Candente Gold Secures Cornerstone for New Growth Strategy
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Candente Gold Secures Cornerstone for New Growth
Strategy
Vancouver, British Columbia, September 28 th, 2020. Candente Gold Corp. (TSX V:CDG)
("Candente Gold” and/or the “Company” ) is pleased to advise that the Company has
signed the Definitive Agreement (in keeping with the Memorandum of Understanding
(“MOU”) signed April 28 th, 2020) with Magellan Acquisition Corp. (“Magellan”) which
gives Candente Gold the right to earn up to a 100% interest in the San Dieguito de Arriba
beneficiation plant (“SDA Plant”) and take over their rights to a lease agreement on the
El Dorado Property, both located in Nayarit State, Mexico.
SDA Plant
The SDA plant consists of a flotation plant which also includes a precious metals leach
circuit - Merrill Crowe system and associated assets, licenses and agreements. The plant
has a ten year operating history at 100 ton nes per day but can be expanded to process
mined material at a rate of up to 200 tonnes per day. Historically its operation has been
based on sales of flotation concentrates to smelters, and payment for precious metals
content. The plant lies within the rich Sierra Madre Occidental mineralized belt, which
historically has yielded millions of ounces (“oz”) of precious metals and offers multiple
high grade gold and silver epithermal vein opportunities.
The mill was operational from 2007 (by Minerales Vane S.A. de C.V.) until April 2017,
processing material from various operations in the region on a both a profit sharing and
toll basis. The toll material s were tested prior to processing to estimate recoveries and
concentrate grades. Typical reported recoveries were in the range 85 to 92% for gold and
72 to 77% for silver. The mill operated as recently as February 2019 for processing of a
bulk sample of approximately 600 tonnes. Due Diligence uncovered the requirements for
usual wear and tear maintenance estimated at $95,000 to restore the mill to functional
condition in order to receive an d run a 1,000 ton ne bulk sample from El Dorado. The
Company has initiated discussions for potential lines of credit facilities with offtake
groups.
El Dorado Gold-Silver Project
The El Dorado Gold-Silver Project is located in the Pacific Coastal Plain, State of Nayarit,
within a district of epithermal vein systems which is known to host high grade gold and
silver in several veins. The El Dorado vein trend is the principal vein system within the
property covering an area of 5 km x 3.5 km in size. Veining follows a general northeasterly
strike dipping steeply to the NW. A continuous reef outcrop forms a ridge 1.5 kilometers
(“km”) in length. Additional discontinuous outcrops both to the NE and SW indicate a
strike length of 3.5 km.
NEWS RELEASE
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The El Dorado vein system has a history of small -scale mining from two veins. Mining
in the area has been documented during the periods of: 1900 to 1927; 1965 to 1975; 1975
to 1983; and 1985 to 1990 , often producing direct-to-smelter grade material . Mos t
recently, from 1985 to 1990 , material from three levels to a depth of 30 meters (“m”)
below the surface was shipped to the "El Venado " processing plant located near Ruiz,
Nayarit, for toll treatment to produce a flotation concentrate. Historical metallurgical
balance sheets from this plant indicate the grade of the material was i n the order of 5
grams per tonne (“g/t”) gold and 70 g/t silver.
Prospero Silver Corp. explored the El Dorado property between 2010 and 2011 , through
a series of comprehensive exploration programs which included historical data reviews,
geological mapping, geochemical sampling, trenching and drilling. A total of 4,950 m
were drilled in 28 diamond core holes to a n average depth of 150 m, over a strike length
of 440 m. The drilling intersected multiple steeply -dipping silicified mineralized zones
extending from near-surface to the 150 metre drilled depth.
Significant results reported by Prospero on Dec 10, 2010
(https://pr.globenewswire.com/FileDownloader/DownloadFile?source=ml&fileGuid=83e6
aacd-f015-48bc-af52-1e3f95cf6d9b) included 16.17 meters grading 4.03 g/t gold , 204 g/t
silver, 4.0% lead, and 1.75% zinc; and 2.32 meters grading 6.04 g/t gold and 140 g/t silver.
The range of widths and grades of the holes within the central portion of the Hundido
historical mine area were reported to range from 1.45 meters to 11.22 meters (true
widths). The Company’s Qualified Persons have not verified Prospero’s drilling results as
due to COVID travel restrictions, they have not yet been able to examine the drill core nor
assay data and are therefore relying on data provided in News Releases filed on Sedar by
Prospero in 2010 and 2011 and verified by their Qualified Persons.
Prospero also reported that t he mineralized zone is 400 meters long and extends up to
180 meters at depth. Within the mineralized zone Prospero intersected grades rang ing
from 3.0 to 40.0 g/t Au and 57 to 500 g/t Ag over true widths that range from 0.52 meters
to 11.2 meters.
To the Company’s knowledge, a NI 43-101 compliant mineral resource estimate has not
been completed for the El Dorado property, however in July 2011, Prospero conducted an
in-house historical resource estimate based on their drilling described above as well as a
review of summary cross sections, limited production documentation and other mine
records, as well as results from samples of mine dumps, underground sampling (46 by
Fresnillo) and 283 surface outcrop samples collected by both Prospero and previous
explorers and exploiters.
Candente Gold believes that Prospero’s Qualified Person (“QP”) is very well qualified and
that the parameters used to arrive at the historical resource estimate are relevant and
reliable, however the categories used in the estimate do not appear to be compliant with
CIM Definition Standards. The Company’s QP cannot verify that a qualified person has
done sufficient work to classify the historical estimates as current mineral resources and
therefore the Company is not treating the historical estimates as current mineral
resources. Historical reviews of the potential tonnes and the potential grades quoted
below are conceptual in nature.
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Prospero’s historical resource estimate was calculated using pol ygonal resources in 10
blocks based on intersections from 10 holes covering/in the Hundid o and Intermedia
Veins, using a tonnage dilution factor of 25% and a specific gravity of 2.8. Metal
equivalencies were based on a gold price of US$1,000 per ounce (“oz”) and a silver value
of US$20 per ounce.
Prospero’s historical estimate for the Hundido a nd Intermedia Veins is 190 ,000 tonnes
grading 7.0 g/t gold and 173 g/t silver containing a historical resource of 40,926 oz gold
and 1,014,030 oz silver. The grades and tonnages attributable to each vein are as follows:
HISTORICAL ESTIMATE / MINERALIZATION INDICATED BY DRILLING
Vein True Width
m
Tonnes Gold
Equivalent
g/t
Hundido 2.3 89,000 7.01
Intermedia 8.3 91,000 15.17
Notes: 1. Polygonal resources based on intersections from 10 holes.
2. Tonnage reduced by 25% to allow for mining dilution and recovery loss.
3. Does not constitute Reserves under SEC Industry Guide 7 nor
Resources under current CIM Definition Standards
Based on all of the existing exploration data and previous historical resource estimates to
date the Company believes that a Conceptual Exploration Target within 150 metres of
surface has potential for: 110,000 to 200,000 tonnes of material grading from 4.4 to 9.8
g/t gold and 113 to 239 g/t silver containing between 22,500 and 41,000 oz gold and
500,000 to 1,000,000 oz silver , with secondary credits from lead and zinc. This in -situ
conceptual estimate of the potential tonnes and grade is co ntained in unmined portions
of the veins as previously delineated. It does not include vertical extensions of the veins
below 150 m nor along strike where the veins have been mapped for 3.5 km nor additional
exploration potential. The potential quantity and grade described above is conceptual in
nature, that there has been insufficient exploration to define a mineral resource and it is
uncertain if further exploration will result in the target being delineated as a mineral
resource.
The following longitud inal section by Prospero shows the drilling pattern along the El
Dorado veinin the area of the Hundido and El Dorado mines, along with summary drill
hole intersection grades and widths used in the historical resource estimation. (Prospero
News Release dated June 22, 2011)
(https://pr.globenewswire.com/FileDownloader/DownloadFile?source=ml&fileGuid=8153
e87a-3b93-4a6b-b4af-b0a9c50c0e5b)
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Significant data compilation, re -drilling, re- sampling and data verification may be
required by a Qualified Person for the Company before the intersection widths and grades
can be verified to be compliant with current NI 43-101 standards. The Company’s QP has
not done sufficient work to verify the above-mentioned intersections.
In addition to the data described above , exploration potential outside of the area of
historical mining and Prospero’s drilling is believed to be excellent based on the 3.5 km
strike length of the vein structures as indicated by vein outcroppings, argillic alteration
and silicification. Along this trend, potential exists for both high-grade veins and lower-
grade bulk tonnage stockwork zones that have been observed to extend over tens of
meters in width in both the hanging wall and footwall of the El Dorado vein system
(“Magellan Gold Corporation, Form 10-K Annual Report US SEC dated Dec 31, 2018, File
No. 333-174287”)
(https://pr.globenewswire.com/FileDownloader/DownloadFile?source=ml&fileGuid=f7eae
2de-c9e8-4748-9f41-78d2cd4ca914). Both the northeast erly striking as well as east -west
striking splits of the main structure exhibit structural complexity and potential for multi-
meter wide precious metal mineralization. Anomalous base metal assays (100's to 1000's
of parts per million le ad, zinc and copper ) are ubiquitous as evidenced by the common
occurrence of visible galena, sphalerite and chalcopyrite in outcrop and dumps.
El Dorado lies 50 k m south of the SDA Plant , 70 km north-northwest of Tepic, the state
capital, and 180 k m southeast of Mazatlan, Sinaloa. The project has excellent road and
rail infrastructure.
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Terms of the Agreement
Candente Gold has the Option to earn up to a 100% interest in the Plant and assume the
Lease Agreement to the El Dorado Property by m aking staged payments in shares
totalling a value of US$1.425 million over 30 months as well as $5,000 on signing the
MOU and 5,000,000 shares on signing the Definitive Agreement and obtaining TSXV
approval. Share values are to be calculated using a 30 day VWAP. The Company also has
the option to earn a partial interest in the plant and pay Magellan Acquisitions a fee for
usage based on percentage owned. (See News Release No. 077 dated April 28th, 2020 for
more details)
Candente Gold also has the right to assume the rights and obligations of a Lease
Agreement Magellan Acquisitions had with the owner of the El Dorado Ingenieros
Mineros, S.A. de C.V. (“IMSA”). Candente Gold has the right to explore and exploit form
the El Dorado property while IMSA retains a negotiable NSR of 3.5% and is obligated to
either perform US$20,000 of work on the property in 2020 and $25,000 in 2021 or make
payments of US$5,000 per quarter.
About Candente Gold
Candente Gold has launched a comprehensive growth strategy to build a cash flowing
business platform and gaining access to properties with near surface exploration potential
while maintaining El Oro as its flagship asset and an integral part of the overall growth
strategy. The acquisition of the SDA Plant and the El Dorado historic mines signifies an
important first step. The Company is currently evaluating other properties that are
complimentary to the SDA plant and El Dorado Property.
The recently announced profit -sharing agreement on the Cocula Property in Jalisco
affords Candente the opportunity to establish a second production center in Western
Mexico. Whereas the target properties to provide feed for the SDA plant are dominantly
underground targets, the Cocula Property hosts near surface, gold-silver-lead which may
be amenable to open pit mining and either leaching or flotation, bringing an element of
diversification the Western Mexico operations.
El Oro is a district scale gold project encompassing a well-known prolific high-grade gold
dominant silver epithermal vein system in Mexico. The project covers 20 veins with past
production and more than 57 veins in total, from which approximately 6.4 million ounces
of gold and 74 million ounces of silver were reported to have been produced from just two
of these veins (Ref. Mexico Geological Service Bulletin No. 37, Mining of the El Oro and
Tlapujahua Districts. 1920, T. Flores*)
Modern understanding of epithermal vein systems indicates that several of the El Oro
district’s veins hold excellent discovery potential, particularly below and adjacent to the
historic workings of the San Rafael Vein, which was mined to an average depth of only
200 metres.
Joanne Freeze, P.Geo., President, CEO and Director and Matthew Melnyk, CPG., Director
Operations and Director, are Qualified Persons as defined by National Instrument 43-101
for the project discussed above. Ms. Freeze and Mr. Melnyk have reviewed and approved
the contents of this release.
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Neither TSX Venture Exchange nor its Regulation Services Provider accepts
responsibility for the adequacy or accuracy of this release.
Forward-looking Information
This news release may contain forward -looking information (as such term is defined
under Canadian securities laws) including but not limited to information regarding
references to historical resource estimates, the potential for discovery on the El Dorado
Property and in the El Oro district and other statements that are not historical facts.
While such forward -looking information is expressed by Candente Gold in good faith
and believed by Candente Gold to have a reasonable basis, they address future events
and conditions and are therefore subject to inherent risks and uncertainties including
those set out in Candente Gold’s MD&A. Factors that c ause the actual results to differ
materially from those in forward-looking information include, without limitation, gold
prices, results of exploration and development activities, regulatory changes, defects in
title, availability of materials and equipment, timeliness of government approvals,
potential environmental issues, availability of capital and financing and general
economic, market or business conditions. Candente Gold expressly disclaims any
intention or obligation to update or revise any forward -looking information, whether
as a result of new information, future events or otherwise, except in accordance with
applicable securities laws.
On behalf of the Board of Candente Gold Corp.
“Joanne Freeze” P.Geo.
President, CEO and Director
For further information please contact:
Joanne Freeze
President & CEO
Tel: + 1 (604) 689-1957
NR 085