Candorado Operating Company Ltd.

Candorado Operating Company Ltd.

August 25, 2009 14:36 ET

Candorado Acquires Properties in the La Corne- La Motte Lithium District Near the Quebec Lithium Mine in Addition to Earlier Release

KELOWNA, BRITISH COLUMBIA--(Marketwire - Aug. 25, 2009) - Candorado Operating Company Ltd. (the ''Company") (TSX VENTURE:CDO) (FRANKFURT:HQU) (BERLIN:HQU) is pleased to announce that it has entered into an option agreement with Glenn Griesbach and Kamaleddin Salmasi to acquire a 100% interest in 29 Quebec mineral claims located in the La Corne - La Motte lithium district of Quebec.

The properties are located in Quebec's well known La Corne - La Motte lithium district, approximately 30 kilometres northwest of the historic mining town of Val d'Or and 400 km northwest of Montreal. Surface access to the properties from Val d'Or is easily gained via paved Highway 111 and a number of all-weather gravel roads.

The properties comprise a total of 1,289.95 hectares and are distributed within an area of approximately 10 km x 10 km. They were carefully selected and staked by the optionors in early 2007, prior to Canada Lithium's announcement in 2009 that it had entered into an exclusive agreement with a Japanese trading house to market the lithium products from the company's Quebec Lithium Mine. Canada Lithium's Quebec Lithium mine is located less than 8 kilometres east of Candorado's properties. According to information on Canada Lithium's website "The Quebec Lithium Mine was an underground operation, surface concentration plant and a refinery from 1955 to 1965 which produced 272,000 tonnes of ceramic grade and chemical grade spodumene concentrates, lithium carbonate, lithium hydroxide monohydrate as well as a small quantity of lithium chloride and feldspar. The ore is a system of wide lithium-bearing pegmatitic granite dikes with a historic resource of 15 million tonnes at a grade of 1.14% Li2O calculated down to the 150 m level. The actual recovered grade during the ten years of production was 1.25% Li2O (not National Instrument 43-101 compliant). This is equivalent to 0.58% Li."

Romios Gold Resources' past producing La Corne Molybdenite Mine is located less than 8 km south of the properties. The La Corne Molybdenite Mine was operated intermittently by Molybdia Corporation Limited from 1951 to 1972 as an underground mine. Total production during this period was 3,838,844 tons of ore at a head grade of 0.33% MoS2 and 0.040% bismuth. The historical probable reserve calculated in 1974 was 1,440,000 tons grading 0.23% MoS2 and 0.04% bismuth. These numbers are not NI 43-101 compliant. (Source: Romios Gold and Quebec Sigeom database, DPV 619, p.5. Source: Romios Gold's website.)

Although the Quebec Lithium Mine is located east of the properties and the Romios Mine is located south of the properties, they all share the common geological feature of being located close to the edge of the La Corne Pluton. Historical work reported on and near Candorado's properties demonstrates the excellent exploration potential of the properties, as evidenced by the presence of significant lithium mineralization in historical diamond drill holes emplaced within and adjacent to Candorado's La Corne - La Motte lithium properties. In the opinion of Candorado a modern exploration program with the objective to confirm the presence, geometry and continuity of lithium-mineralized pegmatites on the properties is merited. The existence of a past lithium producer (and a past molybdenum producer) at the margins of the La Corne Pluton in the vicinity also supports the conclusion that economically significant lithium (and/or molybdenum) mineralization may be found on the properties. An exploration budget is being prepared, with an extensive exploration program planned to commence in April 2010.

Lake La Motte South Property

The 15-claim, 698.20 hectare, Lake La Motte South Property is located in eastern La Motte Township, on the south shore of Lake La Motte and covers the historic Lake La Motte lithium occurrence. The occurrence is centred on diamond drill hole No. 16 located about 1 km southeast of the lake, on lot 58 of Range 6 (File Report GM 03989). The host rocks are pegmatite dykes containing 15 to 30% spodumene as well as beryl. The dykes measure between 0.60 and 1.20 metres in width and intrude diorites and monzonites as well as metasediments of the Caste Group. The pegmatite dykes containing spodumene have been found in other places as well, such as the extreme north end of lot 58, the northern part of lot 56 at the edge of the lake, the extreme south of lots 57 and 58, the centre of lots 61 to 63 and the south end of lot 60, all in Range 7. Spodumene and beryl fill fractures within pegmatite dykes. Drill hole intercepts on the property include 1.65% Li2O over 1.0 m (drill hole No. 16, Quebec Government file report GM 03089), 1.34% Li2O over 0.9 m (drill hole No. 15) and 1.12% Li2O over 1.32 m (drill hole No. 14).

Lake La Motte East Property

The 4-claim, 161.41 hectare, Lake La Motte East Property is located in eastern La Motte Township, on the eastern shore of Lake La Motte and 400 m south of the historical La Corne Lithium occurrence where lithium-bearing pegmatite dykes intrude granites. These include at least 6 known parallel dykes containing spodumene. Drilling and trenching centered on the large area of the La Corne Lithium occurrence returned 0.83% Li2O over 4 m (samples V409 to V411, survey L-3, GM 03924-B), 0.90% Li2O over 2.7 m (sample V425, DDH L-6, GM 03924-B), 1.19% Li2O over 9 m (trench, GM 03924-A) and 1.29% Li2O over 13.5 m (GM 03924-A). The irregular distribution of the lithium-bearing pegmatite dykes in fractures in the granites suggests that this system of dykes should also be present on the Lake La Motte East Property.

Landrienne South Property

The 4-claim, 169.04 hectare, Landrienne South Property is located in southern Landrienne Township, on strike with and about 8 km northeast of the Quebec Lithium Mine. This covers over 1 km of strike length of a major east-west structural zone that hosts several lithium occurrences, including the historic Canadian Lithium occurrence (located 1.4 km to the east and not to be confused with Canada Lithium Corp), the historic Martin-McNeely lithium occurrence (1 km to the east), and the historic August Exploration Lithium occurrence (3.5 km to the east). The few diamond drill holes that have been drilled on this property suggest that the prospect may have the potential to contain a high tonnage lithium deposit. Of particular interest are one hole that intercepted 15.1 metres of 0.28% Li2O, a second hole that returned 0.28% Li2O over 8.1 m and a third hole that intersected 0.18% Li over 5.2 m (Quebec SIGEOM map database). The three intercepts are en-echelon parallel zones. No holes are known to exist for several hundred metres on strike in either direction. It appears that this mineralized zone is open and untested on strike for the 1050 m east-west extent of the property. No written geological information has been examined specifically concerning the Landrienne South Property; however information is available on the nearby Canadian Lithium and Martin-McNeely lithium occurrences. The Canadian Lithium occurrence and Martin-McNeely occurrences consist of mineralized granitic pegmatite dykes that intrude an amphibolitized peridotite in contact with the La Corne granitic Pluton to the south. The dykes are mineralized with spodumene, lepidolite and molybdenite. Drilling is reported to have reached grades of up to 2.5% Li2O over 2.44 m (Quebec SIGEOM database).

La Corne Valor East Property

The 4-claim, 169.96 hectare, La Corne Valor East Property is located in northwest La Corne Township, approximately 5 km east of Lake La Motte. The Valor Lithium East Property is an L-shaped claim block with the historic Valor Lithium occurrence about 200 m from the property boundary. The pattern of historical drilling appears haphazard, indicating that there is no known definitive orientation of the Valor Lithium occurrence. For this reason it may be expected that similar mineralization exists on the Valor Lithium East Block. The Valor Lithium occurrence centres on an outcrop of pegmatite dyke that intrudes granite of the La Corne Pluton. All minerals in the pegmatite are coarse grained and are by order of abundance: feldspar, quartz, spodumene, muscovite and beryl. The spodumene crystals are reported to measure up to 1.2 metres in length and are surrounded by aggregates of clevelandite-quartz-pegmatite in the granite. Drilling of the Valor Lithium occurrence returned the following grades: 1.12% Li2O over 2.4 m; 0.97% Li2O over 8.0 m; 1.32% Li2O over 2.0 m; 1.08% Li2O over 6.3 m (GM 03190).

La Corne Valor West Property

The 2-claim, 91.31 hectare, La Corne Valor West Property is located in northwest La Corne Township, approximately 3 km east of Lake La Motte and 2.8 km west of the historic Valor Lithium occurrence. According to Quebec SIGEOM data only 2 holes have been drilled on this prospect. One hole returned 0.26% Li2O over 4.4 m.

Relatively little exploration diamond drilling has been performed on the La Corne Lithium properties and it appears that no follow up drilling was ever conducted where mineralized zones were found. In the region it appears that previous exploration tended to be concentrated where the amount of rock exposure is greatest and depth of overburden least. Similarly, areas with deeper overburden have been largely ignored. It is in these locations where greater attention, using modern exploration techniques, should be applied. Therefore there remains tremendous potential for significant lithium intercepts and a significant discovery. The recent work carried out by Canada Lithium, and its agreement with a Japanese buyer, is a strong indication that lithium mined in the region can in fact compete with other lithium sources in the world. Furthermore, the excellent, and therefore relatively inexpensive, access to the region, and the strong existing mining infrastructure will encourage exploration and development.

In November 2001 the Ministere des Ressource Naturelles et Faune Quebec published a report, titled PRO-2001-9 (Rare Metal Potential in the Abitibi and Pontiac Sub-provinces), authored by Lucie St-Croix and Pierre Doucette. This report pertains to the Rare Metal Potential in the Abitibi and Pontiac Sub-provinces. On page six of this report St-Croix and Doucette are quoted as concluding:

"The vast majority of exploration work carried out in the Preissac - La Corne area was performed in the 1950s, and was oriented towards the discovery of lithium and molybdenum. There is very little recent work. Numerous outcrops do not appear to have been investigated or do not show any evidence of work. Others aren't even inventoried. We would like to attract the reader's attention to the La Motte and La Corne plutons, where the exploration potential for tantalum and lithium is very good. An integrated approach involving mapping and sampling in these areas is warranted, and could lead to a rare metal discovery"

Historical work reported on and near Candorado's properties included historical diamond drill holes and surface samples that yielded up to 1.65% Li2O. These results are historical in nature and should not be relied upon. The historical exploration work conducted on these properties demonstrates the excellent exploration potential of the properties. After a review of the properties, Candorado concurs with St-Croix and Doucette that an exploration program involving mapping and sampling is warranted to confirm the presence, geometry and continuity of lithium-tantalum mineralized pegmatites. The fact that there is a past lithium producer in the vicinity also supports the conclusion that economically significant lithium mineralization may be found on the properties. The company is compiling historical drill hole and surface exploration data and will be preparing an exploration budget and plan to aggressively explore the lithium and rare earth element potential of the area.

The terms of the Option agreement require that Candorado:

1.) Make a cash payment of $20,000 upon execution of this agreement.

2.) Payment of $40,000 and 1,000,000 shares of the Company within 7 days of Exchange Acceptance of this agreement.

3.) Payment of $40,000 and 1,000,000 shares of the Company on or before six months after Exchange Acceptance of this agreement.

4.) Payment of 1,000,000 shares in the Company on or before one year after the Exchange Acceptance Date.

5.) Payment of 1,000,000 shares in the company on or before two years after the Exchange Acceptance Date.

6.) Payment of $260,000 to the vendors upon receipt of a feasibility study or at the four year anniversary of this agreement.

7.) Candorado incurring $300,000 in Exploration Expenditures on the Properties within 18 months of the Exchange Acceptance Date.

The vendors will retain a 2% Royalty which can be reduced to 1% by the Company paying $1 Million dollars. A finder's fee will be paid on the transaction.

Rene Bernard, President of Candorado states: "We consider the acquisition of these strategic lithium properties located in close proximity to the important Val d'Or, Quebec mining centre to be an outstanding opportunity to position Candorado to potentially supply the lithium carbonate market. We are every encouraged by the lithium potential of the La Motte - La Corne lithium district and will move aggressively to explore the lithium and rare earth element potential of the area".

A 7% finder's fee comprising both cash and shares will be paid on the transaction to an arm's length third party within seven business days after Exchange acceptance of the lithium option agreement.

Non-Brokered Private Placement:

Candorado has arranged a non-brokered private placement for up to 4,500,000 units ("Units") at a price of $0.05 per Unit for total proceeds of $225,000. Each Unit will consist of one common share plus one warrant entitling the investor to purchase one common share for a period of 24 months at a price of $0.10 per share.

The proceeds of the private placement will be used to fund the company's exploration commitments on its mineral properties and working capital.

Appointment of President and CEO:

The Board of Directors of Candorado announce that Mr. Rene Bernard will be resigning as President and Chief Executive Officer of the Company. Mr. Bernard will remain as Chairman and Director of the Company. The Company thanks Mr. Bernard for his years of service to the company.

Mr. Kirk Reed has been appointed as President and Chief Executive Officer of the Company effective immediately. Mr. Reed has extensive experience serving as a director and officer of various public companies.

About Candorado:

Candorado Operating Company is an aggressive junior exploration company primarily focused on the Quesnel Trough located in central British Columbia. Candorado is also one of British Columbia's largest mineral rights holders with a land position exceeding some 2000 km2. The company's principal assets include the Murphy Lake, Prime-Man, and Rayfield claim blocks in addition to the La Corne and La Motte Lithium Properties.

Bill Gilmour, PGeo of Discovery Consultants, a "Qualified Person" as such term is defined by National Instrument 43-101, has reviewed and approved the technical information in this news release on behalf of Candorado Operating Company Ltd.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Candorado Operating Company Ltd.
    478 Bernard Avenue, Suite 208
    Kelowna, BC, Canada V1Y 6N7
    (250) 979-2595
    (250) 860-2957 (FAX)