Cardero Resources Corp. - Main Alisitos - Baja Project

Baja Project

Background

Cardero's Mexico iron-oxide copper gold (IOCG) project represents a massive exploration venture with numerous indications of potential multiple, large scale mineral deposits.

Ownership

The project is 100% owned by Cardero.

Project Area

Cardero has examined a 50,000 square - kilometre area and defined approximately 200,000 hectares of the most prospective ground along the Lower Cretaceous Alisitos Arc in Baja California Norte. This belt shows striking geologic similarities to the Central Andean coastal IOCG belts of Chile and Peru, which host several producing IOCG deposits.

Massive Exploration

During 2003, Cardero undertook an aggressive regional targeting program utilizing a combination of regional geophysical, geological and geochemical datasets in conjunction with remote sensing (Landsat/Aster) and structural analyses which highlighted 31 target areas for ground acquisition and follow-up. Several large hydrothermal systems with associated IOCG were identified.

Targets

San Fernando

Initial drilling, predominantly geophysically focused (combined magnetic - chargeability ± gravity anomalies), resulted in the intersection of thick intervals of 'barren' IOCG magnetite - sodic - pyrite mineralization (drill holes 05-SF-01 to -03). The most recent drill holes targeted more subtle geophysical anomalies associated with potassic alteration and resulted in the intersection of significant copper mineralization in the northwest quadrant of the target zone (diamond drill holes 05-SF-05, and -09).

The copper (chalcopyrite) mineralization is intimately related to pervasive potassic alteration (biotite and orthoclase) as is seen at other large copper bearing systems (for example, Candelaria in Chile). Detailed borehole logging, supplemented by petrographic studies, demonstrates that at least three phases of copper-bearing potassic alteration are present. Chalcopyrite mineralization occurs as both en-echelon and sheeted veinlets in addition to fine disseminations, suggesting that the property is prospective for both vein and disseminated-type IOCG mineralization. See attached pictures for details.

Mineralization remains open in all directions. Specifically to the west (where potassic alteration has been mapped for a minimum of 2.5 km from the westernmost drill hole, 05-SF-05, and remains open); to the south, where it extends approximately 1 km south (dips below younger cover sequences); to the east (approx. 600-800 m), along the northern faulted contact of the magnetic anomaly; and at depth (drill hole 05-SF-08 finished at 438m in pervasive potassic alteration containing disseminated pyrite and chalcopyrite mineralization).

Following a recent property examination on behalf of the Company by IOCG specialists Dr. M.W. Hitzman and G. Lopez from the Colorado School of Mines, Dr. Hitzman concluded "It is apparent that the San Fernando Prospect represents a robust iron oxide-copper-gold (IOCG) system. San Fernando is comparable in terms of alteration style and intensity to the Candelaria deposit in Chile." He further noted that "Only a very small portion of the prospect has been tested to date [and] additional drilling is the only reliable means of testing the prospect. The drilling results at San Fernando are very encouraging for further exploration within the district."

Other target areas include:

Picale

During the first quarter of 2006, Cardero completed an additional 700 meters of diamond drilling in six boreholes in order to test the geophysical anomaly subjacent to the discovery borehole 05-PC-03. Drilling to date indicates good to excellent manto continuity and the presence of very attractive copper accumulations. To date only a very minor portion of the 6-kilometre strike length manto horizon has been tested

Phase I drill testing in late 2005 by Cardero on behalf of exploration partner Anglo American successfully intersected significant hypogene copper mineralization associated with a flat-lying magnetite manto at the Picale target:

Borehole 05-PC-03 intersected 6.5m of massive to semi-massive magnetite - chalcopyrite mineralization that graded 4% Cu & 0.4 g/t Au, within which 4.2m returned 5.5% Cu and 0.56 g/t Au (see press release dated Jan 5th, 2005 for details).

In January 2006, Cardero conducted a series of 3D-Induced Polarization (IP) surveys on the San Fernando, Picale and San Jose targets. The Picale 3D - IP survey successfully mapped the shallowly dipping magnetite (± copper) manto mineralization. The anomaly dips to the North and West and covers an area of one kilometre square; it remains open.

Subsequently boreholes 06-PC-04 to -07 were collared to the SE, SW, NW and NE, respectively, of the initial discovery intersection in 05-PC-03 (see figure for collar locations). In summary, all four boreholes tested the target horizon and significant copper was intersected in boreholes 06-PC-04 and -07.

Borehole 06-PC-05 contains geochemically anomalous copper concentrations and the Delta Manto occurrence, located some 350m to the South, contains some of the most abundant copper oxide mineralization discovered on the property to date and is interpreted to indicate that copper-bearing manto mineralization may extend at least this far South.

In borehole 06-PC-06, the mineralized manto is structurally attenuated by a post-mineral hanging wall fault the extents of which are presently unknown; however, the geophysical model and drill intersections (06-PC-08) together indicate that the target horizon extends to the North and West of the collar location.

In order to test the geophysical model, borehole 06-PC-08 was collared approximately 650m N of 05-PC-03. It intersected the target horizon within 15m of the predicted target depth and contains several geochemically anomalous intervals. Similarly, it is worth noting that borehole 05-PC-03 was collared 200m North of 05-PC-02, which contained a broadly similar geochemical response. Finally, borehole 06-PC-09 was collared toward the leading edge of the outcropping magnetite mineralization and is interpreted to reflect metal zonation within the manto horizon.

Highlights of recent drilling include:

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          From     To   Interval
Borehole   (m)     (m)     (m)    Grade
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05-PC-03   56.4   63       6.6    4% Cu & 0.4 g/t Au
Inc.       58     62.2     4.2    5.54% Cu & 0.56 g/t Au
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06-PC-04   25     34.8     9.8    2.77% Cu & 0.21 g/t Au
Inc.       29.5   32 2.    5      10.1% Cu & 0.64 g/t Au
-----------------------------------------------------------------------
06-PC-05   52.5   61.2     8.7    0.4% Cu & 0.03 g/t Au
Inc.       59.8   61.2     1.4    1.77% Cu & 0.13 g/t Au
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06-PC-06   89.7   90.8     1.1    2.2% Cu & 0.12 g/t Au
                                  (note faulted hanging wall contact)
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06-PC-07   66.5   74.4     7.9    2% Cu & 0.19 g/t Au
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06-PC-08                          Geochemically anomalous varying from
                                  1.08 to 2.16m intervals in the 0.3 to
                                  0.8% Cu range
-----------------------------------------------------------------------
06-PC-09   68     71.5     3.5    0.21% Cu & 0.03 g/t Au
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Amargosa

Located 35 kilometres due south of the San Fernando IOCG system, the Amargosa area formed part of one of the initial thirty-one (31) high priority regional scale targets generated by Anglo's 2003 belt scale targeting initiative.

First pass geological reconnaissance identified significant alteration associated with undocumented IOCG mineral occurrences. Subsequent stream sediment geochemistry and geological follow-up resulted in the discovery of previously unknown and unworked hematite-chalcopyrite-pyrite mineralization outcropping over 350 metres in Amargosa Creek. Chip Sampling returned grades of 10 metres @ 1.45% Cu.

The majority of the showings are hosted by a thick (10s to 100 metres), permeable volcaniclastic unit and considered to be controlled by a complex interplay of the large regional Catarina fault zone (+30 kilometre strike) and second-order Amargosa and Specularite Creek faults.

Preliminary interpretation and modelling of the IP results by Anglo is highly encouraging:

The Amargosa IP Anomaly, as presently defined, extends over an area of 900 metres N - S by 350 metres E - W. This anomaly is centered on the outcropping Amargosa Creek mineralization and the mapped structural intersection of the Catarina and Amargosa fault zones (Figure 1). The anomaly has chargeabilites ranging from 28 to 42 milliseconds (ms) and appears to extend from subcrop to depths in excess of 200 metres.

The Central Anomaly occurs at the intersection of the Catarina and Specularite Creek faults zones and occurs over a 600 by 400 metre area (Figure 1). The anomaly is modeled to occur at depths of approximately 200 metres to 470 metres; it remains open at depth and has chargeabilites ranging from 30 to 40 ms.

The Amargosa NW anomalies are associated with and centred on the regional scale Catarina fault zone, a broad zone of anomalous copper geochemistry and intense, high level, alteration. They are comprised of two large IP anomalies (30 - 40 ms) which range from 1000 to 1200 metres strike length and over widths of 400 to 500 metres. They are modeled to occur at depths which vary from subcrop to approximately 500 meters deep and modeled thicknesses of plus 150 metres (Figure 1). They remain open to the NW.

Finally a single 28 to 42 ms anomaly occurs on the NE section of the northwestern most line at modeled depths of approximately 150 to 330 metres, it remains open to the NW (Figure 1).

El Cuervito

At the El Cuervito prospect steeply dipping magnetite - silica veins occur within a wide (up to 1700 metres) N-S trending shear zone. The intrusive and volcaniclastic hosted veins vary from 1 to 10 metres wide and are traceable intermittently along strike for up to 2 km. Alteration associated with these showings is typical of that associated with iron oxide copper-gold deposits. A composite dump sample from one of these occurrences (Santa Maria 1) returned the following values: >10% Cu, 2.6 g/t Au, 15.4 g/t Ag, 13.9% Fe and anomalous Co and Mo.

El Encanto Fault Zone

This is a major northeast trending fault zone traceable for a minimum of 8 km along strike and averaging 150-250 metres in width. This structure is locally associated with broad zones of epidote alteration and frequently copper oxide. Locally, close to specific fault structures, alteration is dominated by chlorite and copper mineralization, which is localized in discrete breccia zones that are associated with pervasively silicified and alkali feldspar altered rocks. Mineralization is comprised of secondary copper minerals associated with quartz and specular hematite. Chip samples from one showing (Llanito Colorado) returned the following values: 3 metres (minimum) grading 4.7% Cu, 176 ppb Au and 49 g/t Ag.

This type of mineralization is typical of distal or high level mineralization within an IOCG system which has undergone oxidation and supergene enrichment.