Overview

Commodity

Iron with titanium & vanadium by-products

Overview

The Iron Sands deposit (Pampa El Toro) is a bulk-tonnage, low-grade iron deposit hosted in surface sand dunes. Iron is contained within the sand dune as magnetite. The entire deposit has been drilled to 30 metres depth, with deeper 60 metre and 120 metre holes having been completed in only portions of the deposit. The deposit is capable of producing iron-ore concentrate (through magnetic separation), pig iron (through proprietary electric-arc process) or direct-reduction pellets. Cardero has built and operated a pilot-scale dry magnetic separation plant, producing a concentrate grading 64% iron. Cardero has also produced a high-quality pig iron from the concentrate; 96% Iron, 3% Carbon and <1% deleterious elements. Finally, testing to produce iron-ore pellets for use by direct reduction iron-making customers is in progress and results will be announced in due course. Ongoing metallurgical testing at the Colorado School of Mines is ascertaining the recoverability of vanadium and titanium as by-products.

Ownership

Cardero Peru owns 100% of claims surrounding the option property. The core of the deposit is held under option, with a final payment of US$6M due in Q4 2011 to acquire a 100% interest in the deposit.

Location

The project is located in southern Peru, adjacent to significant infrastructure; PanAmerican Highway, electrical transmission grid, natural gas lines under development and deep water port with direct shipping lanes to Asia.

Resource Estimate

NI43-101 resource estimate of the dune-field hosted iron deposit by SRK reviewed 241,831,000 indicated tonnes grading 6.67% Fe2O3, 0.72% TiO2 and 172 ppm vanadium plus an additional 629,881,000 inferred tonnes at 6.48% Fe2O3, 0.70% TiO2 and 166 ppm vanadium within only approximately 15% of the total 10,300-hectare concession area and including resources drilled to only 30 metres from surface.