Mr. Dino Titaro reports

CARPATHIAN'S RDM GOLD PROJECT RECEIVES AUTHORIZATION TO PROCEED WITH GOLD PRODUCTION TO BECOME BRAZIL'S NEXT GOLD PRODUCER

Carpathian Gold Inc.'s wholly owned subsidiary, Mineracao Riacho dos Machados Ltda., which owns and operates the RDM gold project, Brazil, has received from SUPRAM, the state environmental agency, the autorizacao provisoria de operacao (APO), a provisional permit, allowing it to proceed with the full operation of its gold producing facilities. The APO provides the same legal rights as the licenca de operacao (LO) and allows the project to proceed in the interim while arrangements are being performed by the government agencies and related entities for the issuance of the LO.

As allowed under the previously granted licenca instalacao (LI), the open-pit mining operations have proceeded as planned. A total of 19 million tonnes of material have been extracted with daily rates at approximately 80,000 tonnes. Mining operations have demonstrated that the 7,000 tonnes per day of ore production that was proposed in the feasibility study can easily be exceeded, thereby representing an opportunity to increase gold production due to the extra processing capacity of the process plant that is rated in excess of 9,000 tonnes per day.

Wet commissioning and start-up of the process plant has taken place and, with the granting of the APO, the processing and leaching of ore can commence to produce gold. During the commissioning and start-up phase, the process plant has been operating on a continuous basis at a feed rate of 8,500 to 9,000 tonnes per day, which is well above the initial planned rate of 7,000 tonnes per day. During the start-up period, the grinding mill consumed energy at approximately 65 per cent of the estimated power to generate a final product at the design particle size of 80 per cent passing 53 microns. This reduction in power consumption may represent a major opportunity for a reduction of the estimated operating cost of the plant.

The corporation will provide further information on its forecasted gold production and cash costs once the operation has ramped up over the next few months. With gold now in the circuit it is anticipated that the first gold pour will be in December and that the project will produce in excess of 100,000 ounces of gold per year.

"While the unfortunate delay in the start-up of the operation may have affected the outlook for the company and led to a cash shortfall situation, it is nonetheless a pleasure to report that with the receipt of the APO the RDM gold project can now commence gold production and be Brazil's next gold producer," said Dino Titaro, chairman and chief executive officer. "With the wet commissioning of the mill and process plant, the project is now ready to receive and process ore from the mine, with the expectation of its first gold pour within two weeks. The entire corporation is grateful for the support it has received from all of its stakeholders during the last three months of uncertainty. In particular, the financial support of Macquarie Bank through this period has been crucial, and is highly appreciated by the management team and the board of directors."

As previously announced, the corporation is conducting a review of strategic alternative options. Even though the project is now up and running, this process remains continuous with continued discussions with a number of parties that have indicated an interest, and which are presently carrying out due diligence at all levels, including visits to the company's operation in Brazil. The corporation intends to keep moving forward expeditiously with the strategic review process but there can be no assurance that any transaction will result. The corporation does not intend to disclose further details with respect the process unless and until the board of directors has approved a specific transaction or such disclosure is otherwise appropriate.

Mr. Titaro is the qualified person (as defined in National Instrument 43-101) and is responsible for preparing the technical information contained in this news release.

We seek Safe Harbor.