TORONTO, ONTARIO, Aug 18, 2010 — Castillian Resources Corporation (“Castillian” or the “Company”) announces that it has commenced an exploration program that is designed to include a minimum of 5,000m of diamond drilling at its Hope Brook Gold Project on the southwest coast of Newfoundland. The Hope Brook deposit, discovered in 1983 by BP-Selco Inc., was mined from 1987 to 1997 with total production reported to be 752,153 ounces of gold plus a copper concentrate. Preproduction historical resources are reported to have been 10.2 million tonnes grading 4.54 grams gold per tonne (g Au/t) and 0.12% copper (Cu) (1.45 million ounces of gold) (Geological Survey, Newfoundland and Labrador). These resources are historical in nature and are not National Instrument 43-101 (“NI 43-101”) compliant. Castillian has not done the work necessary to verify this resource and hence cautions that this estimate should not be relied upon.
Bill Pearson, President & CEO of Castillian commented “We are very excited about the potential of Hope Brook and delighted to start work after our successful financing. Our compilation of historical data indicates that the gold deposit mined at Hope Brook appears to have unmined extensions at depth below the old mine, as well as along strike. In addition, zones of unmined gold mineralization defined by historic drilling are also present, including the 240 Zone which is one km south of the mine. Many of the deeper historic drill holes appear not have been drilled far enough to fully test the deeper extension potential of the main mineralized zone. We also believe there is excellent potential for larger tonnage near surface, bulk mineable mineralization. The camp is currently being mobilized and field work will commence next week. Drilling is expected to start by early September and this project will be a major focus for the Company.”
Mr. Michael Cullen M.Sc., P.Geo. of Mercator Geological Services Limited, has completed a NI 43-101 Technical Report on the Hope Brook property (the “Technical Report”) and is an independent, qualified person as defined by NI 43-101. The Technical Report, which will be filed on Sedar, summarizes and reviews historical exploration and development work carried out on the property, focusing particularly on work leading to the discovery of the deposit in 1983 and the subsequent exploration, development and mining of the deposit from 1987 to 1997. Castillian has accessed and relied upon publically available technical information pertaining to the property and compiled pertinent historic records of the Hope Brook Mine and area exploration/development programs on file with the Department of Natural Resources, Newfoundland and Labrador. This material has been reviewed and incorporated into the Technical Report by Mr. Cullen.
Five priority target areas have been identified in the Technical Report for exploration diamond drilling. These are outlined below and shown on the attached longitudinal section (all intersections horizontal width in metres):
— Unmined historical resource areas and possible extensions to these that
occur immediately adjacent to underground mine workings, particularly
below the 4,800 Level (approximately 340 metres below surface).
Historical surface drill hole intersections in this area include 3.37 g
Au/t over 10m (CW-051), 3.26 g Au/t over 16.4m (CW-094) and 2.38 g Au/t
over 27.9m (CW-052) in addition to underground definition drill holes
not shown on the longitudinal section;
— The Northeast Extension area, located adjacent to and east of the mine
(east of Line 12,000 East on the grid), where potential exists for
discovery of a displaced, subsurface extension of the Hope Brook
alteration zone and associated gold mineralization, based on
interpretation of the 2008 airborne survey results;
— The near-surface mineralized zone located immediately southwest of the
open pit, between Line 11,000 East and Line 11,350 East, where potential
exists for definition of gold mineralization extending from the limits
of the historical open pit. Historical drill intersections in this area
include 2.88 g Au/t over 10.3m (CW-246) 1.28 g Au/t over 24.5m (CW-243),
4.64 g Au/t over 14.9m (CW-235), 2.06 over 13.6m (CW-012) and 3.11 over
18.0m (CW-212);
— Plunge extensions of the unmined 240 Zone, located 1 km southwest of the
open pit. Historical drill intersections in this zone include 3.88 g
Au/t over 41.0m (CE-246), 2.71 g Au/t over 43.4m (CE-283A) and 6.98 g
Au/t over 5.8m (CE-240);
— The Chetwynd Prospect area, located 2 km southwest of the mine, where
extensions to mineralized historic drilling intercepts warrant follow-
up.
Additional exploration targets have also been identified on the property outside of the general mine area, including areas with anomalous gold values in soils and rocks; alteration zones associated with major structures; and targets defined from the 2008 airborne geophysical survey. These targets are described in more detail in the Technical Report.
A two-phase exploration program is recommended in the Technical Report: Phase I budgeted at $2.0 million will focus primarily on the five highest priority target areas and consist of 7,000m of diamond drilling plus down hole and grid-based Induced Polarization (IP) surveys and preliminary assessment of areas external to the main mineralized area. The Phase II program, which is contingent on success in Phase I, consists of infill and mineralized zone extension drilling totaling 12,000m with additional IP surveys and exploration outside of the main mineralized area. On July 22, 2010 Castillian announced completion of a private placement totaling $2.86 million and hence is fully financed to proceed with the Phase I program.
The Company also announces that it has granted a total of 4,075,000 options under the share option plan of the Company to certain officers, directors, employees and consultants of the Company. The options shall vest immediately, are exercisable at $0.10 per option, expire on August 16, 2015, and are subject to regulatory approval.
Mr. Michael Cullen, M.Sc., P. Geo., an independent qualified person as set out in National Instrument 43-101 (“NI 43-101) and the author of the NI 43-101 technical report entitled “Technical Report on the Hope Brook Gold Project, Newfoundland and Labrador, Canada”, has reviewed and approved this press release.
Castillian Resources Corp. is a Canadian mineral exploration company listed on the TSX Venture Exchange under the symbol “CT” which has gold and base metal properties in Canada and South America.
Cautionary Note Regarding Forward-looking Information
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the future financial or operating performance of the Company, its subsidiaries and its projects, statements regarding exploration prospects, the identification of mineral reserves and resources, costs of and capital for exploration projects, exploration expenditures, timing of future exploration, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or claims, limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Generally, forward-looking information 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”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; future prices of mineral prices; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and shortages and other risks of the mining industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information 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 information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
To view a map of the Hope Brook Gold Project SW Newfoundland Longitudinal Section (Looking Northwest), please visit the following link: http://media3.marketwire.com/docs/ct_0818_hope_brook_gold_project_map.pdf
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