Newcastle Gold to drill 40,000 m at Castle Mountain

2016-11-01 09:32 ET - News Release

Mr. Gerald Panneton reports

NEWCASTLE GOLD ANNOUNCES CLOSING OF $18.5 MILLION BOUGHT DEAL OFFERING AND NEW DRILL PROGRAM AT CASTLE MOUNTAIN

Newcastle Gold Ltd. has closed the previously announced bought-deal offering of common shares for gross proceeds of $18.5-million. The offering was made through a syndicate of underwriters led by TD Securities Inc.

Newcastle plans to use the net proceeds of the offering to finance exploration and development at its permitted Castle Mountain project in California -- including the launch of a 40,000-metre drill program, engineering, design and technical work, and for general working capital purposes.

The program will commence with two drill rigs and ramp-up to a total of six rigs, and is expected to comprise 30,000 metres of reverse circulation drilling and 10,000 metres of core drilling. Drilling will primarily focus on the Oro Belle South area with the main objective of infilling and expanding the current 4.19-million-ounce measured and indicated resource. Additional follow-up drilling is also planned to support all engineering, geotechnical and metallurgical studies for a phase 1 pit.

President and chief executive officer Gerald Panneton commented: "We are pleased that the recent successful $18.5-million financing has enabled us to continue aggressively drilling the Castle Mountain project. Drilling to date has shown excellent potential to expand the resource and also to improve the average grade and strip ratio in the Oro Belle South area."

Newcastle has a 100-per-cent interest in the Castle Mountain property in San Bernardino county, California. An updated National Instrument 43-101 resource for the project was announced Dec. 2, 2015, which includes measured mineral resources of 17.4 million tonnes grading 0.86 gram per tonne gold containing 480,000 gold ounces, indicated mineral resources of 202.5 million tonnes grading 0.57 g/t gold containing 3.71 million gold ounces along with inferred mineral resources of 40.8 million tonnes grading 0.58 g/t gold and containing 760,000 gold ounces.

Ian R. Cunningham-Dunlop, PEng, the company's vice-president, exploration, is the designated qualified person for this news release within the meaning of NI 43-101. He has reviewed and verified that the technical information contained in this release is accurate and has approved of the written disclosure of the same.

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