Candente Copper makes headway in Peru

On the last day of May, the Ministry of Energy and Mines of Peru granted Candente Copper (DNT-T, CCOXF-O) the permit it needs to complete drilling for the feasibility study on its Cañariaco Norte project, a porphyry copper deposit about 700 km northwest of Lima.

The company still requires two other permits, however, to complete its feasibility study: a water permit from the National Water Authority and surface rights access from the local Kanaris community. (The water permit could not be applied for until Candente received its drill permit.)

If Candente can wrap up the surface rights agreement within the coming months, it should be able to complete the feasibility study on Cañariaco Norte by the third quarter of 2013, according to Adam Low, a mining analyst at Raymond James in Toronto.

Low notes that a community vote has yet to be scheduled on the three-year surface rights access agreement—the key catalyst. “Candente has recently made progress on securing a General Assembly meeting of the local community and expects the vote to be held soon,” he wrote in a research note to clients on June 1.

On May 9, Candente reported in a press release that its president, Joanne Freeze, was invited by the members of twelve hamlets in the Kanaris area to attend a meeting with about 200 locals, and reached an agreement with community members on local employment and sustainable development initiatives, including support for agricultural projects in the high zone of the Kanaris community. 

The Cañariaco Norte deposit is a single, contiguous, open-pit mineable deposit containing measured and indicated resources of 752.4 million tonnes grading 0.45% copper for 7.5 billion pounds of contained copper and inferred resources of 157.7 million tonnes grading 0.41% copper for 1.4 billion pounds of contained copper.

Three main zones have been recognized in the porphyry-copper-gold deposit: a variable-thickness leached cap, minor supergene copper mineralization under the leached cap, and hypogene copper mineralization, the main component of the deposit. A full pre-feasibility study progress report on the major was completed in March 2011.

In addition to Cañariaco Norte, the company has identified two other porphyry copper-gold-mineralized centres on the property called Cañariaco Sur and Quebrada Verde zones. (The drill permit the company received from the Ministry of Energy and Mines on May 31 also covers exploration drilling on Cañariaco Sur and Quebrada Verde.)

Cañariaco Norte, Cañariaco Sur and Quebrada Verde are part of an extensive porphyry complex covering a minimum length of five kilometres and an average width of two kilometres. Cañariaco Sur is the second copper-gold porphyry intrusive body discovered on the Cañariaco property and lies 1.3 km south of the centre of Cañariaco Norte. Quebrada Verde lies 3 km from Cañariaco Norte.

The project is about 110 km northeast of the city of Chiclayo in the Western Cordillera of the Peruvian Andes in the province of Ferrenafe. The property is road accessible from Lima via Chiclayo on the Pan-American Highway (about an eleven-hour trip). It can also be accessed by flying to Chiclayo from Lima, then making the 149-km, six-hour drive, to site.

Copper was first discovered at Cañariaco Norte in the 1970s, but phases of exploration and drilling in the 1970s and 1990s were sporadic until Candente Copper started exploration there in 2004.

Low of Raymond James has a six-to-twelve month target price on the stock of $2.10 per share. At presstime in Toronto Candente’s shares were trading at 53¢ apiece within a 52-week range of 58¢-$1.54.