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Castle Gold Files Q1-2008 Financial
Statements Indicating First Quarter Profit
Vancouver, BC, June 20, 2008 - Castle Gold Corporation ("Castle
Gold" or the "Company") (TSX-V CSG) is pleased to announce
that it has filed its consolidated interim financial statements and
management discussion and analysis for the three month period ended March
31, 2008 and reported a first quarter profit of US$0.01 per share on net
income of US$764,662 and revenues of US$1,610,271. Coincident with the
filing of the financial statements the Company has applied to the British
Columbia Securities Commission and the Ontario Securities Commission for
the revocation of cease trade orders which were issued against the Company
on June 10 and June 11, 2008. Upon revocation of the cease trade orders and
the removal of the Company from the list of issuers in default maintained
by each of the British Columbia, Alberta and Ontario Securities
Commissions, the Company will proceed to make an application to the TSX
Venture Exchange to reinstate the Company's shares for trading.
Trading in the Company's shares on the TSX Venture Exchange was halted on
June 11, 2008 as a result of the issuance of the cease trade orders against
the Company for failing to file first quarter 2008 financial statements
within the time prescribed by National Instrument 51-102. The Company would
like to re-iterate that the cease trade order in no way related to the
financial condition of the Company. The Company apologizes for any concerns
that this has caused our shareholders.
Operating and Financial Results
During the first quarter of 2008, the Company reported a quarterly profit
of US$0.01 per share on net income of US$764,662. Total first quarter
revenue was US$1,610,271 primarily from the sale of 1,787 ounces of gold
(Castle Gold's 50% share) from the Company's 50% owned El Sastre Mine in Guatemala.
The average gold price received on the sale of gold during the quarter was
US$901 per ounce. This compares to a loss of US$105,769 on revenues of
US$824,575 primarily from the sale of 620 ounces of gold during the first
quarter of 2007. The average gold price received on the sale of gold during
the first quarter of 2007 was US$665 per ounce. The Company's 100% owned
Castillo mine in Mexico remains in the pre-production stage and as such all
operating results were capitalized during the first quarter 2008.
El Sastre Mine, Guatemala
The El Sastre mine produced 1,280 ounces of gold (Castle Gold's 50% share)
during the first quarter of 2008 compared to 1,504 ounces of gold during
the first quarter 2007. The decline in gold production at the El Sastre
Mine from the first quarter of 2007 to the first quarter of 2008 is a
result of mining and leaching lower grade ore from the El Sastre open pit
in late 2007 and early 2008. Construction of a second leach pad at the El
Sastre Mine began in late 2007. The second pad was required as the first
leach pad was nearing planned capacity. Over the course of 2008 the average
grade of ore placed on the heap pad is expected to improve to the
historical average of approximately 2.5 grams per tonne. In addition the
return to planned mining rates of 75,000 tonnes per month should result in
improved gold production late in 2008 and into 2009. It is anticipated that
as ore grading closer to the historical average is placed on the leach pad
over the course of 2008 that costs per ounce of gold sold will decline
later in 2008 and into 2009.
El Castillo Mine, Mexico
At the Company's 100% owned El Castillo Mine in Durango State, Mexico, the
Company sold 1,555 ounces of gold during the quarter. The Company initiated
pre-production mining operations at the Castillo gold mine in July 2007
with limited leaching performed on ore removed during waste stripping by
utilizing existing test leach facilities. Construction of the new leach pad
was completed in September 2007 and loading of ore began in October 2007. Pre-production
gold output for the three months ended March 31, 2008 was 2,632 ounces.
Gold sales for the three months ended March 31, 2008 were 1,555 ounces at
an average realized price of $927 per ounce for gross proceeds of $1,441,983.
The resulting revenue has been offset against operating costs with the
balance of operating costs being capitalized until the mine is in
commercial production. Upon achieving commercial operating status, revenues
and operating costs from gold sales at El Castillo mine will be recognized
in the Company's statement of operations. During the first quarter of 2008,
the El Castillo gold mine remained in pre-production status with mining
advancing at planned mining rates of 291,000 tonnes per month for a total
of 873,000 tonnes of material being mined from the open pit. Of this volume
153,000 tonnes per month was ore for a total of 459,000 tonnes of ore,
having an average cyanide soluble grade of 0.42 g/t Au was placed on the
leach pad and which contained an estimated 6,250 ounces of gold in ore. The
Company estimates 3,632 ounces of gold is recoverable from this ore.
The Castillo mine will remain in pre-production status until gold
production has achieved a consistent rate of certain operating parameters
and costs, including producing on average 1,250 ounces of gold per month
(15,000 ounces annualized), at which time the mine will be declared to be
in commercial production. The Company is also in the process of having a
revised NI 43-101 technical report on the El Castillo gold mine prepared
which will update mineral resources and reserves. The updated NI 43-101
resource and reserve report is expected early in the third quarter of 2008.
As of March 31, 2008 the Company had US$658,687 in cash and working capital
(current assets less current liabilities) of US$2,084,997.
About Castle Gold
Castle Gold Corporation is a growth focused gold producer currently
expanding gold production within the America's. Castle Gold owns a 100%
interest in the El Castillo gold mine in Mexico and a 50% interest in the
El Sastre gold mine in Guatemala. Castle Gold is also advancing exploration
and development work at its La Fortuna gold project in Mexico and at its El
Sastre, El Arenal, Bridge and Lupita Projects in Guatemala.
For further information please contact:
Thomas Atkins
President and CEO
Tel: 416 214 4809
or by fax, 416 366-7421, email, info@castlegoldcorp.com or visit our
website, www.castlegoldcorp.com.
CAUTION REGARDING FORWARD LOOKING STATEMENTS:
The information referred to referred to above contains
"forward-looking statements" within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and applicable
Canadian securities legislation. Forward-looking statements include, but
are not limited to, statements with respect to the future price of metals,
timing of exploration activities, mine life, economic viability and
estimated internal rate of return, estimation of mineral resources, the
results of drilling, estimated future capital and operating costs, future
stripping ratios, projected mineral recovery rates and plans for
developing, the projects. Generally, these forward-looking statements can
be identified by the use of forward-looking terminology such as
"plans", "expects" or "does not expect",
"is expected", "budget", "scheduled",
"estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or state that
certain actions, events or results "may", "can",
"could", "would", "might" or "will be
taken", "occur" or "be achieved". Forward-looking
statements are subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, level of activity, performance
or achievements of the companies to be materially different from those
expressed or implied by such forward-looking statements, including but not
limited to: risks related to the exploration and potential development of
the projects, risks related to international operations, the actual results
of current exploration activities, conclusions of economic evaluations,
changes in project parameters as plans continue to be refined, future
prices of metals. Although the companies have attempted to identify
important factors that could cause actual results to differ materially from
those contained in forward-looking statements, there may be other factors
that cause results not to be as anticipated, estimated or intended. There
can be no assurance that such statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. The companies do not undertake to
update any forward-looking statements that are incorporated by reference
herein, except in accordance with applicable securities laws.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy of this news release.
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