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| | | |   Pampa de Pongo Property Project The 15,300-hectare Pampa de Pongo iron property hosts iron ore deposits in an iron oxide-copper-gold (IOCG) environment. Location The property is located in the arid coastal region of southern Peru approximately 60 km southwest of the city of Nasca and approximately 400 km south of Lima. Deep sea port facilities are located approximately 42 km to the northwest at Puerto San Nicolas, and approximately 38 to the west-northwest in San Juan. Region The southern coastal region of Peru hosts numerous IOCG deposits that occur within a 70 km by 400 km belt extending south of Lima. The Marcona mining district is one of the main mineralized districts of Peru and includes the large iron deposits of the Marcona mine and Pampa de Pongo as well as the recently discovered Mina Justa copper-gold deposit. Ownership Cardero Resources Corp. has acquired 100% ownership (please see below for additional details). Property Background Pampa de Pongo was discovered by RT in 1994 while drill-testing a large magnetic anomaly located about 30 km southeast of the Marcona Mine site. Follow-up drilling by Rio Tinto in 1995 and 1996 identified widespread magnetite mineralization hosted in sediments and volcanics of Lower Paleozoic and Mesozoic age. Mineralization occurs in a northwest-trending structural corridor that is approximately one kilometer in width and in excess of six kilometres long. Coincidental magnetic and gravity anomalies suggest magnetite associated mineralization occurs over a 12-km strike length and is up to 1 km in width. The thickest intersection to date is 169 metres of magnetite at 52.9% iron. Preliminary metallurgical test work indicates that simple low intensity magnetic separation could produce a saleable concentrate with 66 to 69% iron. While the RT exploration was focused on the iron potential, drill hole PPD009 intersected 8 metres of 1.72% Cu, 2.6 g/t Au and 95 metres of 54.3% iron and, drill hole PPRC002 intersected 21 metres of 0.43% Cu and 0.68 g/t Au. In 2002 a paper on the Marcona IOCG district by Rio Tinto and Queen's University, published in Porter, T.M. (Ed), 2002 - Hydrothermal Iron Oxide Copper-Gold & Related Deposits: A Global Perspective, volume 2; PGC Publishing, Adelaide, pp 115-130, states, "Approximate resources include more than 1400 Mt of iron ore at Marcona and 1000 Mt of magnetite mineralization at Pampa de Pongo". On page 123 of this paper the authors state that, "Wide-spaced drilling suggests a potential resource of 1,000 Mt comprising approximately 75% magnetite. Hole 1 cut 168.7 m of magnetite grading 52.9% Fe with anomalous Cu and Au." A review of this publication and data provided to the Company by Rio Tinto suggests that the potential quantity and grade of the Pampa de Pongo deposit is conceptual in nature, that there has been insufficient exploration to define a mineral resource on the property and that it is uncertain if further exploration will result in discovery of a mineral resource on the property. At Pampa de Pongo, Cardero completed a TEM (electromagnetic) survey in early 2004 that identified two significant conductors. Key Regional Mineralization The Marcona District is well known for its iron deposits, which are actively mined at the Marcona Mine. The Marcona Formation dominantly hosts the Fe mineralization as broadly stratabound lenses replacing impure dolomitic sandstones and pyroclastic units. The overlying Rio Grande Formation also hosts Fe-mineralization. Magnetite ± specularite have replaced impure limestone lenses within the volcanoclastic sequence, forming large "mantos". Geology and styles of mineralization of the Marcona Fe bodies are described in Hawkes, et al. (2002), Atchley (1956) and Adrian (1958). Going Forward An 11-hole drill program is underway to test the two conductors and evaluate the extent and grade of iron mineralization along the structural corridor. This program is intended to provide enough information to proceed with a preliminary scoping study to identify the potential viability of the project. Ownership Details Cardero has acquired a 100% interest in the Pampa de Pongo project from Rio Tinto Mining and Exploration Ltd. ("RT"). In acquiring the 100% interest in the Pampa de Pongo iron deposit Cardero issued a combination of cash and shares to a private Peruvian company that held the option rights, and Cardero assumed all terms and conditions of the underlying agreement with RT and made the following payments to RT or RT's designated affiliates:
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