January 07, 2014 13:48 ET

Carpathian Begins its Transition to become an Operating Company With its First Smelting and Pouring of Gold at the RDM Gold Project, Brazil

TORONTO, ONTARIO--(Marketwired - Jan. 7, 2014) - Carpathian Gold Inc. (TSX:CPN) (the "Corporation" or "Carpathian") is pleased to announce that on December 24, 2013 it completed its first gold smelt at the RDM gold project, Brazil (the "Project"), which is wholly owned by the Corporation's subsidiary, Mineração Riacho dos Machados Ltda. ("MRDM"). The Corporation has subsequently completed a second gold smelt and has poured its first doré gold bar of approximately 10.1 kg. Loaded carbon continues to be transferred from the CIL tanks to the ADR plant, where the gold will be stripped from the carbon and recovered in the electrowinning cells, on a routine basis. The Corporation anticipates that gold doré production can now commence and that it can be shipped on a regular basis, currently forecast at 100,000 ounces per annum over the life of the mine. This achievement is a major milestone in transforming the Corporation into a gold producing operating company.

During the ramp-up phase the plant has been operating on an intermittent basis due mainly to unusually severe precipitation for this time of year as well as to typical ramp-up procedures. The Corporation anticipates that the process plant will be ramped-up to approximately 8,400 tonnes per day in the coming weeks. As of December 31, 2013, over 58,000 tonnes have been processed with an average mill feed grade of 1.45 g/t gold.

As previously disclosed in its press release dated December 20, 2013, Macquarie Bank Limited ("Macquarie") extended its forbearance agreement in respect of its project loan facility (the "Facility") with the MRDM to January 3, 2014. To date, the additional funds drawn down under the Facility currently stand at $US 30 million. At present, additional funding for the Project to be able to continue producing and shipping gold remains entirely at the discretion of Macquarie and there is, therefore, no assurance that MRDM will have sufficient funds to continue its operations. While the forbearance agreement has not been formally extended, the Corporation continues to work closely with Macquarie in relation to all possible on-going options, including the strategic alternative process that remains underway, so as not to disrupt the production status of the Project.

While no exploration drilling was completed in 2013, generative exploration efforts have continued on the Corporation's Exploration License package that covers 40 km of the Riacho dos Machados greenstone belt straddling the RDM Mine, with the objective of extending the RDM mine life. Nine targets have been identified and include the following two targets defined in 2013 that were previously unreported:

Mata Da Roca 2 - Russo Target: It lies eight km south of RDM Mine defined by 3 km strike length gold-in-soil anomaly (>10 ppb Au with core >25 ppb Au) along a mafic-granite contact. Includes one drill hole, a scout diamond drill-hole, FMU-01, completed at the end of 2012 intersected 7.00 metres at 2.09 g/t gold starting at 21.00 metres down hole* This sizable target has only one drill hole and follow-up drilling is planned in 2014.

Cinco Mil North Target: It is situated 1.5 km north of RDM Mine defined from surface sampling in December 2013 with partial assay results returned. This target lies along strike of the RDM Shear Zone and within a contiguous Arsenic in soil anomaly. Highlights from surface grab and rock-chip samples include (g/t gold) 0.60; 0.78; 2.50; and 2.47 and cover a strike length of 200 metres. In addition hand-auger auger drilling has intersected 5.0 metres at 2.51 g/t gold (hole FTCM-09) and 4.0 metres at 1.10 g/t gold (hole FTCM-08)**. Further work will be required prior to any drilling in 2014.

* FMU-01 azimuth 270 degrees, declination -50 degrees, total depth 70.18 metres. Interpreted true width is 7.0 metres. Intersection calculation based on 0.30 g/t gold cut-off with maximum allowance of 2 consecutive metres at < 0.10 g/t gold.

** Assays reported from Cinco Mil North Target were performed by the company's RDM mine-site laboratory using industry standard sample preparation and 50 gram fire-assay with AAS finish. Blind QA-QC samples are routinely submitted. Assays from the Mata da Roca 2 Target are from the SGS Laboratory near Belo Horizonte with blind QA-QC samples routinely submitted.

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. 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.