Carpathian Gold Inc. (the "Corporation" or "Carpathian") is pleased to provide an update on its progress towards completion of its wholly owned Riacho dos Machados Gold Project ("RDM" or "Project") located in the state of Minas Gerais, Brazil.
A video that shows the development of the Project as of the end of April is available on the Corporation's website at www.carpathiangold.com.
Project Construction and Development
- Development of the Project remains on schedule for gold production, expected to commence by the end of the 3rd quarter of 2013.
- The Project will produce approximately 100,000 ounces of gold on an annualized basis for an initial period of +8 years.
- As of the end of May, the construction and development of the project is approximately 82% complete with a peak work force of approximately 1,300 people. To date there has been approximately 2.0 million man-hours of work on the Project with no loss time injuries.
- The Project will treat 7,000 t/d of ore from an open pit operation utilizing a standard crush, grind, CIL and ADR processing facility. The extraction rate of the mine for the combined waste plus ore will be about 2.1 million tones per month.
- The gold production line (crushing to smelting) is well advanced with crushers running and being commissioned.
- Two new reverse circulation drill rigs dedicated for ore control and short-term mine planning are in operation for use for grade control procedures. Ore is currently being stockpiled for the start-up of the process plant.
- Waste removal is progressing at full capacity and stockpiling of waste is within the planned Project schedule.
- The tailing dam and impoundment area construction is nearing completion and will be ready to receive water for the operation this month.
- The assay laboratory is fully functioning and treating approximately 250 samples per day for ore grade control purposes.
"This is an exciting time for Carpathian as the RDM Project is now nearing its scheduled completion of construction in order to commence gold production and be the next gold producer in Brazil", said Chairman and CEO, Mr. Dino Titaro. "We commenced grubbing and clearing of the site less than 11 months ago with expected gold production by the end of the third quarter of this year. The mine building and operating experience of our on-site management team and our employees and contractors has allowed us, to date, to progress the Project on schedule within a short construction time line."
"While the price of gold has significantly declined over the past few months and is currently meeting resistance at the $1,400 level, we are fortunate that the Project was designed using a $950 gold price and that we had entered into protective measures for the Project, including the selling forward of approximately 216,000 ounces of gold at $1,600 per ounce. We also have a loan facility arrangement with Macquarie Bank for US $90 million to build the Project and to date we have only drawn down approximately $62.5 million dollars with the scope to scope project budget remaining on track".
When the Project is in its initial production phases, the Corporation will provide guidance as to the gold production forecast for 2013 and its forecasted cash cost and total cash cost. On an annualized basis, it is expected that the total cash cost for the project will be below industry average.
Further details on the Corporation and a video link on the development progress of the RDM construction can be found on www.carpathiangold.com.
Mr. Titaro is the qualified person (as defined in National Instrument 43-101) overseeing the design and implementation of the present exploration programs. He is responsible for preparing the technical information contained in this news release.