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TORONTO,
ONTARIO--(Marketwire - July 21, 2009) -
CASTLE GOLD CORPORATION (Castle Gold, the Company) (TSX VENTURE:CSG) is pleased to announce that following the
signing of a new contract with CAMSA, the mining contractor at the
Company's 100% owned El Castillo gold mine in Durango State, Mexico in
March 2009, the remaining new pieces of equipment have arrived on site
enabling enhanced mining to the targeted, expanded production level. The
addition of this new equipment enables the mining of 800,000 tonnes per
month total monthly mine production (waste and ore material) effective
immediately. This rate represents an approximate 30 percent increase
over the average monthly amount of material mined at El Castillo in the
second quarter of 2009 and is a 70 percent increase over the amount of
material mined in the fourth quarter of 2008, prior to the signing of
the new mining contract and the arrival of new equipment.
The new contract provided for the mobilization of a fleet of larger
mining equipment thereby enabling the ramp-up of production to in
excess of 50,000 ounces of gold annually at reduced unit costs relative
to the current contract. Under the terms of the new agreement, unit
costs of the mined material are reduced by 10% relative to the previous
terms. At the expanded mining rate of 800,000 tonnes per month, this
offers savings of approximately US$25 per ounce of gold produced
commencing July 1, 2009.
Thomas Atkins, President and CEO of Castle Gold commented on the
ramp-up of production stating: "The operating team at El Castillo
continues to successfully expand mining rates, which as this additional
material is loaded on the pads, and as the waste to ore ratio is
reduced over the next two to three quarters, will be reflected in
higher gold production to 50,000 ounces per year and will result in
further efficiencies and reductions in operating costs. The new
equipment additions are a milestone in this expansion, however there
has been a great deal of additional work performed by the technical
team in ensuring the infrastructure to support this rapid doubling of
production, including permits for the expansion, additional water
supply, leach pad space and expansions to the gold recovery plant.
We remain focused on the expansion in production, but the management
team isn't stopping there as we look to increase resources and reserves
at El Castillo with a new resource study expected late in September
2009 based on the results from the Phase I resource expansion drilling.
This resource modeling will help establish
Phase II drilling to commence likely in early Q4 once the rainy season
ends. Phase II drilling is planned to establish a new Measured and
Indicated resource and new Proven and Probable reserves from this work.
Our hope is that with success in this resource-reserve expansion
program, by the time we have reached our 50,000 ounce production target
in 2010, we will be advancing a further expanded production scenario,
based on additional reserves at El Castillo."
The most recent new equipment additions are as follows:
- 4 Caterpillar CAT 740, 40 ton capacity articulated trucks;
- 1 Caterpillar CAT 988H, 8.5 yard capacity front-end-loader;
The total new equipment fleet is as follows:
- 8 Caterpillar CAT 740, 40 ton capacity articulated trucks;
- 2 Caterpillar CAT 988H, 8.5 yard capacity front-end-loader;
- 3 Atlas Copco ECM 590 RC, blast-hole drills
for 3 1/2 inch diameter blast-holes;
- 1 Caterpillar CAT 416, back-hoe excavator; and
- 1 hydraulic hammer for secondary rock breaking.
It is expected that the combination of new and original equipment will
permit mining at the expanded production target rate of 800,000 tonnes
of waste and ore material per month effective immediately. An
additional 2 - CAT 740, 40 ton trucks plus 1 - CAT 988H front-end-loader
will arrive in September permitting maintenance of the new equipment
that has arrived since April 2009 at a sustained production level of
800,000 tonnes of material mined per month. With the reduction of the waste:ore ratio in early
2010 towards the life-of-mine waste:ore ratio
of 0.6:1.0, from current levels of 1.3 to 1.5 : 1.0 at present, higher
volumes of gold production towards the 50,000 ounce per year level are
expected.
About Castle Gold
Castle Gold Corporation is a growth oriented gold producer with
projects focused in the America's. The Company 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-silver-copper
project in Mexico.
TSX-V Trading Symbol: CSG Total Shares Outstanding: 75.3MM Fully Diluted: 82.8MM 52-Week Trading Range: C$0.15 - $0.80
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this news release.
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