The property consists of seven minas and two cateos (665 hectares) and is centered on the former Incahuasi gold mine, a significant high-grade historical Sediment Hosted Vein (SHV) type gold producer in the region.
Reconnaissance scale sampling conducted by Cardero targeted surficial quartz veins, altered sediments with quartz veinlets, and tailings from the historical workings. The average grade from a total of 108 characterization or grab samples was 4.3 g/t gold and in-situ veins returned values up to 231 g/t gold. Ten grab samples of material scattered around the former mill assayed 25.3, 19.25, 13.1, 12.65, 12.05, 9.97, 7.26, 6.63, 5.95, 2.15 g/t gold with an additional three samples assaying less than 1 g/t gold, suggesting that the head grade of the former operation was probably in the order of 5 to 10 g/t gold.
In detail, the results from the 108 characterization samples collected are as follows:
From twenty-seven samples collected from in-situ quartz veins, a single sample returned a bonanza grade of 231 g/t gold, four samples ranged from 3-10 g/t gold, eight samples ranged from 1-3 g/t gold, with the remaining fourteen samples containing 0.05-1 g/t gold. Twenty-six samples collected from altered sediments with quartz veinlets yielded grades up to 10.05 g/t gold and all samples contain detectable gold, indicating the potential for disseminated bulk tonnage gold mineralization adjacent to principle vein sets. Finally, forty-two composite samples from the approximately 75000 m3 tailings dump averaged 2.2 g/t Au and yielded results ranging from 0.26 g/t to 13.45 g/t gold, in part, confirm the high grade nature of the past producing mine.
Geologically, the Incahuasi property is characterized by multiple generations of gold-bearing quartz veins hosted within structural and hydrothermally modified sediments. The exposed system measures approximately 1.5 km by 4 km, with the most intensely altered zone centered over the main deposit area, and remains open to both the North and South. This zone is characterized by a sericite-pyrite-iron carbonate assemblage associated with intense quartz veining over a 300 meter by 1200 meter area within a faulted and sheared anticline. Preliminary mapping has revealed hydrothermal features and associated quartz veining that are no less extensive than those found over the area of the formerly producing deposit and which have not been evaluated by modern exploration techniques.
Mining activity at Incahuasi dates back to the pre-Hispanic and Jesuit periods, with modern mining techniques first used at the Incahuasi mine from 1936 to 1954. During this period the Nueva Compania Minera Incahuasi conducted a 40 tonne per day operation exploiting a series of high-grade quartz veins, reportedly ranging from 9.8 g/t to 43 g/t gold on six underground levels. High-grade gold values up to 300 g/t are reported from quartz veins within the deposit and are locally confirmed by Cardero's initial reconnaissance sampling.
Mining ceased at a depth of 130 meters in ore grade rocks, not due to a lack of gold bearing veins, but rather due to flooding which inhibited further mining efforts. Most recently, during the mid to late 1990s a junior exploration company conducted a modest reverse circulation drill program within the deposit area. Although the results of this drilling program are unknown, Cardero's preliminary property evaluation suggests that the program only tested the principal veins that have historically been mined. Based on the drill pad locations, it appears that this initial drill program did not test the northern and southern extensions of the deposit, nor the potential for disseminated bulk tonnage gold mineralization along the flanks.
Cardero plans to systematically explore the Incahuasi property through a phased program of detailed structural and alteration mapping, trenching, and geochemical sampling. Contingent on favourable results, an initial drill program will then evaluate the continuity of the known high-grade gold deposit along strike and at depth as well as the potential for disseminated bulk tonnage gold mineralization. Detailed structural mapping is presently in progress and will be followed by systematic trenching and associated geochemical sampling in the third quarter of 2006.
Dr. Paul Klipfel, a recognized authority on SHV deposits, examined the Incahuasi property over a period of three days in late March 2006. Dr. Klipfel states "Evaluation of the strike and dip extent of mineralization as well as discovery of other vein zones, could result in identification of a significant resource".
The terms of the relevant agreements are as follows:
- Cardero has the option ("Option") to acquire a 100% interest, subject to a 2% NSR, in 5 minas from a private Argentinean individual (the "Vendor") by making aggregate payments of USD 1,410,000 over 5 years to May 29, 2011. The Company may purchase the 2% NSR at any time for USD 500,000.
- Cardero has also agreed with the Vendor that, subject to the grant thereof by the applicable Mining Tribunal, each of Cardero and the Vendor will own 50% of two additional minas presently under application, with the Vendor's 50% being subject to the Option for no additional consideration. If the Company terminates the Option prior to exercise, it will transfer the 50% interest held by it back to the Vendor.
- Cardero has also applied, through its agent, for two cateos surrounding the foregoing minas, which cateos are to be transferred to the Company upon payment of the agent's expenses in the amount of ARS 6,000.
EurGeol Dr. Mark D. Cruise, Cardero's Vice President-Exploration and a qualified person as defined by National Instrument 43-101, has supervised the preparation of the scientific and technical information that forms the basis for this news release.
All geochemical samples are secured and shipped to ALS Chemex Argentina for assay. ALS Chemex's quality system complies with the requirements for the International Standards ISO 9001:2000 and ISO 17025: 1999. Analytical accuracy and precision are monitored by the analysis of reagent blanks, reference material and replicate samples. Quality control is further assured by the use of international and in-house standards. Finally representative blind duplicate samples will be forwarded to ALS Chemex and an ISO compliant third party laboratory for additional quality control.
Cardero is well financed with $14 million in the treasury and well positioned to continue to explore its projects in Mexico, Peru, and Argentina. The common shares of the Company are currently listed on the TSX Venture Exchange (symbol CDU), the American Stock Exchange (symbol CDY) and the Frankfurt Stock Exchange (symbol CR5). The Company is actively evaluating gold, copper and iron projects, which will continue to ensure the recognition of Cardero as a world-class exploration and development company.
For further details on the Company readers are referred to the Company's web site (www.cardero.com), Canadian regulatory filings on SEDAR at www.sedar.com and United States regulatory filings on EDGAR at www.sec.gov.
On Behalf of the Board of Directors of
CARDERO RESOURCE CORP.
"Hendrik van Alphen" (signed)
Hendrik van Alphen, President
Quentin Mai, Manager - Corporate Communications & Investor Relations
Phone: 1-888-770-7488 (604) 408-7488 / Fax: (604) 408-7499
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.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 27E of the Exchange Act. Such statements include, without limitation, statements regarding future anticipated exploration program results, the discovery and delineation of mineral deposits/resources/reserves, business and financing plans, potential mining scenarios, the success of mineral processing procedures, business trends and future operating costs and revenues. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward looking statements as a result of various factors, including, but not limited to, variations in the nature, quality and quantity of any mineral deposits that may be located, the Company's ability to obtain any necessary permits, consents or authorizations required for its activities, the Company's ability to produce minerals from its properties successfully or profitably, to continue its projected growth, to raise the necessary capital or to be fully able to implement its business strategies.
All of the Company's public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including the technical reports filed with respect to the Company's mineral properties. This press release contains information with respect to adjacent or similar mineral properties in respect of which the Company has no interest or rights to explore or mine. The Company advises US investors that the US Securities and Exchange Commission's mining guidelines strictly prohibit information of this type in documents filed with the SEC. Readers are cautioned that the Company has no interest in or right to acquire any interest in any such properties, and that mineral deposits on adjacent or similar properties are not indicative of mineral deposits on the Company's properties.
This press release is not, and is not to be construed in any way as, an offer to buy or sell securities in the United States.