TORONTO, ONTARIO–(Marketwire – Jan. 10, 2012) – Carpathian Gold Inc. (TSX:CPN) (the “Corporation” or “Carpathian”) is pleased to provide a review of the results and achievements for 2011 and its capital expenditure and exploration work programs and outlook for 2012 for which it has allocated a total budget of approximately $152 Million. The Corporation is pleased with the achievements it made in 2011 on its two wholly owned assets: 1) Riacho dos Machados Gold Mining Project (the “RDM Mine” or “Project”) in Brazil which is now in the mine construction phase and; 2) the Rovina Valley Project in Romania which is currently undergoing a Pre-feasibility Study. These two projects provide the means for the Corporation to achieve its goal of becoming a gold producer in the near-term and advance its project pipeline toward a gold production profile of a mid-tier mining company.
Despite 2011 being a year of very unsettled and turbulent markets the Corporation was able to raise significant equity funds enabling it to advance its two projects. These funds are utilized for the on-going exploration and Pre-Feasibility Study on the Rovina Valley Project as well as provide the equity contribution necessary towards the capital to construct the RDM Mine where the goal is to commence gold production by mid-2013. To help achieve this goal, the Corporation finalized in late 2011, a senior debt financing package dedicated for the construction of the RDM Mine.
In summary, the Corporation achieved the following in 2011.
RDM Mine, Brazil:
Rovina Valley Project, Romania:
The following is a brief overview of the 2011 objectives for the RDM Mine and the Rovina Valley Project along with summary results and/or progress developments on both projects.
RDM Mine, Brazil
For 2011, the Corporation established the following goals:
In April of 2011, the Corporation announced an updated Resource Estimate and the results of its Feasibility Study.
The 2011 Resource Estimate highlights include (see the Corporation’s press release of April 5, 2011):
Highlights of the feasibility study are as follows (see the Corporation’s press release of April 6, 2011):
Using near current spot prices of US$1,600 per oz of gold, the after-tax NPV based on a 5% discount rate is US$268.2 million with an IRR of 36.5%. With the release of the feasibility study results, the board of directors of the Corporation announced, on April 6, 2011 a decision to proceed with the development of the RDM Mine.
On November 28, 2011 the Corporation announced that it had received official notice to the effect that the Licenca Instalacao (“LI”), allowing for the construction of the RDM Mine had been granted. The Corporation originally announced the governmental approval for the construction of the Project on September 16, 2011, but was later advised that the COPAM (an environmental agency group) wanted to further review the technical data and consequently the construction activities at the Project were suspended for the Project until the approval of the license was granted and subsequently announced on November 28, 2011. While the suspension on the previous permission to proceed with construction of the Project was fairly short, it nonetheless resulted in an overall cumulative delay of the time line for construction and gold production. The work suspension happened at a time when the earthwork contractors would have been mobilizing. This delay resulted in limiting the work activity that could be carried out during the rainy season and the holiday season. The Corporation envisions that the RDM Mine will now commence production by mid-2013.
The Corporation’s goal to carry out an exploration drill program along strike of the open-pit deposit on several gold mineralized targets did not commence during the year, predominantly as a result of delays in obtaining drilling permits, which delays were related to obtaining the LI, and of the Corporation’s focus on getting the necessary permits required for the construction of the Project. This exploration drill program is now scheduled to start towards the end of the first quarter of 2012.
Rovina Valley Project, Romania
The Corporation set out the following objectives for 2011:
During 2011, the Corporation completed a series of drill programs for 77 core holes totaling 46,590 metres. The majority of this drilling, about 33,230 metres was completed on in-fill and lateral extension drilling on the Ciresata porphyry. At the Colnic porphyry 4,695 metres of in-fill drilling was also completed. Both of these porphyries are now drilled off for purposes of an updated resource estimate. In late 2011, in-fill drilling commenced on the Rovina porphyry and 2,110 metres was completed by the end of the year. An additional 7,300 metres will be required to drill off this porphyry (for the resource update) that will be carried out in early 2012. As indicated above, the 2011 drill program for resource updating purposes was budgeted at 35,000 metres, however because of positive drill results this program will now total approximately 48,000 m.
In addition to the above drilling for the resource update, 8 drill holes totaling 2,140 metres of geotechnical drilling was also completed at the proposed Rovina and Colnic open-pits as part of the geotechnical work program for the Pre-Feasibility Study.
During the latter part of 2011, the Corporation commenced a 15,000 metre exploration drill program to test satellite targets on the property. Five drill-holes totaling 4,415 metres were completed by the end of the year with a focus on testing potential extensions of the Ciresata deposit. The balance of this drilling program will be carried out during 2012 and will focus on new porphyry targets on the Rovina Exploration License.
Some highlight intersections from the 2011 diamond-drill program at the Ciresata gold-rich porphyry are as follows:
|Drill hole||From (m)||To (m)||Length (m)||Au (g/t)||Cu (%)||Au-eq* (g/t)|
|* To estimate Au-eq (Gold Equivalent) a gold price of US $1,000 and a copper price of US $3.00/lb is used. Metallurgical recoveries are not taken into account. This is consistent with the Au-eq. calculations the Corporation has used in its recent press releases for Ciresata. See the Corporations website at http://www.carpathiangold.com/ for drill hole locations and drill hole orientations.|
A consortium of leading engineering groups and specialists, led by AGP Mining Consultants Inc. (“AGP”), was selected in 2011 to complete a Pre-feasibility Study on the Project, specifically on the Ciresata, Colnic and Rovina porphyries. AGP was also retained to complete an updated resource estimate for the three porphyry deposits incorporating new drill hole data from 2010 to 2012. This new database will include an additional 46 step out and in-fill drill hole results at the Ciresata deposit, the in-fill drill results from the Colnic deposit and the on-going in-fill drilling results from the Rovina deposit. It is expected that the resource update will be completed in the 2nd quarter of 2012 with the Pre-Feasibility Study results announced in the 3rd quarter of 2012.
A consortium of Romanian certified consultants have been retained by the Corporation to complete the studies and provide a report required by the National Agency of Mineral Resources (“NAMR”) for conversion of the Rovina Exploration License to a Mining License. These studies include resource-reserve assessments, mining and processing evaluations, environmental-social baselines and risk assessments, and health & safety evaluations. The technical portion of the report were initially completed in early 2011 and were to be submitted to the NAMR; however, and in cooperation with the NAMR, the anticipated positive impact of the 2011 drill program that could increase the gold-copper resources at the Ciresata deposit led to a mutual agreement to include the 2011 Ciresata drill results in the Mining License Application prior to the conversion to a Mining License. This revised report work is near completion and it is expected that this report will be submitted to the NAMR by the end of the first quarter of 2012.
In addition to the technical fieldwork, the Corporation, through its wholly owned operating subsidiary in Romania, continued to maintain its proactive local stakeholder engagement programs. These included 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.
2011 Corporate Activity
At the Corporate Level the following achievements were realized in 2011.
The Corporation’s priorities are to expedite the construction and development of the RDM Mine as well as to continue to advance and expand the resources at the Rovina Valley Project. Additionally the Corporation will continue to evaluate any other opportunities that may add significant shareholder value.
The following lists the major objectives for each of the RDM Mine and the Rovina Valley Project for 2012.
2012 Objectives for the RDM Mine, Brazil
2012 Objectives for the Rovina Valley Project, Romania
Further details on the Corporation and the individual projects can be found on the Corporation’s website at www.carpathiangold.com andwww.sedar.com.
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.
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 Mining Project (“RDM Mine”) in Brazil, which is currently focusing on activities surrounding permitting and construction, 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 NI 43-101 resources of 4.0 million ounces of gold in the measured plus indicated categories and 4.5 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 RDM Mine is targeted to produce in the order of +/-100,000 ounces of gold per annum with an anticipated goal for the commencement of production by mid-2013. 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, except as required by law. 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.
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