2001 News

Candente Resource Corp. (CDNX: DNT) (http://www.candente.com) is pleased to forward the following Economic Update for investors with exposure to Peru's world-class mineral potential.

See Updated Corporate Summary below.

Toledo promises end to exploration taxes

Peru's President Alejandro Toledo pledges to send new legislation to Congress to boost the mining sector's competitiveness, including the scrapping of taxes on exploration work.
Speaking at the closing of Peru's XXV Mining Engineers' Convention in the southern city of Arequipa, Toledo promised the new legislation would encompass "all measures needed to reactivate mining and make it the motor and pillar of a great transformation."
"We will guarantee legal and tax stability and pave the way for balanced and fair economic development," he went on.
Toledo proposed the State, the private sector and the community form a "harmonious alliance" to develop the mining sector so it is not restricted to being simply an exporter of raw materials.
This commitment "obliges companies not just to think of economic success but also of the well-being of all and achieving harmony with the community and the environment," he told delegates.
Toledo said US$10bn could be invested in Peru's mining sector over the next decade if the three-way "alliance" is a success. (Business News Americas)

Economic crisis ignored by foreign investors in Peru

During the first half of 2001, US$ 3,606 million entered the country; a 143% increase over the same period in 2000. Under Law Decree No 600, a total of US$ 6,610 million have been authorized to enter the country during the first six months of 2001, a 473% increase over the same period in 2000.
Foreign investment distribution: -Mining 71.4%, -Industries 7.9% -Services 7.5%.
Foreign investment origin: United States (35%), Italy (29,9%), Spain (9%) and Australia (6.3%).(Area Minera, 08, 09, 01).

Political stability benefits investment

Latin Watch reported: " Peru's lower political risk will attract investors. The Argentinean crisis raises the risk perception for South America, only Chile and Peru present a favourable future for investors." (Gestion, 09, 05, 01).

Commission to promote foreign investment

The President of Lima Chamber of Commerce, Samuel Gleiser Katz, proposed the creation of a private institution to promote foreign investment.
The government has a package of projects, totalling about US$ 20 billion, that are not related to privatization or concessions. (Gestion, 09, 05, 01).

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Corporate Update

Candente has advanced copper and gold projects in Peru. Cañariaco is a leachable copper target with potential for a low-cost SX-EW operation and El Tigre, is an epithermal gold project where gold values from 0.5 to 9.5 grams per tonne occur over a two kilometre long target area. Both projects are in situated in Northern Peru with road access, good infrastructure and ports nearby.

Peru is the eighth largest gold producer in the world and largest in South America. The Yanacocha and Pierina epithermal gold deposits make up 60% of Peruvian gold production. Yanacocha is one of the largest heap leachable gold mines in the world with production costs of $88 per ounce (in the year 2000) and reserves in excess of 35 million ounces of gold. The average grade of the Yanacocha deposits varies from 0.8 to 2.8 gpt and the cutoff grade is 0.35 gpt. Newmont's 51% interest in this mine provides approximately 70% of Newmont's annual profit yet only accounts for 25% of their worldwide production. Candente's Las Sorpresas Property lies on the southern border of the Yanacocha Mines.

SX-EW copper operations such as Cerro Verde, one of Phelps Dodge's lowest cost producers (worldwide), produce copper in the $0.40 range (cash costs), which makes them economic even at current copper prices.

The Company went public on the CDNX in May of 2000 and has 9.24 million shares outstanding. Company principals have extensive exploration experience including instrumental work on some of Peru's major discoveries.

Cañariaco Property (Copper)

In April 2001, Candente acquired 100% interest with no NSR and no work commitments.

Some of the key features are as follows:

Potential for a leachable copper resource amenable to a low-cost SX-EW operation, with a strip ratio, likely to be <0.5 / 1 (waste/ore).
"The southern parts of the prospect could contain 100 million tonnes or so at an average grade of perhaps 0.6-0.7% Cu." (Dr. Richard Sillitoe, October 1999).

-High grade drill intercepts of 0.80 to 2.16% copper in the northern area were not included in Sillitoe's estimate.
-Leachable zone is open both laterally and vertically.
-Copper leach testing commissioned by Billiton using Geomet S.A. of Chile indicated recoveries of 85 to 90 % with a 0.78% head grade.
-The leachable zone is hypogene chalcocite, which may represent a late high sulfidation overprint superimposed on a much larger mineralized porphyry system.
-A larger potential resource includes a chalcopyrite zone under the enriched chalcocite zone and is also a target for eventual low strip ratio production with floatation or sulfide leach process.
-Two additional poorly explored mineralized porphyry targets (Cañariaco Sur and Quebrada Verde) on the property.
-Located 100 km by air from the coastal city of Chiclayo and ten kilometres from a major highway with road access.
-The property lies at the north end of the Cajamarca District, a major cluster of significant porphyry copper (+/- gold) and high sulfidation gold deposits extending over 165 km, which includes La Granja, Tantahuatay, Yanacocha and Michiquillay.

Cañariaco is one of the few significant projects of this type not controlled by a base metal producer.

El Tigre Property (Gold)

El Tigre is an epithermal gold project where gold values from 0.5 to 9.5 grams per tonne occur over a two kilometre long target area.

Low sulfidation epithermal environment with similarities to Meridian's El Penon and Rosia Montana of Gabriel Resources.
Gold occurs in structurally controlled quartz veins, stockworks and silicified wallrocks including volcaniclastic and sedimentary rocks and breccia zones comprising debris flows, vent breccias, hydrothermal breccias and possible diatremes. Rhyolitic dykes and domes are also part of the sequence.
Situated next to a road within an hours drive from a major city and ports in Northern Peru.
In excess of 1000 surface samples show anomalous gold over two kms.
Previous drilling intersected gold in every hole with values of 0.5 grams in wallrock and up to 9.5 grams in siliceous zones.
Visible gold is evident in petrographic studies.
Recent work includes structural interpretations by Dr. Peter Lewis, Carlos Angeles Z. and stratigraphic work by volcanologist Dr. Wolfgang Morche.
A 44 sample program to determine mineralization controls showed that 18 contain in excess of 500 ppb (0.5 gpt) gold, 12 assayed over 1.0 gpt and 5 samples carry between 3.5 and 9.5 gpt.
On surface veins have been found to be at least 2.5 metres wide and stockwork zones at least 8 metres wide.
A magnetics geophysical survey is planned to better delineate structures controlling the gold zones.

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