Candente Resources: Deep Freeze

Joanne Freeze has a thing for rocks. The president, CEO and co-founder of Candente Resource Corp., a Vancouver-based mineral exploration and development company, loves rocks so much she has endured spider venom, carried a gun and slept in grizzly habitats to learn more about them. Or, more specifically, what’s in them.

Joanne Freeze has a thing for rocks. The president, CEO and co-founder of Candente Resource Corp., a Vancouver-based mineral exploration and development company, loves rocks so much she has endured spider venom, carried a gun and slept in grizzly habitats to learn more about them. Or, more specifically, what’s in them.

But Freeze’s passion is born out of pragmatism. Drawing from 30 years of geological experience, Freeze and Candente recently laid claim to what an independent panel of engineers has estimated as somewhere in the ballpark of eight billion pounds of copper in northern Peru. Based on extensive drilling and sampling conducted in 2006, the project is expected to yield pure copper, giving the relatively small company, which has projects in Mexico and Peru, a deep foothold in the mining industry.

Candente has also been lauded by the Peruvian government for its socially and environmentally progressive approach to mining. “I think that we’re all put on this earth to help each other out, and the minerals that are out there need to be benefiting a lot of people,” says Freeze, known to friends and business associates as Joey. “They need to be benefiting whoever invests in Candente, but also all Peruvians and, of course, the Peruvians who live closest to the site.”

Seeing her seated behind her desk in Candente’s Pender Street office, it’s hard to believe that Freeze, a slender blonde in an elegant suit, knows all about the dirty side of mining. She is a chameleon of sorts, equally at ease crawling into the earth’s darkest places with little more than a headlamp or wooing European investors over a five-star dinner. As a woman in the industry, she is part of a minority in a long-standing boys’ club, and her skill set has earned her kudos throughout the industry. She wants to better the lives of the Peruvian people and has a natural instinct for protecting the interests of Candente’s shareholders. It all fits into the world Freeze has created for herself: a place filled with exhilarating discoveries as well as defeat, a reality that depends on the whims of the market and the earth’s natural blessings.

“Joey’s geological skills are impressive, and her contacts in the Latin community are very strong. She has shown an excellent ability to move the company forward by getting involved with projects, with raising money and by channelling that money into work that adds to shareholder value,” says Lawrence Roulston, editor of the Vancouver-based mining newsletter Resource Opportunities. Freeze’s desk is covered in chunks of raw copper and fractured pieces of unrefined gold and marble. Framed pictures of her teenaged children are parked beside two oversized Mac monitors. Moments into our conversation, her phone rings and she gestures a “Sorry” as she exits the room. Upon returning she apologizes; her 15-year-old daughter Samantha is away at boarding school in Spain and is suffering the first agonies of homesickness. Her 18-year-old son Dylan recently started his first year of university. Because she is away from Vancouver three weeks each month, Freeze connects with them every chance she gets. Being a mother, geologist, wife, president and CEO carries about the same pressure level as the mineral deposits her company seeks beneath thousands of tonnes of earth.

“It’s not easy on women in terms of normal, traditional marriage. There is a lot of travelling, a lot of time away and a lot of time with a lot of men, which some husbands don’t like very much,” she says, adding that her geologist husband Art has been supportive of her path. “I have two children, and the only way I’ve been able to do it is because my husband is very flexible. I know he has passed up opportunities in his career to make sure he could be flexible at home.”

Freeze’s curiosity for the workings of the earth’s crust was a given from the start. “My dad was in the oil business, so I understood the exploration mentality and pioneering and such,” she says, adding that when she entered the mineral-exploration field, women were not a common entity. “I was very lucky that when I started, it was just the right time when people were realizing that women can do it too. The women who were a little bit older than me definitely had a harder time getting jobs. What surprises me is how few women have come into the end of the business that I’m in, as an executive or running a company… In university we were 25 to 30 per cent women, but it’s not 25 to 30 per cent women in the business end now.”

Graduating from the University of Western Ontario in 1978 with a BA in geography and from UBC in 1981 with a BSc in geology, Freeze cut her teeth in mineral exploration across Northern B.C. and Chile before moving to Peru with her family in 1994. Employed as consultants, she and her husband soon had a keen understanding of the geological bounty to be discovered in the area.

Tapping into that Peruvian potential, however, was not without its difficulties. Early in her stay, Freeze was bitten by a spider while sleeping in a remote mining camp. Waking up with a swollen face and covered in a rapidly spreading rash, she received a less-than-sympathetic response from the operation’s authorities.

“They were like, ‘You’re just a gringo with a fat face; don’t worry about it.’ It was such a weird scene for me. Nobody understood the medical situation I was in because they just thought I was ugly, and I really had to beg to get on a plane to get myself out,” she recalls with a chuckle. “I kept telling people a spider had bitten me but nobody believed me. Now I travel with my own medical kit.”It was during this period that Freeze met Candente co-founder Fredy Huanqui, who at the time was well known in Peru as the “Inca with a Midas touch.” While working with Freeze for Arequipa Resources Ltd.

in Peru, Huanqui was a key player in the discovery of a large gold deposit. The find, dubbed Pierina after Huanqui’s daughter, sold to Barrick Gold Corp. for about $1 billion in 1996.

“It was one of those phenomenal discoveries of the day; everybody in the industry was talking about it,” says Freeze. “That kind of ties into one of the misunderstandings of the industry. A lot of people seem to think we go to South America because it’s cheaper to mine there, but we go there because it’s very rich in minerals, and most of the ground hasn’t been walked, so there is still a lot to be discovered.”

Roused by the momentum of the Pierina find, Huanqui and Freeze formed Candente in 1997, just in time for mineral prices to plummet. It was during this period that Candente acquired rights for the Cañariaco Norte Copper Deposit in northern Peru. Seven years, 26,000 metres of rock and 82 drill holes later, Candente’s preliminary explorations suggest a significant amount of copper. With improved mineral market prices, the company is now looking at developing the mine single-handedly. Projected costs vary, depending on how the company extracts the copper. It would cost around $142 million to extract the copper through leaching, which has an associated recovery rate of 60 per cent. Milling, which has a recovery rate of 90 per cent, would double the cost. Freeze says they’ll start raising the money through banks and Peruvian pension funds as soon as a feasibility study is wrapped up next year.

“Normally, a small company like ours would have a hard time becoming a development company; we’d just make a discovery and sell it. In our case, we can get into production for a relatively low amount of money, and we’re estimating we should get our payback in one to three years, yet still have a 20-year mine life or more, so that puts us in a pretty good position,” says Freeze. “We don’t need a partner; we can do this by ourselves and we will do this by ourselves unless we get an offer we feel is good for our shareholders.”

The long-term effects of environmental and social degradation associated with processing, particularly in rural areas, have left the mining world with a scorched reputation. Through fair corporate policies and a progressive approach to the social welfare of locals, Freeze is striving to improve the impact mineral development and extraction has on the health of the regions in which Candente operates.

“We have always understood that you always hire the locals. Right from the beginning we would stay in their homes or rent their horses, and rather than taking a crew from somewhere else, as some companies do, we would use them,” says Freeze. “The way the Peruvians work so hard, you want them to benefit. Any way we can possibly employ them, we do.”

Candente has created 200 jobs within the Cañariaco project camp, and the ripple effects include a new school and school supplies, a medical post and a breakfast program for children – all compliments of Candente. This approach to the welfare of the local community won Freeze a gold medal from the Peruvian government for contributing to the development of Peru through entrepreneurial activities, and the Fijet America Corporate Excellency 2005 Golden Trophy “Best of Year 2005.”

“There is definitely a trend toward mining companies operating in another place being a lot more socially responsible. Certainly Candente is doing an exceptional job – more than most other companies,” says Roulston. “They have a very long history in the country, and Joey has some really strong relationships there. They’re probably more attuned to exactly what’s needed, and they may be more effective at providing what the local communities are in need of.”

As Candente’s dedication to the future of the Peruvian people deepened, Freeze took steps to ensure Latin investors had a chance to get in on the game. Diving into Peru’s banking and equity-investment world, she told Candente’s tale to a captive audience. When the company listed on the Lima stock exchange in February 2007, it raised US$3.7 million on opening day. (Candente went public on the TSX Venture Exchange in 2000, and today trades on the Toronto Stock Exchange and the Frankfurt Stock Exchange, in addition to the Lima exchange.) It was a vivid example of how a small company driven by a capable president can bridge the broadest of gaps, both cultural and economic.