Review of Carpathian's 2008 Exploration and Corporate Activity
January 22 2009 - 8:31AM
Marketwired Canada
Carpathian Gold Inc. (CPN:TSX) (the "Corporation" or "Carpathian") is pleased to
provide a review of the results, progress and achievements for 2008 and provide
an outlook for 2009.
Despite the global market volatility during 2008 and the uncertainties it
presented during the year for all companies, Carpathian accomplished all of its
2008 exploration and corporate goals and, as a result, achieved several major
milestones. These milestones center on the advancement of its gold-copper
porphyry discoveries on its 100% owned Rovina Valley Project in Romania and the
acquisition of the advanced stage Riacho dos Machados exploration/development
gold project in Brazil. This acquisition provides a second 100% owned
exploration/development project, which management is proceeding to evaluate as
to the feasibility of commencing development of an open-pit mining operation.
The near-term potential production profile of Riacho dos Machados will elevate
Carpathian to a mid-tier gold producing company while it continues to advance
and develop the Rovina Valley Project in Romania.
Highlights
Romania
- Discovery of third gold-copper porphyry, the Ciresata deposit, that is located
4 km south of the Colnic and Rovina porphyry deposits.
- Release of an updated NI 43-101 compliant resource estimate on the Rovina
Valley Project, resulting in a total Measured + Indicated Resource of 5.09 Moz
gold equivalent ("Au eq.") and a total Inferred Resource of 5.66 Moz Au eq. (see
press release dated November 17, 2008). This mineral resource represented an
increase of 180% in the total Measured + Indicated Au eq. ounces and a 54%
increase in the total Inferred Au eq. ounces as compared to the previous 2007
mineral resource estimate announced on May 29, 2007 (total Indicated Resource of
1.82 Moz Au eq. and a total Inferred Resource of 3.69 Moz Au eq.). Further
details of the 2008 mineral resource estimate are outlined below.
- The 2008 resource estimate includes enough contained gold-only ounces (3.07 M
ounces in the Measured + Indicated category and 3.89 M 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 indicated that the total resource size of this project has not yet
been fully defined and further immediate potential exists to expand the 2008
resource estimate.
- Each deposit has a higher-grade core of gold + copper mineralization which may
provide enhanced start-up economics and possible production-scale trade-off
options. A Preliminary Economic Assessment to evaluate the economic potential of
the project commenced in the fourth quarter of 2008 and is currently in
progress.
Brazil
- Acquisition of a 100% interest in the Riacho Dos Machados gold project located
in the state of Minas Gerais, Brazil. It is comprised of exploration licenses
and a Mining Concession that hosts a well maintained past producing open-pit
gold operation that is currently in a suspension mode and can be re-activated
quickly. This brown field project provides the potential for near-term gold
production.
- Results indicate that the gold mineralized zone is in the order of 2.0 km in
length and extends from surface to a depth of greater than 550 m. This gold
mineralized zone is larger in size than previously indicated and provides the
potential to expand on the 'Historical Resource Estimate' by Vale (non-43-101
compliant) which contained 560,000 ounces of gold at an average grade of 4.61
g/t gold (see press release dated October 31st, 2008 and d NI 43-101 Technical
Report on RDM dated February 29th, 2008 filed on SEDAR).
- Assay results from confirmation and extension drilling programs are confirming
the historical gold grades of the project that are in the order of 4.5 g/t Au.
The results also indicate that project is amenable to the expansion and
deepening of the open-pit with targeted average grades in the order of 1.5 to
2.2 g/t gold.
- Based on the positive results received to date, management's plan is to
commence open-pit mining within twenty four months to be followed up at a later
date with an underground mining scenario of the higher gold grades that are in
the order of 4.5 g/t Au. A NI 43-101 compliant Mineral Resource Estimate is
currently being prepared to be followed by a Preliminary Economic Assessment.
Hungary
The Corporation entered into a Joint Venture Agreement with Caracal Gold LLC
("Caracal"), an indirect wholly-owned subsidiary of Electrum Ltd., a private
company based in Denver, Colorado (see press release dated August 12, 2008).
Caracal has the option to earn up to an 80% joint venture interest in HUMEX Kft
("HUMEX"), a Hungarian corporation which is wholly-owned by Carpathian Gold
Limited ("CGL"), a subsidiary of the Corporation. HUMEX owns the Fuzerradvany
Concession and Kanszavar Exploration License covering mineral properties in
Hungary (the "Properties"). Caracal shall be the initial operator of the
Properties. To earn the 80% interest in HUMEX, Caracal must make a combination
of option payments to CGL and cash contributions to HUMEX in the aggregate
amount of US$1.25 million on or before the 36-month anniversary of the signing
of the Option Agreement. Once Caracal has earned its interest in HUMEX, CGL and
Caracal are required to fund their respective percentage interests of future
exploration/development budgets for the Properties through HUMEX, subject to
having their respective interests diluted if they do not provide their share of
funding. During the fourth quarter of 2008 Caracal completed a drilling program
on the Fuzerradvany Concession, which was comprised of 7 diamond holes for a
total of 2,417 m. Assay results from this program are pending.
The following summarizes in further detail the exploration activity and results
for Romania and Brazil.
2008 Exploration Activities and Results
The principal exploration activities in 2008 were centered on drilling, geologic
modeling for resource estimation, and project evaluations. A total of 26,000 m
of diamond drilling (95 drill holes) was completed in 2008, roughly split
between the two 100% owned exploration/development projects:
1. The Rovina Valley Project comprised of three gold-copper porphyry systems
discovered by the Corporation on its Rovina Exploration License in Central
Romania.
2. The Riacho Dos Machados ("RDM") gold project, located in Minas Gerais,
Brazil, was acquired in 2008 and includes an ex-Vale heap-leach gold mine closed
in 1997 with an historical (non-43 101 compliant) gold resource estimate.
Rovina Valley Project, Romania
- The discovery of the Ciresata Au-rich copper porphyry, which represents the
third potentially economic porphyry system on the project.
- 14,727 m of drilling (31 diamond drill holes) completed during 2008.
- Since 2006, 181 diamond drill holes for 71,375 m have been completed on the
project.
- PEG Mining Consultants Inc. ("PEG") was commissioned to complete a NI 43-101
resource estimate with results announced on November 17, 2008. This Resource
Estimate is based on the drilling results from each of the Colnic, Rovina and
Ciresata porphyry deposits, utilizing diamond drill hole data from the 2006,
2007 and 2008 drilling campaigns. The Mineral Resource Estimate reported used
different base case cut-off grades for each respective deposit that were
determined by giving consideration to the characteristics of each deposit,
envisioned mining methods, approximate mining and milling costs derived from
internal studies as well as comparable porphyry-type deposits, results from
early metallurgical test work and the reasonable potential for them to be
economic. Both the Rovina and Colnic porphyries are amenable to bulk open-pit
mining. The cut-off grade used to report the current mineral resource at the
Rovina Porphyry was based on a 0.30% Cu eq. This deposit contains gold and
copper mineralization at essentially a 1:1 ratio (g/t Au: % Cu). At the Colnic
Porphyry, which is a gold-rich copper porphyry, a 0.45 g/t Au eq. cut-off was
used. The Ciresata Porphyry, which is also a gold-rich copper porphyry is more
amenable to an underground bulk mining scenario and, consequently, a 0.70 g/t Au
eq. cut-off was used for the estimation of this resource. The gold and copper
equivalent grades for the cut-off values were calculated using a gold price of
US$675/oz and a copper price of US$1.80/lb.
The following tables summarize the total Mineral Resources for the project at
the base-case cut-off grades.
Rovina Valley Project: Total Mineral Resource Estimate
(as of September 30, 2008)
---------------------------------------------------------------------------
Resource Tonnage Au Cu Au eq(i) Gold Copper Au eq(i)
Category (Mt) (g/t) (%) (g/t) (Moz) (Mlbs) (Moz)
---------------------------------------------------------------------------
Measured
Rovina Deposit 12.6 0.40 0.33 1.01 0.16 92.0 0.41
Colnic Deposit 9.4 0.76 0.12 0.98 0.23 25.0 0.30
---------------------------------------------------------------------------
Total Measured 22.0 0.55 0.24 1.00 0.39 117.0 0.70
---------------------------------------------------------------------------
Indicated
Rovina Deposit 65.3 0.36 0.28 0.86 0.75 396.5 1.81
Colnic Deposit 105.8 0.57 0.11 0.76 1.92 245.1 2.58
---------------------------------------------------------------------------
Total Indicated 171.1 0.49 0.17 0.80 2.68 642.0 4.39
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Total Measured
+ Indicated 193.1 0.49 0.18 0.82 3.07 759.1 5.09
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Inferred
Rovina Deposit 35.1 0.33 0.25 0.78 0.37 192.0 0.88
Colnic Deposit 41.2 0.44 0.10 0.62 0.58 88.8 0.82
Ciresata Deposit 101.3 0.90 0.17 1.22 2.94 382.0 3.96
---------------------------------------------------------------------------
Total Inferred 177.7 0.68 0.17 0.99 3.89 663.1 5.66
---------------------------------------------------------------------------
- (i)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.
- 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 for 0.30% Cu. eq.
for the Rovina deposit.
- Rounding of tonnes as required by reporting guidelines may result in
apparent differences between tonnes, grade and contained metal content.
- The Ciresata Deposit hosted a significant number of tonnes above the cut-off
grade of 0.70 g/t Au eq that were not incorporated into the resource estimate
due to low drill hole density as they lay on the edges of the resource estimate
mineralization and at depth where the mineralization is still open. Essentially
every drill hole in Ciresata bottomed in 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
greater than 10 ppb gold and greater than 20 ppm copper. This anomaly is a high
priority drill target for extending the Ciresata mineralization laterally.
- A Preliminary Economic Assessment study commenced in the fourth quarter of
2008, evaluating primarily the extraction of the higher-grade gold and copper
mineralization for each deposit. At both the Colnic and Rovina Deposits this
mineralization comes to surface, whereas the Ciresata Deposit has continuous
zones of higher-grade gold and copper mineralization that persist at depth which
is favourable for an underground bulk mining scenario.
- Bench scale metallurgical test work, completed by SGS-Lakefield in 2007, on
each of the Colnic and Rovina deposits, indicates the utilization of a standard
cyanide-free, flotation process producing a saleable copper-gold concentrate
containing a high gold content. Depending on sample grade, copper concentrate
grades range from 20.3% Cu to 26.8% Cu containing gold grades ranging from 28.4
g Au/t to 97.6 g Au/t. Metallurgical test work is underway on the Ciresata
deposit and early results also indicate that this deposit is amenable to the
utilization of a standard cyanide-free, flotation process producing a saleable
copper-gold concentrate with gold recoveries in the order of +70% and copper
recoveries in the order + 90%.
- Work for incorporation into an EIA and SIA compliant study continued
throughout the year as well as the implementation of long-lead studies as
typically required for permitting of similar projects.
- Continuation and further development of community and social responsibility
programs were advanced during the course of the year.
Riacho Dos Machados Project, Brazil
- The 100% acquisition of this 22,000 ha project was completed on October 30,
2008. The property hosts a past producing mine that was operated by Companhia
Vale do Rio Doce ("Vale") as an open-pit heap-leach gold mine until 1997, with
maximum pit depths of approximately 60 m. Drilling by Vale defined
sulfide-bearing gold-mineralization below the present pit and localized oxide
gold mineralization along strike. The gold mineralization occurs within a
shear-zone hosted by Precambrian metasediments and metavolcanics.
- An operations office was established in the regional capital city of Belo
Horizonte.
- Necessary technical personnel were retained to advance the project to the
resource definition stage to be followed by an open-pit mine development plan.
Project evaluation work at RDM included:
- Computerization of historical diamond and reverse circulation drilling data
(364 drill holes for 33,500 cumulative metres) and underground channel sampling.
- In-house reviews of resource potential and mineability.
- Third party review of Environmental compliance status and permitting pathways
for re-starting mining.
- The Corporation completed a diamond drill program comprised of 64 drill holes
for 11,277 m. This drilling targeted deepening of the open-pit and immediate
strike extensions. In addition, re-sampling of drill core from 22 drill holes
completed by Vale was completed incorporating complete QA-QC protocols.
- Of the assay results reported to date, some highlight intersections include
(see press release dated November 4, 2008 and January 12, 2009):
10.9 m of 2.10 g/t Au
8.0 m of 6.95 g/t Au; including 5.6 m of 9.21 g/t Au
7.8 m of 4.75 g/t Au including 6.1 m of 5.99 g/t Au
14.9 m of 2.23 g/t Au
20.9 m of 1.67 g/t Au
13.0 m of 1.4 g /t Au; includes 4.0 m of 3.12 g/t Au
30.0 m at 2.01 g/t Au including 4.3 m of 7.68 g/t Au
13.9 m at 3.66 g/t Au including 4.6 m at 9.25 g/t Au
23.5 m at 1.23 g/t Au including 9.4 m at 2.53 g/t Au
16.0 m at 3.96 g/t Au including 2.8 m of 18.45 g/t Au
10.2 m at 3.75 g/t Au including 3.7 m of 5.64 g/t Au
Notes: Widths are approximate true thicknesses.
An update on further assay results from the 2008 drilling program
will be provided in the first quarter of 2009.
- Metallurgical test work utilizing CIL gold recovery methods is in progress to
verify historical results from Vale.
- Resource modeling and a NI 43-101 compliant resource estimate are currently in
progress. It is anticipated that this will be completed in the first quarter of
2009 in conjunction with a Preliminary Economic Assessment.
- EIA and SIA Studies have been commissioned to start in early 2009.
2009 Outlook
The Corporation's priorities are to continue to advance both the Rovina and the
RDM gold projects. Given the weak equity markets that have quickly developed as
a result of the global economic crisis, and the uncertainties that face all
companies, the Corporation is pursuing a cost saving strategy to ensure that the
assets of the Corporation are protected and shareholder value is maintained. To
this end, the Corporation has temporarily suspended all high cost field
activities, including drill programs on both the Rovina and RDM projects and
will continue to review and implement other cost savings. While cutting back on
higher cost activities in the short term, the Corporation will, however,
continue with the work necessary to achieve its objective of delivering a NI
43-101 mineral resource estimate on the RDM project and, completing Preliminary
Economic Assessment studies for each of the Rovina and RDM projects to continue
to enhance their value. Once all of the results from these studies have been
completed and received, the Corporation will assess what further work would be
required for each of the projects in the light of then market conditions for
future funding. In the meantime, all environmental base line work and social
programs will also continue on each of the Rovina and RDM projects.
Appointment of New Director
The Corporation is also pleased to announce the appointment of Mr. Julio L.
Carvalho to the Board of Directors effective January 19, 2009. Mr. Carvalho is
currently an executive director of Santa Elina Group in Brazil and the Chairman
and CEO of Rio Novo Holdings S/A, which owns two developing gold projects in
Brazil. Mr. Carvalho's previous experience, over 35 years in the Brazilian
mineral resource sector, included being the CEO and President of Peak Gold
Limited and the Executive Vice President of South and Central America for
Goldcorp Inc., and senior executive positions with Canico Resources Inc. and Rio
Tinto Brazil, where he worked for more than 33 years.
Further details on the Corporation and the individual projects can be found on
the Corporations website at www.carpathiangold.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 a mineral exploration company focused on gold exploration
primarily on its property in Romania as well as gold exploration and development
on its development-stage property in Brazil. The Corporation has 207,278,454
shares outstanding.
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, and 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.