TORONTO, ONTARIO, Oct. 13, 2009 (Marketwire) --
TORONTO, ONTARIO -- (Marketwire) -- 10/13/09 -- Carpathian Gold Inc. (TSX: CPN) (the "Corporation" or "Carpathian") is pleased to announce further infill drilling results from the ongoing 2009 Phase II Drill Program (the "Program") at its 100% owned Riacho Dos Machados ("RDM") Gold Project located in Minas Gerais State, Brazil. A total of 18,000 to 22,000 metres of drilling are planned for this Program, which follows the results from a NI 43-101 compliant Preliminary Economic Assessment (the "PEA Study") announced on August 12, 2009. To date, approximately 15,000 metres of infill drilling has been completed and the results are demonstrating good geologic and gold grade continuity both along strike and down dip with strong gold mineralization intercepted just below the existing shallow open-pit (maximum 60 m deep) mined by the previous operator, Companhia Vale do Rio Doce ("Vale"). This is shown by drill hole FRM-106 which intersected 17 m at 2.83 g/t Au approximately 53 m below the existing pit and drill hole FRM-102 which intersected 14 m at 2.30 g/t Au only 14 m below the existing pit.
The principle objective of the Program is to upgrade the open-pit Inferred Resources to the Measured + Indicated categories as well as extend its strike length for use in a feasibility study planned to commence this quarter and be completed in the first quarter of 2010. The Corporation is not only committed to this phase of the project and the development of the asset, but also to further developing the size and scope of the project over the next several months. This includes accessing the growth of the overall project from the on-strike potential of the known gold occurrences along a 14 km shear zone as well as incorporating an underground component to the open-pit resource as these could significantly increase the annual production level of the operation and the extension of the mine life.
The Phase II Drill Program commenced on May 23, 2009 and to date 111 drill holes have been completed for a total of approximately 15,000 m. On August 24, 2009 the Corporation reported the results from 14 drill holes. Results from an additional 55 drill holes have been received and are reported herein, with highlight assay intersections listed below. All of these results represent the portion of the mineralized zone that is considered to be accessible, as shown in the results of the PEA Study, through deepening of the existing shallow open-pit mined by the previous operator, Vale. The gold mineralization occurs in a shear zone with the proposed open-pit to be developed over a strike length of 1,800 m. A complete list of the assay results can be found at the end of this press release. A map showing the location of the drill holes completed can be found on the Corporation's website at www.carpathiangold.com.
i) North Pit Area (known as Area V)
Hole No. Intersection Au (g/t) Approx. depth below
length (m) surface(i) (m)
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FRM-91 6.9 4.63 82
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FRM-101 25.4 1.74 23
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Incl. 4.9 3.29
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FRM-102B 13.9 2.30 14
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Incl. 3.0 4.04
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FRM-104 10.0 3.45 55
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Incl. 2.0 12.83
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FRM-106 17.0 2.83 53
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Incl. 4.0 6.94
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FRM-111 15.2 2.43 24
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Incl. 5.6 4.02
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FRM-120 17.3 1.65 115
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Incl. 2.9 5.51
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FRM-131 10.5 1.54 43
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Incl. 2.6 4.66
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ii) Central Pit Area (known as Area IV)
Hole No. Intersection Au (g/t) Approx. depth below
length (m) surface(i) (m)
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FRM-94 9.9 1.38 69
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Incl. 4.0 2.59
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FRM-96 11.0 1.38 59
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Incl. 3.0 2.01
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FRM-126 6.9 1.82 102
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iii) South Pit Area (known as Area III)
Hole No. Intersection Au (g/t) Approx. depth below
length (m) surface(i) (m)
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FRM-73 12.2 1.52 120
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Incl. 3.8 3.92
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FRM-74 26.1 1.23 80
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Incl. 4.5 3.02
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FRM-85 20.6 1.15 140
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Incl. 5.9 2.43
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FRM-88 9.7 2.24 5
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FRM-93 19.2 1.25 20
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Incl. 3.6 2.22
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FRM-100 11.0 1.60 15
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FRM-103 8.0 1.56 30
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FRM-130 13.7 1.61 20
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Incl. 2.9 2.72
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Notes: Widths are approximate true thicknesses rounded.
(i) Approx. depth below surface equals depth below existing shallow (maximum
60 m deep) open pit.
"As shown from our prior results our infill drill program continues to demonstrate good grade continuity along strike and down-dip" said Dino Titaro, President and CEO. "Virtually every infill drill hole has intersected the mineralized zone where predicted from the resource geological and grade block models and is demonstrating that our conversion of Inferred Resources to Measured and/or Indicated should be very good. The results continue to show that we should be able to further enhance the robust nature of the Preliminary Economic Assessment announced August 12, 2009 due to the potential of possibly lengthening the mine life and improving the economics. We are continuing engineering and environmental work on the project to support our vision for a near-term open-pit, production time line in the second half of 2011. We remain committed to the development of this project as well as enhancing the size and scope of the overall project through additional exploration work along strike and the ability of bring in an underground component to the project during the open-pit operation".
Project Background
The RDM gold project is a 22,000 hectare land parcel comprised of 12 Exploration Licenses and one Mining Concession that covers a 20 kilometre long north-south shear zone. The Mining Concession hosts a past producing open-pit gold mine, which was previously operated by Vale between 1986 and 1997 from which oxide gold ore was mined to maximum depths of 60 m below the surface. The gold mineralization at RDM is shear zone hosted, within a package of Precambrian aged metamorphic rocks. This shear zone strikes 20 degrees and dips 40 to 50 degrees west. The gold mineralization is now known to be continuous over a strike length of greater than 1,800 m and open at depth to greater than 550 m at the RDM mine-site.
The Corporation announced the results of the initial NI 43-101 compliant Resource Estimate on May 18, 2009. This Resource Estimate utilized open-pit optimization software to constrain an open-pit resource and underground resource for material below the open pit using appropriate cutoff grades, costs, and US $800 USD/ounce gold price. This open-pit is 1,700 m in length and ranges from 60 m deep in the south extension to 270 m deep in Area III (middle to south part of existing open-pit).
The open pit resource includes (combined oxide, transition, fresh zones and 0.30 g/t Au cut-off):
- Measured + Indicated - 4.547 M tonnes at 1.84 g/t Au for 268,800 ounces Au
- Inferred - 15.164 M tonnes at 1.56 g/t Au for 762,700 ounces Au
The underground resource includes (1.0 g/t Au cut-off):
- Measured + Indicated - 0.201 M tonnes at 3.31 g/t Au for 21,400 ounces Au
- Inferred - 2.733 M tonnes at 2.84 g/t Au for 249,700 ounces Au
The combined open pit and underground resource includes:
- Measured + Indicated - 4.748 M tonnes at 1.90 g/t Au for 290,200 ounces Au
- Inferred - 17.897 M tonnes at 1.76 g/t Au for 1,012,400 ounces Au
The underground resource has a further geological potential of 12 million tonnes at 2.91 g/t Au for a total in-situ metal content of 1.12 million gold ounces as outlined in the Resource Report which is available on www.SEDAR.com.
On August 12, 2009 the Corporation announced the results of the PEA Study on the project which was based solely on the open-pit mineralization defined in a NI 43-101 Mineral Resource Estimate released on May 18, 2009. The open-pit mine design for the PEA was constrained, using a US $704 per ounce gold-price whittle pit-shell as a strategy for lowering the risk of the Project. This study can be found on www.SEDAR.com.
Highlights of the PEA Study include:
- Average annual production of 102,000 ounces of gold per annum over an initial 7.1 year mine life.
- Total operating cash cost of US$428 per gold ounce.
- Project after tax net present value ("NPV") of US$123.3 million based on a 5% discount rate and a gold price of US$900 per ounce.
- Project after tax internal rate of return ("IRR") of 32.0%, with a 2.9 year payback on Project capital expenditures, at a gold price of US$900 per ounce.
The Project will be a conventional open pit mine with down-the-hole drill rigs and blasting, backhoe excavators, and conventional haul trucks. The processing operation will include crushing the ore to minus 19 mm and processing it in an industry standard carbon in leach and ADR (adsorption, desorption, and recovery) plant followed by a detoxification process prior to placing the tailings in an impoundment area. Based on metallurgical test work, the gold recovery is estimated at 90%. The open pit mining operation will be at a rate of 6,000 tonnes per day with a life-of-mine average plant feed grade of 1.65 g/t gold over a mine life of 7.1 years. The PEA Study has also demonstrated a good probability of additional higher grade ounces from an underground operation that could add substantially to the overall operation; both in terms of extending the mine life of the project and significantly increasing the annual production rate up to another 50% (see PEA Study on www.SEDAR.com). The Corporation will be further evaluating and accessing this underground component as it advances the feasibility study.
According to the cautionary statement required by NI 43-101, it should be noted that this assessment is preliminary in nature as it includes inferred mineral resources that cannot be categorized as reserves at this time and as such there is no certainty that the preliminary assessment and economics will be realized.
In additional to the drilling program being conducted on the project, with results reported herein, the Corporation has commenced some of the activities required for a feasibility study which is planned to be completed in the first quarter of 2010. Environmental work and permitting is on-going. It is expected that the Licensa Previa, or Preliminary License, will be received this quarter, which will allow the Corporation to commence earthworks construction on the project. It is anticipated that the Installation License will be obtained in the first quarter of 2010, which will allow construction to begin on the project. The Corporation has initiated discussions on project financing mechanisms with a view to minimizing equity dilution and meeting our project time lines.
Sample Protocol
Assay results presented in this news release are half-core from split NQ drill core which have been 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 meter by meter basis and assayed only when dry samples are collected. Drill holes denoted with an (ii) in Table II below are RC drill holes sampled through the gold mineralized zone. All samples collected from Brazil are prepared and analyzed 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. They consist of 20% 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 is the qualified person (as defined in National Instrument 43-101) overseeing the design and implementation of the present exploration programs.
