Carpathian Gold Inc.
CNSX : CPN

Carpathian Gold Inc.

May 09, 2016 08:18 ET

Carpathian Gold Inc Announces Cornerstone Investment From Forbes and Manhattan

TORONTO, ONTARIO--(Marketwired - May 9, 2016) - Carpathian Gold Inc. (CSE:CPN) (the "Corporation" or "Carpathian") is pleased to announce that it has agreed to a private placement into the Corporation whereby Forbes & Manhattan Resources Inc. ("Forbes") and its associated entities will subscribe to a private placement (the "Private Placement") of units (the "Units") for a minimum amount of ten million dollars (CAD$10,000,000) to advance its Rovina Valley Gold Project in Romania.

Rovina is the second largest gold deposit in Europe holding measured and indicated resources of 7.2 million ounces of gold and 1.4 billion lbs of copper. Rovina is only 17km from Eldorado Gold's rapidly developing Certej gold project. The Corporation and its board of directors believe that the Private Placement will provide it with both significant funding for its Rovina Valley Project and that Forbes' involvement with bring significant financial depth as well as the management expertise that will be required going forward.

Guy Charette, Carpathian's Interim Chief Executive Officer, stated "We are extremely excited about this opportunity and our future involvement with Forbes and our Rovina Valley project." Scott Moore, Chief Operating Officer of Forbes, added "Forbes has a long track record of identifying and unlocking value in gold projects globally such as Sulliden Gold in Peru, Avion Gold in Mali, and in Brazil, Desert Sun Mining and more recently Belo Sun Mining. We are excited to be involved in a project such as Rovina and look forward to unlocking the value for all Carpathian shareholders. Forbes's in house engineering, geological and metallurgical expertise has decades of experience in multiple countries in Eastern Europe and the Former Soviet Union including Ukraine, Russia and Romania with a deep understanding of the social and political challenges in permitting a mine in these jurisdictions."

Each Unit will consist of one (1) common share of the Corporation ("Common Share") and one-half (0.5) of a common share purchase warrant ("Warrant") at a subscription price of CAD$0.07 per Unit. This subscription price represents approximately a 250% premium to the Common Shares' 20 day volume-weighted average price as of the close of trading on Friday, May 6, 2016.

Each whole Warrant will entitle the holder to acquire one (1) Common Share at a price of CAD$0.12 for a period of two (2) years from the date of issuance. However, the Warrant exercise period may be accelerated if the Common Shares trade at a price above CAD$0.15 for a period of 20 consecutive trading days. After having given effect to the private placement but prior to giving effect to the exercise of the Warrants, Forbes and its associated entities will own approximately 15.75% of the outstanding Common Shares based on the current outstanding Common Shares of 764,364,355. After giving effect to the exercise of the Warrants, Forbes and its associated entities will own approximately 22% of the outstanding Common Shares. As part of the Private Placement, Forbes will be entitled to appoint that number of additional directors in order to provide it with a majority on the Corporation's board of directors.

Closing of the Private Placement, which is anticipated to occur on or about May 18, 2016, is subject to the approval of the Canadian Securities Exchange (the "CSE") and the entering into of a subscription agreement in respect thereof, which will include the agreed terms and conditions and other customary conditions, representations, warranties, covenants, indemnities and other agreements of the parties.

Origin Merchant Partners acted as financial advisor to Carpathian with respect to the transaction.

About Carpathian

Carpathian is an exploration and development company whose primary business is focused on advancing its exploration and development plans on its 100% owned Rovina Valley Au-Cu Project located in Romania.

Forward-Looking Statements: Statements and certain information contained in this press release and any documents incorporated by reference may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation which may include, but is not limited to, information with respect to the Corporation's expected production from, and further potential of, the Corporation's properties; the Corporation's ability to raise additional funds; the future price of minerals, particularly gold and copper; the estimation of mineral reserves and mineral resources; conclusions of economic evaluation; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; capital expenditures; success of exploration activities; mining or processing issues; currency exchange rates; government regulation of mining operations; and environmental risks. Often, but not always, forward-looking statements/information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements/information is based on management's expectations and reasonable assumptions at the time such statements are made. Estimates regarding the anticipated timing, amount and cost of exploration and development activities are based on assumptions underlying mineral reserve and mineral resource estimates and the realization of such estimates are set out herein. Capital and operating cost estimates are based on extensive research of the Corporation, purchase orders placed by the Corporation to date, recent estimates of construction and mining costs and other factors that are set out herein.

Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Carpathian and/or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include: uncertainties of mineral resource estimates; the nature of mineral exploration and mining; variations in ore grade and recovery rates; cost of operations; fluctuations in the sale prices of products; volatility of gold and copper prices; exploration and development risks; liquidity concerns and future financings; risks associated with operations in foreign jurisdictions; potential revocation or change in permit requirements and project approvals; competition; no guarantee of titles to explore and operate; environmental liabilities and regulatory requirements; dependence on key individuals; conflicts of interests; insurance; fluctuation in market value of Carpathian's shares; rising production costs; equipment material and skilled technical workers; volatile current global financial conditions; and currency fluctuations; and other risks pertaining to the mining industry. Although Carpathian has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking information contained herein or incorporated by reference are made as of the date of this presentation or as of the date of the documents incorporated by reference, as the case may be, and Carpathian does not undertake to update any such forward-looking information, except in accordance with applicable securities laws. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers are cautioned not to place undue reliance on forward-looking information. The forward-looking information contained or incorporated by reference in this document is presented for the purpose of assisting shareholders in understanding the financial position, strategic priorities and objectives of the Corporation for the periods referenced and such information may not be appropriate for other purposes.

The CSE does not accept responsibility for the adequacy or accuracy of this news release.

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