St. LOUIS (ResourceInvestor.com) -- Cardero Resource Corp. announced today that it is in the early stages of forming a joint venture operation with Newmont Ventures Ltd. to explore for gold deposits in northwest Argentina. The news sent Cardero [TSX:CDU; AMEX:CDY] shares up more than 17% while Newmont [NYSE:NEM] shares pared back almost 1%.
The deal benefits the Vancouver-based Cardero, which will receive access to Newmont’s exploration technologies in exchange for operating the joint venture based on its extensive regional exploration surveys in the area. Detroit-based Newmont will not earn any interest in existing Cardero properties but can later elect to acquire interest in some or all of Cardero’s properties not included in the joint operation.
According to terms of the agreement - which is currently nonbinding - Cardero will be able to use Newmont’s “proven ‘mine-finding’ ultra-low detection geochemical and geophysical techniques,” including its Bulk Leach Extractable Gold (BLEG) sampling, remote sensing imagery and geophysical data interpretation.
“Newmont commenced interpretation of Aster satellite imagery in recent weeks, and this review is almost complete. Fieldwork in the upcoming months will be focussed on regional BLEG sampling with approximately 2,000 samples planned to screen 11,000 square kilometres of prospective terrain previously identified by Cardero geoscientists,” according to a Cardero press release.
“This work will ideally place the alliance to rapidly advance targets. Detailed geophysical surveys on pre-existing targets will begin in October with subsequent targets identified by BLEG sampling being screened later in the field season.”
The joint exploration will cover approximately 36,000 square kilometres in the provinces of Jujuy and Catamarca in northwest Argentina. It will operate in the northern section of Cardero’s Sediment Hosted Vein, which holds 12 known gold properties. Four properties in the region will be excluded from the deal, with Cardero continuing those operations alone.
Also excluded is Cardero’s Incahuasi gold project, located on a historical high-grade gold mine where mining activity dates back to pre-Spanish settlement times. The average grade of 108 grab samples from the property was 4.3 grams per tonne gold. In-situ veins held values up to 231 g/t Au.
All properties acquired by the joint operation will be split 50-50 by Cardero and Newmont. The budget for the deal is set at $4.5 million.
“We are extremely pleased with the prospect of entering into a long term alliance with a company of Newmont’s global expertise,” Henk Van Alphen, president and CEO of Cardero, said.
“It is a considerable vote of confidence that Newmont has chosen Cardero as a strategic partner and should give our shareholders comfort that the company is creating gold opportunities of interest to major mining companies. The alliance will also enable Cardero to leverage its exploration assets and focus on new opportunities, some of which it hopes to be in a position to announce in the near future.”
More details of the proposed operation will be released upon final approval of the deal. Newmont shares dropped a total of .82% today on the New York Stock Exchange, losing 37 cents to end at $44.53. It dipped to $43.78 during daytime trading, its lowest price in two and a half weeks. In after-hours trading, the miner lost another 8 cents.
Cardero shares jumped 17.86% on the news, adding 25 cents to end at C$1.65 on the Toronto Stock Exchange - its highest close since 14 August. Shares hit a 52-week high of C$3.38 in late March.
