Carpathian Gold Inc.
TSX : CPN

Carpathian Gold Inc.

January 12, 2011 06:00 ET

Carpathian Strikes Again in Romania: 664 m of 0.86 g/t Au & 0.17% Cu, Including 213 m of 1.24 g/t Au & 0.24% Cu

TORONTO, ONTARIO--(Marketwire - Jan. 12, 2011) - Carpathian Gold Inc. (TSX:CPN) (the "Corporation" or "Carpathian") is pleased to provide the results from the first hole of a planned 20,000 m drill program on the Corporation's 100% owned Rovina Valley Project ("RVP") in west-central Romania. The RVP includes three Au-Cu porphyries discovered by the Corporation with the focus of the 2011 drilling program on the Au-rich Ciresata Porphyry deposit. During 2010, the Corporation completed a three hole, deep-drilling program in this deposit which encountered long intercepts of excellent Au-Cu mineralization and added approximately 280 to 300 m of depth extension below the previous drilling and demonstrated that the deposit is open laterally and at depth. The 2011 drill program has been designed as a follow up to define the limits of the Ciresata deposit, upgrade the inferred resource to the measured plus indicated resource categories, as well as test satellite targets.

Core hole RDG-19 is the first drill hole of the 20,000 m drill program and was drilled in the western part of the Ciresata Au-Cu porphyry deposit (as presently known) in an area with very limited information at depth. Highlight intersections from this hole are shown below.

Drill hole From (m) To (m) Length (m) Au (g/t) Cu (%) Au-eq* (g/t)
RGD-19** 109 733 664 0.86 0.17 1.20
Including 173 386 213 1.24 0.24 1.73
also 289 337 48 1.59 0.29 2.19
             
* To estimate Au-eq (Gold Equivalent) a gold price of US $1000 and a copper price of US $3.00/lb is used. This is consistent with the Au-eq. calculations the Corporation has used in its recent press releases for Ciresata.
** RGD-19 located on drill fence 1060N and drilled vertical to 838.0 m depth; drill hole location is shown on drill hole location map at www.carpathiangold.com.

"We are very pleased with the results of this initial drill hole of our 2011 drill program at the Ciresata porphyry and look forward to further drill results," said Dino Titaro, President and CEO of Carpathian. Mr. Titaro adds, "This first hole for 2011 is a very important one as it was drilled in an area with limited information and demonstrates excellent continuity and extension of higher grade Au-Cu mineralization towards the southwestern portion of the deposit. We believe that the 2011 drill program could add significantly to the size of this deposit and provide a good basis for pre-feasibility/feasibility studies at the Rovina Valley Project in 2011."

The Ciresata porphyry system is a blind deposit that begins 40 to 140 m below surface. Drill hole RDG-19 is the first of approximately 25 drill holes planned for the 2011 drill program. RDG-19 is a vertical hole that was drilled in a part of the deposit with only shallow angle holes and limited information. This hole intersected a high-grade zone of 213 m of 1.24 g/t Au and 0.24% Cu. This zone correlates with, and extends 130 m southwest, a high-grade zone intersected in drill hole RGD-17 of 244 m of 1.70 g/t Au and 0.22% Cu (see the Corporation's Press Release dated September 8th, 2010).

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.

RVP Background Information

RVP is comprised of three Au-Cu porphyry systems (Rovina, Colnic and Ciresata) discovered by the Corporation. 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 ("2008 Resource"). This resource estimate is based on the drill results from each of the 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 potential total resource of this project has not yet been fully defined and further potential exists to expand the current resource estimate in the near term. 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 and will be tested as part of the 2011 drilling program.

A detailed Preliminary Economic Assessment ("PEA") was released on March 23, 2010. The PEA was completed by 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.

According to the cautionary statement required by NI 43-101, it should be noted that this PEA is preliminary in nature as it includes inferred mineral resources that cannot be categorized as reserves at this time and as such there is no certainty that the preliminary assessment and economics will be realized. The full Study of the PEA is available on www.SEDAR.com.

Sample Protocol

All samples collected from any program in Romania are prepared and analyzed at the independent ALS Romania SRL Laboratory in Gura Rosiei, Romania, owned and operated by ISO Certified ALS-Chemex Laboratory, using industry standard fire assay techniques for gold on 50-gram sample charges with AAS finish. Copper is analyzed using the industry-standard method of aqua-regia digest on a 0.40-gram sub sample with an AAS finish. Coarse blanks, pulp blanks, pulp duplicates, core twins and certified gold and copper standards are inserted on a routine basis. They consist of 15 per cent of submitted samples. In addition, coarse rejects from 3% of the samples are periodically re-submitted for analysis. For the current drill program a minimum of 3% of sample pulps are analyzed at the ISO Certified OMAC Laboratory in Ireland, for check assays. The drill assays reported in this press release are from split HQ and NQ size diamond core with the remaining half retained for reference. All holes at the Ciresata deposit are sampled at one metre intervals through the mineralized zone and two-metre intervals in the upper barren zone.

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 Corporation's 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.

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

Contact Information

  • Carpathian Gold Inc.
    Dino Titaro
    President & CEO
    +1 (416) 368-7744
    +1 (416) 260-2243 (FAX)
    or
    Carpathian Gold Inc.
    Mike O'Brien
    Manager Investor Relations
    +1 (416) 368-7744
    +1 (416) 260-2243 (FAX)
    info@carpathiangold.com
    www.carpathiangold.com
    or
    Paradox Investor Relations
    Montreal
    +1 (514) 341-0408 or 1-866-460-0408
    +1 (514) 341-1527 (FAX)
    info@paradox-pr.ca
    or
    Seton Services, UK
    Toni Vallen
    +44 207 224 8468
    toni@setonservices.co.uk