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National Bank Financial initiated coverage on NewCastle Gold (TSX: NCA)

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Analyst Raj Ray gives the company an outperform rating, with a speculative risk rating, and a $1.70 target price, a premium of 139% to the $0.71 price on March 2nd, the day the report was issued.

Additional Information:

Company: NewCastle Gold
Website: http://www.newcastlegold.ca
Stock Symbol: TSX: NCA
Date Published: Mar 9, 2017
Transcript: Available

Video Transcript:

I’m Isabelle Chatelain for Investmentpitch Media

Today’s buy recommendation comes from National Bank Financial, which has initiated coverage on
NewCastle Gold.

Analyst Raj Ray gives the company an outperform rating, with a speculative risk rating, and a $1.70 target price, a premium of 139% to the $0.71 price on March 2nd, the day the report was issued.

NewCastle Gold has a 100% interest in the Castle Mountain property in San Bernardino County, California.

The Castle Mountain heap leach gold mine produced over one million ounces of gold from 1992 to 2004.

The large scale open-pit project is permitted for a 9-million tons per year operation.

The company’s ability to delineate sufficient water supply remains a key risk.

However, management has identified an aquifer south of the project that is estimated to be much larger than the source tapped during historical production.

The company has been reporting assay results from a 40,000 metre Phase II definition and exploration drill program that commenced November 1, 2016.

Recent exploration results indicate further upside potential to the project’s already large resource of approximately 5 million tons of gold and a 20+ year mine-life.

Gerald Panneton, President and CEO, stated: “The South Domes area continues to demonstrate the open potential of this exciting target with gold mineralization well above average resource grade. Gold mineralization is being intersected both outside modeled pit limits and at depth. South Domes continues to be our prime exploration target as the deposit is open in all directions.”

Analyst Raj Ray stated: “The Castle Mountain project ranks attractively with respect to its scale, permitting status and jurisdiction when compared with global gold assets that are not currently owned by major/intermediate gold producers. As such we believe NCA is among only a handful of companies that provide investors direct upside exposure through either share re-rating or M & A.”

The shares are trading at $0.66, well below the $1.70 target price, and with 198.9 million shares outstanding fully diluted, the company is capitalized at $131.3 million.

For more information, please visit the company’s website www.newcastlegold.ca, or contact Susan Muir, VP Investor Relations and Corporate Communications at 416-505-7606 or email smuir@newcastlegold.ca.

For more information about National Bank Financial or to obtain a copy of their research report, contact your nearest National Bank Financial office. Their branches are listed on their website at www.nbfm.ca.

I’m Isabelle Chatelain for Investmentpitch Media