Vancouver, British Columbia...Cardero Resource Corp. ("Cardero" or the "Company") (TSX: CDU, NYSE-A: CDY)announces that it has been advised by Emmaland Resources Limited, its Ghanaian joint venture partner ("Emmaland") that Emmaland has received final approval from The Minister for Lands and Natural Resources (Ghana) ("Minister") for the grant to Emmaland of three prospecting licensescovering lands located in the Zabzugu-Tatale District in the Northern Region of the Republic of Ghana and referred to as the Sheini Hills Iron Project (approximately 400 square kilometres in aggregate). Accordingly, Emmaland has submitted to the Minerals Commission (Ghana) ("MinCom") the final documentation required for the formal issuance of the prospecting licenses and anticipates that they should be issued around the beginning of November, 2011. Cardero has negotiated joint ventures with Emmaland pursuant to which the Company can acquire a 100% working interest in each of the three licenses.
The Sheini Hills Iron formation, occurring as hematite with a lesser component of magnetite, has an indicated average thickness of 50 to 150 metres and can be followed by surface mapping and sampling for a minimum of 30 kilometres of strike. The mineralized system appears to be flat to gently dipping at surface, forming north-south trending prominent ridges.
The Sheini Hills Iron Project is a large-scale iron project, which is in line with Cardero's bulk commodity focus, and is anticipated to add considerably to the Company's existing coal and iron resource base.
Sheini Hills Iron Project
Location and Infrastructure
The three prospecting licenses to be issued to Emmalandwill cover an area approximately 55 kilometres long by an average of 7 kilometres wide and aggregate approximately 400square-kilometres.The project is approximately centred on the town of Sheini located in north-eastern Ghana adjacent to the border with Togo approximately 400 kilometres north-east of Accra and 160 kilometres east of Tamale, the regional capital of Northern Ghana. Infrastructure is good to moderate with graded roads, power and communications available at the district capital of Zabzugu, some 20 kilometres north-west of Sheini.
Project History & Due Diligence
Former slag heaps and historical excavations suggest artisanal--scale mining of the Sheini Hills Iron deposits in pre-Colonial times. The iron ore deposits were recognized in the 1920's, although it was not until the 1950's and 60's that significant work was carried out on them. In 1929, the Gold Coast Geological Survey conducted a large scale regional geological mapping and prospecting program that outlined the extent of the Sheini mineralized system. In the 1950's E.H. Jacques completed a ten-trench and nine-hole diamond drill program and described the presence of eight mineralized bodies with average iron grades in the 30-40% range.During the early to mid 1960's the area was the focus of work by the Soviet Geological Team, including mapping, trenching and initial drilling. Work by the Soviet Team stopped with the change of government in 1966 and no significant work has been carried out on the Sheini Hills iron ore deposits since then.
Prior to applying for the prospecting licenses, Emmaland carried out a 12 month due diligence program, which was designed and supervised by Dr. Karel Maley of Aurum Exploration Services, Ireland (a Qualified Person under National Instrument 43-101) with the input of Cardero's in-house iron specialists. Due diligence predominantly focused on the Sheini Hills West area - the location of the majority of historic exploration. The results of the due diligence program have supported the historic information and confirmed the presence of a large regional iron ore system.
As part of the due diligence program, detailed geological mapping at 1:2, 500 scale was carried out, and 37 trenches (1, 873 trench-metres) were dug, at Sheini Hills West. Trencheswere typically spaced at 100 or 200 metre intervals. Representative composite channel samples of banded iron formation and fragmental mineralization types (n=284) were analysed by ALS Chemex and returned ranges of mineralized values as outlined in Table 1.
Mineralized Rock Type
Banded Iron Fm
29.2 - 60.1
6.9 - 53.9
0.02 - 0.35
Fragmental Iron Fm
29.9 - 48.2
14.9 - 42.5
0.09 - 0.32
Proposed Work Program
Cardero Ghana Ltd., an indirect wholly owned Ghanaian subsidiary of the Company ("Cardero Ghana") will manage the project under the joint ventures with Emmaland. It is anticipated that the initial work program provided for in the prospecting licenses will consist of detailed remote sensing imagery interpretation and geological prospecting and mapping over the area of the licenses, as well as an airborne geophysical survey and a series of new air photos. High priority areas identified by such initial work will then be subjected to detailed ground geophysics and, where appropriate, soil and selected grab sampling and channel sampling, with a follow-up program of pitting and trenching. It is anticipated that the program will also include initial drill testing of the extensive areas of outcropping iron mineralization identified historically and confirmed during the due diligence period, as well as initial drilling on newly identified prospects. The primary focus of the initial program will be on evaluating the full linear extent and nature of the iron mineralization through the re-assessment of known occurrences and the identification and assessment of significant new occurrences.
Joint Ventures with Emmaland
Cardero, through Cardero Ghana, has agreed with Emmaland to enter into three separate joint ventures (one for each prospecting license) to explore and, if warranted, develop, the lands subject to the prospecting licenses. Formation of each joint venture is subject to the actual issuance of the prospecting license that is the subject of that joint venture.
Under the three proposed joint ventures, Cardero Ghana will have the right to earn a 100% working interest in each license, subject to (a) a 10% NPI in favour of Emmaland and (b) a 10% fully carried interest, in favour of the Government of Ghana, in the portions of the license areas that become the subject of one or more mining licenses subsequently issued to Emmaland. In order to earn its interest, Cardero will fund all expenditures under the particular joint venture and make the following payments to Emmaland:
For each of the Sheini Hills North and Middle Sheini prospecting licenses:
- USD 25, 000 upon the agreement to enter into the joint venture (paid)
- USD 250, 000 as an initial joint venture payment (paid)
- USD1, 000, 000 upon the formation of the joint venture (Effective Date)
- USD 1, 000, 000 six months after the Effective Date
- USD 500, 000 one year after the Effective Date
- USD 1, 000, 000 two years after the Effective Date
- USD 1, 000, 000 three years after the Effective Date
- USD 500, 000 four years after the Effective Date
- USD 500, 000 five years after the Effective Date
For the Sheini South prospecting license:
- USD 3, 000, 000 upon the formation of the joint venture (Effective Date)
- USD 1, 000, 000 one year after the Effective Date
- USD 1, 000, 000 two years after the Effective Date
Cardero Ghana will have the right to purchase the 10% NPI held by Emmaland in a joint venture at any time for an amount representing the net present value thereof, as calculated by an independent engineering firm, or such other amount as is acceptable to Emmaland.
Emmaland has advised that each of the prospecting licenses will be issued for an initial term of two years, and will require the completion of a work program during that time as specified in each license (presently being finalized by MinCom, but anticipated to be approximately USD 1.65 million in aggregate). Each license may be extended for an additional year without any reduction in area, provided that the requirements of the license (including the required work program) have been complied with and that the additional time is required for the holder of the license to make an informed decision concerning the renewal of the license. Each license may thereafter be renewed for a further period of up to three years (as determined by Minister upon recommendation of MinCom), provided that 50% of the area subject to the license must be surrendered upon such renewal. Emmaland may, at any time prior to the expiration of a license, apply for up to three mining licenses over some or all of the area subject to each license. Mining licenses are issued for a maximum of 30 years (subject to extension for an additional period of up to 30 years) and are limited in size to approximately 63 square kilometres.
The Republic of Ghana is located inWest Africa and is bordered byCôte d'Ivoire to the west, Burkina Fasoto the north, Togoto the east, and theGulf of Guineato the south. The population is approximately 24 million people with a labour force of 11.5 million people. Ghana is richwith natural resources and was known for itsgoldin colonial times, remaining one of the world's top gold producers today. Other exports suchascocoa, oil, timber, electricity, diamonds, bauxite andmanganeseare major sources of foreign exchange. Ghana remains one of the more economically sound countries in all of Africa.
Ghana operates politically through a stable parliamentary system yet also honours an historic chief system with a complex hierarchy branching downward from an Ashanti king, through four "paramount" regional chiefs and then down to district and village chiefs. Ghana is a modern developing country with strong economic ties in West Africa and with Europe and North America. It is West Africa's largest gold producer and a top-ten gold producer globally. It is also the world's second largest cocoa producer and is emerging as an oil-producing nation through newly discovered offshore fields.
"As a major undeveloped iron deposit with world-class potential, Sheini represents another excellent opportunity to increase the Company's value and exemplifies Cardero's strategy to generate shareholder value through the acquisition of large-scale bulk-tonnage iron and metallurgical coal deposits" stated Henk Van Alphen, Cardero's CEO. "I believe Cardero's determination and commitment to become a bulk commodity producer is demonstrated by the Company's two recent acquisitions - amidst major competition, Cardero successfully acquired the Sheiniiron project in one of the best mining regions in Africa and the Carbon Creek Metallurgical Coal Deposit in the Peace River Coal District in northeastern British Columbia".
Qualified Person and Quality Control/Quality Assurance
EurGeolKeith Henderson, PGeo, Cardero's VP Exploration and a qualified person as defined by National Instrument 43-101, has reviewed the scientific and technical information provided by Emmaland that forms the basis for portions of this news release, and has approved the disclosure herein. Mr. Henderson is not independent of the Company, as he is an officer and shareholder.
Emmaland has advised that the due diligence reconnaissance geological work program at Sheini was designed and supervised by Dr. Karel Maly (consulting geologist), who was responsible for all aspects of the work, including the quality control/quality assurance program. On-site personnel at the project rigorously collected and tracked samples which were then security sealed and shipped to ALS Laboratories, Vancouver, for assay.ALS's quality system complies with the requirements for the International Standards ISO 9001:2000 and ISO 17025: 1999. Analytical accuracy and precision were monitored by the analysis of reagent blanks, reference material and replicate samples. Quality control was further assured by the use of international and in-house standards. Blind certified reference material was inserted at regular intervals into the sample sequence in order to independently assess analytical accuracy.
About Cardero Resource Corp.
The common shares of the Company are currently listed on the Toronto Stock Exchange (symbol CDU), the NYSE-Amex (symbol CDY) and the Frankfurt Stock Exchange (symbol CR5). 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, Chief Executive Officer
Nancy Curry, Manager - Corporate Communications & Investor Relations
Phone: 1-888-770-7488 (604) 408-7488 / Fax: (604) 408-7499
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable Canadian and US securities legislation. All statements, other than statements of historical fact, included herein including, without limitation, statements regarding the anticipated content, commencement and cost of exploration programs, anticipated exploration program results, the discovery and delineation of mineral deposits/resources/reserves, the potential issuances of prospecting licenses by the Government of Ghana to Emmaland and the timing of such issuances, the finalization of each of the joint ventures between Emmaland and Cardero Ghana, the ultimate nature and required expenditures of the work programs under the prospecting licenses; business and financing plans and business trends, are forward-looking statements. 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, variations in the market for, and pricing of, any mineral products the Company may produce or plan to produce, the Company's inability to obtain any necessary permits, consents or authorizations required for its activities, the Company's inability 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, and other risks and uncertainties disclosed inthe Company's 2011 Annual Information Form filed with certain securities commissions in Canada and the Company's annual report on Form 40-F filed with the United States Securities and Exchange Commission (the "SEC"), and other information released by the Company and filed with the appropriate regulatory agencies. All of the Company's Canadian public disclosure filings may be accessed via www.sedar.com and its United States public disclosure filings may be accessed via www.sec.gov, and readers are urged to review these materials, including the technical reports filed with respect to the Company's mineral 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.