Due Diligence Team Successful on Western Mexico Projects
Candente Gold Corp. (TSXV:CDG) ("Candente Gold” and/or the
“Company”) is pleased to advise that due diligence visits have been
conducted at both the San Dieguito de Arriba processing plant ("SDA
plant") and the historic El Dorado Mine both in Nayarit, Mexico.
The examination of the SDA plant found all key components in good
order and, as expected, identified the need for the replacement of
various working parts for which a cost estimate is being
prepared. The historical mine, La Hundida, at El Dorado, was
accessed both on surface and underground.
In April 2020, Candente Gold signed a Memorandum
of Understanding ("MOU") with Magellan Acquisition Corp.
("Magellan") giving Candente Gold the right to earn up to a 100%
interest in both the SDA plant and the El Dorado property.
The site visits to the SDA plant and El Dorado Project represent
the physical inspection portion of Candente Gold’s due diligence on
the properties. The reviews will provide the Company with
valuable information to progress toward a definitive agreement and
implementation of the initial stages of our growth strategy. Legal
due diligence work is ongoing although preliminary reviews have not
identified any concerns.
In the historical La Hundida Mine, underground
workings were found to be in stable condition. Rock chip sampling
was conducted and samples were collected and sent to Altiplano Gold
Silver SA de CV laboratories in Matehuala, San Luis Potosi, Mexico
for assay and metallurgical testing. Due to the current
COVID19 travel restrictions, the Company’s Qualified Persons cannot
verify the Quality Assurance and Quality Control (“QA-QC”)
procedures carried out during the sampling process but understand
that it was overseen by Ing. Gerardo Moreno, an experienced
Geological Engineer and Project Manager with more than 35 years of
experience with mining projects.
The results of these tests along with
recommendations for rehabilitation work and projections of ongoing
operating expenses will provide the basis for a cost estimate to
return the plant to operational status with feed material from the
El Dorado Property. The company is targeting a 1000t bulk
sample for an initial trial run.
The SDA plant was operational from 2007 (by
Minerales Vane S.A. de C.V.) until April 2017, processing ore from
various operators in the region on a toll and partnership
basis. Magellan acquired the SDA plant from Rose Petroleum in
November 2017 through the purchase of its subsidiary, Minerales
Vane, for a value of $1.5M ($1M cash plus shares). Magellan
only operated the plant in February 2019 when processing a bulk
sample of approximately 600 tons for a tolling opportunity.
While the results of the test were encouraging, the supplier
subsequently experienced challenges in providing feed to the plant
on a consistent basis and therefore the plant has not operated
since.Magellan entered an option agreement on the El Dorado
property in August of 2018, with Ingenieros Mineros, S.A. de C.V.
(“IMSA”) and modified the agreement January 15, 2020. IMSA
retains a negotiable NSR of 3.5% and Magellan 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.
Under the Definitive Option Agreement with Magellan, Candente Gold
would assume these obligations.
About Candente Gold
Candente Gold has launched a comprehensive
growth strategy to build a cash flowing business platform and gain
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
The financial benefits from Western Mexico
operations and the addition of specialized personnel will
translate across platforms to strengthen our efforts to explore and
potentially mine. The Company is currently evaluating
properties that are complimentary to the SDA plant and El Dorado
El Oro is a district scale gold project
encompassing a well-known prolific high-grade gold dominant
gold-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.
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 C. Freeze, P.Geo., President, CEO and
Director and Matthew Melnyk, CPG., Director Operations are
Qualified Persons as defined by National Instrument 43-101 for the
projects discussed above. Ms. Freeze and Mr. Melnyk have
reviewed and approved the contents of this release.
Neither TSX Venture Exchange nor its Regulation
Services Provider accepts responsibility for the adequacy or
accuracy of this release.
InformationThis news release may contain forward-looking
information (as such term is defined under Canadian securities
laws) including but not limited to information regarding the
potential for discovery 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 cause 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
For further information please contact:Joanne
Tel: + 1 (604) 689-1957
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