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Mr. Sokhie Puar reports


Candelaria Mining Corp. has completed a mapping and sampling program of historical underground workings at its Pinos gold-silver project located in Zacatecas, Mexico. The company has also begun a 30-hole, 4,500-metre core drilling campaign on the Cinco Estrellas portion of the project to test the downdip potential of the Cinco Estrellas vein below historical workings.

Underground sampling program

The underground sampling and mapping program was undertaken to provide a detailed understanding of vein geometry and to confirm gold and silver values from previous sampling and historical mining.

More than 900 underground rock-chip channel samples were collected. Of the 97 underground samples that the company sent to ALS for gold and silver analyses, 28 samples assayed over five parts per million (ppm) gold and 13 samples assayed over 100 ppm silver. The highest values reported by ALS were 91.9 ppm gold and 561 ppm silver. ALS's gold and silver assay results for the 65 samples that assayed more than five ppm gold are presented in the attached table. The rest of the underground samples were analyzed by the company's in-house laboratory, which showed results consistent with those returned by ALS.

"The underground sampling program confirms continuity of high-grade gold-silver vein mineralization along the Cinco Estrellas structure," stated Sokhie Puar, Candelaria's president and chief executive officer. "The drilling program currently under way is testing the downdip projections of vein mineralization in the historic Pinos gold camp."

A quality assurance/quality control system is in place to assure reliability of assay results. Standard pulps of known concentrations of gold and silver, blanks, and duplicate samples are inserted into the sample stream every 20 samples. Standards and blanks allow for control of quality of assaying and sample preparation. Duplicate samples (a second split of the drill core assay interval) give an indication of the homogeneity of the assayed sample.

All samples are placed into a plastic rock-sample bag and sealed with tape under the supervision of the project geologist. Each sample is labelled, catalogued and delivered to the ALS preparation laboratory in Zacatecas, Mexico. Pulps prepared at the ALS C Zacatecas facility are sent to the ALS laboratory in North Vancouver, B.C., Canada. All samples are analyzed for gold using fire assay with an atomic absorption finish. Samples that assay more than 10 grams per tonne gold are reanalyzed using fire assay with a gravimetric finish. All samples are analyzed for silver using fire assay. Select samples are analyzed for a multielement package using a multiacid digestion ICP AES (plasma emission spectroscopy). ALS is an internationally recognized independent laboratory operating to ISO 17025 quality assurance standards.


Sample        Line         Mine/area      Level       Length             Au           Ag 
                                                          (m)          (g/t)        (g/t)

1089         SJ-05          San Jose          5          0.3           8.31           84
1099         SJ-08          San Jose          5         0.32           5.56          100
1105         SJ-09          San Jose          5          0.4          12.50         77.2
1118         SJ-12          San Jose          5         0.28           8.05         68.6
1132         SJ-15          San Jose         15          0.6           5.22         63.5
1139         SJ-16          San Jose         15          0.5           6.49         34.5
1150         SJ-19          San Jose         15          0.3           6.82
1155         SF-02        SFrancisco         35         0.45           7.07         18.6
1179         SF-07        SFrancisco         35          0.3           5.26         29.8
1188         SF-09        SFrancisco         35          0.3           5.36         27.8
1266         SF-13        SFrancisco         35          0.3           6.78         33.8
1276         SF-15        SFrancisco         35         0.46          16.10         77.2
1299         SF-19        SFrancisco         35          0.4          39.90         73.3
1352         SF-20        SFrancisco         35         0.45           9.28         36.9
1523          P-8A        SJ Penitas         20          0.6          10.45          173
1528           P-9        SJ Penitas         20          0.3           6.53          154
1552          P-16        SJ Penitas         20          0.3           7.12          263
1568          P-18        SJ Penitas         20          0.6           5.93         48.5
1587          P-21        SJ Penitas         20          0.4           9.94         65.8
111263       NA-03         Natividad         12          0.4          21.90         22.3
111267       NA-04         Natividad         12          0.4           7.20         28.1
111287       NA-09         Natividad         12          0.4          91.90          535
111301       NA-12         Natividad         12          0.4          39.40         91.3
111312       NA-15         Natividad         12          0.3          23.30         51.9
111337       NA-21         Natividad         12          0.4           7.06         93.9
111421       CE-01       5 Estrellas         22          1.1          10.75         19.5
111428       CE-02       5 Estrellas         22         1.05           7.20          8.5

The Pinos vein system, of which the Cinco Estrellas vein structure is the most extensive portion, consists of north-northeast-striking, steeply dipping, low-sulphidation gold-silver veins that are emplaced in Cretaceous sedimentary rocks adjacent to a mid-tertiary rhyolite-dome complex. Gold and silver are contained in "ginguro" bands containing fine-grained electrum and silver sulphide. Worldwide, low-sulphidation gold-silver vein systems (such as Waihi and Golden Cross, Pajingo, Hishikari, Lampung, Cerro Vanguardia, Esquel and El Penon) are known to have vertical extents of several hundred metres.

The Pinos district is part of a regional trend of precious-metal systems in Zacatecas and the neighbouring states of San Luis Potosi and Guanajuato that include the Fresnillo, Real de Angeles, Guanajuato and Cerro de San Pedro districts. The region enjoys a long history of mining and mineral development, and the mining industry is recognized as being integral to its economy.

Historical records indicate that Spanish prospectors discovered gold and silver in the Pinos area in 1575, and that mining was sporadic until the late 1800s, when British interests produced an estimated five million ounces of gold and 25 million ounces of silver from the district. Most of the extensive British underground workings stopped at the water table around 100 metres from the surface, with some workings reaching 290 metres in depth. Mining activities at Pinos stopped during the 1910-1920 Mexican Revolution. Since the revolution, exploration and development have been intermittent, with increased activity since 1975, including exploration programs conducted by Bethlehem Steel, Penoles, Minera Apolo, Hecla Mining and Romarco Minerals.

Qualified person

Stephen Maynard, MS, CPG, has acted as the qualified person as defined in National Instrument 43-101 for this disclosure, and has supervised the preparation of the technical information in this release.

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