Zonia Copper Oxide Project, Arizona
OverviewThe Zonia Copper Oxide Project has been held under private ownership for almost 100 years and has undergone comprehensive exploration, metallurgical studies and mine development planning. The majority of the mineralized area was pre-stripped during previous open-pit mining operations at Zonia in 1966, as 17 million tons were mined with 7 million tons stacked on heap leach pads, producing cement copper up till 1975. The property has been drill tested with almost 700 drill holes (60,000 meters). This high density drilling covers 30% of the property and defines the current resource estimate, reducing technical risk on the deposit. Mineralization is mostly open to the northeast, providing considerable opportunity to grow the resource.
On January 13, 2016, Cardero reported a NI43-101 resource estimate for Zonia. The resource estimate was completed by Tetra Tech Inc. on behalf of Cardero. Highlights include:
- Measured and Indicated Resources of 76.8 million short tons grading 0.33% copper containing 510 million pounds of copper (0.2% copper cut-off grade).
- Inferred Resources of 27.2 million short tons grading 0.28% copper containing 154.6 million pounds of copper (0.2% copper cut-off grade).
- Low strip ratio of 1:1 waste to mineralized material in base case.
Table 1: Base Case Classified Resources
|Measured & Indicated||0.2||76,800||0.33||510.0|
Table 2: Resources at Various Cut-Off Grades
|Strip Ratio||Measured & Indicated||Inferred|
Table 3: Lerch-Grossman Pit Optimization Parameters
|Recovery Primary Sulfide||0||%|
Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources will be converted into Mineral Reserves. Inferred resources are that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
The deposit has undergone deep oxidation from surface and metallurgical studies demonstrate that it is amenable to open-pit mining, heap-leaching and SX-EW to produce cathode copper, with an expected recovery of 73%.
The currently defined deposit is located on private land, where mine road construction and pre-stripping has already been completed. Power is available from the public grid within 7km of the mine site and the project has sufficient water supply to support mining and processing. Cardero believes that permitting for the project will be streamlined due to the fact that no part of the project will impact public lands.
Cardero intends to publish a preliminary economic assessment ("PEA") in 2018. No additional on-site data collection is required before completing the PEA. In preparation for the PEA, Cardero will analyze the database of work completed by Redstone and former owners, including open pit design and optimization, production scheduling, metallurgical test work, geotechnical analysis, leach pad and process design, waste rock facility design, hydrogeological studies and reclamation planning.
Environmental work and permitting will be a parallel process. Cardero has received advice regarding permitting requirements and some of the necessary baseline work and permit applications have already been completed. Notwithstanding this advanced-stage work, permitting will be an area of focus and Cardero believes that a development plan located on private land will offer the easiest permitting route for the project, at least for the first phase of development.
Cardero intends to seek a development partner and financier to move the project through feasibility and construction.
Cardero Resource Corp. has the exclusive option to acquire up to a 100% interest in the Zonia Copper Oxide Project, located in Arizona.
On August 27, 2015 Cardero entered into an Option Agreement with Redstone Resources Corporation (Redstone) under which Cardero has been granted an exclusive option to acquire a 100% interest in the Zonia copper project. In order to exercise the option, Cardero must pay Redstone $2,225,000 ($801,350 paid) and issue 16,500,000 common shares of Cardero Resource Corp. to Redstone (7,500,000 issued).
Table 4: Option Agreement
|Date||Cash to Redstone (USD$)||Cardero Shares|
|Initial Payment||$25,000 (Paid)||-|
|BLM Fees||$26,350 (Paid)||-|
|October 15, 2015||$150,000 (Paid)||1,000,000 (Issued)|
|January 31 2016||$75,000 (Paid)||1,500,000 (issued)|
|July 31 2016||$75,000 (Paid)||-|
|January 31 2017||$450,000 (Paid)||2,500,000 (issued)|
|July 31 2017||-||2,500,000 (issued)|
|January 8 2018||$1,423,650||4,000,000|
|October 31 2018||-||5,000,000|
Cautionary Note Regarding Forward-Looking Statements
Forward Looking Information: This report includes certain information that may be deemed "forward looking information". Forward-looking information can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology. All information in this release, other than information of historical facts, including, without limitation, the potential of the Zonia general future plans and objectives for the Zonia project, the completion of the Plan and receipt of shareholder and regulatory approval therefor, the likelihood of receipt of value from the Retained Right, the availability of financing to Cardero Resource Corp. ("the Company") and the Company's plan in relation to its listing review are forward-looking information that involve various risks and uncertainties. Although the Company believes that the expectations expressed in such forward-looking information are based on reasonable assumptions, such expectations are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking information. Forward-looking information is based on a number of material factors and assumptions. Factors that could cause actual results to differ materially from the forward-looking information include changes in project parameters as plans continue to be refined, future metal prices, availability of capital and financing on acceptable terms, general economic, market or business conditions, regulatory changes, delays in receiving approvals, and other risks detailed herein and from time to time in the filings made by the Company with securities regulatory authorities in Canada. Mineral exploration and development of mines is an inherently risky business. Accordingly, actual events may differ materially from those projected in the forward-looking information. For more information on the Company and the risks and challenges of our business, investors should review our continuous disclosure filings which are available at www.sedar.com. Readers are cautioned not to place undue reliance on forward-looking information. The Company does not undertake to update any forward looking information, except in accordance with applicable securities law.