WOW, this is great Q&A, its ansered alot of questions ive had.

Also- The M&A announcement could not have come a better time; with managements' (and BOD) ability to negitiated a premium 'kicker' for the buy-out price of CSG, we can all now look forward to a premium above floor price ($1.25) of almost 6-7 cents ($1.31-$1.32).

had we not had an M&A announcement, our stock would be trading closer to $.74 cents. Great JOB CSG!

doggone!

QUESTIONS PROPOSED BY: red dragon,

We received the following reply from Mr. Rory Quinn, Manager Investor & Public Relations at Castle Gold:

1. I haven’t heard of Argonaut before, I googled “Argonaut” and found nothing, who are they?

A) The Principals behind Argonaut were the principals behind Meridian Gold.Really, Argonaut is three people: Peter Dougherty, Brian Kennedy & Edgar Smith.Meridian Gold grew to be a mid-tier gold company. The stock rose from roughly $3 to $38 in less than 12 years, creating immense wealth for stakeholders and shareholders after the company was sold to Yamana for aprox $3.5 billion.As a result, the people behind Argonaut have a very good reputation on the street, and have the support of many brokerages, investment banks and institutions.I would suggest googling the words: Meridian, gold, Reno if you want to find out more.

2. The release said they need to raise the money to buy Castle Gold. Isn’t that risky? Do you think they can do it?

A) Given Argonaut’s make-up the M&A committee at Castle Gold was confident that they would be able to raise the money.My understanding is that Argonaut’s raise is going extremely well.Neither Castle Gold or the street (investment banks, institutions, brokers, high net worth’s) have a concern that Argonaut will be able to raise the money.

3. Many people are posting/speculating regarding possible ounces in the ground, value of these grades at La Fortuna and that this offer could be worth more, particularly with gold at $1100. Could you comment on this?

A) This is a good question, and requires a thorough answer.I think it is important to remember that 38 companies signed CA agreements with Castle Gold.Several companies visited the sites. The company had a data room with every conceivable bit of information about the company.After a complicated, and thus lengthy process, with many interested parties Argonaut Gold made the best offer.Period.Does Management and Board at CSG think there will be more ounces at El Castillo?Absolutely!That’s what we’ve been working toward.We certainly have not hid the fact, in fact we have been out presenting/marketing at brokerages and investment banks across Canada, the US and Europe telling them the same.Initial M&I resources have shown to be 1.2 million ounces.We have stated on many occasions that with further drilling, and study of the transition material, we believe there will be 1.5 million ounces at Castillo, conservatively.That of course is at a very low cut off corresponding with the very high price of gold.If the POG goes down over the next 8-12 years (the mine life) then the cut off will need to be adjusted accordingly.

B) With regard to La Fortuna.Yes, these are terrific early results, but they are grab samples.They are not drill holes.It is very early stage.It certainly does not indicate that there is an economic large scale (or even) commercial mine to be built at La Fortuna.La Fortuna will likely receive more follow up work in the future.If investors are convinced of the upside, of La Fortuna and perhaps El Castillo, they may want to consider investing with the new company, and the quality people involved, if and when they go public.The new company will have available money to spend on La Fortuna, if it is warranted after follow up geological work and feasibility studies.

4. Look, honestly, I think +$1.25 is a good deal..., congrats, but I have some mixed feelings. They say not to fall in love with a stock...but I did with this one. I guess my patience was rewarded. But why did the company think there would be more value in selling CSG now rather than waiting for organic growth down the road?

A) Don’t forget that the deal value can grow to as much as $1.50/share.Hind sight is 20/20 and no person had the hind sight to know that gold would automatically go up considerably within 2 weeks of the deal announcement, $1113/oz, as I write this.What it was though, was foresight.There was upside built in to this deal on the price of gold, but no downside.It is turning out to be a crucial caveat, turning what was thought to be a $1.25 deal to what could easily be +$1.35/share.This company, a very well known quantity in the marketplace was worth less than half of that, in October.

B) Quite simply, to make El Castillo as robust an operation as possible requires money.Lots of it. In order to do that efficiently, the company could have raised a lot of money, and considerably diluted current investors, with no certainty of a significant SP increase for many quarters and perhaps years to come.That’s if we raised equity.If we raised debt....perhaps $10 million, the company could have had $17 million of debt on its books.Again with no certainty of a SP increase and a huge burden to pay off.What this deal does is give shareholders a very significant premium to what their shares were trading at, only a month prior.It is very highly unlikely that this premium would have been seen organically in the share price for 6-8 quarters.Why?Because the company has been moving about 2.5 times the waste it will be in the future.To make the mine even bigger, will require even more waste to be moved to open up the pit and thus more money.This waste removal all costs a lot of money, and pays back nothing.So the EPS shareholders have been looking for and expecting...would not become a reality...under status quo...not for 4 quarters at 50,000 – best case scenario.I believe given this uncertainty most shareholders would prefer a huge premium by industry standards so that they can do with their money what they wish, reinvest in the market if they wish.This is why so many small gold companies are purchased by bigger entities, it is the industry norm.It is economies of scale.The company was consistent in saying that it would pursue organic growth unless a significant offer came in for shareholders. Given this offer, it was deemed in the best interests of all shareholders, certainly the very vast majority, that this deal be accepted.Certainly the company was criticized mightily when it did not conclude a deal earlier, at what would have been much lower terms.The company realises that it will never please 100% of shareholders, though it strives to, but believes with this agreement it will certainly satisfy most of the shareholders (even those who fell in love with the company a little, and profited by showing patience as you did)

5. Given I like this offer, currently worth $1.30 I guess at 1105 POG, how do I tender my shares/support the company and the deal if I want to? Do you need our support, or do you have what you need?

A) You can call the company at 416 214 4809.Rory Quinn is available as the IR person at extension 208, or by email at rquinn@castlegoldcorp.com He will provide you with the tendering forms and “Soft” lock up agreement.Yes, although shareholders have shown terrific support for this deal, we would like all shareholders who are supportive of this offer to tender their shares and to support it by tendering their shares to the deal.

6. If I tender my shares now, what about if there is a higher offer?

A) By signing a “Soft” lock up agreement you do not lose your right to tender your shares to another, improved offer that is put forward.

7. It says Argonaut is private, does that mean I won’t be able to reinvest? It would be nice to keep track of El Castillo if Argonaut are a good group.

A) It is very possible that Argonaut will go public. Given their track record with Meridian gold, I would suggest they are a group to watch.They will obviously be leveraging their previous success and expertise to create value for shareholders.Again, $3 to $38 with Meridian Gold as their last venture will provide for a lot of support from the marketplace.If you believe in the Castle Gold assets, and you like what you read about the principals at Argonaut (Meridian) when doing your due diligence, you may want to consider an investment in that new company if and when they do go public.

*If I may, please can I add one thing.It has often been speculated on various boards on the internet that certain members of management may not have supported this deal, and may have considered resigning, or resigned as a result.Let me set the record straight. That is completely untrue.When this offer and deal was presented to management and board for their approval, ALL management and board members signed their approval, and tendered their own shares (or options) to the offer.Without exception, the executive, management and board of directors supported this acquisition by Argonaut as was evidenced by their signing of the lock up agreement and as was noted in the news release on October 28th.

Regards,
AGORACOM