Published: April 12, 2016 |

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NewCastle Gold Ltd. has entered into an agreement with Franco-Nevada Corporation, whereby NewCastle and Franco-Nevada have agreed to create, in return for a cash payment of approximately $2.2 million, a new 2.65 percent royalty covering all of NewCastle’s Castle Mountain Gold Project claims, located in California, USA. The new royalty will override five separate pre-existing royalties held by Franco-Nevada that cover most of the Castle Mountain Gold Project. The new royalty does not require any advanced minimum royalty payments.

“We are pleased with this positive endorsement and streamlining of project royalties. We look forward to continuing our partnership with Franco-Nevada on our project. In conjunction with our recently announced transaction with Catalyst Copper which, on closing, brings both cash and high calibre new board members to NewCastle, this new injection of working capital will allow the company to advance the project to the mutual benefit of NewCastle and Franco-Nevada,” said David Adamson, chief executive officer of NewCastle.

In addition to this royalty purchase, Franco-Nevada will subscribe for 3,636,364 subscription receipts of NewCastle at a price of $0.32 per subscription receipt for proceeds of approximately $1.2. Each subscription receipt will, immediately upon the completion of certain conditions, without payment of any additional consideration or taking of further action, entitle Franco-Nevada to receive one unit of NewCastle. Each unit will consist of one common share of NewCastle and one half of one common share purchase warrant of NewCastle, where each whole common share purchase warrant is exercisable by Franco to acquire one common share at a price of $0.64 for a period of five years from the closing of the placement.

The transaction provides to NewCastle the injection of working capital into the company allowing the advancement of the Castle Mountain Gold Project and a streamlined royalty with Franco-Nevada which is easier and more cost effective to manage for both parties than the existing patchwork of royalties on the Castle Mountain Gold Project.

About NewCastle
NewCastle has 100 percent of the right, title and beneficial interest in and to the Castle Mountain Venture, a California general partnership, which owns the Castle Mountain property in San Bernardino County, California. The Castle Mountain heap leach gold mine produced over one million ounces of gold from 1992 to 2001, when mining was suspended due to low gold prices. The mine and reclamation plan, under which the mine operated, was authorized by the County of San Bernardino as the Lead Agency and remains in effect. Water for the drill programs was accessed from existing patented wells on the project.

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