TORONTO, ONTARIO, Apr 23, 2010– Castillian Resources Corporation (“Castillian” or the “Company”) is pleased to provide an update on its corporate activities in Canada, South America and Tanzania. Bill Pearson, President & CEO of Castillian commented, “With the acquisition of the Hope Brook Gold Mine Project we are accelerating the transition of Castillian to an aggressive junior gold exploration and development company focused in the Americas. We are continuing to evaluate options for our nickel-copper projects which remain valuable assets for the Company. A major strength of Castillian is its strong technical team that allows us to carry our exploration programs throughout North and South America.”
Hope Brook Gold Project, Newfoundland
On March 8, 2010, Castillian announced that it had acquired a 100% interest in approximately 993 claims comprising the Hope Brook Gold Project located on the southwest coast of Newfoundland from the Quinlan Brothers prospectors (the “Vendors”) (See Press Release dated February 9, 2010). Pursuant to the terms of the acquisition agreement, Castillian has made a cash payment in the amount of 35,000 and has 100,000 common shares of the Company to the Vendors. The Hope Brook deposit, discovered in 1993 by BP-Selco Inc., was mined from 1987 to 1997 with total production reported to be 752,826 ounces of gold plus a copper concentrate from 1993 to 1997. Preproduction historical resources are reported to have been 10.2 million tonnes grading 4.54 g Au/ and 0.12% 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.
A compilation of all available data filed with the Mines Branch of Newfoundland & Labrador Natural Resources Ministry is in progress. The Geology Survey of the Mines Branch also has selected diamond drill core available from the deposit which have been examined. Physical property measurements have been completed on selected core samples to aid in planning of further geophysical work. Work is also progressing on developing the best approach for further exploration which will include induced polarization geophysical surveys and diamond drilling. In addition the Company has retained an independent geological consultant to prepare a NI 43-101 compliant report.
Bill Pearson, President & CEO of Castillian commented “We are very excited about the potential of Hope Brook. Initial results of our compilation work indicate that the gold mineralized zone appears to be open at depth below the old mine and some of the historic drill holes may not have been drilled far enough to intersect the zone. In addition, based on this analysis, the Company believes, there is excellent potential for larger tonnage, lower grade, bulk mineable mineralization. Field work is expected to commence this summer and this project will be a major focus for the Company.”
Paramirim Gold-Copper Project, Bahia State, Brazil
The 100% owned Paramirim Gold-Copper Project located in west-central Bahia state, Brazil, was acquired by Castillian through its acquisition of Tucano Resources (See Press Release dated January 29, 2010). The Paramirim project consists of 35 mineral concessions covering more than 39,000 hectares. This project covers a favourable belt for both IOCG-style mineralization and orogenic gold that extends some 80 km along strike. There are extensive garimpeiro (artisanal miner) workings along the belt for both gold and copper. Work completed by Tucano includes geological mapping, sampling and approximately 2,000 metres of reconnaissance drilling, which has defined a number of follow-up targets. The project is discussed in detail in a NI 43-101 technical report prepared by B. Terrence Hennessey, P.Geo. of Micon International Limited that is available on Sedar.
Castillian plans to initially carry out induced polarization surveys on the principal IOCG targets identified by previous work and continue geological mapping, prospecting and sampling to define additional drill targets.
Pure Gold Property, Yukon
In February 2010, Castillian announced that it had acquired by staking a 100% interest in 46 mineral claims totaling 961.54 hectares located in the historic Klondike gold fields (See Press Release dated February 23, 2010). The property known as the Pure Gold Property is located at the headwaters of Pure Gold Gulch, nine kilometres southeast of Dawson City. The Pure Gold Property lies within the Tintina Gold Belt that hosts a number of world class gold deposits including Donlin Creek, Nixon Fork, Fort Knox, Pogo, Brewery Creek and Dublin Gulch. Recently, a number of new discoveries have been made in the belt including the White property. The White property is located 95 kilometres immediately south of the Pure Gold property and is in the same geological setting and environment. The primary target on the Pure Gold property is for “White” style gold mineralization that has been the focus of extensive exploration in the region over the past two years. Worked planned in summer 2010 includes geological mapping, prospecting and sampling.
Achachucani (formerly Pederson) Gold Project, Bolivia
The Achachucani Gold Project (formerly known as the Pederson Project) is located in the central west side of Bolivia, approximately 360 km south of La Paz. The property comprises approximately 78 square kilometers within 13 contiguous concessions. The claims contain a near surface, structurally controlled, sediment hosted gold deposit. Orvana Minerals Corporation and BHP, defined an area of continuous mineralization for which a historical resource estimate of 51.6 million tonnes grading 1.4 g/t Au containing 2.3 million ounces of gold was delineated. Approximately 20% to 25% of the historical resource is reported to be contained within oxidized material which potentially could be heap leached. This resource is historical in nature and is not NI 43-101 compliant. Castillian has not done the work necessary to verify this resource and cautions that this estimate should not be relied upon.
The Company entered into the agreement to acquire a 90% interest in the project in September 2005. The project is presently under force majeure due to opposition by certain members of the local community. The Company has hired an experienced Bolivian consultant and has initiated a program of public meetings with all stake holders in the local communities and governments to address concerns and obtain a resolution of the issues that is satisfactory to all parties involved so that exploration work may proceed with respect to the project.
Kagera Nickel-Copper Project, Tanzania
The Company holds a 100% interest in six concessions in the prospective Kabanga-Musongati mafic-ultramafic belt in northwest Tanzania. The properties of the Kagera Nickel Project comprise a large land position covering approximately 960 square kilometers along the western border of Tanzania. The property is directly adjacent to the important nickel sulphide Kabanga Nickel Deposit (Tanzania), the largest undeveloped high grade nickel sulphide deposit in the world. The Kabanga Nickel Deposit is currently undergoing feasibility studies in a 50:50 joint venture among Xstrata Nickel (the operator) and Barrick Gold. The deposit is one of the world’s largest nickel sulfide projects. The Company is reviewing alternatives for reactivating the project.
Mangabal Nickel-Copper Project, Goias State, Brazil
The Mangabal Project concessions which originally covered approximately 153,000 hectares have been reduced to approximately 8,474 hectares to cover the core areas of nickel-copper mineralization. In 2007 and 2008, Castillian completed an extensive drill program to test the Mangabal South deposit and other targets in the area. Highlights from this drilling included hole CRMS-07-060 which intersected 15.55 meters grading 0.91% nickel and 0.46% copper; hole CRMS-07-076 which intersected 14.40 meters grading 1.05% nickel and 0.33% copper; hole CRMS-07-085 which intersected 9.00 meters grading 1.18% nickel and 0.39% copper and hole CRMS-07-086 which intersected 7.00 meters grading 0.99% nickel and 0.38% copper.
On February 2, 2010, Castillian reached an agreement with Xstrata Brazil to amend the agreement whereby Xstrata has agreed to vest Castillian’s interest at 100% for consideration of cash payments made, shares issued and work already completed, subject to a 2% net smelter royalty and rights to offtake as defined in the initial agreement. Castillian is reviewing alternatives for further advancing the Property.
Las Aguillas Nickel-Copper-PGM Project, Province of San Luis, Argentina
Castillian announces that it has terminated its agreement with Maximus Resources Ltd. (“Maximus”) whereby it can acquire 100% of Maximus’ rights to acquire an interest in the Las Aguillas Nickel-Copper-PGM Project in the Province of San Luis, Argentina, from Marifil Mines Ltd. and it has also terminated a second agreement with Marifil relating to the regional exploration in the San Luis area (See Press Release dated March 6, 2007).
Dr. Bill Pearson, P.Geo. and Mr. David Gower, P.Geo., directors of the Company and both qualified persons as defined by National Instrument 43-101, have reviewed and approved the technical content of this press release.
Management and Corporate Update
The Company announces that Mr. Helio Diniz has resigned as Chief Operating Offer but will continue his involvement with Castillian as a Co-Manager for South America projects. Bill Pearson, President & CEO commented: “I am very pleased that Helio will continue to be involved with Castillian going forward as we transition to be a gold-focused junior exploration and development company. He has made a valuable contribution to building Castillian and will continue to play an important role in advancing our projects in South America.”
Castillian is in the process of revising and updating its website which will be re-launched shortly.
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, South America and Tanzania.
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; acquisition risks, the actual results of current exploration activities; delay or failure to receive board or regulatory approvals; timing and availability of external financing on acceptable terms;; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; 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; and, delays in obtaining governmental approvals or required financing or in the completion of activities. 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.
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