Cardero Resource Corp announced that Emmaland Resources Limited, its Ghanaian joint venture partner has received from the Government of the Republic of Ghana, through the Minister for Lands and Natural Resources, three prospecting licenses covering 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). Cardero Ghana Ltd an indirect wholly owned Ghanaian subsidiary of the Company has now signed joint venture agreements with Emmaland pursuant to which Cardero Ghana can acquire a 100% joint venture interest in each of the three licenses.
Proposed Work Program
Cardero Ghana is the operator under the joint ventures and will, in collaboration with Emmaland, manage the work on the property. In accordance with the requirements of the prospecting licenses, Cardero Ghana has designed a preliminary exploration program that will, subject to the issuance of the required permits, commence in Q1 2012.
The purpose of the program will be to explore the entire 400 square kilometre licence block, within which iron formations have been already been mapped as outcropping over at least 35 kilometres of strike. The aim is to explore for pockets of direct shipping iron ore within the greater area of known iron formation.
An airborne geophysical survey, comprising V-TEM, magnetic gradiometer and radiometrics has been scheduled for Q1 2012 and the survey is designed to map physical rock properties that will help target higher-grade pockets of haematite dominated iron formation at surface. In tandem with this, acquisition of high resolution photo imagery and satellite imagery has been completed and interpretation of the data is in progress.
Cardero Ghana has also signed a contract with a drilling firm in Ghana and drilling is expected to begin in Q1 2012. The initial drill contract is for 10,000 metres with potential for additional metres thereafter. Construction of the field camp that will support this program has already begun.
The planned program will also include preliminary metallurgical assessment of the upper oxidized and lower primary banded iron formations. Large diameter core is being drilled to facilitate this testing. This work is slated to begin in Q2 2012.
Joint Ventures with Emmaland
Cardero Ghana, has entered into three separate joint ventures (one for each prospecting license) dated December 12, 2011 (the "Effective Date" of each joint venture) to explore and, if warranted, develop the lands subject to the prospecting licenses.
Under the joint ventures, Cardero Ghana will have the right to earn a 100% joint venture 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 (157.5 km2) and Middle Sheini (157.5 km2) 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)
USD 1,000,000 upon the Effective Date of the joint venture agreement (paid)
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 (87.5 km2) prospecting license:
USD 3,000,000 upon the formation of the joint venture (paid)
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.
The Company has agreed to pay a finder's fee of 2,000,000 common shares to an arm's length British Columbia company. The shares are to be issued in stages, as to 500,000 upon execution of one or more joint venture agreements on the Sheini properties, and an additional 500,000 shares after 6, 12 and 18 months, provided that at least one of the joint venture agreements is still in effect and that further work is planned. Issuance of the shares is subject to acceptance for filing of the finder's fee agreement by the Toronto Stock Exchange, which has not yet occurred.
