Candor eyes Mary March (April 14, 2003)

Candor Ventures (CND-V) has signed a letter of intent to acquire a half-interest in the promising Mary March massive sulphide property from the Canadian exploration arm of Phelps Dodge (PD-N).

Situated 20 km northeast of the past-producing Buchans mine in central Newfoundland, Mary March covers 24 sq. km along a 100-km-long trend stretching from Buchans to Pilley’s Island.

Phelps must spend a total of $1.5 million in order to earn its interest, according to a 1998 option deal with Noranda (NRD-T). It has spent $745,000 so far.

Under the latest deal, Candor can acquire the major’s half-interest by footing the remaining $755,000 bill. Candor must also issue Phelps 100,000 shares plus an equal number of 2-year warrants. The warrants are exercisable at 25 apiece in the first year after closing, and at 50 apiece in the second.

Candor must also pay Phelps $2 million in cash within six months of the start of commercial production, and at that time, a 1% net smelter return royalty payable to Phelps would kick in.

A portion of the property is the subject of a motion brought before the Newfoundland Mineral Rights Adjudication Board by a third party. The company expects a decision to follow quickly on the heels of final arguments, which are to be heard by May 27.

The transaction is subject to a favourable ruling, though Candor notes it could simply acquire the remainder of the property. The deal is also subject to normal regulatory approvals.

Between July 1999 and August 2000, Phelps sank 11 diamond drill holes to test a strong copper-lead-zinc-barium soil anomaly on the property.

Hole 7 returned 9.2 metres grading 10.3% zinc, 1.6% lead and 0.66% copper, plus 118.1 grams silver and 4.1 grams gold per tonne. Follow-up hole 11 encountered a 4.65-metre semi-massive-to-massive-sulphide interval, including 0.9 metre averaging 16.8% zinc, 5.4% lead, 0.18% copper, 660 grams silver and 12.2 grams gold.

So far, Phelps has identified two massive-sulphide-bearing horizons. Elsewhere on the property, footwall-style mineralization has returned up to 3% zinc, 1.1% lead, 0.13% copper and 172.4 grams silver over 20.6 metres.

Massive sulphide mineralization on the property is hosted by intensely altered (sericite-chlorite-pyrite) felsic volcanics of the Buchans group.

The soil anomaly has been defined over a strike length of 2 km, with the favourable volcanic host rocks extending beyond the anomaly in either direction.

The property has not been explored since Phelps’s drilling wrapped up in August 2000.

Candor intends to review all work completed at Mary March, then carry out geophysical surveys and, if warranted, diamond drilling.