The Company is a mineral exploration company focusing on gold and copper exploration in Peru and Eastern Canada. The Company operates in Peru through Cia. Minera Oro Candente S.A. and in Newfoundland through Candente Vinland Inc.
On May 22nd, 2002 the Company agreed, subject to regulatory approval, to a Non Brokered Private Placement in order to raise proceeds of $292,500 by issuing 650,000 units at $0.45 per unit. Each unit comprised one share and one half non-transferable share purchase warrant. One whole non-transferable share purchase warrant allows the placee to purchase one previously un-issued share of the Company at a price of $0.55 per Share during the first twelve months and $0.60 per Share during the second twelve months. A total of 470,000 units will entitle the placees to receive flow-through benefits. All securities will be subject to a four-month hold period. The flow-through funds will be used for general working capital and exploration programs on the Company's gold properties in Newfoundland and the remaining funds for general working capital and exploration in Peru.
On July 10th, the Company agreed, subject to regulatory consent, to a Non-Brokered Private Placement to raise a total of $1,200,000 by issuing 2,000,000 shares at $0.60. The financing will not include warrants nor flow-through tax credits. The funds will be used for general working capital and exploration of the Company's gold properties in Peru.
On October 22nd, the Prudent Bear Fund exercised 382,850 Warrants @ $0.25 and 1,200,000 Warrants @ $0.20 for net proceeds of Canadian $335,712.50 (US$212,272). In addition to previous investments, the Prudent Bear Fund now holds 4,188,550 shares of the Company, which is 19.8% of the total issued and outstanding shares of the Company. These shares were acquired for investment purposes. The Fund also holds a total of 505,000 Warrants of the Company (370,000 exercisable @ $0.20 if exercised by January 31, 2003 or @ $0.25 if exercised by January 31, 2004 and 135,000 exercisable @ $0.44 if exercised by May 16, 2003 or @ $0.49 if exercised by May 16, 2004.
Mr. Larry Kornze has been appointed as a Director of the Board of Candente. Mr. Kornze joined the Company's Advisory Board as an Officer on October 4th, 2001 and on October 18th, 2002 became a Director. He remains in the position of Director of Business Development of the Company. In the year 2001, Mr. Kornze retired from Barrick Gold Corporation as the General Manager of Exploration for Mexico and Central America, and International Evaluations. Prior to working internationally, he was the US Exploration Manager for Barrick Gold Exploration Inc. and was involved with discovery of over 40 Million ounces of Gold in the Carlin Trend of Nevada. Prior to joining Barrick in 1985, Mr. Kornze held various positions with Newmont and Getty Mining Co. in North America. His exceptional 34 year career in international gold exploration brings invaluable experience to the Company, which will greatly assist Candente in advancing its' gold properties in Peru and Newfoundland.
Related Party Transactions
During the nine months ended September 30st, 2002, the Issuer incurred the following expenses to its directors or corporations controlled by its directors:
Duties for Joanne C. Freeze and Fredy J. Huanqui are described under proposed compensation:
(1) Paid to Joanne C. Freeze, a director of the Issuer.
(2) Paid to Joanne C. Freeze and Fredy J. Huanqui G., directors of the Issuer.
Other than as described above, the Issuer did not acquire any assets and services from present or past insiders, promoters and members of management and their associates or affiliates other than for management services rendered by management or as otherwise reported herein under the headings "Business of the Issuer"; "Properties of the Issuer"; and "Directors, Officers, Promoters and Other Management".
Investor Relations Activities
Reg Advocaat joined the Company, in May of 2002, to carry out corporate communications services on a part-time basis in the Company's offices. He is paid each month according to the amount of time he works for the Company at the request of management. Remuneration is $200 per day. On Feb. 11, Wells Media Inc., wholly owned by Nancy Wells of Vancouver, B.C., was hired to carry out communications and public relations services for the Company. As of July 10th Ms. Wells remuneration for services is $500 per month. Reg Advocaat has been granted stock options to purchase 100,000 common shares of the Company and Nancy Wells has been granted stock options to purchase 50,000 common shares of the Company.
During this quarter, Investor Relation activities have included participation in Industry Conferences and Individual meetings in Vancouver, Toronto, St. John's, San Francisco, Chicago and New Orleans, the issuing of News Releases and other shareholder communications. The Company also keeps various Mining Analysts and brokers updated on the Company's activities by telephone and email.
There is no compensation planned to be paid to Executive Officers for the 12 month period following the completion of the offering for management fees, except that:
(1) In consideration of performing administrative management duties as President of the Issuer, which include arranging financings, communications with investors and potential investors, corporate development with other mining companies as potential Joint Venture partners, liason with the Peruvian exploration office, Stillwater Enterprises Ltd., a consulting management company in which Joanne C. Freeze, a director of the Issuer, owns 50% of the shares, receives US$875 per month.
(2) In consideration of performing geological consulting duties for the Issuer, which include travel to Peru and Newfoundland and the various properties, review of all geological data and discussions with geological personnel, Stillwater Enterprises Ltd., a consulting management company in which Joanne C. Freeze, a director of the Issuer, owns 50% of the shares, receives US$2,625 per month.
(3) In consideration of performing geological consulting and exploration management duties for the Issuer, which include hiring of all exploration staff, overseeing all exploration activities and visiting all of the properties, Fredy J. Huanqui G., a director of the Issuer, receives US$3,500 per month.
Since inception of the Company in June of 1997, the Company has held interests in epithermal gold, disseminated copper, copper-gold and volcanogenic massive sulphide prospects in Peru. The Company's founders have extensive exploration experience in Peru and were part of several significant discoveries including the Pierina gold deposit. The Yanacocha and Pierina gold deposits are very similar geologically and make up 60% of Peruvian gold production. Peru is the eighth largest gold producer in the world. Yanacocha is one of the largest heap leachable gold mines in the world with production costs of $88 per ounce 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. Most of the Company's gold prospects have similar geological environments to that of Yanacocha and Pierina.
On June 1, 2002 the Company entered into an Option to Purchase Agreement with Hecla Mining on the Alto Dorado Property. Candente has the right to earn 100% interest subject to a 2.5% NSR with a buyout of 1.5% of Hecla's NSR for US$1.5 million. Candente's obligations are: to pay annual vigencia fees of US$10,000, fund and carry out applications for all exploration permits and to share any future third party option/joint venture payments received by Candente as to 25% to Hecla in the first year, 20% in the second, 15% in the third and 10% in the fourth. All payments will be applied to the NSR buyout. Hecla's exploration on the property included extensive mapping, geochemical sampling, trenching, road building and limited diamond drilling. Expenditures by Hecla were in excess of US$500,000. All of the data has been delivered to Candente.
On October 22nd the Company was the successful bidder in an auction for a high sulphidation gold target in Northern Peru. Candente and Barrick Gold were the only participants in the auction having applied for overlapping areas on the same day September 2nd, 2002. Candente paid the Peruvian government US$50,227 for 100% interest in the Toril Zone. The Toril Zone was originally held and explored as part the Alto Dorado Property by Hecla, is within an area of mutual interest and will therefor form part of the Option to Purchase Agreement with Hecla.
The Alto Dorado Property is located half-way between the Yanacocha and Pierina Mines, 36 km south-southeast of the Alto Chicama property, where Barrick Gold recently announced a new discovery in excess of 7 million ounces of gold. Gold grades of up to 1 to 3 grams per tonne occur in vuggy silica breccia and alunite fragments over an area one kilometre long and 150 metres wide in the new target area, the Toril Zone. The Toril breccia material is very similar to the host rocks of the Pierina and Yanacocha Mines in Peru. The presence of the breccia indicates the potential for a buried body of gold mineralization.
In February of 2002, Larry Kornze, Candente's Director of Business Development, recommended the Company get involved in the Botwood basin of Central Newfoundland where Barrick and other companies are exploring as it has many similarities to the Carlin Gold Trend of Nevada. Mr. Kornze has extensive experience in the Carlin Trend of Nevada as Exploration Manager for Barrick Gold and was instrumental in the Goldstrike Mine discoveries (2.4 million ounces in 2000).
Management is very pleased to now hold properties and to be actively exploring in two of the most active exploration districts in the world.
Island Pond-- Option to Earn 75% Interest
Drilling commenced on the Island Pond gold property on November 17th, 2002. Phase I drilling is planned to comprise a minimum of 1000 metres in approximately 15 drill holes. Island Pond is located in the Botwood Basin, Central Newfoundland. Drill targets on Island Pond include a group of north-northwesterly trending structural zones, paralleling those targeted by drilling on the Moosehead Property.
The Island Pond property adjoins the southwest end of the Moosehead property where drilling by Altius Minerals and Sudbury Contact Mines have intersected high grades such as 1154.35 grams per tonne (gpt) (33.71 ounce per ton (opt)) over 0.18 metres; 170.31 gpt (5.4 opt) gold over 1.5 meters; 14.07 gpt over 16.84 metres; and other lower grade intersections such as 4.2 gpt over 5.5 metres.
Candente has an option to earn an initial 51% interest in the Island Pond Gold Property from Cornerstone by spending $1,500,000 on exploration, issuing 115,000 of Candente shares to Cornerstone and paying Cornerstone $115,000 over 4 years. Candente holds a second and third option to increase their interest to 61% and 75% interest by funding bankable feasibility and arranging mine financing.
Linear Property -- Option to earn 100%
Current work on the Linear property includes logging of drill core, trenching and rock chip sampling in order to delineate drill targets for the coming year. Management is very pleased with the advancement of the property and the development in the understanding of controls to gold mineralization.
Virgin Arm -- 100% Candente
A new gold zone was discovered on the Virgin Arm properties. Gold mineralization occurs along a structural trend exceeding 3 km in length. Visible gold occurs in blebs up to 0.5 cm wide in bedrock with assays as high as 127.0 gpt (4.1 opt) Au and 82.2 gpt (2.6 opt) Au. Five showings have been identified to date along the three kilometre long zone. In addition to the higher grades associated with visible gold, assays ranging from 0.5 to 8.0 gpt Au occur with disseminated arsenopyrite and pyrite mineralization in pervasively altered zones. In one showing alone, mineralization has been found in three locations over an area covering nearly one kilometre square.
Most of the visible gold to date occurs in extremely altered siliceous zones and bodies believed to be quartz feldspar porphyries. Alteration includes carbon/pyrite (shaley units) and orpiment, massive grey sulphide-bearing silica cut by multiple events of quartz veining. In addition, localized arsenopyrite stringers occur. Wallrocks include shales / siltstones / greywackes / limestones as well as pillow basaltic debris flows and fine siliceous sediments.
A sixth showing similar to the others occurs 2 kilometres north of the main zone. Coarse angular gold has also been found by panning the soils along the structural trend. In addition to visible gold mineralization, abundant disseminated and veinlet-controlled arsenopyrite occurs in the sediments and felsic bodies.
Other Botwood Properties
Systematic exploration has been carried out on most of the Company's properties in the Botwood Basin this season. All data will be compiled and evaluated over the winter to assess and prioritize the properties.
For more information on our current exploration progress visit http://www.candente.com and/or call us at (604) 689-1957, toll free 1-877-689-1964 or e-mail to mailto:email@example.com
ON BEHALF OF THE BOARD OF DIRECTORS
"Joanne C. Freeze "
Joanne C. Freeze
President & CEO
Candente Resource Corp.
The Canadian Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. This News Release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.