Candente Copper Corp. is pleased to provide the following Corporate and Project updates.
Further to appointing Endeavour Financial Limited (Cayman) as financial advisor for funding the Cañariaco Copper project, the Company has received Expressions of Interest in different forms of funding for the project. The Company is interested in forms that include but are not limited to: concentrate off-take, royalties, streaming, loans and joint venture agreements. The Company is furthering discussions with the parties expressing interest with the goal to obtain long term funding for the advancement of the Cañariaco project.
Feasibility Study Update for the Cañariaco Norte Project
The Feasibility Study of the Cañariaco Norte Project was initiated in April 2011 and although well advanced was put on hold in mid 2013 due to the deterioration in the investment climate for small cap mining exploration companies. The Feasibility Study is being conducted by Amec Foster Wheeler and supported by Knight Piesold Consultants, both of Vancouver. The Environmental Impact Assessment is being performed by AMEC (Peru) SA.
Overall, the Feasibility Study is approximately 50% complete. Activities completed to date include all resource drilling and resource estimation, metallurgical drilling, site layout, infrastructure and ancillary facilities design, and access road alignment. The process plant (grinding and flotation) layout is approximately 80% complete and will be finalized upon completion of metallurgical testwork. Geotechnical drilling for the pit design is 50% complete and approximately 80% of the field work for the Environmental and Social Impact Assessment study has been completed.
Additional metallurgical testwork is required to finalize design criteria for the cleaner flotation circuit and concentrate roasting processes. Limited geotechnical drilling is required to provide information to finalize the design criteria for the open pit wall slope and mine plan plus additional geotechnical assessment for facility foundation design and water management.
The Feasibility Study scope of development is based on the Prefeasibility Study Progress Report ("PFSPR") completed in March 2011, however the Feasibility Study incorporates several key modifications as identified below:
The daily processing rate has been increased from 95,000 to 110,000 tonnes per day with a corresponding increase in annual copper production. The increase is achieved by utilizing a 40 foot diameter SAG mill in place of the 38 foot SAG mill as specified in the PFSPR, increasing the size of the ball mills and adding pebble crushers to the primary grinding circuit. Importantly, even with the throughput increase the crushing and grinding circuit will retain a single line configuration with one primary crusher, one SAG mill and two ball mills.
Tailings Management Facility
As part of the Feasibility Study work, Knight Piesold conducted a review of the tailings management facility concepts. This analysis resulted in the selection of a new tailings management facility location significantly closer to the proposed process plant site. All project facilities including the open pit, process plant and tailings management facility are now within close proximity resulting in a smaller project footprint with all facilities located within one watershed. With this project layout the overall water management design for the project is significantly improved relative to the original PFSPR layout.
New Peru Corporate Tax Rate and Project Economics
The Government of Peru recently approved a significant reduction in the corporate income tax rate from 30% to new rates as follows:
This proactive move clearly demonstrates the Government's support and recognition of the importance of mining to the future growth of Peru.
Amec Foster Wheeler completed an independent financial assessment of the Cañariaco Norte project economics as part of the PFSPR which indicated robust economics for the project. Since that time industry costs have increased (capital and operating) and so have the forecasts for the long term price of copper. In the PFSPR a long term copper price of US$2.25 per pound was used for the financial assessment whereas current long term copper prices are now forecast in the US$2.75 to $3.00 range. As part of the Feasibility Study the financial model will be updated to include new capital and operating costs, new long term metal prices and the reduced corporate income tax rates. Candente believes that the updated financial analysis will continue to demonstrate robust economics for the Cañariaco Norte project.
Exploration - Cañariaco Sur
The Cañariaco Sur copper-gold-silver porphyry system is located approximately 1.5 kms southwest of the Cañariaco Norte deposit. Candente has drilled twelve widely spaced diamond drill holes at Sur with ten new holes completed in the 2013 drilling program. All twelve holes intersected copper-gold-silver mineralization from surface to target depth, with several of the holes drilled to over 500 meters total depth. This drilling confirms excellent potential for Cañariaco Sur to be a large copper-gold-silver deposit that could have a significant positive impact on the overall scope of development at Cañariaco. Future drilling is planned for additional step-out drilling at Cañariaco Sur as well as first phase drilling on the Quebrada Verde target.