The Phase I drilling will test the down-dip extensions of four of the most prolific veins in the El Oro Camp including San Rafael, Verde, Borda and Coronas as well as recently identified targets in the Oriente area. Compilation of mining records in the El Oro camp has identified the most productive areas within the four main veins and suggests that these veins remain open to depth below previous levels of mining. In total 27 drill targets have been identified to test these targets. In the Oriente area mapping and data compilation has identified 6 drill targets to date.
Mining of the veins in the El Oro camp is reported to have stopped for financial reasons (see below*) and not due to lack of ore. The San Rafael vein is reported to have produced in excess of 5 million gold equivalent ounces (oz) over 45 years from 11.9 million tonnes (Mt) of ore with an average production grade of 10.8 grams gold per tonne (g/t Au) and 115 grams silver per tonne (g/t Ag) over an average width of 10 m. The Verde vein is reported to have produced in excess of 3 million gold equivalent ounces from 6.3 Mt of ore with an average production grade of 12.0 g/t Au and 160 g/t Ag over an average width of 5-10 m. In the San Rafael vein production occurred over a vertical depth of 250 m and over a strike length approaching 3.5 kilometres (km). In the Verde vein production occurred over a vertical depth of up to 240 m and over a strike length of approximately 2 km. The average vertical depth for gold and silver production in veins in Mexico is understood to be 450 metres.
The Oriente area is the eastern extension of the prolific El Oro ore-shoot trend. It has had no mining and little exploration and is covered by younger Tertiary volcanic rocks, which mask favourable host rocks and potential veins. Seven exposures of the favourable host rocks have been found within these younger volcanics and five of these have alteration and quartz-calcite veining, and stockwork typical of the El Oro gold-silver veins. The veins and stockwork are hosted in the older Cretaceous andesitic volcanics which overlie the common host rocks (sediments) to the veins mined in the past. Veins comprise varying proportions of quartz, chalcedony and calcite and exhibit banding, brecciation and drusy crystal textures which are all typical of the gold and silver bearing El Oro veins.
NSAMT geophysics has also been carried to assist in the identification of potential new veins. Initially, nine test lines were conducted over the Coronas, Borda and San Rafael veins and results showed that the geophysics was successful in detecting the veins and/or the structures hosting the veins. Given the success of the test work, thirty-six line kilometers (km) of NSAMT was conducted over an area measuring 3 km by 4 km in the central part of the Oriente zone. Results of the survey are pending.
The veins on the El Oro property have been worked since the late 1700's. The height of mining activity began in 1904 with the Gold Mining & Railway Company. For 33 years four companies produced gold and silver, predominantly from the San Rafael and Verde veins. In excess of 18.2 million tonnes grading 11.1 grams gold and 131 grams silver were produced. In 1938, all of the mines and properties were acquired by the Las Dos Estrellas Mining Company. Shortly thereafter, a tailings dam collapsed and compensation costs bankrupted* the Las Dos Estrellas Mining Co. so the properties were transferred to the workers who formed a consortium with the government and continued to operate the mines largely as a selvage operation, mining pillars and backfill. This proved to be very costly resulting in closure of the mines in 1959.
The El Oro Mines have collectively been described as some of the most significant high-grade, gold-silver producers in the history of Mexican mining, with past production of approximately 20 million gold equivalent oz. El Oro hosts the largest known vein systems in the region with past production from veins varying between 1 and 70 m in width.
The Option agreement, entered into jointly (50/50) by Canaco and Candente, gives the combined companies the right to earn up to a seventy percent (70%) interest in all of the 24 El Oro exploration and mining concessions (14,950 hectares), held by Luismin. (See News Release 166, dated May 12th, 2006.) Funds are in place for completion of the Phase I drilling and all year one option obligations.
Additional information on the companies and the El Oro property is available at www.candente.com and www.canaco.ca.
Candente and Canaco have chosen to jointly explore at El Oro to take advantage of the companies combined abilities and successful track records in exploration, discovery, project development and mining operations. The companies have formed a Mexican subsidiary named Minera CCM SA de CV to operate this joint venture. Piotr Lutynski, P.Eng. Consultant, Michael J. Casselman, PGeo and Director, Candente and Andrew Lee Smith, P.Geo. Chairman and CEO, Canaco, are the Qualified Persons as defined by NI 43-101 for the project discussed above and they have read and approved the contents of this release.
Joanne C. Freeze, P.Geo.
President and CEO, Candente
For further information please contact:
Neil Currie at (604) 689-1957 or toll free 1-877-689-1964
Email: info@candente.com
Andrew Lee Smith, P.Geo.
Chairman and CEO, Canaco
Nick Watters, 604-488-0822 or 1-866-488-0822
Email: investors@canaco.ca
NR208 The TSX 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 anticipat ed in such statements. Canaco relies upon litigation protection for forward -looking statements.
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. Candente relies upon litigation protection for forward-looking statements.