TORONTO, ONTARIO--(Marketwire - Jan. 10, 2011) - Carpathian Gold Inc. (TSX:CPN) (the "Corporation" or "Carpathian") is pleased to provide a review of the results, progress and achievements for 2010 and an outlook for 2011.

For 2010, the Corporation established goals for the continued advancement of its two wholly owned exploration/development projects, the Riacho dos Machados Gold Project, located in Minas Gerais State, Brazil, and the Rovina Valley Project which is a gold-copper porphyry system located in central Romania.

The Riacho dos Machados Gold Project is the more advanced of the two projects as it represents a near-term production project that will elevate the Corporation to a gold producing company. The primary objectives set out by the Corporation for 2010 were to:

  1. complete an updated resource estimate;
  2. complete a Feasibility Study for the open pit portion of the deposit in mid to late 2010; and
  3. proceed with a construction decision.

In July of 2010, the Corporation announced an updated resource estimate in which the open pit portion of the resource contained 806,200 ounces in the measured plus indicated Category and 355,900 ounces in the inferred category. A large percentage of the inferred resource is situated at the bottom of the open pit as determined by the pit shell optimization program and the Corporation determined it would be prudent to conduct a follow-up drill program. The goal of the program was to upgrade additional inferred resources to the measured plus indicated category, particularly at depth, to ensure the proper mine design and scheduling was established so as to avoid the risk of the loss of those resources through the open pit mine plan as well as to lengthen the open pit mine life. This additional drill program was completed in late 2010 and it is now anticipated that an updated resource estimate will be completed in January of 2011. Initial results indicate that this program was successful in converting a high percentage of the targeted inferred resources that will be incorporated into the measured plus indicated category. This new open pit resource will then be incorporated into the final Feasibility Study to be released during the first quarter of 2011. 

For the Rovina Valley Project, the Corporation set out the following objective for 2010:

  1. to complete and release a detailed Preliminary Economic Assessment ("PEA") in the second quarter of 2010;
  2. to complete a three-hole deep drill program on the Ciresata porphyry system, the highest grade and one of three proximal Au-Cu porphyry deposits as previous drilling showed that many of the drill holes within the Ciresata porphyry system ended in higher-grade gold plus copper mineralization; and
  3. to complete the required work and documentation to be submitted to the relevant government authorities by the end of the year for the conversion of the Rovina Exploration License to a Mining License.

All of the targeted objectives set out for this project for 2010 were accomplished. The PEA was released in March 2010, and established an economically viable, long mine life project of approximately 19 years producing on average approximately 200,000 ounces of gold plus 50 million pounds of copper per annum. The three deep drill hole program was designed to: 1) test the depth extension of the gold plus copper mineralization within the Ciresata porphyry system in the context of utilizing a bulk underground mining method as outlined in the results of the PEA; 2) confirm the geologic model for the deposit; and 3) begin upgrading the resource to measured plus indicated categories. The results of this drilling program met all of the objectives established and have successfully determined that the Ciresata porphyry system is open and could be significantly larger.

The technical reports for the conversion of the Rovina Exploration License to a Mining License have been completed with subsequent information as requested by the government being delivered.

At the Corporate Level during 2010, the following was achieved.

  1. On May 21, 2010, the Corporation concluded a gold purchase and sale agreement (the "Agreement") for US $30 million with Macquarie Bank Limited ("Macquarie Bank") for its RDM Gold Project (the "Project") in Brazil. Under the terms of the Agreement, Macquarie Bank will make upfront cash payments (the "Upfront Payments") totaling US $30 million in return for which it will have the right to purchase 12.5% of the gold produced from the Project at a price of US $400 per ounce of payable gold delivered ("Delivered Gold Ounce"). The price per Delivered Gold Ounce to the Corporation will be subject to an inflation escalator as well as upside price participation for the Corporation of 25% of every Delivered Gold Ounce delivered at a price above US $1,850 per ounce. Macquarie Bank will also have the right to extend its participation to purchase 12.5% of the additional gold produced from any underground operation within the mining concession and five contiguous exploration licenses, as well as any open pit and/or underground operation on the balance of the property ("Expanded Production"), by contributing 12.5% of the capital required to develop the Expanded Production and paying US $450 per Delivered Gold Ounce. This price per ounce will also be subject to adjustment by the price escalation and inflation factor described above.
  1. On September 21, 2010, the Corporation signed a mandate letter with Macquarie Bank for it to arrange a project financing facility of up to US $75 million to be used to partially fund the development of the Corporation's RDM Gold Project, Brazil. In addition, the Corporation also mandated Caterpillar Financial Services Corporation ("Cat Financial") to arrange an equipment leasing facility for up to US $22 million for the Project. The mandate letters were signed on the basis of indicative term sheets that are normal for transactions of this nature. Due diligence in connection with these mandates is currently underway pending the results of the final release of the Feasibility Study.
  1. On November 3, 2010, the Corporation closed a "bought deal" financing for gross proceeds in the amount of CDN $51.6 million.

The following details the results and major achievements established in 2010. 

Riacho Dos Machados ("RDM") Gold Project, Brazil

  • In July 2010, the Corporation announced the results of an updated NI 43-101 resource estimate.

The open pit resource includes:

  • Measured + Indicated – 17.20 MM tonnes at 1.46 g/t Au for 806,200 ounces Au
  • Inferred – 7.18 MM tonnes at 1.54g/t Au for 355,900 ounces Au

The underground resource includes:

  • Measured + Indicated – 0.53 MM tonnes at 3.63 g/t Au for 6,200 ounces Au
  • Inferred – 3.92 MM tonnes at 2.67 g/t Au for 377,000 ounces Au

The combined open pit and underground resource includes:

  • Measured + Indicated – 17.25 MM tonnes at 1.46 g/t Au for 812,300 ounces Au
  • Inferred – 11.10 MM tonnes at 1.94 g/t Au for 692,900ounces Au

Of the total 2010 resource estimate, 99.2% of the measured and indicated resource and 51.4% of the inferred resource is located within a Whittle pit shell. The pit shell was obtained utilizing pit-optimizer software (Whittle Four-X) using appropriate mining and processing costs from the ongoing Feasibility Study, a US $950/ounce gold price and a 0.36 g/t Au cut-off grade. Within this open-pit shell, the measured plus indicated gold resource in the 2010 Resource Estimate has increased by 537,400 ounces, from 268,800 ounces to 806,200 ounces, a 200% increase compared to the 2009 Resource Estimate. Below the open-pit shell and excluding a 15-metre crown pillar, a higher-grade cut-off was utilized (1.09 g/t Au), based on potential economic parameters along with engineering considerations, to define a resource with underground mining potential. 

The gold mineralization at RDM is situated within a continuous 14.0 kilometre long shear zone hosted in Precambrian metamorphic rocks with a demonstrated gold endowment. This shear zone is fully covered by the Corporation's mining concession and exploration licenses that extend over a continuous length of approximately 30 kilometres covering an area of approximately 22,000 ha. The most intensely explored zone and location of the current 2010 Resource Estimate only represents approximately 2.0 kilometres of the southern portion of this shear zone. There are numerous surface gold targets of similar gold grade that occur along strike within this shear zone and to date a total of seven (7) exploration targets have been outlined north of the open pit resource area and one to the south.

In addition to the strike extension targets and defined satellite exploration targets, the gold mineralization at RDM is also open at depth. Once the open pit is in production the Corporation plans to evaluate the underground resource, which is higher-grade that could add to the overall operation both in terms of extending the mine life of the Project and potentially increasing the annual production rate by an additional 50%.

  • The Corporation retained an engineering and environmental consortium group consisting of Tecnomin Projetos e Consultoria Ltda, NCL Brasil Ltda, Golder Associates Brasil Consultoria e Projetos Ltda, and YKS Services Ltda to complete a Feasibility Study. The scope of the Feasibility Study was to concentrate solely on placing into production the open pit mineralization. The Project will be a conventional open pit mine with down-the-hole drill rigs and blasting, backhoe excavators, and conventional haul trucks. The processing operation will include crushing the ore and processing it in an industry standard carbon in leach and ADR (adsorption, desorption, and recovery) plant followed by a detoxification process prior to placing the tailings in an impoundment area. Based on metallurgical test work, the gold recovery is estimated at 90%. The open pit mining operation is envisioned to be at a rate of approximately 7,000 tonnes per day. The capital costs, operating costs, infrastructure, layout design required for the Feasibility Study are essentially complete with some optimization work in progress while a final open pit design and mine schedule is being completed based on the additional drilling results carried out in late 2010. It is envisioned that the Feasibility Study will be completed and released during the first quarter of 2011.
  • Subsequent to the release of the 2010 Resource Estimate in July, the Corporation drilled an additional 74 core holes for 9,938 m with the objective of converting additional inferred resources in the open pit to the measured plus indicated categories. As of December 31, 2010, a total of 446 drill holes have been incorporated into the database representing approximately 66,421 m. Additionally, during 2010, the Corporation completed condemnation drilling in the proposed areas designated for the waste pile and tailings dam, along with significant geotechnical, metallurgical and acid rock drainage test work.
  • In 2010, the Corporation completed the purchase of all surface lands required for the life-of-mine footprint for the open pit mining operation.
  • The Corporation was also granted the critical path time line license, the Licença Previa ("LP") that allows all earthworks in the mine and water retention dams and tailing dams to be constructed. All technical documentation required for the Licença Instalaçấo ("LI") that will allow construction to begin on the Project, has been compiled and submitted to the appropriate government authority for approval. 
  • During the year, the Corporation also continued to advance base line environmental work and social programs.

Rovina Valley Project ("RVP"), Romania

RVP is comprised of three gold-copper porphyry systems discovered by the Corporation on its 100% owned Rovina Exploration License in central Romania. From 2006 to 2009, 181 diamond drill holes totaling 71,375 m have been completed on the project. In late 2008, PEG Mining Consultants Inc. ("PEG") completed a NI 43-101 resource estimate. This resource estimate is based on the drill results from each of the Colnic, Rovina and Ciresata porphyry deposits, utilizing diamond drill hole data from the 2006, 2007 and 2008 drilling campaigns, and is summarized below.

  • Measured + Indicated – 193,100,000 tonnes at 0.49 g/t Au for 3,070,000 ounces Au and 0.18% Cu for 759,100,000 lbs Cu
  • Inferred – 177,700,000 tonnes at 0.68 g/t Au for 3,890,000 ounces Au and 0.17% Cu for 663,100,000 lbs Cu

Base case cut-offs used in the table are 0.45 g/t Au eq. for the Colnic deposit, 0.70 g/t Au eq. for the Ciresata deposit and 0.30% Cu. eq. for the Rovina deposit.

Au eq. determined by using a gold price of US$675 per ounce and a copper price of US$1.80/lb as defined by PEG. 

Metallurgical recoveries are not taken into account.

The 2008 resource estimate includes enough contained gold-only ounces (3.07 million ounces in the measured + indicated category and 3.89 million ounces in the inferred Category) to place the Corporation within the top tier of advanced-exploration companies (top 20) hosting resources that have not yet been developed. Drilling has indicated that the total resource size of this project has not yet been fully defined and further immediate potential exists to expand the current resource estimate. Essentially every drill hole in the Ciresata porphyry bottomed in higher-grade gold and copper mineralization. In addition, results from a soil-geochemistry in-fill program highlighted a coincident gold + copper anomaly extending 300 metres west from the present drill hole pattern with >10 ppb gold and >20 ppm copper. This anomaly is a high priority drill target for extending the Ciresata mineralization laterally.

During 2010 the following activities were completed.

  • A detailed PEA was released on March 23, 2010. The PEA was completed by PEG Mining Consultants Inc ("PEG"), which led a consortium of specialists assembled for the study. The project is envisioned to be a conventional open pit mine with down-the-hole drill blast holes, hydraulic shovels and conventional haul trucks for the Rovina and Colnic deposits located approximately 2.5 km apart. Mine production from the combined two open pits is planned at 20,000 tonnes per day. The Ciresata deposit will be mined by a combination of a sublevel panel retreat mining in the upper levels of the deposit accessed by a decline from the surface, and an induced block cave method for the lower part of the deposit. The upper sublevel panel retreat mining will allow mining access to high-grade ore while development is undertaken to prepare for the induced block cave operation at depth. At full capacity, the underground operation will mine 20,000 tonnes per day. Ore from the induced block cave operation will be fed to a centralized process plant located between the Rovina and Colnic deposits via a 6 km inclined conveyor tunnel to the surface.

The onsite metallurgical facility will include conventional unit operations such as crushing, grinding, froth flotation and dewatering to produce a gold-rich copper flotation concentrate. Ore processing will utilize an industry-standard flotation process-only at a rate of 40,000 tonnes per day to produce a gold-rich saleable copper concentrate containing 18 to 22% Cu and 50 to 60 g Au/t. This process does not require the use of cyanide.

A summary of the PEA results is provided below.

  • Average annual gold production of 238,000 ounces per annum for the first five years and averaging 196,000 ounces per annum over the mine life of 19 years, for a total of 3.72 million ounces of recoverable gold over the life-of-mine (LOM).
  • Average annual copper production of 53.5 million lbs for the first five years and averaging 49.4 million lbs per annum over the19-year mine life, totaling 938 million lbs of recoverable copper over LOM.
  • Total gold equivalent ounces produced over the 19-year mine life is 6.22 million.
  • Total operating cash cost of US $81/oz with copper as a by-product credit and US $446/oz gold on a co-product basis (copper cash cost is US $1.05/lb on a co-product basis), using metal prices of US $1,000/oz Au and US $3.00/lb Cu.
  • At metal prices of US $1,000/oz gold and US $3.00/lb copper the NPV is US $1.13 billion based on a 5% discount rate.
  • Project internal rate of return ("IRR") of 24.2%, with an approximate 3.3-year payback on an initial Project capital expenditure of US $509.4 million, at a gold price of US $1,000/oz and copper price of US $3.00/lb.

There has been no previous commercial mining activity at RVP and the proposed mine site footprint as defined by the PEA does not include any known protected heritage sites or archaeological occurrences and has been designed to minimize impact in the nearby communities of Rovina and Bucuresci. 

  • Three deep, vertical core holes for approximately 3,000 m were completed in 2010 to test for the depth extension of the Ciresata mineralization as the results of the PEA highlighted additional upside potential for the resource growth at Ciresata as essentially every drill hole bottomed in higher-grade gold and copper mineralization. The drill program was designed not only to test for the depth extension of the mineralization but also to provide infill drill hole data useful for upgrading the present resource category from inferred to indicated. The results of this drilling program have successfully met the objectives and have added significant depth extensions of gold and copper mineralization below previous drilling in addition to verifying and upgrading the grade tenor of the inferred resource estimate. Results of the three deep drill holes have added 280 to 300 m depth extension of Au-Cu mineralization below the previous drilling, and indicate that the deposit is still open laterally.

Highlight intersections from the 2010 deep-drilling program at Ciresata are as follows:

Drill hole From (m) To (m) Length (m) Au (g/t) Cu (%) Au-eq* (g/t)
RGD-16 142 933 791 0.63 0.14 0.92
Including 316 524 208 1.13 0.19 1.53
RGD-17 160 876 716 1.14 0.16 1.47
Including 216 460 244 1.70 0.22 2.15
RGD-18 221 930 709 0.63 0.14 0.92
Including 309 890 581 0.66 0.16 1.00
Including 320 483 163 0.74 0.15 1.02

* To estimate Au-eq (Gold Equivalent) a gold price of US $1,000 and a copper price of US $3.00/lb is used.

  •  Throughout 2010, the Corporation, through its wholly owned operating subsidiary in Romania, has maintained its proactive local stakeholder engagement program. The program includes local community hall public meetings, a public information centre and partnership programs with local NGO's (partly funded by the European Union) and community leaders to implement community-based projects. The good relations with the community have allowed unhindered surface access for drilling in the project area which requires permission from landowners. In addition, throughout the year the Corporation continued with its long lead time work activities for both EIA and SIA documentation that will be required for the permitting of the project.
  •  Using the base results of the PEA, the Corporation retained a consortium of State-recognized consulting groups to prepare detailed technical studies required to convert the Rovina Exploration License into a Mining License as per the norms of the National Agency of Mineral Resources ("NAMR"). These studies include preliminary evaluations of social and environmental impacts, risk factors, and economic benefits to be reviewed solely by the NAMR for Mining License designation. These documents have been completed, with additional follow up by documentation being submitted as requested the NAMR for their review. Acceptance and conversion of the Exploration License to a Mining License is anticipated to be in early 2011.


No fieldwork was completed in Hungary during the year and the Corporation will be terminating its activities within the country.

2011 Outlook

The Corporation's priorities are to continue to advance the RDM Gold Project towards a construction decision as well as to continue to advance and expand the resources at the Rovina Valley Project. The following lists the major objectives for 2011.

RDM Gold Project, Brazil

  • Complete an updated resource estimate, followed by a reserve estimate and Feasibility Study within the first quarter of 2011. 
  • Announce a construction decision within the first quarter of 2011 in preparation for targeted production in late 2012.
  • Finalize and secure the necessary project financing for construction of the project.
  • Continue exploration drilling (approximately 13,000 m) primarily on-strike following up on the positive results obtained to outline additional shallow resources for future growth and extend the mine life of the project.
  • Commence evaluation studies for the exploitation of deeper resources via an underground operation with the objective of adding approximately 50% more mineable material approximately half way through the open pit mining operation.

Rovina Valley Project, Romania

  • Obtain final approval for the conversion of the Exploration License to a Mining License.
  • Complete an initial planned drilling program of 20,000, which commenced in late 2010 with the primary objective of drilling a combination of in-fill holes and lateral extension holes on the Ciresata deposit in order to build upon the size of the deposit as well as to test satellite targets on the project. 
  • Advance the project to the pre-feasibility stage and complete an updated resource estimate.
  • Continue EIA and SIA programs throughout the year as well as all long-lead time programs that will be required for permitting of the project.
  • Initiate the detailed permitting process in order to put the project into production.

Further details on the Corporation and the individual projects can be found on the Corporation's website at

Mr. Titaro is the qualified person (as defined in National Instrument 43-101) overseeing the design and implementation of the present exploration programs. He is responsible for preparing the technical information contained in this news release.

About Carpathian

The Corporation is an exploration and development company whose primary business interest is developing near-term gold production on its 100% owned Riacho dos Machados Gold Project in Brazil, which is currently in the Feasibility Study stage, along with progressing its exploration and development plans on its 100% owned Rovina Valley Au-Cu Project located in Romania. On a company wide basis, the Corporation currently hosts 43-101 resources of 3.88 million ounces of gold in the measured plus indicated categories and 4.58 million ounces of gold in the inferred category, as well as 759.1 million pounds of copper in the measured plus indicated category and 663.1 million pounds of copper in the inferred category. 

The Riacho dos Machados Gold Project, which is in the final phase of a Feasibility Study, is targeted to produce in the order of 100,000 ounces of gold per annum, with construction targeted by management to be initiated in early to mid 2011 with an anticipated goal for the commencement of production in late 2012. The Rovina Valley Project will enhance the Corporations growth profile as a mid-tier gold producer.

Forward-Looking Statements: This press release includes certain statements that may be deemed "forward-looking statements". Forward-looking statements are frequently characterized by words such as "plan", "expect", "Project", "intend", "believe", "anticipate", "estimate", and other similar words, or statements that certain events or conditions "may" or "will" occur. All statements in this release, other than statements of historical facts, that address future exploration drilling, exploration activities and events or developments that the Corporation expects, are forward-looking statements. Although the Corporation believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. There can be no assurance that forward-looking statements will prove to be accurate, as results and future events could differ materially from those anticipated statements. The Corporation undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

Contact Information: Carpathian Gold Inc.
Dino Titaro
President & CEO
+1(416) 368-7744
+1(416) 260-2243 (FAX)
Carpathian Gold Inc.
Mike O'Brien
Manager Investor Relations
+1(416) 368-7744
+1(416) 260-2243 (FAX)
Paradox Investor Relations - Montreal
+1(514) 341-0408 or 1-866-460-0408
+1 (514) 341-1527 (FAX)
Seton Services, UK
Toni Vallen
+44 207 224 8468