Carpathian Gold Inc. (TSX:CPN) the "Corporation" or "Carpathian") is pleased to
announce an updated National Instrument ("NI") 43-101 Resource Estimate, as
provided by independent consultants NCL Brasil Ltda. ("NCL") on its 100% owned
Riacho dos Machados ("RDM") gold project located in Minas Gerais State, Brazil.
This resource estimate (the "2011 Resource Estimate") is an update to the NI
43-101 Resource Estimate previously announced on July 26, 2010 (the "2010
Resource Estimate"), and includes results from a database representing 444 drill
holes totaling 66,636 metres. Samples from auger holes and trenches totaling
1,386 m were also used in this estimate. The Corporation drilled 74 core holes
for 10,365 metres subsequent to the 2010 Resource Estimate.
2011 Resource Estimate Highlights include:
-- Measured plus Indicated mineral resource of 936,600 ounces of gold
(open-pit plus underground), an increase of 15% from the 2010 Resource
Estimate.
-- Inferred resource of 587,300 ounces of gold (open-pit plus underground).
-- Inferred mineral resource for the open-pit portion of the deposit of
240,700 ounces of gold.
"We are pleased with the new 2011 Resource Estimate and the continued success of
the high rate of conversion of upgrading the inferred resources to measured plus
indicated categories" commented Mr. Dino Titaro, President and CEO of the
Corporation. "This is the third resource estimate on the project and each
estimate confirms the excellent continuity of the gold mineralization and
significantly decreases the risks of the project development. While the RDM
feasibility study was commissioned for the conversion of the measured +
indicated resources to reserves for the open-pit portion of the deposit, we are
confident that there is a high probability of further conversion of the
remaining open-pit inferred resources at a later date once mining operations
have commenced, plus significant further organic growth for the project both
along strike and at depth".
The 2011 open-pit Resource Estimate is constrained by a pit shell obtained using
pit-optimizer software (Whittle 4X) applying approximate mining and processing
costs derived from the ongoing Feasibility Study, a US$1,100/ounce gold price
(less than approximate the two-year trailing average for gold price) and a 0.32
g/t Au cut-off grade. Below the resource open-pit shell, and excluding a
10-metre crown pillar, a higher-grade cut-off is utilized (1.0 g/t Au) to define
a resource with underground mining potential. This underground mining resource
includes considerations of potential economic parameters and mine engineering.
Table 1 below shows the details on the 2011 Resource Estimate.
Table 1
NI 43-101 Mineral Resource Estimate for RDM
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Open-Pit Measured Indicated
Ktonnes Au (g/t) Au (koz) Ktonnes Au (g/t) Au (koz)
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Oxide 274 1.13 10.0 1,965 1.08 68.1
Transition 219 1.29 9.0 1,515 1.35 65.8
Fresh Rock 1,573 1.64 82.7 13,762 1.57 695.6
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TOTAL 2,065 1.53 101.7 17,242 1.50 829.5
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Underground Measured Indicated
Ktonnes Au (g/t) Au (koz) Ktonnes Au (g/t) Au (koz)
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Total (Fresh
Rock)1 - - - 52 3.18 5.3
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Total Open-Pit &
Underground Measured Indicated
Ktonnes Au (g/t) Au (koz) Ktonnes Au (g/t) Au (koz)
----------------------------------------------------------------------------
Total 2,065 1.53 101.7 17,294 1.50 834.8
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Table 1
NI 43-101 Mineral Resource Estimate for RDM
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Open-Pit Measured plus Indicated Inferred
Ktonnes Au (g/t) Au (koz) Ktonnes Au (g/t) Au (koz)
----------------------------------------------------------------------------
Oxide 2,239 1.08 78.1 175 1.31 7.4
Transition 1,734 1.34 74.8 64 1.32 2.7
Fresh Rock 15,335 1.58 778.3 4,378 1.64 230.6
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TOTAL 19,308 1.50 931.3 4,617 1.62 240.7
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Underground Measured plus Indicated Inferred
Ktonnes Au (g/t) Au (koz) Ktonnes Au (g/t) Au (koz)
----------------------------------------------------------------------------
Total (Fresh
Rock)1 52 3.18 5.3 4,830 2.23 346.6
----------------------------------------------------------------------------
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Total Open-Pit &
Underground Measured plus Indicated Inferred
Ktonnes Au (g/t) Au (koz) Ktonnes Au (g/t) Au (koz)
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Total 19,360 1.50 936.6 9,447 1.93 587.3
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-- Base case cut-offs grades used in the mineral resource are 0.32 g/t Au
for the open-pit and 1.0 g/t Au for the underground.
-- Open-pit resources are constrained within a pit shell utilizing
estimated mining and processing costs and US$1,100/oz gold (see
parameters listed below). The US$1,100 gold price is less than the two-
year trailing average gold price.
-- Rounding of tonnes as required by reporting guidelines may result in
apparent differences between tonnes, grade and contained metal content.
The 2011 Resource Estimate includes the de-commissioned cyanide heap leach pile
from the previous mine operator (Vale) which includes 541,170 tonnes at an
average grade of 0.56 g/t Au. This resource was defined by an auger drill
program and is classified as an indicated resource incorporated into the
open-pit oxide zone. The Corporation intends to use this heap-leach pile for
process-plant commissioning as a low-grade stockpile.
Shown below are tables of cut-off grade versus grade-tonnages for the 2011
open-pit resource estimate (Table 2) and the underground resource estimate
(Table 3). These tables illustrate the high-grade content of the resource with
significant tonnages at 2x the base-case cut-off grades.
Table 2
Open-Pit Resource Cut-Off Grade versus Grade-Tonnages.
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Cut-Off Grade Measured + Indicated Inferred
Au (g/t) Ktonnes Au (g/t) Au (Koz) Ktonnes Au (g/t) Au (Koz)
----------------------------------------------------------------------------
1.10 10,885 2.08 727.4 2,824 2.16 196.4
0.95 12,679 1.93 786.5 3,256 2.01 210.6
0.80 14,574 1.79 839.8 3,678 1.88 222.4
0.65 16,482 1.67 884.3 4,060 1.77 231.4
0.50 18,168 1.57 915.6 4,405 1.68 237.8
0.35 19,218 1.51 930.3 4,608 1.62 240.6
0.32 19,308 1.50 931.3 4,617 1.62 240.7
----------------------------------------------------------------------------
Notes: 1) Rounding of tonnes as required by reporting guidelines may result
in apparent differences between tonnes, grade and contained metal content.
2) the resource is the total of the oxide, transitional and sulfide
material. 3) The calculation utilizes economic parameters and gold price of
US$1,100/ounce gold). Base-case cut-off grade is shaded.
Table 3
Underground Resource Cut-Off Grade versus Grade-Tonnages.
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Cut-Off Grade Indicated Inferred
Au (g/t) Ktonnes Au (g/t) Au (Koz) Ktonnes Au (g/t) Au (Koz)
----------------------------------------------------------------------------
2.00 47 3.32 5.0 2,721 2.82 246.7
1.75 51 3.21 5.2 3,267 2.65 278.3
1.50 51 3.20 5.2 3,782 2.51 305.2
1.25 51 3.19 5.2 4,252 2.39 326.7
1.00 52 3.18 5.3 4,830 2.23 346.6
0.79 52 3.18 5.3 4,941 2.20 349.5
----------------------------------------------------------------------------
Notes: 1) Rounding of tonnes as required by reporting guidelines may result
in apparent differences between tonnes, grade and contained metal content.
2) All resource is sulfide material. 3) Beneath the Resource Open-Pit Shell
(US$1,100/ounce gold). Base-case cut-off grade is shaded.
A series of Whittle 4X pit shells were performed utilizing the current open-pit
resource estimate within a range of gold prices of US$ 950 to US$ 1,140 per
ounce (Table 4). When comparing the 2010 open-pit Resource Estimate that was
calculated with a gold price of US$950 per ounce with the current 2011 open-pit
Resource Estimate, at the same gold price there is a significant increase in the
2011 measured plus indicated resources: 806,200 ounces to 915,900 ounces. The
gold price $1,100 per ounce utilized for the 2011 Resource Estimate pit shell is
less than the two-year average tailing gold price.
Table 4
A series of Whittle 4X Pit-Shells at Various Gold Prices
----------------------------------------------------------------------------
Gold Applied Measured + Indicated Inferred
Price Cut-Off
Grade
US$ Au (g/t) Ktonnes Au (g/t) Au (Koz) Ktonnes Au (g/t) Au (Koz)
----------------------------------------------------------------------------
$1,140 0.30 19,378 1.50 932.6 4,732 1.62 246.5
$1,100 0.32 19,308 1.50 931.3 4,617 1.62 240.7
$1,000 0.35 19,025 1.51 923.2 4,147 1.64 219.1
$950 0.37 18,774 1.52 915.9 3,660 1.65 194.7
$900 0.39 18,582 1.53 911.3 3,181 1.67 171.1
----------------------------------------------------------------------------
Notes: 1) Rounding of tonnes as required by reporting guidelines may result
in apparent differences between tonnes, grade and contained metal content.
Resource Growth Potential
The gold mineralization 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 strike-length
of approximately 30 kilometres covering an area of approximately 22,000 ha. The
most intensely explored zone and location of the current 2011 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 five (5)
priority exploration targets have been outlined north of the open-pit resource
area and one to the south.
The focus of the Corporation's drill programs thus far has been on resource
definition with in-fill drilling within the open-pit portion of the deposit for
incorporation into the reserve estimate contained in the Feasibility Study.
Further exploration drilling and evaluation is planned to extend the near
surface mineralization as well as test the other exploration targets along this
highly prospective shear zone.
In addition to the strike extension targets and defined satellite exploration
targets, the gold mineralization at RDM is open at depth. Once the open-pit mine
is in production the Corporation plans to evaluate the underground resource as
defined in the Preliminary Economic Assessment study completed in 2009, which
demonstrated a good probability of additional higher-grade ore from an
underground operation that could add to the overall operation both in terms of
extending the mine life of the project and increasing the annual gold production
rate by approximately 50%. Insufficient work has been completed at this time to
allow for this potential underground resource to be included in the Feasibility
Study. The grade of this underground mineralization is analogous to existing
underground operating mines in Brazil, such as Yamana Gold's Fazenda Brasileiro
and Jacobina mines.
Mineral Resource Estimate Parameters and Assumptions
The following data and methods were used to generate the 2011 Resource Estimate:
-- Mineral resources were estimated in conformance with the CIM Mineral
Resource and Mineral Reserve definitions referred to in National
Instrument 43-101, Standards of Disclosure for Mineral Projects.
-- The resource estimate database was based on 444 drill holes, totalling
66,636 metres, 35 Auger holes for 275 metres sampled and 1,136 metres of
trenches, where 1,107 samples were taken. This drilling is predominantly
diamond drill core, but does include Reverse Circulation drilling mainly
as pre-collars for diamond drill holes. As part of this total, and
following validation, the Corporation re-sampled drill core from 156
drill holes completed by Vale, a previous property owner, which
represents a total of 24,659 metres drilling.
-- Sample preparation and gold assays were conducted by independent ISO
Certified international laboratories. A thorough QA/QC program was in
place during the drill program, which included the insertion of
standards, duplicates and blanks at regular intervals totalling 17% of
the submitted samples along with a check assay program from a secondary
assay laboratory with 3% check assays. A review of the QA/QC database
showed adequate levels of quality for the Resource Estimate.
-- Densities were determined for a representative number of rock and
mineralization types using industry standard methods. A total of 116
determinations exist in the database. The average value for each modeled
alteration type was applied to the block model.
-- Detailed geologic logging and sectional interpretations led to the
development of a geologic model of lithology and alteration types. This
model is utilized to constrain the geometry of three-dimensional grade-
shell solids with a nominal cut-off of 0.30 g/t Au for the open-pit and
1.00 g/t Au for the underground. Geologic interpretation and modelling,
3D domain model building was carried-out by the Corporation's
exploration team and audited by NCL. The grades shells typically form
stacked elongated tabular bodies. In the open-pit, a main mineralized
solid (Main Zone) is overlain by a thinner hanging wall solid (Hanging
Wall Zone) with an intervening waste zone. For the underground model, a
single main-zone grade-shell solid was adopted with a localized hanging-
wall zone of widths on the order of 1 to 8 metres, averaging 2.7 metres.
-- A geologic/grade shell-model constrains the grade interpolation of a
block-model generated using Gemcom software. Analysis of gold grade
distributions and variography studies were utilized for grade
interpolation utilizing the Ordinary Kriging ("OK") method. Validation
of OK through various methods were completed prior to finalizing.
-- A pit optimizer software (Whittle Four-X) was used to define the
portions of the block model with reasonable prospects of being economic
using open-pit mining methods, as defined by the CIM code for mineral
resources. NCL adopted the following parameters for the Whittle
optimization:
- Gold price of US$1,100 /oz
- Mining operating cost: US$1.56/tonne for ore and US$1.40/tonne for
waste
- Plant operating cost including a CIL circuit: US$8.50 /tonne
- G&A: US$1.25/tonne ore
- Gold recovery (for all mineralization types based on metallurgical
test work completed by Carpathian) of 90%
- For the open-pit, pit slope angles of 29 degrees to 34 degrees for
the oxide zone degrees , 30 degrees to 47 degrees for the mixed zone
and 34 degrees to 50 degrees for the fresh rock domain were
utilized.
-- The underground resource estimate model was examined to justify the
portions of the block model that would support the necessary capital to
develop them. The portions that were too isolated or with insufficient
grade or tonnage for underground mining were categorized as waste.
-- The resource classification parameters for all models considers the
geologic model in context of gold-grade continuity and gold-grade
variography studies to determine the parameters of a search ellipsoid.
The requirement for indicated resources is two drill holes from within a
search volume of 40 metre radius along plunge and 36 metre across
plunge. Measured resources have half of this range, also requiring two
drill holes and inferred resources are defined with a search volume of
100m x 75 m, without restriction of number of drill holes.
Mr. Rodrigo Mello, MAusIMM, Senior Geologist with NCL is the independent
Qualified Person responsible for the Mineral Resource Estimate and has reviewed
this press release. The complete NI 43-101 compliant Technical Report will be
filed on SEDAR at www.SEDAR.com within 45 days.
Sample Protocol
Assay results are predominantly from a half-core split (sawn) NQ drill core and
sampled on a metre by metre basis through the mineralized zone and into
surrounding altered rock. In addition, Reverse Circulation ("RC") drilling
through the mineralized zone is sampled on a metre by metre basis and assayed
only when dry samples are collected. Samples were also collected from Auger
holes, in the decommissioned heap leach pile, and from channel samples, along
the wall of trenches crossing the mineralized zone. All samples collected from
RDM are prepared and assayed at the independent ISO Certified SGS laboratory,
located near Belo Horizonte, Brazil using industry standard fire assay
techniques for gold on 50-gram sample charges with AAS finish. Coarse blanks,
pulp blanks, pulp duplicates, and known gold standards are inserted on a routine
basis. Combined, they consist of 17% per cent of submitted samples. In addition,
on a periodic basis 3% of the crusher rejects are re-submitted and a minimum of
3% of the pulps will be analyzed at the ISO Certified ALS Chemex Laboratory near
Belo Horizonte, Brazil for check assays.
Mr. Titaro, P.Geo. is the qualified person (as defined in NI 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 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 Riacho dos Machados Gold Project, is targeted to produce in the order of
100,000 ounces of gold per annum, with construction targeted by management to be
initiated by 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.
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