Carpathian Gold Inc. announce that it has entered into an option agreement with Caracal Gold LLC, an indirect wholly-owned subsidiary of Electrum Ltd., a private Global Gold Group with a portfolio of over 80 exploration projects around the world. Electrum is managed by a team of professionals with a proven track record of successfully discovering, financing and developing major precious metals deposits in North and South America, Africa, Asia and Eastern Europe. Pursuant to the Option Agreement, Caracal will have the option to earn up to an 80% joint venture interest in HUMEX-Kft, a Hungarian corporation which is wholly-owned by Carpathian Gold Limited, a subsidiary of the Corporation. HUMEX owns the Fuzerradvany Concession and Kanszavar Exploration License covering mineral properties in Hungary. Caracal shall be the initial operator of the Properties.
To earn the 80% interest in HUMEX, Caracal must make a combination of option payments to CGL and cash contributions to HUMEX in the aggregate amount of US$1.25 million on or before the 36-month anniversary of the signing of the Option Agreement. The cash contributions to HUMEX are to be applied toward exploration activities on the Properties, principally the Fuzerradvany Concession. Caracal can elect to earn only a 55% interest in HUMEX through an exploration expenditure commitment of US $550,000 and a US $50,000 option payment with the right to earn an additional 25% interest by making another option payment of US $50,000 and an additional exploration expenditure commitment of US$600,000. Until such time as Caracal has earned its entire ownership interest in HUMEX, whether at the 55% level or the 80% level, Caracal shall provide 100% of the funding to HUMEX for the exploration and/or development of the Properties. Once Caracal has earned its interest in HUMEX, Carpathian and Caracal are required to fund their respective percentage interest of future exploration/development budgets for the Properties through HUMEX, subject to having their respective interests diluted if they do not provide their share of funding. If a party’s interest is diluted to less than 10%, such party’s interest will be automatically converted to a 10% net profits interest. There is a two-kilometre area of interest from the outside boundary of the Properties.
“We are very pleased with this agreement as Electrum has a proven track record of exploration and development and a strong exploration and development team”, said Dino Titaro President and CEO of the Corporation and CGL. “The Hungarian properties will benefit from a focused exploration effort while the Corporation dedicates its exploration and development expertise to its Romanian and Brazilian assets”.
The Hungarian Properties include one exploration license, the Kanazsvar License, and one mineral concession, Fuzzerradvany, both of which are 100% owned by CGL through HUMEX. These total approximately 95 square kilometres and are located in the Tokaj and Matra Mountains situated in north-eastern Hungary. On the Fuzerradvany Concession, CGL completed 6 diamond drill holes in late 2007 totaling approximately 803 metres. That drill program was designed to test the interpreted centre of a large epithermal hot-springs style alteration system, which covers an area of approximately 2 km2. All drill holes intersected alteration features consistent with a shallow-level epithermal mineralized system. Locally, the alteration-mineralization features intersected include hydrothermal breccias, cross-cutting banded quartz-chalcedony veinlets, lattice-structure quartz, and disseminated fine-grained sulphides in intensely silicified tuffs. Assay results indicate this alteration-mineralization system is gold and silver bearing with 5 of 6 drill holes intersecting discrete zones with greater than 1.0 g/t Au. The highlight intersections include: Hole FR-57 with 24 m of 1.7 g/t Au and 171 g/t Ag (including 9 m of 3.33 g/t Au and 247 g/t Ag). The six diamond drill holes tested a 450 m strike length of the northwest striking breccias-silicification zone with a coincident Au-As-SB soil anomaly. All drill holes intersected gold-silver mineralization with the exception of hole FR-68 which was abandoned at 107.1 m due to drilling problems, before reaching its target depth. Caracal plans to follow up on these results with an initial drill program of approximately 2,000 metres.
The Corporation is a mineral exploration company focused on gold exploration primarily on its properties in Romania as well as gold exploration and development on its proposed development-stage property acquisition in Brazil.