Carpathian’s RDM Looks Promising

VANCOUVER — In just a year and a half, Carpathian Gold (CPN-T, CPNFF-O) has delineated a resource and completed a scoping study for its Riacho dos Machodos (RDM) gold project in Brazil.

The project, which is in eastern Brazil’s Minas Gerais state, hosts 4.6 million measured and indicated tonnes grading 1.84 grams gold per tonne, as well as 15.2 million inferred tonnes averaging 1.56 grams gold within an open-pit shell. Carpathian bought the project in March 2008, defined the initial gold resource 14 months later, and now has already incorporated that resource into a scoping study that shows reasonable economics.

The study considered an open-pit operation mining 6,000 tonnes grading 1.65 grams gold on average, daily, to produce just over 100,000 oz. gold annually. Resources defined to date would support such an operation for 7.1 years and the mine would create a pit 1.7 km long that would be 600 metres deep in the south extension and slope upward to 270 metres depth in the middle.

Ore processing would be conventional: crushing followed by carbon-in-leach and adsorption-desorption and recovery. Gold recovery is estimated at 90% and the strip ratio averages 8.9:1.

For an initial capital investment of US$112.9 million, Carpathian could build a mine able to produce an ounce of gold for US$428. Sustaining capital over the mine’s lifespan boosts capital requirements to US$125.9 million. Based on a gold price of US$850 per oz., the project carries a pretax net present value of US$119.8 million, using a 5% discount rate, and a 31.4% pretax internal rate of return. According to the study, Carpathian would be able to repay its investment in 3.2 years.

News of the study left Carpathian’s share price unchanged at 30¢. The company has a 52-week trading range of 5-35¢ and 259 million shares outstanding.

Carpathian is currently advancing an infill and expansion drill program. The infill efforts should upgrade inferred resources ahead of a feasibility study; expansion drilling is targeting deeper mineralization that could still be mined by open pit, as well as in both directions along strike.

The project also hosts an underground resource, which Carpathian plans to evaluate further once the open-pit operation is established. The resource is not yet large — 201,000 measured and indicated tonnes grading 3.31 grams gold plus 2.7 million inferred tonnes averaging 2.84 grams gold — but the company believes the sulphide resource could be significant.

The RDM gold deposit is part of a 20-km-long, north-south-trending shear zone. Carpathian is exploring around and underneath the pits left behind from an earlier operation: between 1989 and 1997, Vale (VALE-N) operated an open-pit mine at RDM, producing 155,000 oz. gold from oxide ore.

RDM is a shear-related lode gold deposit, with gold hosted primarily as disseminated mineralization associated with zones of hydrothermal alteration related to district-scale shear zones that cut the greenstone sequence. The oxide gold zone transitions abruptly at 30 to 40 metres depth into a sulphide gold zone.

Carpathian is hopeful it can find further areas of mineralization on the 220-sq.-km property. During its time mining in the area, Vale identified more than a dozen outlying gold targets; two of those targets are of particular interest.

Confisco is an area at the northern end of the RDM shear zone. Two trenches there hit significant gold, including 25 grams gold over 1-to 1.5-metre widths, and then four of five shallow reverse-circulation (RC) drill holes returned gold grading better than 1 gram. And at Passagem Nova, 10 km east of the old mine, mineralization is not the expected shear-related kind but instead seems to relate to an intrusive body that spawned gossanous gold-copper veins and stockwork veinlets. Carpathian found assay results for two historic RC holes; both returned promising intercepts but the area has seen no recent work.

And in other Carpathian news, the company says it is close to completing another scoping study, this one for its Rovina gold-copper project in Romania. Results from the study are expected before the end of September. Rovina hosts 193.1 million indicated tonnes grading 0.49 gram gold and 0.18% copper, as well as 177.7 million inferred tonnes averaging 0.68 gram gold and 0.17% copper in three porphyry deposits.