fortuna gold-silver-copper property, situated in the north-western corner of Durango state, about 70 kilometres northeast of Culiacan, Sonora state, Mexico. Between 1991 and 1996, previous owners spent over US $9 million developing the 10,000-hectare property and 8,900 metres of diamond drilling has been completed in 121 drill holes. This historical drill program outlined a non NI 43-101-compliant resource of 4,451,000 tonnes grading 2.25 grams gold/tonne, 29.9 grams silver/tonne and 0.23% copper (321,981 ounces of gold, 4,278,776 ounces of silver, and 22,569,152 pounds of copper), and which includes numerous high-grade intersections, including DDH LF-007 which assayed 7.39 grams gold/tonne, 30 grams silver/tonne and 0.51% copper over 168 feet. Castle conducted a six-hole twin drill program in early 2008 with the objective of verifying this historical data and providing material for metallurgical testing. The company intends to issue NI 43-101 compliant resources later this year and hopes to have gained some insights into how and to what extent the gold, silver and copper can be economically recovered. View Article in PDF Format: http://www.castlegoldcorp.com/i/pdf/... 561 KB in size, approx. 1 minute, 46 seconds to download at 56. |
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