Candente aims drills at Peruvian targets

Vancouver — Candente Resource (DNT-V) is preparing to drill its Alto Dorado and Canariaco properties in northern Peru.

At Alto Dorado, the company intends to complete at least 2,000 metres in the first quarter, the chief targets being the Toril high-sulphidation gold zone and the Olla gold-copper porphyry zone.

The company acquired Alto Dorado from Hecla Mining (HL-N) in August 2003 in return for 100,000 shares. Hecla retains a 2.5% net smelter return royalty, which can be reduced to 1% by paying Hecla US$1.5 million.

The property is halfway between the Yanacocha and Pierina mines and 36 km southeast of the Alto Chicama property, where Barrick Gold (ABX-T) recently discovered a deposit estimated to contain more than 7 million oz. gold.

Alto Dorado is underlain by andesite-to-dacite tuffs and flows, which unconformably overlie Mesozoic-aged sedimentary rocks. Diorite-granodiorite stocks intruded these units. Alteration in the volcanic and intrusive rocks is typically potassic, phyllic and argillic. Northwest- and northeast-striking fault structures appear to control the alteration and mineralization.

The Toril zone measures 3 by 1.8 km and is defined by three highly resistive geophysical anomalies coincident with gold-bearing vuggy silica breccias. The zone is apparently in a collapsed caldera structure. Breccia sampling returned grades ranging from 0.5 to 3.6 grams gold per tonne.

Geophysical surveys will be carried out to delineate additional targets.

At the Olla zone, copper and gold-copper mineralization has been identified over a distance of 8 km in a series of porphyries. Samples from outcrops returned average grades ranging from 0.1 to 15 grams gold per tonne and copper grades ranging from 0.04% to 1.38%.

Previous reconnaissance drilling by Hecla intersected mineralization with intervals of up to 85 metres averaging 0.31 gram gold and 0.19% copper. Individual 2-metre intervals assayed up to 1.42 grams gold and 0.37% copper. Short hole (overburden) drilling by Candente cut similar mineralization, with grades of up to 0.65 gram gold and 0.35% copper. Much of the Olla zone is covered by colluvium, and all the drilling to date has targeted geochemical anomalies. Trenching and geophysics will endeavour to delineate diamond drill targets.

Another high sulphidation gold zone, known as Ana, occurs 3 km west-northwest of the Toril zone. Trenching indicates that Ana covers an area measuring 2.7 by 1 km and contains anomalous gold, silver and mercury. Values of up to 0.78 gram gold, 390 grams silver and 21,376 parts per billion mercury have been obtained at the prospect. Alteration and mineralization, including alunite, opaline and vuggy silica, hematite and limonite, occur in structurally controlled zones.

Satellite imagery and geological mapping have identified several additional high-sulphidation and high-temperature targets at Alto Dorado, and Candente is investigating these.

To date at Alto Dorado, Candente has performed 29 line km of geophysical surveys, 450 metres of overburden (reverse-circulation) drilling, and geological mapping at scales of 1:20,000; 1:10,000 and 1:5,000. About 400 chip samples have been collected, as well. The surveys consist of induced-polarization/resistivity, time-domain electromagnetic soundings (TDEM), and magnetics.

At the Canariaco property, Candente will try to delineate the leachable copper zone by performing 2,000 metres of drilling in the first quarter.

The company acquired the property from the Peruvian government in April 2001 in return for US$17,500 in cash. Work to date has identified a leachable copper zone grading 0.6-1.25% copper (chalcocite) with a low waste-to-ore stripping ratio of 0.5-to-1.

Depending on drill results, Candente may seek a partner to advance the property through bankable feasibility and production.

Prior to Candente’s involvement, 11 diamond drill holes were drilled and preliminary metallurgical tests were performed.

Copper mineralization ranging from 0.23% to 1.25% occurs over widths varying from 200 metres to greater than 300 metres in 10 of the 11 holes drilled. Higher-grade copper mineralization occurs in an enriched zone that, in places, exceeds 200 metres in thickness. Mineralization remains open in all directions, as well as at depth. Several holes ended in mineralization at depths greater than 300 metres.

Private placement

The company recently closed a non-brokered flow-through private placement of 250,000 units priced at $1.20 apiece for a gross proceeds of $300,000. A unit consists of one share and half a share purchase warrant. Each whole share purchase warrant can be used to buy one share of Candente at $1.65 for 18 months after the closing. The proceeds will finance exploration and development on Candente’s properties in Newfoundland.

The company’s cash position now exceeds $5 million. It has 34.1 million shares issued and outstanding and 42.1 million shares fully diluted.