Candente finally came out today with a PR revealing some preliminary characteristics of the PEA of Cañariaco Norte.

http://biz.yahoo.com/ccn/081030/20081030...

I guess the delay in the final report is due to the heavy fluctuations in present input- and output prices, so they may have to do a few additional simulations.


Most important details:

Expected mine life minimum of 19 years;

- Low life-of-mine strip ratio of approximately 0.55 to 1.0 (waste to ore);

- Throughput rate of up to 75,000 tonnes per day ore;

- Average copper concentrate production of 350,000 to 400,000 tonnes per year;

- Average copper production of approximately 100,000 tonnes per year (224 million pounds);

- Copper concentrate grade of 26% to 28%;

- Process metal recoveries of 88% for copper, 55% for gold and 65% for silver.

Now what has drawn my attention is the following.

The project is principally a copper project with gold and silver as by-products. But when you look at the gold and silver reserves, these appear to be more than substantial: 1.43 million ("M") ounces ("oz") gold ("Au") and 36.5 M oz silver ("Ag") in the Measured and Indicated categories.

Translating this to annual production during the 19 years of (minimal) life of the mine, the annual production value of gold and silver as by-products at today's bottom prices would be USD 74 million. If gold and silver were to climb back to their high we are talking about double that amount.

So even if copper prices would not allow for very high margins over the coming years due to stagnating demand (growth), the by-products may become the proverbial cream on the pudding, particularly when you consider the company's valuation, which today stands at CAD 20 million, fully diluted.