- gold production expected to be 30000-40000oz in 2008 and 40000-45000oz in 2009

- long-term gold sales estimate of $900/oz

- total cash cost estimate of $325-350/oz in 2008 and $300-325/oz in 2009

- gross profit of $550-575/oz in 2008 and $575-600/oz in 2009

- Operating income before interest, tax, depreciation and amortization (OIBITDA) of $16.5-23 million in 2008 and $23-27 million in 2009

- stock price at $0.49 with fully diluted shares at 84.3 million gives a market cap of $41.3 million

- $0.20-0.27 forward OIBITDA per share for 2008 and $0.27-0.32 forward OIBITDA per share for 2009

- forward price to OIBITDA (F P/OIBITDA) of 1.8-2.5 for 2008 and 1.5-1.8 for 2009

The above information, of course, assumes Castle Gold will meet sustainable production, $900/oz sales of gold with cash costs between $300-350/oz, and no further share dilution. I did not use EBITDA in my calculations because earnings involve the measurement of several accounting instruments and can be distorted; whereas, OIBITDA measures the core business and cash flow from operations. Basically, the stock investment payback, based on core business, for this company can be as low as 1.5 years which is extremely rare, especially for a corporation whose assets are in relatively safe regions (North America). The discounted average payback multiple for junior gold producers is believed to be around 10 years, but if the yellow metal continues much higher, which I believe to be the case, then that multiple could go to the historical highs of 25+ years. CSG's stock is under pressure due to a lot of market uncertainty in the short-term. Based on current market conditions, Castle Gold should be trading at $2.50 per share. Over time however, I believe it will yield returns well above $5.00 as long as production from the El Castillo and El Sastre projects ramps up and their resources expand. Also, any significant discoveries in their smaller projects will be a value added bonus. Buy on any weakness and patiently hold for at least 2 years in order to realize large gains. The book value was $26 million or $0.31 per share as of Q3 '07 and I believe the reported Q1 '08 book value may be higher than the current trading levels! The sellers are being irrational because Castle Gold's income and balance sheet will continue to grow in contrary to the downtrending stock price.