Mine Site

Highland Gold is pleased to announce that on 30 November 2004 it was awarded the licence for the Taseevskoye Deposit by the Russian Ministry of Natural Resources. This award follows the public auction held on 23 September 2004, where Highland Gold acquired the rights for 100% of the Taseevskoye Deposit with a bid of 742.35 million roubles (US$26.5) million. The licence provides Highland Gold with the rights to develop and mine the deposit for an initial term of 20 years.

2005 Plans

Highland Gold’s immediate plans for Taseevskoye include re-estimating the resources and financial parameters in accordance with current standards and economic conditions. Highland Gold has engaged Snowden Associates of Perth, a company specialising in ore reserve definition, to complete the resource re-estimation. On completion of this work, which is expected during the first half of 2005, Highland Gold plans to engage a new mining consultant to assist the company in defining the appropriate scope and size of the project that will be the subject of a new, detailed feasibility study.

As announced on 23 September, the resources currently approved by The State Committee for Resources are 1.7 million ounces of gold (C1 and C2). Following completion of the study by Snowden Associates, a revised resource statement will be submitted for approval by The State Committee for Resources.

Barrick Participation

In January 2004, Highland Gold and Barrick Gold exchanged reciprocal participation rights on certain new acquisitions, which includes Highland Gold’s acquisition of the Taseevskoye licence. Barrick has expressed its intention to exercise its 50% right to the Taseevskoye deposit.

Taseevskoye Overview

The Taseevskoye gold deposit is located two kilometres south of the town of Baley (Population: 15,000) in the Chita region, Eastern Siberia. It lies 56 kilometres south by paved road from the Trans Siberian Railway station at Priiskovaya. Chita, the regional capital, is located 285 kilometres to the west of Baley.

The deposit was discovered in 1941 and during the period 1948 to 1994 the Taseevskoye mine produced 6.4 million ounces of gold from 16.3 million tonnes of ore at an average grade of 12.2 g/t Au. This was produced from a swarm of epithermal gold bearing quartz fissure veins located within a circular area 1000m in diameter. The predominantly underground mining operation concentrated on three principal vein systems, leaving un-mined a large lower grade mineralized envelope contained within an argillic alteration halo surrounding the fissure veins. Highland Gold’s acquisition of Taseevskoye is rooted in the potential for open pit mining of this large lower grade resource, which was also the subject of a 1997 bankable feasibility study commissioned by the former licence holders.

Historical Production from the Taseevskoye Deposit

Period	Location	Ore (000t)	Grade (g/t)	Gold (tonnes)	Gold (k ozs)
1948 – 1992	Underground	14,372	13.6	195.0	6,270
1984 – 1994	Open pit	1,918	1.8	3.4	109
Total		16,290	12.2	198.4	6,379

Historic Bankable Feasibility Study

Between 1995 and 1997, Kvaerner Metals was commissioned to deliver a bankable feasibility study on the Taseevskoye project. The scope of this study covered Geology/Ore Reserves, Geotechnical/Hydrology, Survey Control, Mine Design, Metallurgical Testwork, Environmental, Mine Waste Management, Process Design, Engineering, Cost Estimates and Scheduling. The mine process facilities and infrastructure were to be developed for a process plant with a throughput rate of 1.75 million tonnes per year over 16 years, while mine production was optimised at 2.5 million tonnes per year with selective stockpiling of mine production for treatment of higher grade ore in the initial 10 years and lower grade ore to be treated in the last 6 years. The study was completed in October 1997 and is summarised briefly below.

1997 JORC Resource Estimates

In addition to The State Committee for Resources’ estimates, as shown above, Snowden Associates prepared an historic geological resource study for the Taseevskoye deposit in June 1997. The resource classifications assigned were based on underground channel sampling on drifts, cross cuts and “orts” on the levels at a maximum spacing of 40 m and more frequently 20 m or less. Drill hole spacing, both underground and surface, was basically 40 to 50 m on section and from 40 to 80 m down dip. The database contains assay results from approximately 23,000 underground channel samples, 1,113 (643 from Surface; 470 from Underground) historical Russian holes and a further 82 holes drilled in 1996-97.

1997 JORC Resource estimates

	0.3 g/t Cutoff	1.0 g/t Cutoff	2.0 g/t Cutoff
	Ore Mt	Au g/t	Ounces Million	Ore Mt	Au g/t	Ounces Million	Ore Mt	Au g/t	Ounces Million
Measured	13.8	4.76	2.11	13.7	4.80	2.11	11.1	5.55	1.98
Indicated	104.8	1.05	3.54	28.1	2.38	2.15	9.9	4.34	1.38
Sub total	118.6	1.48	5.65	41.8	3.17	4.26	21.0	4.98	3.36
Inferred	20.8	1.53	1.02	7.8	3.14	0.79	4.0	4.84	0.62
Total	139.4	1.49	6.67	49.6	3.17	5.05	25.0	4.96	3.98

1997 JORC Reserve

An historical pit optimization analysis by Snowden defined an optimum shell with dimensions of 1,100 metres by 1,200 metres with a maximum depth of 260 metres containing 232 million tonnes of ore and waste.

Using a cutoff grade of 0.88 g/t Au and a gold price of US$380 per ounce, diluted, recoverable, proven and probable reserves totalled 28.2 million tonnes of ore at an average grade of 3.23 g/t Au and containing 2.9 million ounces of gold. The stripping ratio to recover these reserves is 7.25 t of waste per tonne of ore. Within this pit design is 3.6 million tonnes of Inferred Resource grading 3.66 g/t Au that has been treated as waste.

1997 Process

The grinding circuit was to consist of a jaw crusher, a semi-autogenous grinding (SAG) mill and a ball mill operating in closed circuit with cyclones. After grinding 80% of the ore coming in, 53 microns, the slurried ore was to flow by gravity to the flotation circuit where a gold rich sulphide concentrate containing about 85% of the gold values would be produced and thickened before being pumped to a pressure oxidation circuit. The oxidized sulphides would then be leached in a carbon-in-leach (CIL) circuit to recover about 97% of the gold contained in the concentrate, thus 82% of the total contained gold was to be recovered in the concentrate circuit.

Flotation tailings were to be thickened and leached with cyanide in a second CIL circuit to recover an additional 5% of the gold. Loaded, activated carbon from both CIL circuits was to be treated separately by elution in a single carbon stripping vessel, followed by electrowinning to recover the gold in a sludge which was then to be refined in a furnace to produce doré bullion. Tailings from both CIL circuits after cyanide destruction and the neutralized solution from pressure oxidation were to be pumped to the tailing impoundment area in a natural valley, located about 4 kilometres from the plant.

Overall recovery of gold in the first 10 years was to be about 87% of the values contained in mill feed reducing to 82% in the last six years.

1997 Estimated Capital and Operating Costs

Total capital costs of the project were estimated to be US$170 million as of the third quarter of 1997. Total estimated operating costs for the first 10 years of the project were to average US$20.94/t of ore milled. For the last 6 years of the project, total operating costs were expected to reduce to an average of $9.84/t milled.

Commenting on today’s announcement Ivan Koulakov, Managing Director, said:

“Given that Taseevskoye is a very well known and well developed deposit that was subjected to a full Bankable Feasibility Study in 1997, we view it as an acquisition that is complementary to our existing assets and that fits firmly within our core strategy.

“Taseevskoye will create new economic opportunities for the people of the Chita region and will create value for Highland Gold shareholders as our company continues its impressive record of growth in Russia and takes yet another step closer to an annual production goal of 1 million ounces of gold.”

Company Statement

Carpathian Gold Inc. (TSX:CPN) is a mineral exploration company that is focused on the development and exploration of two advanced gold and gold + copper projects with the goal of becoming a gold producing company in mid 2012. 

Currently, Carpathian has an advanced gold project in the state of Minas Gerais, Brazil and a gold + copper project within the Apuseni Mountains of Central Romania, which combined host +12 million gold equivalent ounces in all resource categories.  

The project in Brazil is referred to as the RDM Gold Project which hosts a NI 43-101 resource of 1.5 million ounces (in all resource categories) of which 1.0 million falls within an open pit.  A completed Preliminary Economic Assessment in August 2009 on the open pit portion of the resource only, indicated the project can be 6,000 t/d, convention CIL operation producing an average of 102,000 ounce per year for an initial mine life of 7.1 years.  At a gold price of $1000 gold the project has an after tax NPV7.5 of US$143.0 million and an after tax IRR of 41%.  Carpathian is in to feasibility and production stage with management expectation of commencing production in mid 2012.

In Romania, Carpathian has discovered a world class size gold-rich, copper porphyry system referred to as the Rovina Valley Project (RVP).  The global mineral resource (NI 43-101 compliant) of this system, based on drilling results from 2006 through 2008, totals 10.7 million gold equivalent ounces (all resource categories) of which 7 million is gold only. The preliminary economic assessment (March 2010) for the RVP Project has been released and is very positive.

Carpathian has extensive exploration and operation teams in both Brazil and Romania working towards the advancement and development of these two projects.

Current Operations

Romania
Romania is particularly well endowed with metallic ore deposits: gold has been mined in Romania since pre-Roman times and the country has been one of the most important producers of precious metals in Europe. Carpathian Gold, through its Romanian subsidiary, holds the Rovina license in the Golden Quadrilateral mining district of Romania.

The richest concentration of gold in Romania has been in the Apuseni Mountains, in this area which has historically produced in excess of 55.0 million ounces of gold from epithermal deposits, and ranks as one of the richest epithermal gold producing regions of equivalent size in the world.

Recent exploration within the Golden Quadrilateral by Gabriel Resources at their Rosia Montana deposit has identified a proven plus possible gold reserve of 16 million ounces. Also within the Golden Quadrilateral, European Goldfields has recently announced a drill-indicated gold resource of 3.5 million ounces on their Certej deposit.

Rovina Valley Au-Cu Project, Romania

• Located in Romania’s Golden Quadrilateral with historic Au production of
  over 55 M oz.
• NI 43-101 Mineral Resource (Colnic, Rovina & Ciresata porphyries) of:
  – Measured + Indicated: 3,070,000 oz Au & 759 million lbs Cu
  – Inferred: 3,890,000 oz Au & 663 million lbs Cu
  – Global Resource*: 10,750,000 oz Au eq***
•  Deposits still open and not yet been fully delineated.
  – Positive Preliminary Economic Assessment
  – 40,000 tpd mining with standard flotation processing
  – Ave. 343,600 Au-eq1ounces/yr over a 19 yr mine life
  – NPV5 $1.130 billion (@ US$1000/oz gold price & US$3.00/lb Cu)
  – IRR, 24% (@ US$1000/oz gold price & US$3.00/lb Cu)
• All infrastructure, including road, power and water, adjacent to the deposit
• Still open in all directions, Drill Hole RGD-17, 716 m at 1.14 g/t Au &0.16% Cu.
• 20,000 metres of drilling started in Dec 2010 on Ciresata deposit and satellite targets on RVP licence
• Exploration license to be converted to Mining license in early 2011

Brazil
The Riacho dos Machados (RDM) Gold Project is in southeastern Brazil approximately 540km north of Belo Horizonte in Minas Gerais State, one of Brazil’s oldest and most important mining states. The project consists of a single 1000 – hectare mining concession and 12 exploration areas totaling 21,000 hectares. The mining concession includes surface rights ownership for 266.6 hectares and has significant mining infrastructure inherited from an open-pit oxide heap leach gold operation (Mina de Ouro Fino) that was operated from 1989-1997 by Companhia Vale do Rio Doce (“Vale”), Brazil’s largest mining company.

This permitted brownfield gold project has an historical resource (from Vale) consisting of 560,000 ozs Au with 3.8 million tonnes at 4.6 g/tAu and an upside exploration target potential of 5-15 million tones of 3.0 to 4.5 g/tAu.

Riachos dos Machados Gold Project (RDM)

• Permitted brownfield gold project with an updated NI 43-101 Mineral Resource (July 2010) of:
  – Measured + Indicated: 812.3 koz Au (200% increase)
  – Inferred: 692.9 koz Au
  – Global Resource*: 1,505,200 oz Au
• Robust Preliminary Economic Assessment & Near-term OP
  production (July 2009)
  – An initial open pit operation at 6,000 tpd
  – Avg. 102,000 ounces/yr over initial 7.1 yr mine life
  – NPV7.5 ,143.0 million (after tax @ US$1000/oz gold price)
  – IRR, 41% (after tax @ US$1000/oz gold price)
  – Low start-up capital, attractive “economic grades” with excellent
  cash flow and short payback period.
• Existing infrastructure, roads, power, water & ownership of surface rights.
• Currently in the feasibility stage , expected Q4 2010
• Exploration upside: Deposit open at depth and along strike with identified extension targets along strike (drilling currently in progress).

Geographical Spread

Romania, Brazil

Board of Directors and Key Management

Mr. Peter Lehner	Chairman, Director
Mr. Dino Titaro	Director, President and Chief Executive Officer
Julio Carvalho	Director
Mr. Patrick J. Mars	Director
Mr. John W. Hick	Director
Mr. David Danziger	Director
Mr. Daniel B.J. Kivari	Chief Operating Officer
Mr. Randall K. Ruff	Executive Vice President, Exploration
Mr.Guy Charette, Exec. Vice President,Corporate
Linda Prager	CFO and Secretary
Mr. Alexandru Nicolici	Managing Director SAMAX Romania S.R.L.

Company Address365 Bay St. Suite 500 Toronto, Canada M5H 2V1 Telephone:+ 1-416-368-7744Facsimile:+1-416-260-2243Email:info[at]carpathiangold.comWebsite:http://www.carpathiangold.com

Additional Address/Key ContactInvestor Relations Mike O’Brien – Ext 238, mobrien@carpathiangold.com BRAZIL  OFFICE Alameda da Serra, 1021 Office 211 Nova Lima – Minas Gerais Brazil CEP:34.000-000 Phone: +55 (31) 3286 5703 ROMANIA OFFICE SAMAX Romania S.R.L. Str. Aleea Viitorului, nr. 2A, Sala 6 Cod 330075, Deva Jud. Hunedoara , Romania t: (+40) 254-232-070 office@samax.sintec.ro

CapitalBasic Shares Outstanding: 385.4 MM 21,110,000 options outstanding at a weighted average exercise price of $0.40 and maturity by May 13, 2013. 11,944,130 warrants at $0.33, maturity May 6, 2012. 10,889,376 wt at $0.45 maturity Dec 3, 2011. 1,339,296 Brokers wt at $0.23 expiring May 6, 2011 and 1,197,381 Brokers wt at $0.34 expiring Dec. 3 2011. Fully Diluted: 430.6M

For some time now the Australian government has stuck to a policy of only allowing three mines to produce uranium, , but demand from around the world as the price of uranium has risen may bring about a change of heart. The re-election of the Howard government, which now also has control of the Senate, could be a major factor, but a lot will still depend on State governments which control mining and export licences. South Australia has always been supportive and reaps handsome royalties from the Olympic Dam and Beverley mines and the Northern Territory takes the same attitude towards the Ranger mine operated by Energy Resources of Australia, which is itself 65 per cent owned by Rio Tinto. Western Australia, on the other hand, has been against any expansion of uranium exploration. There is an election in the offing, however, and this stance may change if Labour is thrown out.

In the past there have been more than ample supplies of enriched uranium for nuclear power stations around the world. Above-ground strategic stockpiles of the metal put aside by utilities and for use in nuclear weapons have been unwound and highly-enriched military uranium in decommissioned bomb arsenals diluted and reprocessed. As a result there has been a lack of investment in uranium exploration and mine development over the past 10 years or more. Things are now changing dramatically with higher oil and gas prices increasing the popularity of nuclear power. Above-ground stockpiles are now heavily depleted and rising demand has driven the world spot price for uranium oxide from US$7.10 per pound in late 2000 to US$15.50 at the beginning of this year and it is now above US$20/lb which is a 20-year high

This is no temporary blip as figures for the end of July showed that 30 reactors were in construction, another 32 were on order and 72 more were proposed. Japan, China and Taiwan are planning substantial increases in capability and all three are ideal markets for Australian producers. This puts a focus on Giralia Resources which is the only Australian junior involved in an active drilling programme for uranium as it has a 25 per cent free carried interest in tenements around the Beverley mine which produces around 700 tonnes a year of uranium oxide. Its partner is Heathgate Resources which owns and operates the Beverley mine and is related to the private US utility General Atomics.

The joint venture is exploring the Lake Frome property which covers some 2,000 sq kms around Beverley and is known to contain potential extensions of the mineralised palaeo channels being mined at Beverley. A drilling programme is now underway to assess the uranium potential and the regional/structural geology of areas to the south and east of the Beverley mine. Recent geophysical surveys have traced a well defined structural target called the Poontana fault on the Lake Frome tenements which is related to the regional setting of the Beverley uranium deposit. To date exploration has been a bit laid back as Heathgate was restrained from expanding its uranium operations. The possibility that the Australian government may open the door a bit wider for exports could be of great benefit to Giralia which is free carried up to a decision to mine.

Uranium is only a part of Giralia’s portfolio, however. Leading the rest is the 100 per cent owned Snake Well gold project which runs for 45 kms along strike of an under-explored greenstone belt in the West Murchison region of WA north east of Geraldton. The company has already delineated a gold resource of 2.49 million tonnes at 2 g/t gold for 160,000 contained ounces and drilling is in progress to extend known deposits and test new targets with first pass holes. Promising results have been received from drilling to extend the Mixy lode with an intersection of 12 metres at 5.4 g/t gold and 0.4 metres at 32.1 g/t with conspicuous visible gold. More results are awaited , but it is already clear that the resource will have increased significantly when the next estimate is announced.

Giralia is also earning into Haoma Mining’s Daltons nickel project in the Pilbara. At the moment diamond drilling is in progress to test conductor targets where previous high grade nickel-copper-sulphide intersections have been reported. The company is involved in a couple of other gold and nickel jvs and the only other wholly owned project is the Blue Rose copper – gold project in South Australia. Drill targets are being defined by ground gravity geophysical surveys with the focus on primary porphyry skarn and IOCG mineralization under extensive near-surface secondary copper intersections. Last, but not least ,the company has broken out of Australia and also owns the Ann Mason copper project in Nevada. Back in the 70s a porphyry copper resource of 495 million tonnes at 0.4% copper was estimated, but work since then has indicated a high grade core and data is currently being integrated. For the moment, however, it will be uranium that drives the share price.

Analyst John Meyer has produced an interesting paper which claims that collapse of the US dollar effectively renders China more competitive, driving growth BUT will not force Chinese re-valuation. The State Council and Communist Party State Central Committee will meet over the next few weeks at the central economic work conference in China to decide on general policy in the coming year.

At the forefront of the agenda will be the objective of maintaining stable economic growth and political and social stability. China , after all, does not have to concern itself with elections which cause swings in economic policy in the West. The huge investment in dollar bonds will also come under scrutiny as there has recently been growing evidence of a preference for Euros rather than US dollars for the country’s currency reserves. The point has already been made by the deputy governor of the Bank of China that there is no intention to devaluing the currency despite pressure from the Bush government and international markets.

The brokers are of the view that China has set its own internal targets at a rate of around 7 per cent -9 per cent in terms of growth in gross domestic product, and that it will stick to this come what may. This could allow 10 per cent -20 per cent metals demand growth within China, much of which will need to be sourced internationally.

There is bound to be some scare mongering from metals traders in Asia over potential Chinese re-valuation and over Chinese consumption levels. But it is Numis’s view that China will continue to consume substantial and increasing quantities of raw materials, particularly copper and steel related raw materials such as iron ore, nickel, manganese and chromite ores. These commodities are effectively forming the foundations of China’s new economic era and development and China is unlikely to consider the demands of the rest of the world in its drive to develop its infrastructure and economy.

While China is happy to trade with the rest of the world, its stated policy is to manage a relatively small trade surplus/deficit and to remain as independent as possible from the rest of the world. Fortunately for western mining companies China is relatively short of a number of key raw materials which it continues to import. Chinese mining concerns have been slow to discover new prospects and their safety record has not been good, so much so that the authorities were reported to be closing many small coal mines.

Mining may be one of the world’s oldest professions, but China appears to have lagged the west in the development of large-scale mining and exploration organisations. This may be due to the unusual expertise required to discover and develop efficient mining projects. Alternatively it may also be due to the difficulty in discovering prospects in a geology where there is a lack of rock outcrop and where overlying sand cover effectively masks underlying prospects from many geophysical techniques.

There is little doubt that Chinese miners, who traditionally worked in mines in Cornwall, the US and Australia in the 18th and 19th centuries, may now discover more in their back yard but the prevailing geology of China may continue to retain its riches and new discoveries may take some years to bring to fruition.

John Meyer concludes that the Chinese may therefore remain a net importer of many key raw materials for some years and that Western mining concerns should continue to benefit from a continuing high level of demand within the region. Bulk shipping companies and recycling businesses should also continue to fare well from a continuing increase in this trade as will miners which are able to operate in US-dollar based currency zones where they benefit from its weakness..