OT:Bob Bishop on CDU
Cardero Resources (CDU.TSXV/$1.60) - During the resource market's recent
sloppy phase, Cardero was the stock on which I received the most questions.
Perhaps this was due to my occasional mention of it, in the absence of
regular coverage, but whatever the cause, it appears to have been one of
those "bell ringer" moments the market sometimes delivers: when the greatest
number of subscribers are concerned about a stock, it's usually a good time
to be buying it. Large doses of misinformation on internet chat boards
briefly took CDU to $1.33 two weeks ago, but since then this market has
recovered, breaking the Jan-May downtrend and returning to a re-test of the
trendline today:
January's high of $2.69 represented a convergence of internet-driven buying,
focused on an early February start to drilling at the company's Providencia
silver project, (which likely began this week and helps to explain much of
the market slippage of the past two months), the company will soon have news
on multiple fronts: drilling of the Condor Yacu gold project (Maximus
Ventures-MXV.TSXV/$0.57-is earning an 80% interest) has been completed and
assays should be available next week. This project has yielded high-grade
gold results in the past, and with Maximus recently announcing additions to
the land package, I interpret this as optimism surrounding the results to
come (why else would the land package be growing?). A sign of further
optimism was a new annual high yesterday ($.58), on the most volume this
stock has seen since late January. Elsewhere in Argentina, fifteen
kilometers from the company's Providencia silver target, Cardero is in the
midst of a reconaissance drill program on the Chingolo property. The
rationale for drilling Chingolo before Providencia is as follows: if
drilling at Providencia confirms the large silver deposit that has been
mined in the past and that more recent sampling also appears to be
confirming, the thinking is that the company will be an immediate takeover
target-and that Cardero may never have a chance to test the Chingolo
project. A first pass drill testing of Chingolo, however, could add the
prospect of a much larger global resource, and a much higher eventual price
for Cardero shares. I continue to be optimistic about the prospects for such
an outcome. Lastly, the company's joint-venture with Anglo American, in
search of IOCG (iron oxide-copper-gold) deposits in Baja Mexico, is said to
be one of the most important exploration plays in Anglo's portfolio. When
they finish acquiring land, we'll undoubtedly hear more about this program.
In the meantime, we'll learn if the company controls what may be one of the
world's largest silver deposits. The setting certainly seems to be
permissive for such an outcome, and if historical and more recent sampling
grades hold up, initial drilling success is likely to be generously
reflected in the market. (604) 408-7467, fax 684-9877, cardero.com. |
