The Toronto-listed junior recently published a preliminary economic assessment for its Pinos project, supporting an initial investment of US$13.5 million to develop an underground mine that would produce a total of 75,000 ounces of gold and almost one million ounces of silver over a seven-year mine life.

"We took the decision in light of current market conditions - there is a very good market for low-capital, small-scale projects," CEO Curtis Turner told Mining Journal. The PEA suggested an internal rate of return of 25%.

The company already has signed a term sheet with a leading Mexican bank to provide a US$9 million loan - it expects to raise the rest through equity by the end of the year, including $2 million from existing shareholders.

With an environmental permit already in place and a second-hand mill ready to be installed on site, Pinos could be brought into production within just 12 months of completing financing, says Turner.

But the Pinos project is just an appetizer while the company prepares for the main course. Cashflow from the small mine would be used to continue exploration and advance permitting at the company's Caballo Blanco project in eastern Veracruz state.

"(Pinos) bridges the gap to us to get to the bigger goals of exploring both properties and developing Caballo Blanco," Turner said.

Candelaria acquired the 19,000-hectare property two years ago from a subsidiary of Timmins Gold Corp (today Alio Gold Corp) for $12.5 million.

According to a technical report filed by Candelaria earlier this year, the La Paila zone of the Caballo Blanco property contains indicated resources totalling 31.2 million tons with an average ore grade of 0.52 grams per ton of gold (521,000oz in total) and 2.16gpt of silver (2.17 million ounces).

This could support a conventional openpit, heap-leach operation with capacity to produce around 100,000oz of gold-equivalent annually, Candelaria believes.

But Turner highlights the significant exploration potential at the site, with surface sampling and historical mine workings suggesting multiple veins and the possibility of a disseminated zone.

Meanwhile, on the neighbouring El Cobre project, Azucar Minerals is drilling what could be a massive porphyry system which extends right up to the border between the two properties.

"This could turn into a multi-million-ounce deposit as we drill the other targets," Turner said.

However, development of Caballo Blanco has been hold while the company awaited the results of Mexico's presidential elections which took place in June.

That saw the election of Andres Manuel Lopez Obrador, a veteran left-wing campaigner who has promised to overhaul the country's economy and shake up its politics, scaring many foreign investors.

But Candelaria is phlegmatic about the result.

"The president-elect has said the right things about the need to grow the Mexican economy and he sees mining as a key part of the economy," says Turner.

Moreover, the new governor of Veracruz state is one of AMLO's followers, suggesting alignment between the federal and state authorities.

However, there is still much work to be done to move Caballo Blanco on from exploration to development.

Even once the new government takes office in December, Turner says Candelaria's priority will be to open a dialog with local authorities and communities about the benefits of mining and the Caballo Blanco project.

Unlike rocky Zacatecas state, home of the Pinos project, tropical Veracruz is not an important centre for mining and there is little experience of dealing with major mine projects.

Last year, Agnico Eagle Mines acquired 9.95% of Candelaria for C$9.8 million, while this year, Newcrest Mining acquired a 19.9% stake in neighbour Azucar Minerals.