Resource World Magazine

MI N I N G Carpathian Gold on schedule with mine construction in Brazil by Patrick Moore "This is a fantastic time for Carpathian. We are almost two-thirds complete, building our first gold producer here in Brazil." Carpathian Gold Inc. [CPN-TSX] CEO, Dino Titaro said as his team pour concrete, raise steel girders, haul and install the latest in mining technology on the Riacho Dos Machado Project (RDM) gold mine in Brazil's renowned mining state, Minas Gerais. The project is a standard open-pit, with crush, grind, carbon leach and ADR processing. The site is swarming like a colony of busy ants with over 1,300 people working round the clock to complete the 7,000 tonne per day processing plant, plus all the related buildings and camp. "It's a major transition for Carpathian – from an exploration company to a producing company at a very respectable rate of 100,000 ounces per annum," Titaro noted. The company acquired the property just four years ago and has put it on a fast track through reserves, feasibility, permitting and now construction. The company broke ground in November, and has a target production date for the end of the third quarter of this year. Total capital costs for the project are estimated at about US $160 million. Carpathian Gold designed the project using a US $950 per ounce gold price and has sold forward about 216,000 ounces at US $1,600 per ounce. Supervising all the various teams of specialists, consultants, engineers and workers at the construction site is COO, Dan Kivari, a senior mining executive with over 37 years of international experience. "We are ahead of schedule. So that's a very good indication that we got the right contractors and they're doing the right thing on the job." The property is readily accessible by paved road. Labor crews are supplied by nearby communities, and many local workers are being trained and employed. Electrical services are being upgraded to meet the demand. A new reverse circulation drill rig is drilling in the massive open pit. Ore is currently being stockpiled for the start up. All major equipment for the crusher systems and process plant are being delivered and erected. An assay laboratory is operational. Currently, the project has proven and probable reserves of 20 million tonnes grading 1.24 grams gold/tonne with a 90% recovery rate. RDM will produce about 100,000 ounces of gold for at least eight years and the Carpathian team is continuing to expand the resource. Randy Ruff, Executive VP Exploration, explains. "We have a series of exploration targets along the strike of the ore body which are high value targets. They are within trucking distance SEPTEMBER 2013 The ball mill is being placed into position at Carpathian Gold's Riacho dos Machados Project in Minas Gerais, southeast Brazil. Photo courtesy Carpathian Gold Inc. and even if they are 10,000 ounces, they have a significant financial value that can add to the mine life." Despite unsettled markets, Carpathian is well positioned to achieve its goals as a result of good cash control plus a debt loan facility of $90 million with Macquarie Bank. To date, the company has drawn down about $62.5 million. Analysts rate Carpathian highly. Christos Doulis, Mining Research Analyst with Stonecap Securities visited the project last November. "Once the RDM Mine has been brought into production, we should see a re-rating of Carpathian shares and it's one of the reasons that I am very bullish on the stock." Analyst, Michael Siperco, of Macquarie Capital Markets rates Carpathian to outperform. "While the macro environment has not helped, we believe the stock will re-rate back up towards the prior trading range even with a potential financing later in the year. We continue to advise investors to buy CPN ahead of initial production." Carpathian currently trades at the low end of a 52-week range of 17-39 cents per share with 555 million shares outstanding. While Carpathian is bringing the RDM Project into production, the next step in the company's growth is already on the books. Insiders at Carpathian refer to RDM as the company starter, but a massive gold project in the Rovina Valley of Romania (which the company is advancing to pre-feasibility stage) could well be the company maker. "First things first," says Dino Titaro, coming back to RDM. "We're on schedule. We're on budget. And we'll be producing that nice yellow metal soon." n Patrick (Paddy) Moore is a multi-media journalist, a frequent contributor to Resource World Magazine, Editor of Canadian Investor Magazine, and Creative Director of BTV: Business Television on BNN. Twitter @mooremedia_ca. www.resourceworld.com 27

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