Dec 24 2013
Carpathian Gold Inc. (the "Corporation" or "Carpathian") the Corporation, wishes to provide an update on its wholly owned subsidiary, Mineração Riacho dos Machados Ltda. ("MRDM"), which owns and operates the RDM gold project, Brazil (the "Project"). As announced on December 13, 2013, MRDM had received from SUPRAM, the state environmental agency, the Autorização Provisória de Operação ("APO"), a provisional permit, allowing it to proceed with the full operation of its gold producing facilities.
Despite several days this week of severe precipitation, which is unusual for this time of year, the process plant has been operating on an intermittent to variable reduced rate. The Corporation however still anticipates achieving its first gold pour prior to year end.
As previously disclosed in the Corporation's Q3 MD&A, MRDM had entered into a forbearance agreement with Macquarie Bank Limited ("Macquarie") under the terms of which Macquarie had agreed to provide up to $17 million, at its discretion, of additional financing under a "Tranche 3" of the Project Finance. This Tranche 3 was due to be repaid on November 29, 2013 and bears interest at 15% per annum. The forbearance has now been extended to January 3, 2014 and the funds drawn down thereunder now stand at $27.5 Million. The Corporation is working with Macquarie in relation to possible ongoing options. Additional funding still remains entirely at the discretion of Macquarie and there are therefore no assurances that MRDM will have sufficient funds to continue operations during production ramp-up.
As previously announced, the Corporation is conducting a review of strategic alternative options. The Corporation will continue to work with Macquarie while these strategic alternatives are still being pursued. The Corporation does not intend to disclose further details with respect to the process unless and until the Board of Directors has approved a specific transaction or such disclosure is otherwise appropriate.
About Carpathian
Carpathian is an exploration and development company whose primary business interest is developing near-term gold production at its 100% owned Riacho dos Machados ("RDM") Gold Project in Brazil. In addition it is also focussed on advancing its exploration and development plans on its 100% owned Rovina Valley Au-Cu Project ("RVP") located in Romania.
On a company wide basis, Carpathian currently hosts NI 43-101 proven plus probable reserves of 830,200 ounces of gold (proven reserves of 2,300 Kt at 1.30 g/t Au and probable reserves of 18,500 Kt at 1.23 g/t Au) and NI 43-101 mineral resources (inclusive of reserves) of approximately 8.1 million ounces of gold in the measured plus indicated categories (RVP: 405.9 million tonnes at 0.55 g/t Au for 7.19 million ounces, RDM: 19.36 million tonnes at 1.50 g/t Au for 0.936 million ounces) and approximately 0.9 million ounces of gold in the inferred category (RVP: 26.8 million tonnes at 0.38 g/t Au for 0.33 million ounces, RDM; 9.447 million tonnes at 1.93 g/t Au for 0.587 million ounces), as well as 1.4 billion pounds of copper in the measured plus indicated category (RVP: 405.9 million tonnes at 0.16% Cu) and 97.0 million pounds of copper in the inferred category (RVP: 26.8 million tonnes at 0.16% Cu) (see press releases dated July 17, 2012 and April 6, 2011 for further details on resources and reserves). The RDM Gold Project is targeted to produce in the order of +/-100,000 ounces of gold per annum with an anticipated goal for the commencement of production in the fourth quarter of 2013. The Rovina Valley Project will enhance Carpathian's growth profile as a mid-tier gold producer.
Mr. Dino Titaro is the qualified person (as defined in National Instrument 43-101) and is responsible for preparing the technical information contained in this news release.