Categories: Base Metals
Topics: General Base Metals

Selling—Cardero Resources (CDU.TSX) C$1.76

Exploration Insights
by Brent Cook
www.explorationinsights.com

Alert
March 17, 2009

Selling—Cardero Resources (CDU.TSX) C$1.76

As we discussed in the last issue (March 15) no news from Cardero is probably bad news.  Cardero is supposed to receive the US$10 million payment from Nanjinzhao today.  There is no news out at market open today stating that the money has arrived or what the status of the agreement is. 

I much prefer to make a decision based on information.  Unfortunately right now the only information we have is that there is no news from Cardero.  We do not know what has gone wrong, if anything has at all.  The Chinese group could be re-negotiating the deal, they could have run into bureaucratic or financing issues or possibly Cardero has managed to re-structure the US$200 million deal under more favorable terms.  We do not know. 

My understanding from Cardero is that they feel certain the deal is going ahead- there has just been a delay of some sort.  I hope this is right.  Nanjinzhao has been in Peru working on the project and are reportedly sending a full delegation to Peru in anticipation of the acquisition.

Although I am hesitant to sell until Cardero makes a statement, hoping for good news is usually a bad investment strategy. 

I suggest selling Cardero out of the portfolio within approximately C$0.35 of the current price.  I do not think all is lost but feel we can better assess the investment when we see how things evolve.

That’s the way I see it.

Brent Cook

Brent owns shares in Cardero