Feb 15 2011
Candente Gold Corp. (TSX:CDG)(PINK SHEETS:CGDXF)(BVLAC:CDG) has announced that it has delivered notice to Luismin S.A. de C.V., a subsidiary of Goldcorp Inc., that the Company has fulfilled all requirements necessary to exercise its option to earn an undivided 50% interest in the El Oro Gold Project, located in Mexico State, Mexico.
Candente Gold has also delivered to Luismin notice and official confirmation that the Company has elected to earn an additional 20% interest in El Oro.
The option agreement with Luismin (see Candente Resource Corp. NR 267 Oct. 1, 2009) provides Candente Gold the right to earn an undivided 50% interest in El Oro by spending US$5M on the project (including a minimum of US$1.5M in the Exploration Area, as defined in the option agreement), and by delivering to Luismin a fixed number of shares which included 1,000,000 common shares in the capital of the Company. All of these conditions have been met, and all documentation required to exercise this first option has been sent to Luismin in accordance with the terms of the option agreement.
"We are very pleased to lock in 50% ownership of the El Oro Gold Project, and to continue our exploration of the El Oro district in order to acquire an additional 20% interest," said Joanne Freeze, P.Geo., President & CEO. "We believe, particularly in light of recent discoveries, that El Oro may host multiple zones of gold and silver mineralization, and that it has the potential for the discovery of additional high-grade zones beneath the historic workings where 6.4 million ounces of gold and 74 million ounces of silver were produced."
Candente Gold also has a second option to earn an additional 20% in the El Oro Gold Project, for a total of 70%, by spending an additional US$5M and issuing an additional 1,000,000 common shares in the capital of the Company by November 30, 2013.
Once Candente Gold exercises the second option to hold a 70% undivided interest in the El Oro Project, Luismin will have a period of 90 days to advise Candente Gold of its decisions regarding the following options:
- In the Historic Mining Area (as defined in the option agreement): Luismin has the right to: i) stay at 30% by participating in future expenditures; or ii) dilute to a 6.5% NPI; and
- In the Exploration Area: Luismin has the right to: i) stay at a 30% interest by participating in future expenditures; ii) dilute to a 6.5% NPI; or iii) earn-back 40% (to hold a 70% interest) by making exploration expenditures on the Exploration Area within the following four year period that total 2.5 times the total amount of exploration expenditures made by Candente Gold in the Exploration Area to the date of exercise.
Joanne C. Freeze, P.Geo., President and CEO and Mark J. Pryor, Pr.Sci.Nat., are the Qualified Persons as defined by National Instrument 43-101 for the projects discussed above and they have reviewed and approved the contents of this release.