JOANNE C.FREEZE - CEO of Candente Resource Corp (CRC)

Press Tribune: To start off with, could you make a brief introduction on the creation of Candente and the first discovery?

Mrs Freeze: When I came here I worked for another junior company then I started consulting for Canadian and Peruvian companies raising funds with Canadian investors. Fredy Huanqui and I met working for a company called Arequipa resources, Fredy was one of the main geologists and on the second day we were in the field in the Cordillera Blanca where they were drilling one property and getting ready to drill a second. Fredy said that there is another mountain range that he liked better and "I named it after my daughter so no one would ever forget that I had to do something with it, it was Pierina, and 13 months later Pierina was sold for US$70. At that point Pierina was just a project, a piece of dirt with some samples but Freddy recognized that it was similar to Yanacocha and other deposits, in Peru a lot of geologists did not recognize it at the time. It is like the gold didn't glitter, you had to know the alteration and we went from being a very rock prospect to selling it for 700 million dollars in 13 month so it was an amazing exploration discovery.

Press Tribune: Are you confident that the copper prices will stay above 2 dollars?

Mrs Freeze: We don't specialize in predicting copper prices, we worry more about looking for styles of deposits that are economic at lower prices. Fredy and I started the company in 1997 and watched metal prices going down so we made sure that our exploration was only for the kind of deposits that will be economic with those metal prices for example when gold was close to $250 per ounce, I think that this was in 98-99, Yanacocha gold mine made up 25% of the world wide production for Newmont but 75% of their profit so, we knew that is a good kind of mine to look for, so we were looking for that style of mineral in some of our prospects.

We have come to believe over the last few years that metal (copper especially) prices will stay strong for long enough for us to build a mine ad get pay back on our Capital Expeditures, $1.15 is our minimum price to be economic and with $1.25 the payback period and overall cash flow starts getting very attractive. When we acquired Cañarico it was in an auction of the government in 2002 and copper was only 67 cents a pound but it had 11 drill holes and had certain amounts of a mineral that is called chalcocite. It is easy to leach the cooper from chalcocite, so that's why we took the project, but also if we have lots of copper and a significant portion is in chalcocite the combination of those two things is pretty good. We also have a higher copper price, which is why we want to get into production as fast as possible,

We are carrying out feasibility for production with just the starting pit but we are also confident that the larger part of the deposit will also be economic and the mine will have a very long life.

Press Tribune: You have two main projects, one in Peru and one in Mexico. Which one of these two projects is the main driver of the company?

Mrs Freeze: Cañariaco is the main driver right now because we know we have already 8 billion pounds of copper, and in a form that at least partly is mineable and the latest studies said that it is very economic, so that is the more feasible project which means the engineers do all the studies and once they finish a bankable feasibility document then we can take it to the bank and get our loans and go into production.
In Mexico we are still drilling, we know there are some interests in gold; there is some evidence from past producers. Therefore we could make some fantastic discoveries, which mean the geologists are doing all the studies. In addition we also have several projects in Peru one is Tres Marias, which is another silver and gold prospect.

Press Tribune: You recently got some interesting findings in Tres Marias; can you talk about it?

Mrs Freeze: It's a high grade vein with two components of formation It's actually got high grades in veins and also it's got mineral disseminated, you need the high grades but it also got disseminated, with the disseminated you get a lower grade mineral which is more like Cañarico which has lots of mineral spread out. In Tres Marias we have potential for both and we have been working the area for a while but we just put together a nice package and bought a nice part. That will be our third property, we just don't know when we will start drilling but I hope within six months or so.

Press Tribune: Are you planning to initiate operation in Canada or in other Latin countries?

Mrs Freeze: We are keeping eyes open for opportunities but our shareholders might feel we are trying to do too much with too little money and also we want to concentrate on the jobs we are doing right now. So most of our money is for Cañariaco but we do have Freddy who is good at finding fantastic opportunities so he would have his own budget just to look for new things, I think he will find something great and it would be, something that we understand the geology very well or the country and something that gives us a very comfortable level, we did some exploration in Canada because one of our directors did find gold mines in Nevada, but when we discovered the geology was not similar and none of us understood the geology, we didn't pursue it trough.

Press Tribune: When you entered on the Lima Stock Market last February, how did the market react?

Mrs Freeze: They bought just under 3.7 million dollars of our stock on the first day, so I think they like it. They bought 8% of our float on the market by the end of May and then when we did a 17 million dollar financing in June they took 6 out of the 17M, so Peruvians now own about 14% of our stock which is pretty good considering we started the company in 1997 and really didn't have a Peruvian component until February, in only 4 months they bought up the 14 % of the company.

Press Tribune: You said recently that the company is undervalued compared to others juniors can you elaborate on that?

Mrs Freeze: If you compare the amount of copper we have in the ground and you divide the market value we have by the amount of copper we have you get a ratio, a lot of these prices have changed, but generally the comparison holds, compared to other copper producers, their annual production is our starting pit, we have such amounts of copper that our starting pit is just 12% of the deposit, we are starting like this because it is easier to start with a feasibility study from this starting pit, and once we get going we can increase our production. Just 12% of our deposit is around the same amount of other mines production, and they have ten times our market value, so what we see with copper is the closer you get to production, the higher value you get.

Press Tribune: Why should some investors be interested in your shares, in the competitive Toronto´s Stock Market for example?

Mrs Freeze: Because we have such a huge deposit and also because the economics are so robust, we are planning to start operation with under 200 million dollar investment, right now the figure is at 142 million, but even if it was at 200-250 million it would be incredible, most companies here have to get like 1 to 2 billion to start production, so that means a small company like ours wouldn't be able to start it ourselves, we would definitively need partners, right now we don't "need" them. We are not looking for partners but they are coming, we can wait and see if we get a nice offer, if not we can start ourselves. So far we don't have an offer we would accept, otherwise you would have heard about it.

Press Tribune: How would you describe your work with the community?

Mrs Freeze: I thing we are all on the same page in this. It is very important from the beginning of the company that we work well with the locals, always the first thing is to employ as many locals as you can, so it doesn't matter if you just needed guys to pick samples you use as many locals as you can, better to train them than to bring someone from away and stay in their home with rent. As far as Cañariaco, we employ 140 to 200 people a day working or drilling all the time and moving supplies all over the mountain by hand so rather than expending on helicopters or building roads its better for the environment, it gives jobs, plus it is saving for our shareholders.
And in addition to give them jobs we have several programs that again are very instrumental in figuring out what was needed. We also built a school, we built a medical post, we have programs of lunches and breakfasts for children, school supplies. And we are also in contact with the government so that it is well spread.

Press Tribune: How close do you work with the public sector to improve the social situation here?

Mrs Freeze: We are all trying to change it, there was a big conference here 3 weeks ago that was sponsored by Pro Inversion and we presented the idea of a public private associations so that they may have some money and some skills like doctors and nurses for the hospital yet they don't have enough money to build the hospital they don't even have the engineers and also we need to build a road to the ocean, we are going to provide electricity, so maybe some of that money can come from the government so some of the roads can go to the communities from our road but they don't have the engineers, there have a lot of money right now but they don't have the skills so we are trying to created associations for that.
Also there is a foundation to help the poor, so we gave a donation and they have contacts in Europe, so they go to Europe to get donations and come back to Peru and start to help the poor. Again everybody agreed that education, health, roads, electricity was priorities.

Press Tribune: The costs for mining here in Peru are lower, for example the costs per hour to hire an engineer here are lower than in North America, did you consider this aspect of the business to invest in Peru?

Mrs Freeze: We are in Peru because it is a rich country and it is rich in mineral and in the kind of mineral that can be mined at lower cost because of the style of mineralization not because of the work force. I don't mean it is not cheaper it may be a bit cheaper, but still workers want to be treated the same way as everywhere in the world. What happens in Peru, you are in a pyramid, when you hire one person in another country, you are hiring maybe four maybe while you are hiring ten here, so the amount of money spent in two hundred people employed will maybe save some money over getting an helicopter, but it is not that much.
We like the fact that the country likes mining; it is a country with a mining tradition, and a mining mind, since we mostly care about mineralization and mine building.

Press Tribune: There are talks about a FTA with Canada, how do you think the FTA either with Canada and US will boost Peru?

Mrs Freeze: I ´m glad Peru is signing this FTA and is going to be politically and legally recognized that is not a banana republic, that it is a stable country, the kind of country we should be doing business with, that benefits Canadians, Americans and Peruvians. Lots of people don't understand Peru; they think it has got pretty much the same problems as Ecuador or Bolivia.

Press Tribune: After 10 years of creating this company, what are the things that give you the most satisfaction?

Mrs Freeze: That we found something that is very robust economically and we are advancing, which means is going to benefit our shareholders, but it is also good for the community.