Vancouver, British Columbia, October 1, 2009. Candente Resource Corp. (DNT:TSX and BVL) ("Candente Resource") and Candente Gold Corp. ("Candente Gold") advise that Candente Gold has re-negotiated the terms of its Option agreement with Luismin, S.A. de C.V., ("Luismin") a subsidiary of Goldcorp Inc. for the El Oro gold-silver property in Mexico. Candente Gold's indirect right to earn a majority interest in the property has been revised to relinquish Luismin's back-in right for the Historic Mining Area, where a minimum of 8 million ounces of gold and 250 million ounces of silver has been produced predominantly from two veins. Luismin retains the right to back-in to a 70% interest in the outlying Exploration Area (See maps at http://www.candente.com/i/misc/Claims-colour-background.jpg and presentation at http://www.candente.com/i/pdf/2009-09-10-GoldPresentation.pdf).
In exchange for the back-in right in the Historic Mining Area, Candente Gold has agreed to issue 2,000,000 shares to Luismin over 4 years, give Luismin the right to participate in future financings and to spend in the Exploration Area a minimum $1.5 million of the total $10 million expenditure required to fully exercise the option. "We are very pleased with this new structure which allows Candente Gold to have the majority of the upside potential on the Historic Mining Area", comments Joanne Freeze P.Geo., President and CEO. We believe that the Historic Mining Area has the potential to host several million ounces of gold and hundreds of millions of ounces of silver. This potential exists in both vertical and lateral extensions to known veins as well as possible undiscovered veins.
Most of the prior exploration and development at El Oro was conducted prior to the mid 1900's before modern exploration techniques were invented and during much lower prices for precious metals. To date 20 veins have been discovered in the Historic Mining Area, many of which have no surface expression due to a cover of younger volcanic rocks. Most of the exploration and development has been conducted on only two of the veins. The gold and silver mineralization extends over significant lengths and widths within the veins and also occurs in irregular high-grade ("bonanza") zones, which pinch and swell both vertically and laterally. The veins have only been mined over an average of 150 to 250 metres vertically and there is strong evidence that the gold and silver mineralization continues at depth. Similar mineral systems, in other mines in Mexico, host gold and silver ore over 600 to 900 metres vertically.
Updated Option Agreement Terms:
The following are the terms of the Modified Option Agreement by which Minera CCM S.A. de C.V., the Mexican subsidiary of Candente Gold, may earn up to a 70% interest in the El Oro property from Desarrollos Mineros San Luis, S.A. de C.V. ("DMSL"), a subsidiary of Luismin.
- Candente Gold may earn a 50% interest by spending US$5M and issuing 1,000,000 shares over 2 years by November 30, 2011 (approximately US$1.7M is already spent)
- Candente Gold may earn an additional 20%, for a total of 70% by spending an additional US$5M and issuing an additional 1,000,000 shares by November 30, 2013
- In the Historic Mining Area: DMSL has the right to: i) stay at 30% by participating in future expenditures or ii) dilute to a 6.5% NPI
- In the Exploration Area: DMSL has the right to: i) stay at 30% by participating in future expenditures; ii) dilute to a 6.5% NPI or iii) earn-back 40% (to hold 70%) by spending 2.5 times the amount Candente Gold spends on exploration and development in the Exploration Area within 4 years (DMSL has 90 days to advise of a back in decision)
- Luismin has the right to participate in all financings of Candente Gold, Candente Resource and Canaco - up to 10% or equal to current shareholdings each of the Companies
- Candente Resource and Canaco will also issue 125,000 shares each or the equivalent market value in Candente Gold shares to Luismin to fulfill previous commitments by November 30, 2009.
El Oro Exploration - Historic Mining Area
Of the 20 veins discovered to date, the Verde and San Rafael veins were historically the largest gold and silver producers but the Borda and Corona Veins to the west were also significant. Grades in Verde and San Rafael veins averaged 10 to 12 grams per tonne (gpt) gold and 120 to 160 gpt silver over average widths of 3 to 10 metres. Grades of up to 50 gpt gold and 500 gpt silver have also been reported from high grade bonanza shoots occurring sporadically within the veins. The San Rafael vein reaches a width of 70 metres in places.
El Oro is believed to host additional bonanza zones below the old workings as a result of repeated mineralization stages similar to those at the Guanajuato and Fresnillo mines where multiple boiling events created "stacked" high-grade gold and silver mineralization over vertical distances of 600 to 900 metres. This is evidenced by fluid inclusion and petrographic studies, high grade samples from portions of the lowest levels of the old workings and recent drilling which has intersected high grades below the old workings. Assay data from a total of 16,000 historic samples and 7 drill holes compiled and modeled recently by a major mining company highlights five blocks with the potential to host one million gold equivalent ounces at historic grades and widths within just the first 100 metres below the old workings in the San Rafael vein. Extrapolating this potential to depth in a stacked system, as implied above, indicates the potential for the discovery of several million ounces of gold and silver in the San Rafael Vein alone. Testing and defining these areas will be the focus of an immediate underground drilling program.
Placer Dome, which held the El Oro property under option in the early 2000's, extrapolated the information above to the other known veins in the Historic Mining Area such as Verde, Borda, Corona and lesser known veins and considered that potential exists for veins other than San Rafael, to host an additional five million ounces gold as well as significant silver. This potential will be tested by underground and surface drilling and sampling.
In 1993 Luismin estimated a non-NI-43-101 compliant historic resource of 762,000 oz gold and 9.7 million oz silver contained in vein remnants, back-fill and pillars lying along only 40% of the known length of the San Rafael vein. This potential resource comprises 6.89 M tonnes grading 3.44 gpt gold & 44 gpt silver and is part of a larger global resource reported by Luismin as 1.7 M oz gold and 38 M oz silver remnant lying along the whole of the old San Rafael workings. This historic resource requires verification and Candente intends to conduct confirmatory drilling and underground sampling, starting with bulk sampling of a higher grade portion that is estimated to contain 100,000 ounces gold and 1,000,000 ounces silver in 738,000 tonnes grading 4.11 gpt gold and 44 gpt silver.
Mark Pryor, Pr.Sci.Nat., Independent Consultant, Sean Waller, P.Eng., Vice President and Joanne C. Freeze, P.Geo., President and CEO, are the Qualified Persons as defined by National Instrument 43-101 for the aspects of the project discussed above and have reviewed and approved the contents of this release.
About Candente Gold
Candente Gold is a new company formed under a Plan of Arrangement. Candente Gold, through its Mexican subsidiary, Minera CCM S.A., acquired the right to earn a 70% interest in the El Oro gold-silver property in Mexico from Candente Resource and Canaco Resource Inc. who held the option. Candente Resource has also agreed to transfer its portfolio of gold and silver properties in Peru to Candente Gold. The Toronto Stock Exchange ("TSX") has granted Candente Gold conditional approval to list its common shares on the TSX, subject to the completion of a financing.
Candente Gold is conducting the financing by way of a private placement offering which is comprised of units at a price of $0.40 per unit, each unit consisting of one common share in the capital of Candente Gold ("Share") and one-half of one share purchase warrant ("Warrant"). Each whole Warrant will be non-transferable and exercisable for a period of 24 months to purchase one additional Share at a price of $0.60 per Share.
Agents assisting with the financing will receive a cash commission equal to 6.5% of the gross proceeds from the sale of the units they each make pursuant to the Financing, together with broker's warrants to purchase that number of units that is equal to 6.5% of the aggregate number of units they sell pursuant to the financing. Each broker's warrant is exercisable for a period of 24 months to purchase one additional Share at a price of $0.60 per Share. All Shares issued pursuant to the financing will be subject to a four month hold period.
For complete details of the Plan of Arrangement and the Financing see Candente Resource and Candente Gold's News Releases dated July 30, 2009, July 8, 2009 and June 16, 2009.
About Candente Resource Corp and Candente Gold Corp.
Candente Resource and Candente Gold's Management Teams and Boards of Directors are senior mining industry executives with a track record in the discovery and development of copper, gold and silver deposits. Candente subscribes to principles whereby exploration and development activities are consistent with best practice and beneficial to the local communities.
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.
For further information please contact:
Phone: + 1 (604) 689-1957
Joanne C. Freeze, PGeo.
President & CEO
Candente Gold Corp.
Sean Waller, P. Eng.
Candente Resource Corp.