Carpathian Gold Inc. Provides Operations and Corporate Update

TORONTO, ONTARIO--(Marketwired - Jan 24, 2014) - Carpathian Gold Inc. (TSX:CPN) (the "Corporation" or "Carpathian") provides the following update on its operations and corporate activities:

Operations

On January 8, 2014, the Corporation announced that, its wholly-owned subsidiary, Mineração Riacho dos Machados Ltda. ("MRDM"), had received from SUPRAM, the state environmental agency, a temporary suspension of the Autorização Provisória de Operação ("APO") for the RDM Gold Project, Brazil. Representatives of MRDM and SUPRAM have met to discuss the remedial work required in order to resume operations. Works have begun at the mine site to address SUPRAM's requirements, primarily consisting of:

• Reinstating and completing the drainage systems around the plant site area and earthworks to repair erosion in run-off areas in various places which were damaged as a result of the heavy rains in December and early January, and to install new retention dykes;

• Reducing the volume of water within the tailings impoundment to below the current level of the impervious plastic liner, which involves the pumping of approximately 500,000 to 700,000 cubic metres of water to the mining pits; and

• Removal of material from the CIL leach area containment bund.

It is currently estimated that, in the absence of a material impact of further heavy rains, these works may be completed by the end of February 2014. SUPRAM will then make inspection in order to determine if the remedial work satisfies the conditions required to lift the current suspension of the APO. If this is the case, SUPRAM has agreed that it can lift the suspension shortly thereafter. The cost of the remedial works is estimated at approximately US$500,000 to US$700,000. SUPRAM has agreed that the processing of in-circuit material at the date of the suspension may continue for an orderly run-down of the processing plant while the remedial work is progressing. Approximately 1,000 ounces of gold are expected to be produced from this material.

Lost production from the suspension of the APO is estimated at approximately 7,000 to 9,000 ounces of gold per month, or approximately US$8.75 million to US$11.25 million of revenue per month at current gold prices, an overall impact of approximately US$26 million to US$34 million, should gold production not resume until March 31, 2014.

The Corporation also wishes to announce that, effective immediately, its Chief Operating Officer, Mr. Daniel Kivari has stepped down from that position and as an Administrator under Brazilian corporate law of MRDM.

Mr. Vito Hugo Belo has been appointed to replace Mr. Kivari as COO of MRDM on a full-time contract basis. Mr. Belo is a mechanical engineer with a long history in mining, including approximately 20 years with Rio Tinto. He led a number of departments of Rio Tinto's Paracatu Gold Mine, Brazil's largest gold mine, culminating in three years as General Manager and Vice President of the operation.

Mr. Kivari has agreed to remain available on a consulting basis to provide assistance to MRDM's new management. The Board of Directors thanks Mr. Kivari for his efforts and welcomes Mr. Belo to the Carpathian team.

Corporate

Macquarie Bank Forbearance

The suspension of MRDM's operations has increased the Corporation's working capital deficit. A further forbearance agreement is being negotiated with Macquarie Bank Limited ("Macquarie"), pursuant to which the Corporation has requested that Macquarie agree to defer debt repayment and provide up to an additional US$10 million of bridge financing (in addition to the previous US$30 million of bridge financing that was announced by the Corporation on January 7, 2014 and which has been fully drawn down). These negotiations are ongoing.

Management Changes

Effective immediately, Mr. Dino Titaro has stepped down as Chief Executive Officer of the Corporation. Mr. Titaro will remain as a non-executive director of the Corporation. Mr. Guy Charette will be stepping down as Executive Vice President of the Corporation, and Mr. Charette will serve as Interim Chief Executive Officer. He will also remain as a director of the Corporation.

Appointment of Chief Restructuring Officer

In agreement with Macquarie, the Corporation has engaged FTI Consulting to provide the services of Mr. Andrew Bantock to act as Chief Restructuring Officer, supported by fellow FTI Consulting professionals, as required, in Canada and Brazil.

Other Corporate Initiatives

Meanwhile, and as previously announced, the Corporation continues to pursue strategic alternative options. Several parties have conducted due diligence reviews and negotiations are on-going. However, no firm offers have been received, and there can be no assurance that any transaction will result. The Corporation is also considering potential new equity capital raising initiatives.

About Carpathian

Carpathian is an exploration and development company whose primary business interest is developing near-term gold production at its 100% owned Riacho dos Machados ("RDM") Gold Project in Brazil. In addition it is also focussed on advancing its exploration and development plans on its 100% owned Rovina Valley Au-Cu Project ("RVP") located in Romania.

On a company wide basis, Carpathian currently hosts NI 43-101 proven plus probable reserves of 830,200 ounces of gold (proven reserves of 2,300 Kt at 1.30 g/t Au and probable reserves of 18,500 Kt at 1.23 g/t Au) and NI 43-101 mineral resources (inclusive of reserves) of approximately 8.1 million ounces of gold in the measured plus indicated categories (RVP: 405.9 million tonnes at 0.55 g/t Au for 7.19 million ounces, RDM: 19.36 million tonnes at 1.50 g/t Au for 0.936 million ounces) and approximately 0.9 million ounces of gold in the inferred category (RVP: 26.8 million tonnes at 0.38 g/t Au for 0.33 million ounces, RDM; 9.447 million tonnes at 1.93 g/t Au for 0.587 million ounces), as well as 1.4 billion pounds of copper in the measured plus indicated category (RVP: 405.9 million tonnes at 0.16% Cu) and 97.0 million pounds of copper in the inferred category (RVP: 26.8 million tonnes at 0.16% Cu) (see press releases dated July 17, 2012 and April 6, 2011 for further details on resources and reserves). The RDM Gold Project is targeted to produce in the order of +/-100,000 ounces of gold per annum.

Mr. Dino 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.

Forward-Looking Statements: Statements and certain information contained in this press release and any documents incorporated by reference may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation which may include, but is not limited to, information with respect to the Corporation's expected production from, and further potential of, the Corporation's properties; the Corporation's ability to raise additional funds; the future price of minerals, particularly gold and copper; the estimation of mineral reserves and mineral resources; conclusions of economic evaluation; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; capital expenditures; success of exploration activities; mining or processing issues; currency exchange rates; government regulation of mining operations; and environmental risks. Often, but not always, forward-looking statements/information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements/information is based on management's expectations and reasonable assumptions at the time such statements are made. Estimates regarding the anticipated timing, amount and cost of exploration and development activities are based on assumptions underlying mineral reserve and mineral resource estimates and the realization of such estimates are set out herein. Capital and operating cost estimates are based on extensive research of the Corporation, purchase orders placed by the Corporation to date, recent estimates of construction and mining costs and other factors that are set out herein.

Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Carpathian and/or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include: uncertainties of mineral resource estimates; the nature of mineral exploration and mining; variations in ore grade and recovery rates; cost of operations; fluctuations in the sale prices of products; volatility of gold and copper prices; exploration and development risks; liquidity concerns and future financings; risks associated with operations in foreign jurisdictions; potential revocation or change in permit requirements and project approvals; competition; no guarantee of titles to explore and operate; environmental liabilities and regulatory requirements; dependence on key individuals; conflicts of interests; insurance; fluctuation in market value of Carpathian's shares; rising production costs; equipment material and skilled technical workers; volatile current global financial conditions; and currency fluctuations; and other risks pertaining to the mining industry. Although Carpathian has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking information contained herein or incorporated by reference are made as of the date of this presentation or as of the date of the documents incorporated by reference, as the case may be, and Carpathian does not undertake to update any such forward-looking information, except in accordance with applicable securities laws. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers are cautioned not to place undue reliance on forward-looking information. The forward-looking information contained or incorporated by reference in this document is presented for the purpose of assisting shareholders in understanding the financial position, strategic priorities and objectives of the Corporation for the periods referenced and such information may not be appropriate for other purposes.

The TSX does not accept responsibility for the adequacy or accuracy of this news release.