Cardero Iron Ore Co., Cardero’s iron ore subsidiary) has purchased a magnetic separation pilot plant from Eriez Magnetics which will be installed at the company's testing facility, where approximately 1,000 mt of ROM material has been excavated from the magnetite-bearing Pampa El Toro dune field. ROM material will be upgraded by magnetic separation to produce approximately 40 mt of iron concentrate, which the company anticipates will grade between 50% and 60% iron. This phase of the work program is scheduled to commence in January 2008.

The iron ore concentrate will subsequently be exported to the United States for pilot plant scale melting tests to produce what Cardero believes will be a premium quality pig iron ranging from 96% to 98% iron and 2% to 4% carbon. According to the company, previous testing at Midrex Technologies on bench-scale samples from the iron sands project has, on three separate occasions, successfully produced pig iron of the quality required by steel manufacturers to produce high quality steel. Associated titanium and vanadium richslag will also undergo additional testing to determine the economic viability of recovery in an industrial scale process.

Cardero describes its Pampa de Pongo iron deposit as “the largest known undeveloped iron resource on the western seaboard of the Americas,” with a inferred mineral resource of 953 million mt averaging 44.7% iron and 0.12% copper. Preliminary metallurgical testwork by Rio Tinto indicated that the mineralization is readily upgradeable to form either a 69% iron concentrate or a high quality 67% iron oxide pellet.

Cardero Iron has recently finalized plans and secured drill rigs for a 30,000-m definition drill campaign designed to upgrade the inferred resource to a combination of indicated and measured resource status. As part of this program, the company will complete scoping-level studies examining the feasibility of exploiting the shallower zones of the large deposit.