Botwood Basin

[Ed Monton]

Here is a write-up on Candente from the "Resource Opportunities" newsletter:

http://www.resourceopportunities.com/s/RecentSampleReports.asp

Candente Resource Corp.
(DNT-TSXV)

Candente recently reported a couple of news items with very important implications that may not yet be fully appreciated by investors.

On February 5, the company reported assay results from surface sampling on its Alto Dorado property in Peru. The results, from trenches and pits, ranged up to 3.6 grams per tonne. These results are extremely significant in that the geological setting and the rocks that produced those grades are similar to those found in the huge Yanacocha and Pierina deposits, which lie to the north and south, respectively, of Alto Dorado.

Previous work on the property encountered only low gold values in soil geochemical samples taken in the area. Vice-president of exploration, Fredie Huanqui, is using the same exploration approach that he employed in the early days of exploration at Pierina: he brought in crews of local labourers to dig pits through the several meters of soil in order to sample the bedrock directly.

The work being done by Candente is a good example of why junior explorers are often more successful than the larger companies. In the previous program at Alto Dorado, the major sampled the soil only to about 1 meter depth. Finding only low gold values in the soils, the company dropped the project.

In contrast, Fredie insisted on getting all with through to the bedrock -- up to 5 meters below the soil surface. That is a deep hole in the ground, and represents much more effort than would be employed by most mining companies. Having established the presence of gold in the bedrock, Candente now plans to bring in a small drill rig in order to systematically sample the bedrock.

Candente has a strong exploration team in Peru, including geologists with hands-on experience at Yanacocha. That exploration team is excited about what they're finding at Alto Dorado.

Candente has numerous other projects in Peru, including a group of properties staked in an emerging gold belt in southern Peru. Anglo Gold has apparently outlined a substantial deposit in this area and is conducting a regional program. The major, as frequently occurs, may find that the best prospects have already been staked by a nimble junior. As a result, Anglo, Newmont or the other majors may have to enter into a joint venture agreements with Candente in order to gain access to some of the top prospects.

Peru is only half of the story of Candente. The company also has one of the larger land positions in the emerging Botwood Basin region of Newfoundland. Barrick endorsed the concept that the Botwood Basin area may be an analog of the Carlin Trend in Nevada, the world's second largest depository of gold, by optioning a property in the district.

A second major mining company has now officially recognized the enormous significance of this district. Goldcorp has just announced a C$1 million investment in Candente, by way of a private placement at C$0.60, with a half warrant at C$0.90 in the first year and C$1.10 in the second year. The financing deal carries no strings, although the junior company announced its intentions to develop a "strategic partnership" with Goldcorp for exploration of the company's Newfoundland properties.

Whatever form the balance of the deal takes, it will be negotiated independent of the investments already made by Goldcorp in the junior explorer. It is clear that Goldcorp sees potential in the Newfoundland project, and places a high value on the property position held by Candente, as well as the geological team that assembled that property position.

Candente's exploration properties are all at an early stage, but those projects have large-scale potential and the company has better than average prospects for delivering success. It is important to remember that Barrick's 1996 takeover offer for Arequipa came after only nine drill holes on the Pierina project. That offer was raised to C$30 per share, or nearly C$1 billion, before the junior could complete another 20 drill holes.

Candente has a lot of shots at a big success. The investment by Goldcorp provides an added endorsement (not that one was needed) and adds cash to keep the projects moving forward.

Candente is building an ever larger following of loyal believers. I encourage subscribers to maintain a position in this company. It's not too late to acquire a stake if you don't already own some Candente. More than most explorers, this company offers upside potential in the near term through growing investor awareness, and several chances of a home run.


Price February 10, 2003: C$0.73
Shares Outstanding: 21.1 million
Market Cap: C$15.4 million
Contact: Reg Advocaat
604-689-1957
www.candente.com