Nevada Pacific to purchase Castle Mountain

Vancouver — Nevada Pacific Gold (NPG-V) has inked a deal to purchase the Castle Mountain Mine, located 105 km south of Las Vegas, Nevada, in San Bernardino County, California.

Currently, Quest Capital (QC-T), formerly Viceroy Resource, owns 100% of Viceroy Gold which in turn holds a 75% interest in the mine. MK Gold Company (MKAU-O) owns the remaining 25%. According to the deal, Nevada Pacific will pay Quest US$2 million and issue 3 million common shares. An additional US$2 million is to be paid six months after closing, which is expected to occur at the end of February 2004. The Castle Mountain joint venture reclamation fund has a current balance of US$8 million.

Castle Mountain spans 18 sq. mi. and covers 573 claims. The past producing open pit heap leach gold mine produced 1.1 million ounces of gold from 36 million tons of ore with an average grade of about 0.04 ounces of gold per ton. Operations ceased in May of 2001.

“After producing 1.1 million ounces the joint venture partners closed the mine when gold was US$275 per ounce,” commented David Hottman, Chairman of Nevada Pacific. “Now with gold over US$400 per ounce, we believe there is exploration potential that could eclipse the mine’s past production. With this purchase and our recently announced acquisition of the Magistral Mine in Mexico, we are quickly implementing our business model of generating strong cash flow from gold production underwriting our exploration programs and development of new deposits in Nevada. In 2003, the Magistral and the Castle Mountain mines produced collectively 45,000 ounces of gold.”

Nevada Pacific states that an additional 2 million tonnes of ore capacity still remains on the existing leach pad which can also be expanded within the presently permitted area to accommodate a further 5 million tons of ore.

Three open pits on the property have exploited silicified and stockwork zones containing gold mineralization within a series of faults and fracture zones hosted by Tertiary-aged volcanic rocks. A Technical review by AMEC E&C Services demonstrated that there are still numerous lenses of untested potential gold mineralization situated between the Jumbo and Oro Belle/Hart Tunnel pits. Nevada Pacific intends to capitalize on this potential.

In addition, wide spread volcanic hosted, epithermal high-grade gold mineralization also occurs at depth in a number of areas of the property. At the South Domes-621 area, historic drilling intersected 60 ft. averaging 0.438 oz gold per ton in hole DH-954. Hole DH 741 intersected 495 ft. averaging 0.510 oz. gold including 35 ft. grading 4.763 oz. gold. Nevada Pacific believes that there is potential to develop this style of high-grade gold mineralization that could be accessible by underground mining methods. A 1,000 ton per day mill remains on the site.

Nevada Pacific holds an extensive property portfolio in Nevada spanning about 60 sq. miles of mineral rights in the State of Nevada. The Company’s BMX project is optioned to Placer Dome (PDG-T).