TSX-V: CAND     0.01 CAD
OTCQX: CDELF     0.01 USD
FRA     0.01 EUR
Gold     2232.75 USD

News

Candelaria Mining Corp. Announces Agreement To Acquire Caballo Blanco Gold Project And Proceeding With $8.6 Million Private Placement

May 12, 2016 – Vancouver, British Columbia – Candelaria Mining Corp. is pleased to announce that it has signed an agreement to acquire the Caballo Blanco Gold Project in Veracruz from Molimentales Del Noroeste, SA de CV, a subsidiary of Timmins Gold Corp. Pursuant to the terms of the agreement, Candelaria will pay US$12.5 million in cash and assume US$5 million in contingent liabilities in exchange for the project and all related rights and assets.

Caballo Blanco Project Overview

Timmins disclosed the results of a preliminary economic assessment on the Caballo Blanco project in their December 18, 2014 news release. Since that time Timmins focussed on advancing the project including technical and environmental studies and engagement with government and other stakeholders. The information on the project provided below was  extracted from the Timmins 2014 news release.

Caballo Blanco is an advanced stage open pit, heap leach gold project located next to the Gulf of Mexico approximately 65km Northwest of Veracruz, Mexico. The project consists of two large areas of epithermal gold mineralization, the Northern Zone and the Highway Zone, contained within 14 mineral concessions covering over 54,732 hectares. Caballo Blanco has easy access  via paved roads, on-site power and clean water.

Preliminary Economic Assessment was completed on Caballo Blanco and reported in an NI 43- 101 independent technical report entitled “Preliminary Economic Assessment Caballo Blanco Gold Heap Leach, Veracruz, Mexico”, dated May 7, 2012, (re-addressed to Timmins as of January 28, 2015) (the “PEA”) prepared by Joseph M. Keane, Brent C. Bailey, Jim Cuttle, Gary Giroux, Stephen Taylor and Dino Pilloto. The PEA discloses a Measured & Indicated Resource of 575,000 oz Au (28.9 million tonnes grading 0.62 g/t Au) and an Inferred Resource of 419,000 oz Au (24.0 million tonnes grading 0.54 g/t Au).

Mineral Resources

Estimated mineral resources for Caballo Blanco are shown below.

Mineral Resources (1)
  Tonnes Metal Grade Contained Metal
(M tonnes) Au (g/t) Ag (g/t) Au (ozs) Ag (ozs)
Indicated Mineral Resources(2) 28.9 0.62 2.32 575,000 2,150,000
Inferred Mineral Resources (2) 24.0 0.54 2.50 419,000 1,930,000

(1)  As reported by Timmins  in the PEA, subject to rounding, and effective   as at January 17, 2012. The PEA is preliminary in nature, includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

(2)  As disclosed in the PEA, Mineral Resources were estimated using cut-   off grade of 0.20 g/t.

To the best of the Company’s knowledge, information and belief there is no new material scientific or technical information that would make the disclosure of the mineral resources inaccurate or misleading. For a full discussion of the sampling, analysis, quality assurance, quality control, and other technical disclosure relevant to the project, please see the PEA which is available on SEDAR under Timmins Gold Corp. profile at www.sedar.com.

Pursuant to the requirements of NI 43-101, Candelaria is required to file a technical report to support the above disclosure within 180 days from the date of this news release.

Transaction Summary

Pursuant to the terms of the Agreement, Candelaria will acquire the Caballo Blanco project in exchange for cash payments to be paid over a period of twelve months as follows:

Candelaria has also agreed to assume a US$5.0 million contingent payment obligation owing to Goldgroup Mining Inc.

Private Placement

The Company announces that it is proceeding with a private placement of up to $8.6 million.  The offering will consist of up to 80,000,000 common shares of the Company at a price of $0.10 per share for total proceeds of up to $8,000,000. Up to $3 million of the private placement will also be offered by way of unsecured convertible notes provided that the combined proceeds from the sale of the shares and the convertible notes will not exceed $8.6 million. The notes will bear interest at 6% annually, paid monthly and will be convertible into common shares of the Company for a period of 18 months at $0.06 per share for the first 12 months, and $0.10 per share for the remainder of the term. The Company may prepay the convertible notes at any time during the initial 12 month term by paying the holders all remaining interest to maturity in addition to the principal amount.

The proceeds from the private placement will be applied towards the acquisition of the Caballo Blanco Project and related assets as described above. A finder’s fee may be paid in connection with the private placement.

Completion of the acquisition and private placement are subject to customary closing conditions, including approval of the TSX Venture Exchange.

For further information, please contact:
Sokhie Puar, President & CEO
Candelaria Mining Corp.
Telephone: (604) 630-9795

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained herein may constitute forward-looking statements and are made pursuant to the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities laws. Forward-looking statements are statements which relate to future events including projected production (and estimated cash costs). Such statements include estimates, forecasts and statements as to management’s expectations with respect to, among other things, receipt of the requisite approvals for business and financial prospects, financial multiples and accretion estimates, future trends, plans, strategies, objectives and expectations, including with respect to liquidity, working capital management and to production, possible capital savings and estimates of capital, exploration drilling, reserves and resources, exploitation activities and events or future operations. Information inferred from the interpretation of drilling results and information concerning mineral resource estimates may also be deemed to be forward-looking statements, as it constitutes a prediction of what might be found to be present when, and if, a project is actually developed.

In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans, “anticipates”, believes”, “estimates”, “predicts”, “potential”, or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggestions herein. Except as required by applicable law, the Company does not intend to update any forward-looking statements to conform these statements to actual results.

Subscribe to our Newsletter