The Mangabal Project concessions which originally covered approximately 153,000 hectares have been reduced to approximately 8,474 hectares to cover the core areas of nickel-copper mineralization. In 2007 and 2008, Castillian completed an extensive drill program to test the Mangabal South deposit and other targets in the area. Highlights from this drilling included hole CRMS-07-060 which intersected 15.55 meters grading 0.91% nickel and 0.46% copper; hole CRMS-07-076 which intersected 14.40 meters grading 1.05% nickel and 0.33% copper; hole CRMS-07-085 which intersected 9.00 meters grading 1.18% nickel and 0.39% copper and hole CRMS-07-086 which intersected 7.00 meters grading 0.99% nickel and 0.38% copper.
On February 2, 2010, Castillian reached an agreement with Xstrata Brazil to amend the agreement whereby Xstrata has agreed to vest Castillian’s interest at 100% for consideration of cash payments made, shares issued and work already completed, subject to a 2% net smelter royalty and rights to offtake as defined in the initial agreement. Castillian is currently seeking to joint venture or divest this project.