Carpathian Gold in discussions with Macquarie Bank

2014-04-25 10:06 ET - News Release

Mr. Guy Charette reports

CARPATHIAN GOLD INC. UPDATE ON THE RDM GOLD MINE

Carpathian Gold Inc. has provided the following update on its RDM gold mine in Brazil. Recommissioning of the RDM mine processing plant, which commenced in mid-March following reinstatement of the autorizacao provisoria de operacao (APO or provisional operating licence), is proceeding.

As part of this recommissioning, gold production has begun and the corporation is pleased to report that the RDM mine has to date yielded a total of 3,055 ounces of gold and 900 ounces of silver, which have been shipped to the refinery. It is anticipated that the operation will gradually build up to the planned production target of approximately 8,000 ounces of gold per month, over the next several months, subject to completion of the recommissioning and plant performance.

However, as a result of the delays in the start-up of the mine, and the resulting delay in cash flow, the corporation's outstanding debt with Macquarie Bank Ltd. now stands at $154.5-million (U.S.). It is estimated that further financing will be required before the RDM mine becomes self-sustaining on a cash flow basis. Financing discussions with Macquarie Bank are continuing. In addition, the continuing efforts to pursue strategic initiatives in conjunction with Macquarie Bank, including various potential restructuring alternatives and the potential sale of the corporation or some of its assets continue. There is no guarantee that any of these initiatives will result in a satisfactory outcome.