Candor options Comtois from Maude Lake (April 28, 2003)

Toronto-based junior Candor Ventures (CND-V) and Montreal-based gold explorer Maude Lake Exploration (MAU-V) have signed a letter of intent that will see Candor take up half of Maude Lake’s interest in the Comtois gold deposit, near Lebel-sur-Quevillon in northwestern Quebec.

Maude Lake already has earned a 58% interest in the project from Cameco (CCO-T) under an existing agreement that allows Maude to earn an outright interest subject to a 2% net smelter return royalty retained by Cameco.

The agreement requires Candor to spend $3.5 million on exploration over the next four years and make Maude Lake’s scheduled option payment of $500,000 to Cameco at the end of 2003.

Candor also takes up a 1-million-share placement in Maude Lake for $120,000, or alternatively arranges to place the shares. A further 500,000 warrants exercisable at 16 for a year are attached to the placement. Candor also gets an option on 1.4 million Maude Lake shares held by Cameco, and will have a seat on Maude Lake’s board.

Comtois has an inferred resource of 808,000 tonnes grading 9.6 grams gold per tonne. In calculating this figure, Roscoe Postle Associates used a cutoff grade of 6 grams and cut high assays to 30 grams per tonne. The uncut grade was estimated at 20.2 grams per tonne. The 99 holes drilled so far are relatively widely spaced, and Candor believes there may be potential to increase the size of the resource.

The mineralization is held in two deposits, Osborne and Bell. The gold is in pyrite-pyrrhotite-chalcopyrite veinlets and disseminations in mafic-to-felsic volcanic rocks and in feldspar-porphyry dykes that intrude the volcanics.

Candor has 30 days in which to complete due diligence before the deal closes. Both companies’ directors must approve the agreement, and the share issues are subject to regulatory approval.