Tailings Project and Exploration Targets The El Oro Gold District - - PowerPoint PPT Presentation

Tailings Project and Exploration Targets

August – 2014

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The El Oro Gold District Mexico

Disclaimer

• The material contained in this presentation is provided solely for your general knowledge and is not intended to be a

comprehensive review of all matters and developments concerning Candente Gold Corp. (‘Candente’) or its affiliates. Candente has taken all reasonable care in producing the information contained in this presentation. This information may still contain technical or other inaccuracies, omissions, or typographical errors, for which Candente assumes no responsibility. Candente makes no representation or warranty regarding, and assumes no responsibility for, the use, validity, accuracy, completeness, reliability or currency of any claims, statements or information in this presentation. By attending or reviewing this presentation, you agree that Candente will not be liable for any injuries, losses, expenses or damages arising from the use of or reliance on information contained in this presentation, or any inaccuracy or omission in such information or failure to keep the information current. The information in this presentation is not a substitute for

• btaining independent professional advice before making any investment decisions.

The information contained in this presentation does not constitute an offer or the solicitation of an offer for the purchase of any securities of Candente. This information is not intended in any way to qualify, modify or supplement any information disclosed under the corporate and securities laws of any jurisdiction applicable to Candente. No securities commission or similar authority in Canada or any other country or jurisdiction has in any way passed on any of the information contained in this presentation and no representation or warranty is made by Candente to that effect. Cautionary Note to U.S. Investors We advise U.S. investors that this presentation uses terms which are not recognized by the United States Securities and Exchange Commission (“SEC”), including “mineral resources”, “measured resources”, “indicated resources” and “inferred resources”. The estimation of measured & indicated resources involves greater uncertainty as to their existence and economic feasibility than the estimation of proven and probable reserves. U.S. investors are cautioned not to assume that mineral resources in these categories will be converted to reserves. The estimation of inferred resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources. U.S. investors are cautioned not to assume that estimates of inferred mineral resources exist, are economically mineable, or will be upgraded into measured or indicated mineral resources. U.S. investors are cautioned not to assume that mineral resources in any of these categories will be converted into reserves. This presentation also contains information about adjacent properties on which we have no right to explore or mine. We advise U.S. investors that SEC mining guidelines strictly prohibit information of this type in documents filed with the SEC. U.S. investors are cautioned that mineral deposits on adjacent properties are not indicative of mineral deposits on our properties. 2

Management & Directors

Joanne Freeze, B.A., B.Sc., P.Geo., President and CEO

• Co‐Founder of Candente Resource Corp. in 1997. Guided the discovery and development of the Cañariaco Copper Deposit into

Feasibility stage. Lead the acquisition of the El Oro gold project from Wheaton River Minerals ‐ Luismin in 2006. Guided exploration resulting in a portfolio of gold and silver prospects in Peru. Prior to Candente, Freeze worked in management in gold and copper exploration since 1981. Qualified Person for Arequipa Resources on Pierina Project, Peru 1995 to 1996.

Sean Waller, P. Eng – Vice President

• Former VP Global Business Development & Senior Project Manager with AMEC Americas’ Mining and Metals Division
• President of the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”)
• Dr. Peter Megaw, Ph.D., Independent Director
• Co‐founder of Minera Cascabel and MAG Silver. Active and internationally recognized for contributions to Mexican mineral

exploration since 1980. Specializes in Carbonate Replacement(CRD), Epithermal Vein and Porphyry Copper Deposits. Dr. Megaw and his team are credited with the significant discoveries at Juanicipio‐Fresnillo, Zacatecas; Platosa, Durango; and Cinco de Mayo, Chihuahua. Director of MAG Silver since 2005 and Candente Resource Corp. since 2003.

Andres Milla, M.A. Ec., Independent Director

• Active in Peruvian Investment Banking & Capital Markets since 1996, involved in transactions worth in excess of US$2 Billion.
• Former Board member of the BVL & Cabinet of Advisors of the Ministry of Economy & Finance of Peru.

Paul H. Barry, MBA, Independent Director

• Mr. Barry has over 30 years of operating experience in the mining and energy industries in senior executive roles.

Currently, Mr. Barry is engaged by Balfour Beatty Infrastructure Partners serving as CEO of Upper Peninsula Power Holding Company

• From 2011 to 2012, Mr. Barry served as executive VP and CFO of Kinross Gold Corp., where he oversaw $16.5‐billion
• f assets and raised $5‐billion in new debt financing.

Larry Kornze, P.Eng., Independent Director

• 34 year career in international gold exploration. General Manager of Exploration for Mexico and Central America and

International Evaluations for Barrick Gold Corporation. US Exploration Manager for Barrick Gold Exploration and responsible for the Goldstrike Mine exploration with discoveries at Betze, Meikle, Deepstar, Screamer & Rodeo. 3

EL ORO EL ORO

• 110 km WNW of Mexico City
• 27 claims covering 17,960 hectares
• Excellent access ‐paved highway to project
• Mining friendly population
• Excellent infrastructure & services
• Power to Site

El Oro District, Mexico

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Property Location and Access

El Oro District, Mexico

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Candente History at El Oro

July 10th, 2014 El Oro Tailings Inferred Resource contains 119,900 oz Gold and 3M oz Silver June 26th, 2014 High Gold and Silver grades confirmed for the El Oro Mine tailings May 15th, 2014 Candente Gold Appoints Paul H. Barry as Independent Director April 15th, 2014 JDS Mining completes Preliminary Study of Potential of El Oro Mine Tailings Jan 23rd, 2014 Candente Gold closes Non‐Brokered Private Placement of $746,025 July 12th, 2013 Acquired Tailings Deposits from Municipality of El Oro de Hidalgo April 30th, 2013 Development of El Oro Mining & Railway ‐San Rafael 3D gold/silver GRADE model Feb 25th, 2013 Thirty ‐ one exploration targets (9 high priority) ASTER/structural interpret March 31st, 2013 Development of a 3D gold and silver block model of the San Rafael vein segment May 1st, 2012 70% earn‐in by spending $10M in exploration Feb 14th, 2012 San Rafael Vein extended laterally to 3.5km and vertically to 500m May 11th, 2011 Gold discovered deep in the San Rafael Vein (13.7 g/t Au over 3.0m)

• Feb. 9th, 2011 Unconformity Somera Tuff Discovery (1.17 g/t Au and 5.02 g/t Ag over 54.7m)

Corporate Strategy

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• Tailings: Potential for Short Term Cash Flow through

Reclamation and Reprocessing of Historic Tailings known to contain significant gold and silver

• 3D Grade Model: To delineate remnant (un‐mined)

high grade mineralization and to define mineralizing controls for targeting potential additional high grade zones at depth or laterally

• Top 10 of 31 Exploration Targets: To discover new

mineralized veins and/or zones

2014 Inferred Resource Estimate

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• An increase of ~ 40% gold content and 30% silver content from

historic assessments due to:

• Recent topographic surveying resulted in increase in surface

exposure from 5.6 to 6.8 hectares

• Increase in bulk density to 1.5 from 1.3 kg/m3, used historically
• 1.5 kg/m3 more typical for tailings such as at El Oro

Note: * Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. All figures have been rounded to reflect the accuracy of the estimate.

Classification Tonnes Au g/ t Ag g/ t Ounces Au Ounces Ag Inferred 1,267,400 2.94 75.12 119,900 3,061,200

El Oro Tailings

• Located near existing infrastructure at El Oro
• Environmental benefit in removal of hazardous

and unsightly tailings

• Potential gross value of precious metals
• Economic value in reclaimed real estate and

potential for future development

• Potentially profitable recovery program at a

relatively low cost

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Other Potential Tailings Deposits

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Jales Tiro México ~ 5.6 Has. Jales El Oro Mining

~ 3.05 Has.

Jales Esperanza ~ 6.0 Has

Mining History El Oro

• Year 1907: Mexico mine was owned by the Mexican Venture Company and started production
• n the San Rafael vein with the completion if the 100‐stamp cyanide mill.
• Year 1910: the company was sold to the London Exploration Company Limited and certain

English and French interests.

• Year 1912: Esperanza Mine was relinquished to the Esperanza Limited Company. The lowest

grade ore profitably exploited contained 0.25 oz gold Au/ton and 2‐3 oz silver Ag/ton.

• Year 1920: the American Mining Co. built a 120‐stamp cyanide mill.
• Years 1925 to 1937: In 1925, all of the mines and properties including the Mexico Mine were

acquired by Las Dos Estrellas. Higher grade backfill, pillars and intermediate veins were mined at this time. A new crushing and processing plant was built to process this ore. Most of the Mexico Mine tailings were produced from 1919 to 1925.

• Years 1937 to 1960: Minera Dos Estrellas turned the mines over to the mine workers as debt

repayment from 1937 and the La Cooperativa de Las Dos Estrellas en el Oro y Tlalpujahua continued operating as a salvage operation mining stope fill, back fill and exploitation of insitu higher grade pillars from the San Rafael/Veta Verde Veins

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Mexico Mine Tailings Studies from 1931 to 1990

Year Company Process Regrind Rec % Au Rec % Ag Comments

1951

1 Mining Dev. Com.

Flotation 96% to ‐325 mesh 70 71 Good results however long float times and coal dust Cyanidation after calcination No to regrind 70 20 Poor results; short calcination (20min) to 600 0 C and elimination of carbon material 1959

2 Mining Cooperativa

Dos Estrellas Cyanidation after calcination No to regrind 75 22 No regrind and results similar to 1951 Cyanidation after calcination ‐200 mesh 81 30 Grinding to ‐200 mesh increases recoveries Flotation 80% to ‐325 mesh 93% to ‐325 mesh 27 49 48 41 Low recoveries compared to 1951 test work 1982

• Cia. Minera Real de

Asientos y Anexas Heap Leaching No to regrind Yes to regrind 20 20 41.33 53.33 10 day leach requirement 8 day leach required and 8 minute regrind Heap leaching after roasting No to regrind No to regrind 50 50 66.66 70.67 Roasting/chlorination to 700 0 for 30 minutes, 7 days leaching, varying conditions 1989

3 Instituto de

Metalurgia (SLP for MMM) Flotation No to regrind 13.5 13.6 Fine fraction dominant, carbonaceous material and partially oxidized on surface = poor recoveries Direct cyanidation No to regrind 50 47.82 Aggregates of mineralized material (vein?); poor recoveries; require disaggregation BEST RECOVERIES Direct cyanidation Yes to ‐325 mesh 75 82.41 Higher costs of cyanide and calcium reagents Cyanidation after roasting No to regrind 75 55.44 Roasting at 800 0 for 20 minutes

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1 Mining Development Comission 2 Cooperativa Dos Estrellas 3 Instituto de Metalurgia, Universidad de San Luis Potosi for Minera Mexico Michoacán

Terms of the Agreement with the Municipality of El Oro de Hidalgo

• Phase I allows the Company a one year period to carry out the

necessary test work to ascertain recoveries and potential economic viability of a tailings reclamation and reprocessing

• peration, for staged payments of US $25,000 and monthly

rental of $3,000 starting 30 days after signing.

• Phase II Processing ‐ an 8% Net Profits Royalty would be paid to

the municipality during the period of operation. The agreement also provides the municipality with a reclamation program. The processing and reclamation process includes extraction, relocation and reprocessing of the tailings as well as reclamation

• f the current location which would both negate current

potential environmental risks and allow better use of municipal lands

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Tailings Path Forward

• Deposit secured by CDG from the Municipality
• Metallurgical confirmation test work
• Feasibility Study to evaluate Economic Viability, Capital and Operating costs
• If Technically Feasible and Economically Viable ‐ Finance Project
• Reclamation would make strategic land available for Municipality (clean up

benefit)

• Simple operation envisaged:

 Excavator/truck reclamation;  Agitated cyanide leach;  Liquid/solids separation;  Merrill‐Crowe gold/silver recovery and;  Cyanide destruction for tails.

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Tailings Sampling Conclusions

• Best historic recoveries were direct cyanidation by agitation
• 15% passing through a 200 mesh screen (coarse)
• Cyanidation followed by a 100 mesh classification
• Finer fraction had recoveries of 75% for gold and 82.4% for

silver

• Coarser fractions need to be disaggregated and regrinded to

increase recoveries (clusters of mineralized quartz vein (?)

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Proposed Budget: Tailings Verification Drilling and Metallurgical Test work

Creation of a Block Model

• Development of an integrated 3D block model
• Model Historic gold and silver data
• To gain a better understanding of grade

distribution in San Rafael and nearby veins

• To define mineralization controls in the district
• To identify un‐mined mineralization, potentially

economic

• To identify new zones of high grade mineralization

laterally, down‐dip and along‐strike

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Location San Rafael Vein Model

Candente’s 2013 Model Method and Parameters

• All gold and silver assay values on 914 two‐meter grade control

level plans were captured and imported into a sample file in mine grid and UTM coordinates

• Individual vein zone outlines were digitized
• Gold and silver data was captured in the original reported units (Au

USD$/Ton and silver in oz/Ton) using the 1915 mines handbook published metal prices of USD$20/oz Au and USD $0.56/oz Ag)

• Blocks were created measuring 5 x 5 x 5 metres and were calculated

using a short spherical search with a 4 meter radius

• 1.2km of the 3.3km long San Rafael vein was modeled

El Oro Mining & Railway Segment Model

El Oro San Rafael Long Section

Schematic longitudinal section showing past historic production from the San Rafael Vein with Candente 2010‐2011 Drilling; pre‐mineral andesite sills Schematic longitudinal section showing past historic production from the San Rafael Vein with Candente 2010‐2011 Drilling

San Rafael Sampling Long Section

Cross Sections A to Z; Sampled (mined) portions shown roughly by blocks; Drill holes from 1993, 2010 and 2011 shown with significant intercepts displayed.

Gold Grade (ppm) Color Code

Average Gold Grade (ppm)

San Rafael Sampling Long Section

Sampled (mined‐out) portions shown roughly by blocks. Drill holes shown with significant intercepts displayed as disks.

Approximate Mined Thickness (m) Color Code

0.0 ‐1.0 1.0 – 6.0 6.0‐15.0 15.0‐35.0 35.0 +

Candente’s 2013 Block Model Short Term Goals

• Verify shaft and section locations
• Build actual shapes for mineralized zones
• Compare nearby drill hole grades with actual

digitized samples

• On‐going geostatistical evaluation for gold and

silver from digitized samples

• Quick and dirty look at potential adjacent to

mined out areas

Candente’s 2013 Block Model Long Term Goals

• Digitize levels and make “accurate” model of

mined out volumes

• Digitize ore zones and model these in 3D
• Define “controls” on higher grades
• Compare production records to mined out tonnes
• Produce drill plan for testing stope limits
• Estimate of potential remnant mineralization

Note: gold (g/t) and silver(g/t) cut away 3D models are available on website

Remnant Mineralization Highlights

Drill Hole ID From(m) To(m) Intercept(m) Au g/t Ag g/t SR‐93‐01 191.0 193.0 2.0 6.90 58.26

Post mineral volcanics to 125m

198.0 199.5 1.5 15.10 91.00 216.5 217.5 1.0 4.11 49.80 229.0 230.0 1.0 6.18 25.80 254.2 255.5 0.87 4.22 44.70 SR‐93‐02 167.3 168.0 0.7 3.25 49.10

Post mineral volcanics to 125m

183.5 189.5 5.9 1.51 80.05 201.5 207.0 5.5 5.40 87.00 207.0 210.5 3.5 23.20 224.00 201.0 213.0 12.0 10.10 121.49 SR‐93‐04 274.1 275.5 1.4 1.05 75.00 SR‐93‐05 263.5 266.5 3.0 0.31 146.00

Post mineral volcanics to 175m

266.5 271.0 4.5 1.77 307.00 283.0 285.0 2.0 4.00 81.00 SR‐93‐06 289.5 290.0 0.5 0.46 77.80

Post mineral volcanics to 275m

300.0 304.5 4.5 0.77 103.00 329.0 332.0 3.0 0.14 133.00 332.0 334.0 2.0 0.19 213.00 334.0 336.8 2.8 0.11 76.80 SR‐93‐07 243.0 243.5 0.5 1.07 80.00 SR‐93‐08 238.5 240.0 1.5 15.90 59.30

(volcanics to 130m depth)

240.0 241.5 1.5 10.80 66.50

San Rafael Tonnage Estimates Disclaimer

The following tonnage estimations are conceptual in nature and should not be relied upon as insufficient drilling has been done to define the target under an inferred mineral resource using CIM resource category with adequate geological confidence (CIM, Nov 2010). According to the CIM Definition Standards November 2010 “An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity”. Further verification drilling, to better define mineralized vein zone outlines, a recalculation of the specific gravity and further metallurgical test work is required to identify, with more certainty, the quantity and grade of the San Rafael vein target. A systematic verification drilling and sampling program should be such that continuity can be predicted with confidence and contained metals may be better known with a reasonable level of reliability. A mineral resource can be estimated for material where the geological characteristics and the continuity are known or reasonably assumed and where there is the potential for production at a profit. A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves, and the Company is not treating the historical estimate as current mineral resources or mineral reserves.

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Luismin 1989 Historic Estimate of Remnant Mineralization

• The estimate was done on the southern 1.2km of the

3.3 km long San Rafael vein system

• The estimate included approximately 40% of known

workings

• The historic estimate defined up to 6,500,000 tonnes

grading up to 3.44 grams per tonne gold and up to 44.0 grams per tonne silver

Remnant Mineralization

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Exploration Potential El Oro Property

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El Oro and Tlalpujahua Mining Districts

Tlalpujahua Mining District El Oro Mining District

El Oro Lithologic Legend

Key characteristics:

• Au‐Ag plus Hg, Sb, S (minor base metals at depth)
• gold‐rich(low silver) event and silver‐rich (low gold) event
• gold typically with jigsaw texture, quartz‐adularia veins
• gangue of quartz colloform, adularia and bladed calcite qtz
• native gold and silver mined at upper levels at San Rafael
• multiple brecciation with mineralized clasts in silica breccia
• illite‐smectite in extensive halos to veins outwards chlorite
• advanced argillic alteration above San Rafael veins at the

ignimbrite unconformity; localized buddingtonite

• quartz veins/veinlets/silicified breccia with stockwork and

shallow chalcedony

• Larger mining widths up to 120 feet at San Rafael and Verde from

extensive fault controlled transverse silica breccias

• TARGET characteristics vary depending on permeability contrasts

from unique lithologic, structural, and hydrothermal controls to mineralization

• San Rafael and Verde(robust vein swarms) to Syenite(gold‐rich

stockwork); Cortaduras(gold‐rich stockwork) to horizontal controls along low angle faults?

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The Blind El Oro District

Setting: sediment, doming, ignimbrite flare‐up and related qfp intrusions, post mineral volcanic cap Deposit forms: vein swarm, breccia and disseminate/shear hosted (low angle faults) Ore textures: fine bands, comb, crustiform, jig saw breccia Alteration: chalcedony‐adularia‐illite‐calcite‐Kspar‐chlorite; outwards to manganese Ratios: at San Rafael Ag: Au is 8:1; an earlier sulphide rich gold‐rich event (5‐8% py) Known Metals: native gold, native silver, electrum (Au‐Ag amalgam), and Ag sulfo‐salts (Sb‐Pb); pyrargyrite (AgSbS3); and ruby silver, silver sulphides, galena, sphalerite; trace chalcopyrite Base metals: < 0.1‐1.0 % combined lead plus zinc Fluid Inclusions: salinities at 0.80 to 3.5 wt % NaCl; T 202‐3580C Notable: low sulphidation state mineralization (gold‐rich) and intermediate sulphidation state mineralization (silver and base metal rich) Higher grades: Oxidized sulphide rich veins at cross faults (50‐175 g/t Au and 150‐2064 g/t Ag‐Veta Negra, San Carlos

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El Oro Drilling History