The terms of the La Providencia mine agreement require that Cardero, in order to acquire a 100% interest, make an initial payment US$15,000 with an additional US$360,000 to be paid incrementally over the next 48 months. The property is subject to a 1.5% NSR with Cardero having the option to buy out the royalty at any time with a payment of US$1,500,000.
The terms of the second agreement for the property that surrounds the La Providencia Mine and extends to the south requires that Cardero, in order to acquire a 100% interest, make an initial payment of US$23,000 thirty days after signing. An additional US$452,000 is to be paid incrementally over the following 48 months. The property is subject to a 2% NSR which can be reduced to 1% in exchange for a payment of US$500,000.
The terms of the third agreement for the property located mainly to the north of the La Providencia mine requires that Cardero, in order to acquire a 100% interest, make an initial payment of US$50,000 on signing. An additional US$2,100,000 and 400,000 common shares of Cardero are to be paid incrementally over the following 50 months. The property is subject to a 1.5% NSR with Cardero having the option to buy out the royalty at any time with a payment of US$1,500,000.
The only required exploration expenditures pertain to the areas covered by the first and third agreements and total US$700,000 over 36 months.
The terms of the fourth agreement relating to the regional extensions of La Providencia, and the Chingolo property requires that Cardero, in order to acquire a 100% interest, make an initial payment of US$10,000 on signing and issue to the vendor a total of 250,000 common shares of Cardero incrementally over the 48 months after closing. There are no royalties associated with this agreement.
The La Providencia mine is situated on the western side of the Salar Olaroz at the base of the mountain range that borders the salar (salt lake) to the west. La Providencia is accessible by two-wheel-drive vehicles via well-maintained gravel roads. The western ranges of the Salar Olaroz are comprised of folded Ordovician sandstones and shales. Mineralization occurs in poorly cemented piedmont-fan and talus conglomerates, which are part of a Tertiary graben fill. Pre-mining studies undertaken by Mission Alemana (1982) delineated a large silver and copper mineralized structure ranging in width from 150 to 250 metres, 710 metres long and at least 25 to 75 metres deep. Mission Alemana identified various primary silver sulfo-salts and predominantly low-sulphur copper minerals as well as copper secondary minerals, native copper and native silver. Between 1986 and 1996 a small amount of ore, approximately 200,000 tonnes at an estimated mill head grade ranging from 350 to 600 grams per tonne (g/t) silver, was processed at La Providencia by the property vendors from rudimentary surface-pits.
The Company's studies to date have inferred that within the area of the pits at La Providencia native copper and copper secondary minerals are rare. Native silver appears to be present at selected sites where silver values reach several thousand grams per tonne. Native silver is present as an apparent primary mineral in carbonate veinlets as well as a secondary alteration product. Within the surface-pits at La Providencia the Company undertook a systematic chip-sampling program within an area measuring approximately 120 metres east-west by 550 m north-south. The total vertical range sampled was approximately 75 metres. The 54 chip samples returned weighted average silver values of 489.6 g/t (Argentinean laboratory) and 494.8 g/t (Canadian laboratory). These silver values are comparable to those quoted by the property vendors (350-600 g/t mill feed).
This preliminary sampling program also identified the presence of copper (0.47%), lead (0.47%) and zinc (0.44%). Silver appears to be directly associated with copper and not lead or zinc. It is inferred that La Providencia represents the upper levels of a low sulphidation epithermal silver deposit in view of the low sulphur types of minerals reported, the presence of arsenic, antimony and mercury trace elements, and carbonate and clay alteration apparently controlled by incipient vertical fracturing. The Company believes that there is excellent potential to delineate a world class, large tonnage, open-pit, silver deposit at La Providencia. The mineralization also appears to be open on the strike extensions, laterally and to depth. The potential to discover other silver deposits of a similar nature in the area is exemplified by the Chingolo silver prospect.
The Chingolo silver prospect is located approximately 15 kilometres north-west of La Providencia and is accessed over a 25-kilometre road by 4-wheel-drive vehicle. Tertiary, poorly cemented piedmont-fan and talus conglomerates underlie low rolling terrain. The prospect area is a kaolinitic and siliceous alteration zone partially exposed over a 650 metre by 500-metre area. Epithermal style jasperoid (barite-chalcedony) cap-rocks outcrop at the top of a hill at the north end of the prospect. Nine surface chip samples of weathered conglomerate and jasperoid cap rocks were collected. Silver values ranged from 20 up to 391 g/t. The samples also returned elevated average copper (112 ppm), lead (1.03%) and zinc (159 ppm) values. During a previous property examination in 1996 by another exploration company five samples of altered conglomerate were collected from a trench exposure and returned analyses that averaged 747 g/t silver. The Company, on the basis of the above, thus infers that the Chingolo prospect has the potential to contain a silver deposit similar to La Providencia.
Evaluation work will commence shortly on the Olaroz project. A surveyed grid will be established over La Providencia deposit, the Chingolo prospect and the potential strike extensions. The areas will be geologically mapped and geochemically sampled on a reconnaissance basis. Detailed channel sampling and mapping will be undertaken in La Providencia's pits. Pitting and sampling will also be undertaken over and on the strike and lateral extensions of La Providencia and the Chingolo Prospect. Geophysical surveys will be considered. A drill program is anticipated to commence once a thorough understanding of the potential extent and controls on silver mineralization have been established.
Cardero Resource Corp. is a mineral exploration and development company listed on the TSX Venture Exchange. The Company is currently evaluating silver properties in Argentina and gold and copper properties in Mexico, projects that have the potential to contain world class mineral deposits.
On Behalf of the Board of Directors of
CARDERO RESOURCE CORP.
Henk Van Alphen, President
For further information contact:
Henk Van Alphen, President
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release which has been prepared by management.
Cardero Resource Corp. is pleased to announce the signing of four mineral exploration option agreements to acquire, subject to regulatory approval, mineral concessions encompassing 25,000 hectares in the Salar Olaroz region, province of Jujuy, northwestern Argentina. The focus of three of the agreements is the La Providencia silver deposit and the area surrounding it, a total of 8,000 hectares. Between 1986 and 1996 a small amount of ore, approximately 200,000 tonnes at an estimated mill head grade ranging from 350 to 600 grams per tonne (g/t) silver, was processed at La Providencia from rudimentary surface-pits. The fourth agreement encompassing 17,000 hectares secures the regional extensions of La Providencia and the Chingolo silver prospect, located approximately 15 kilometres to the west of the La Providencia silver deposit. Chingolo was acquired on the basis of its geological similarity to La Providencia