Mr. Dino Titaro reports

CARPATHIAN TEMPORARILY SUSPENDS CONSTRUCTION OF RDM GOLD PROJECT IN BRAZIL AND AMENDS TERMS OF "BOUGHT DEAL" FINANCING

Carpathian Gold Inc. has learned of a decision by COPAM, one of the Brazilian environmental authorities having jurisdiction over its RDM gold project situated in Minas Gerais state, Brazil, to attach a condition to the recently granted ad referendum licence to install (AR LI) to the effect that the company's wholly owned subsidiary, Mineracao Riacho dos Machados Ltda. (MRDM), should not start any installation work on the project until the AR LI is ratified by COPAM, pending its further review of technical documents.

On Sept. 16, 2011, the company announced that it had received the AR LI, thereby allowing MRDM to proceed with the overall construction at the site. This requirement to delay construction pending an additional technical review was unexpected. While the AR LI has not been revoked, and the recent condition placed on it by COPAM is unusual, the company is diligently working with COPAM and various government authorities in order to determine the revised timeline for the resumption of construction on the project.

On Oct. 13 2011, the company announced a bought-deal equity offering of 80 million common shares of the company at a price of 50 cents per common share, underwritten by a syndicate of investment dealers co-led by Cormark Securities Inc., Macquarie Capital Markets Canada Ltd. and Canaccord Genuity Corp., and including Haywood Securities Inc., Jennings Capital Inc. and Stonecap Securities Inc. In light of the above development, the company and the underwriters have agreed to amend the terms of the bought deal to provide for an offering of 100 million subscription receipts. Each subscription receipt will be automatically exchanged, without payment of any additional consideration and subject to adjustment, for one common share of the company. The issue price of the subscription receipts will be 40 cents per subscription receipt, for total gross proceeds of $40-million. In addition, the company has granted to the underwriters an option to purchase up to an additional 15 million subscription receipts (representing 15 per cent of the base offering) at the offering price, exercisable within 30 days after the closing of the offering for additional gross proceeds in the amount of up to approximately $6-million.

The gross proceeds of the offering will be held in escrow and released to the company when the release conditions (defined herein) have been satisfied. If the release conditions have not been satisfied on or before 5 p.m. (Toronto time) on Dec. 21, 2011, holders of the subscription receipts will be entitled to a full refund of the subscription price for their subscription receipts. The release conditions include the ratification of the AR LI by COPAM on substantially the same terms and conditions as the current AR LI.

The offering is scheduled to close on or about Nov. 3, 2011, and is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the approval of the Toronto Stock Exchange and applicable securities regulatory authorities.

The net proceeds of the offering will be used for construction and development of the RDM project in Brazil and for general corporate purposes.

We seek Safe Harbor.