Various styles of gold mineralization occur on the Property. Mineralization is found within stockwork veins, tectonic and hydrothermal breccias, and in microfracture-controlled disseminations. The mineralization style can be classified as low-sulphidation epithermal (LSE) with high-grade gold+adularia veins within broad zones of hydrothermal alteration.

Strongly brecciated and silicified volcanic rocks host gold mineralization occurring as electrum and native gold. Mineralization occurs in stockwork veins, tectonic and hydrothermal breccia, and microfracture-controlled disseminations. The hydrothermal brecciation, silicification, and stockwork development are spatially associated with faults and fracture zones (AMEC, 2002). Some of these structures pre-dated mineralization while others developed approximately the same time. The gold mineralization and hydrothermal alteration are associated with low sulphidation epithermal fluids that were channelled along these structural breaks. Dating of adularia (potassium feldspars) in quartz veins suggests that the gold mineralization developed during or shortly after the emplacement of the rhyolite domes.

Coarse gold occurrences and zones of high-grade mineralization are commonly characterized by open-space textures with fluid inclusion evidence of a primary boiling horizon between approximately 3,800 ft and 4,200 ft despite the fact that visible gold and high-grade mineralization occur over 300 ft above and below this horizon. Gangue material is typical of episodic, low-temperature silicification, potassic metasomatism (adularia), and possibly some early albitization (Holland, 1996).

Pyroclastic rocks lie beneath and between the flow domes and have a limited areal extent. Remnants of tuff rings, ash flows of limited extent, surge and near-source pumice block layers, and thin air-fall beds comprise the pyroclastic deposits. The remnant tuff rings are filled with, and locally overlain by, intrusive and extrusive phases of the flow domes.

Intrusive phases of the flow domes dominate proximal to the higher grade gold mineralization. Extrusive sequences on the eastern and western side of the range, flanking the domes and usually at lower elevations, include lava flows, pyroclastic deposits, and epiclastic sediments. The development of a lacustrine basin on the western flank of the Castle Mountains during the time of volcanism is indicated by thin layers of discontinuous mudstone/shale within the rhyolite sequence. These sedimentary layers were logged in drill holes.

Mineralization in the vicinity of the open pits appears to have occurred approximately 800 ft to 1,200 ft below the highest exposure of the rhyolite domes. These exposures are believed to be the top of domes at the time of emplacement. This conclusion is based on the chaotic, highly variable flow foliations near the highest point, the presence of near-source pyroclastic aprons, and by “onion skin” foliation patterns toward the flanks. Similar patterns are observed in the vicinity of the South Domes.

Alteration types related to the gold mineralized zones include propylitic, hypogene oxidation, argillic, potassic, and silicic alteration. The strike length of the alteration is up to 1.5 mi with a width of about 1,500 ft. The most common alteration associated with gold mineralization is silicification along with argillic alteration although the latter is not generally associated with higher grade material. As mentioned above, potassic metasomatism and signs of early albitization are also present. Secondary, finely disseminated pyrite mineralization is commonly associated with gold. Hypogene alteration overprinting these alteration types is common as is secondary supergene oxidation and weak supergene argillic alteration. Iron oxides display a zonation with stronger alteration found in the central mineralized zone and weaker alteration on the periphery.

Mine design and preparation of the mining reserves was completed using conventional open-pit design practice. The designs are based on the $850/oz Lerchs-Grosmann optimal pit solution. From that initial pit design, ramp systems were designed and the pits were divided into 14 different laybacks/phases. Mining of the pits was subsequently scheduled to provide the required ore per year in the plan while balancing the waste mining to ensure proper development of the Project.

During the first two years of operations mining will be performed exclusively by a mining contractor. In years 3 and 4 the mining contractor will continue mining and will also assist with pre-stripping operations, which will be primarily undertaken by the Company’s own mining fleet. Contract mining operations will cease by year 5. Grade control will be performed by Castle Mountain personnel throughout the mine life.

It is anticipated that the mining contractor will use a fleet of 85-tonne to 100-tonne capacity rear dump trucks and equivalent class front-end- loaders. The initial owner fleet is expected to comprise 17 180-tonne capacity rear dump trucks and four 425-tonne class excavators. Mining will take place on 6.1-metre (20 foot) benches, with double benching anticipated in waste areas.

Mining costs are estimated at $1.39 per tonne mined over the current LOM.

The processing plan has been divided into two stages:

- Stage 1 (Years 1-3) considers processing 14,000 tons per day of ROM backfill material from the JSLA pit, where it was stored from the previous operation. Excavated backfill material will be loaded into 100-ton haul trucks and stacked in 50- ft lifts. Quicklime (CaO) will be added to the material in the trucks for pH control before the ore is stacked and leached in two stages using a dilute sodium cyanide solution. Pregnant solution discharging from the heap will flow by gravity to a pregnant solution tank from which it will be pumped to a Carbon-in-Column (CIC) adsorption circuit. Gold and silver values will be loaded onto activated carbon and then be periodically stripped from the carbon in a desorption circuit, electrowon and smelted to produce the final doré product.

- Stage 2 (Years 4+) will be constructed during Year 3 and includes expanding the Stage 1 leach pad, adsorption and desorption circuits, and ........