Candente eyes Alto Dorado

Vancouver-based junior Candente Resource (DNT-V) has agreed to acquire Hecla Mining‘s (HL-N) Alto Dorado gold property in Northern Peru.

Under the deal, Candente can earn a 100% interest in Alto Dorado by paying all fees associated with the property under Peruvian law, including all exploration and development permits. Candente will also issue Hecla 100,000 shares over four years and grant the company a 2.5% net smelter return (NSR) royalty. Candente can reduce the royalty to 1% by paying Hecla US$1.5 million.

Additionally, if Candente sells an interest in the claims with in the first four years of the deal, it must forward a percentage of the proceeds to Hecla. Hecla’s shares ranges, in 5% increments, from 25% in the first year to 10% in the fourth year. Any payments under the plan will be applied toward the royalty buy back.

The deal includes a 3-km area within which any property acquired by either company will be added to the agreement.

The property plays hosts both high sulphidation and porphyry gold targets. High sulphidation targets have been identified both on surface and in drill holes and comprise typical vuggy silica with gold grades ranging between 0.5 to 3.6 grams per tonne. The property’s main alteration zone measures 2.5 by 7 km. Gold-in-soil values from an 8-by-2-km area run up to 0.98 gram gold per tonne.

The 24-sq.-km property is situated midway between Newmont Mining‘s (NEM-N) (51.35%) and Compania de Minas Buenaventura‘s (BVN-N) (48.65) Yanacocha deposit and Barrick Gold‘s (ABX-T) Alto Chicama property.