Carpathian Provides Update on Mine Construction and Development Progress on the RDM Project, Brazil "Remains on track with 2013 Production"

TORONTO, ONTARIO--(Marketwire - Oct. 1, 2012) - Carpathian Gold Inc. (TSX:CPN) (the "Corporation" or "Carpathian") is pleased to report that it is in the process of finalizing documentation with Macquarie Bank Limited to increase the Project Loan Facility for its wholly owned Riacho dos Machados Gold Project (the "Project" or "RDM Project"), Brazil from gross proceeds of US$80 Million (see press release dated January 10, 2012) to gross proceeds of US$90 Million. This increase in the Project Loan Facility is to cover off a previous funding gap that existed on the Project. With this increase, the Corporation is funded for the construction and development of the Project. To date in 2012 the Corporation has spent approximately US$40 million of its own equity and has committed an additional US$35 million to the Project from cash it has on hand. The overall initial CAPEX budget for 2012/2013 for the Project currently remains the same at approximately US$160 Million.

The following provides an overview progress update on the development of the Project as of the date of this press release.

• The Project remains on track with the overall construction and development time-line schedule for gold production in the second half of 2013. Approximately 45% of the Project is completed to date. Essentially all major contract items have been signed off or ready for sign-off.
  
  
• Optimized mine production plan has been completed which shows approximately 100,000 ounces of gold production on an annual basis, scheduled to commence in the second half of 2013. The process plant start-up is still scheduled for June/July 2013.
  
  
• Earth works for the process plant infrastructure areas are 95% complete and ready for the installation of civil works followed by the erection of the structural steel and installation of the 9,000 tpd crushing and grinding line equipment, which is on site.
  
  
• The earthworks for waste rock stockpile area is completed and is receiving the pre-strip material and pre-production waste rock from the open pit area that is currently being excavated by contract mining.
  
  
• Hiring and basic training programs for the project personnel from the local region are virtually completed. All senior project staff members have been hired.
  
  
• The owner mine fleet and excavation equipment is on site. The ADR plant is being shipped to site as per schedule. Two Atlas Copco sampling drills are in transit to the site as per schedule.
  
  
• Engineering and design plans for the lining of the tailing impoundment area, which is an extra scope for the Project, have been completed. Construction of the tailing dam and impoundment area is scheduled to commence in October.

With essentially all major contract items signed off and/or ready to sign off, the overall Project budget is being optimized and updated monthly based on work completed and committed contracts to incorporate the additional scope of environmental work and the lining of the tailings impoundment area. The Project budget is monitored and adjusted where appropriate on a monthly basis to best incorporate the additional scope items to the Project.

Two on-strike exploration targets are currently being drill tested; Cinco Mil, approximately 2 km north of the open-pit and Mato da Roca 2, approximately 13 km south of the open-pit. Assay results are pending and will be reported when available. Several other targets have been identified on the Project and will be evaluated at a later date. The objective of the drill programs is to identify shallow open pit material to truck to the mill facility for either expanded yearly production and/or extended mine life.

The Corporation will continue to post regular updates on its website on the construction and development advancement of the Project.