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NewCastle Gold Reports Initial Results from Water Supply Drilling Program on Castle Mountain Project

NewCastle Gold Ltd. is pleased to report initial results from the water supply drilling program on its Castle Mountain gold project, located in San Bernardino County, California.

These results follow positive initial water exploration results that were previously reported in the press release dated April 16, 2017. The Program involves drilling two large 12-inch diameter holes and installing 8-inch casing to develop production water wells, which will be followed by pump testing and monitoring.

This Program forms part of the ongoing hydrogeological investigations aimed at identifying additional sources of water as part of the pre-feasibility study scheduled for release at the end of 2017 and in support of potentially restarting the operation in 2018.

Water well CMM-W-2 was completed to total depth of 1,973 feet below ground surface, and intersected the water table at a depth of 450 feet. The target for this well is a deeply fractured area of bedrock identified by our geological team and tested in the previous program. Water well CMM-W-2 showed an average pumping rate of 169 gallons per minute ("gpm") during a five hour preliminary well test, and up to 200 gpm locally during the drilling of the well using the 'airlift' capacity of the drill rig.

Gerald Panneton, President and CEO commented: "We are very pleased with the preliminary results of this program as we went from 120 gpm in the previous water test well up to 200 gpm in the current water production well with the only change being the diameter of the hole being drilled. The previous diameter was 5.5 inches, compared to the latest 12 inches. After we complete the second production well (CMM-W-1), we will perform the long-term pump tests and subsequent monitoring. These two (2) new wells, along with our existing wells, could provide us with enough water to sustain the restart of the operation."

Water wells CMM-W-1 and CMM-W-2 were drilled along a 10 km long, north-south trending structure identified through satellite imagery, regional gravity surveys and subsequent surface geological mapping. Areas of highest groundwater water flow appear to coincide with this deep-seated feature. CMM-W-1 is in the vicinity of the JSLA backfilled open pit, and CMM-W-2 is located further south on the same structure. Preliminary results from CMM-W-2 indicate initial water flow rates exceeding 200 gpm during several occasions in the well's development, with an airlift average of 169 gpm during the final five hour development test. The pumping rate was limited by the compressor capacity of the drill, rather than the potential yield of the well, and the ultimate long-term capacity of the well has the potential to be higher. Additionally, during this five hour preliminary evaluation test, the water level in the well showed negligible drawdown. The location of the wells can be seen on the attached maps (Figures 1 and 2).

This water well was drilled using a truck-mounted drill rig belonging to Cascade Drilling, and reverse circulation drilling techniques. The diameter of the hole was 12 inches, and hole was drilled vertically to a maximum depth of over 2,010 feet with the ultimate completion of the casing and screen to 1,973 feet. Water flow rates were measured by performing industry standard "airlift" tests by injecting air from the rig's compressor. Discharge water from the well head was measured by timing the flow of air/water discharge as it exited the rig's cyclone into a 55-gallon barrel. Hydrological consulting is provided by Geo-Logic Associates based in Tucson, Arizona and representatives were present on site for the drilling and testing of the well.

Following a full analysis of the pump test results, the Company will be in a position to forecast the long-term productive capacity of these wells. The goal of the program is to find new wells that will meet the needs for the restart of the Project. The Company currently maintains ten active water rights with three production water wells on the Project. Total production from wells W-14, W-18 and W-45 located in the NW Wellfield is approximately 150 gallons per minute.

Assays and Quality Assurance/Quality Control

The Company employs an industry-standard QA/QC program consisting of standard pulps, coarse blanks and rig duplicates.

Qualified Person

Marc Leduc, P. Eng., the Company's Chief Operating Officer, 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.

Source: http://www.newcastlegold.ca/

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