Firstenergy Corp. (FE)

[1upandaway]

my favourite play: cardero resource, cdy, cdu.to

Iron Ore is the new Uranium

Word from the Iron show in London last week was that many of the projects that are expected to be in production over the next 10 years are being evaluated at $2.00 per tonne in the ground. A small comparative analysis on 3 iron projects has turned up some interesting results:

- Baffinland (Canada) will need to build a rail line running either 100 km north to Milne Inlet or 120 km south to Steensby Inlet, as well as a port facility. From the port, iron ore will be loaded unto ships bound for Rotterdam, a journey of at least 5,000 km. The company plans to extend the 4-month shipping season used by the nearby Nanisivik mine to 8-9 months by using icebreakers when necessary.

- Baffinland (BIM-TSX) recently had a market cap of $500 million before the correction, and is now sitting at about $350 million, and a resource of around 200 million tonnes. BIM has engaged CIBC, and Citigroup to act as the company's co-financial advisers in seeking a minority strategic partner.


Distance does not matter when it comes to Iron Ore Takeover Targets in Australia

- Murchision’s Jack Hills (400 mil. tonnes) iron ore project has to travel 683 KM to reach a port, while Midwest’s Weld Range (570 mil. tonnes) project is 448 KM away.

- Murchison has offered one of its shares for 1.08 Midwest shares, which were set to close on January 23rd.

- Sinosteel made a $1.3 billion offer to buy Midwest.

- Midwest's board has rejected Murchison's offer (Jan. 24th) as undervalued and remains locked in a stalemate with Sinosteel.


Making Sense of Cardero's Pampa de Pongo Iron Deposit News Release

- A world class (c. 1 Billion Tonne) underground Iron Ore deposit.

- Largest undeveloped iron resource on the western seaboard of the Americas, with a 43- 101 compliant inferred resource of 954 Mt @ 44.7% Iron, 0.12% Copper.

- Capex bringing Pampa de Pongo into production is conservatively estimated US$1.8 Billion.

- Planned annual production capacity of 10 million tonnes of high quality 67% iron oxide pellets.

- Mining and production costs are conservatively estimated at $38.00 per tonne.

- Additional credits of 42 million pounds of copper and 40,000 ounces of gold per year.

- Using conservative pricing of $100.00 / tonne for iron pellets, $2.00 / pound for copper, $500.00 / ounce for gold; gross revenue of $1.1 Billion per annum could be realized, with production costs of approximately $400 Million per annum.

- SRK consultants supervising 2008 Scoping Study and 30,000m definition drill program.


Project Background

The Pampa de Pongo Iron Deposit is an IOCG-type deposit, located in the southern coastal belt of Peru, approximately 450 km southeast of Lima. The property was discovered by Rio Tinto Mining and Exploration in 1994 while drill testing a large magnetic anomaly located about 30km southeast of the Marcona Mine site. Cardero’s 100% interest is costing US$500,000 paid from 2005-2008. The final payment will be made prior to January 27, 2008.

The deposit has a N.I.-43-101 compliant resource. It is estimated to contain an inferred resource of approximately; 954 million tonnes @ 44.7% Iron, 0.12% Copper, 0.09 g/t Gold. This resource is open and further exploration is expected to add significantly to resources. Drill highlights to date include; 302m @ 51.6% Iron and 0.1% Copper, 292m @ 47% Iron and 0.16% Copper, and 216m @ 51% Iron and 0.1% Copper.


Mining and Processing

The portion of the deposit to be mined first will be the central zone, which is up to 370 metres thick, 1,000 metres wide and 1,200 metres long. The deposit is ideal for an underground caving method of extraction, with the top of the deposit at approximately 350 metres below surface.

This mining method has a number of key advantages:

- Low cost, highly mechanized mining method.

- No strip ratio.

- High percentage of ore recovery from the resource.

- Minimal drilling, blasting and timbering are done per tonne of ore.

- High rate of production.

Planned processing facilities, constructed at port, would produce 10 million tonnes / annum of iron oxide pellets at 67-69% Fe. In addition, copper concentrate containing payable gold will be produced for export or trucked to smelting and refining facilities in Peru. Preliminary

metallurgical work on ‘run-of-mine’ mineralization by Rio Tinto in 2003 indicated that the mineralization is readily upgradeable to form either a 69% iron concentrate or a high quality 67% iron oxide pellet.


Project Advantage

The primary attractive feature in the potential development of the Pampa de Pongo deposit is the excellent infrastructure including:

- Close proximity to the deep water port at San Nicolas (42km).

- Critically, there is excess capacity at the San Nicolas port.

- The Pan-American Highway passes within 6 km of the deposit.

- A paved road crosses the property.

- A high-tension power line crosses the property immediately adjacent to the Central Zone.

- The existence of a pre-existing iron mining labour pool.

These factors set Pampa de Pongo apart from rival deposits elsewhere around the world, where access to port capacity in particular, can represent a huge challenge.


The Future

Cardero has initiated a 30,000 metre definition drill program, which is designed to upgrade the National Instrument 43-101 Inferred Resource to a combination of Indicated and Measured Resource status. SRK will design and oversee programs for the collection of geotechnical and geological data from drill core. The budget for definition drilling is US$5 million. SRK has also been retained to complete a Mine Scoping Study, scheduled to commence in early February. The scoping study will focus on determining the likely mining methods and will include an initial caveability and fragmentation assessment of the massive central orebody. The scoping study will also determine the range of potential mining costs, which should permit the development of a robust financial model for the deposit. The budget for the Scoping Study is US$250,000.

In the massive Central Zone, the top of the high-grade semi-massive magnetite resource is typically 350 metres below surface. This is the portion of the resource, which is believed to be suitable for underground caving. The overlying stockwork zone includes shallow intersections of up to 347 metres @ 22.5% iron. The scoping study will investigate the possibility of extracting this material from surface by open-pit methods. This mineralisation has not been included in the current inferred resource and, if the extraction of this material appears viable, the scoping study will include an increased Pampa de Pongo Inferred Resource.



Cardero Initiates Scoping Study and Resource Definition Program at Its Pampa de Pongo Iron Deposit, Peru
Tuesday January 15, 9:30 am ET

http://biz.yahoo.com/iw/080115/0348628.html

VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--Jan 15, 2008 -- Cardero Resource Corp. ("Cardero" or the "Company") (Toronto:CDU.TO - News)(AMEX:CDY - News)(Frankfurt:CR5.F - News) is pleased to announce that it has initiated a mining scoping study and resource definition program at its Pampa de Pongo Iron Deposit in Peru.

The scoping study will be produced by the internationally respected consulting firm SRK Consulting Engineers and Scientists (SRK) and is designed to determine the optimum mining method and estimated production costs. In tandem with the scoping study, Cardero is implementing a 30,000 metre definition drilling program, anticipated to commence in February, which is designed to deliver a National Instrument 43-101 compliant combined Indicated and Measured Resource in the third quarter of calendar 2008.

Cardero's focus over the coming 6 months will be to realise the considerable value which it believes is locked in the Company's significant iron ore assets, while continuing to progress its base and precious metal exploration projects in Argentina and Mexico. As part of this process, Cardero's iron ore assets are in the process of being transferred to its wholly owned subsidiary, Cardero Iron Ore Company Ltd.

PERU IRON PROJECTS

Pampa de Pongo Iron Deposit
Cardero's 100% owned Pampa de Pongo Iron deposit is the largest undeveloped iron resource on the western seaboard of the Americas, with a N.I. 43-101 Inferred Resource of 953 Mt @ 44.7% iron and 0.12% copper. Cardero is investigating the possibility of extracting iron ore through an underground caving operation and producing a blast furnace or direct reduction grade iron pellet product for shipping from the San Nicolas deep water port, 40 kilometres to the west.

Preliminary metallurgical work on 'run-of-mine' mineralization by Rio Tinto indicates that the mineralization is readily upgradeable to form either a 69% iron concentrate or a high quality 67% iron oxide pellet. Consequently, the Company has initiated a 30,000 metre definition drill program, which is designed to upgrade the National Instrument 43-101 Inferred Resource to a combination of Indicated and Measured Resource status.

SRK will design and oversee programs for the collection of geotechnical and geological data from drill core during the planned drill program, which is expected to commence in February and continue through to July 2008. SRK has also been retained to complete a Mine Scoping Study, scheduled to commence in early February. The scoping study will focus on determining the likely mining methods and will include an initial caveability and fragmentation assessment of the massive central orebody. Overburden characteristics, hydrogeology and major structural features will all be reviewed. The scoping study will also determine the range of potential mining costs, which should permit the development of a robust financial model for the deposit.

In the main Central Zone, the top of the high-grade semi-massive magnetite resource is typically 350 metres below surface, with intersections up to 302 metres @ 51.6% iron and 0.10% copper. Cardero believes that this portion of the resource may be suitable for an underground cave mining operation. The overlying stockwork zone includes shallow intersections of up to 347 metres @ 22.5% iron. The scoping study will investigate the possibility of extracting this material from surface by open-pit methods. This mineralisation has not been included in the current inferred resource and, if the extraction of this material appears viable, the scoping study will include an updated Pampa de Pongo Inferred Resource including this material.

A primary attractive feature in the potential development of the Pampa de Pongo deposit is the excellent infrastructure including: proximity to the deep water port at San Nicolas, the fact that the Pan-American highway passes within 6 km of the deposit and that a paved road and high-tension power line cross the property immediately adjacent to the Central Zone and the existence of a pre-existing iron mining labour pool.

Pampa el Toro Iron Sands Project
Cardero has purchased a dry magnetic separation pilot plant from ERIEZ Manufacturing Co., which is presently en-route to the Company's custom built testing facility in Peru where approximately 1,400 tonnes of Pampa el Toro 'Run Of Mine' (ROM) material has been excavated from the extensive magnetite bearing dune field and is securely stored. ROM material will be upgraded by magnetic separation to produce approximately 40 tonnes of iron concentrate anticipated to grade between 50 and 60% iron. This phase of the work programme is scheduled to commence in February 2008.

The concentrate will subsequently be exported to the United States for pilot plant scale melting tests, which were designed by Cardero Iron's President Glenn Hoffman to produce a premium quality pig iron ranging from 96 to 98% iron and 2 - 4% carbon. In tandem with the above work, SRK have been retained to complete the 43-101 compliant resource estimate for the Pampa el Torro project.