Cardero Receives Positive Independent Preliminary Economic Assessment for the Central Zone at Pampa de Pongo Iron Deposit

Market Wire, October, 2008

Operating Cost - Operating cost is estimated at approximately US$13 per tonne of ore milled or US$22 per tonne of pellets produced.

Capital Cost - Pre-production capital is US$3.3 billion. Expansion and sustaining capital is US$4.2 billion. All capital costs include 20% contingency.

Metal Price Assumptions - In order to demonstrate robust economics, three separate future price estimates have been utilized, as follows:

1. US cents 154/dmtu ($99/t) - 3-year average Blast Furnace pellet price (based on Brazilian operations);

2. US cents 198/dmtu ($128/t) - long-term price from an independent study; and

3. US cents 230/dmtu ($148/t) - long-term price from recent and comparable economic assessments.

CASH FLOW RESULTS

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               US cents/dmtu           154        198        230
Pricing        pellet grade þ       64.5       64.5       64.5
               US$/t                    99        128        148
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               NPV 0                11,671     17,558     21,819
Post-Tax       NPV 8                 1,655      3,318      4,514
               NPV 10                  844      2,114      3,026
               IRR%                     14         18         21
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               NPV 0                18,165     27,263     33,879
Pre-Tax        NPV 8                 3,253      5,808      7,665
               NPV 10                2,020      3,969      5,385
               IRR%                     17         23         26
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Table 2. Cash Flow Results

Table 2 summarizes the pre-tax and post-tax Net Present Value (NPV) and Internal Rate of Return (IRR) for three price scenarios. NPV remains robust at all discount rates and at all pricing levels.

The Company anticipates that the final version of the SRK PEA Technical Report will be delivered, and thereafter filed on SEDAR, prior to the end of October, 2008.

Qualified Person

Mr. Gordon Doerksen, P.Eng., Mr. Marek Nowak, P.Eng. and Mr. George Wahl, P.Eng. (all of SRK Consulting (Canada) Inc.), each of whom is a qualified person as defined by National Instrument 43-101, are each responsible for portions of the PEA Technical Report and have reviewed the scientific and technical information that forms the basis for this news release. All of these qualified persons are independent of Cardero.

Gordon Doerksen, P.Eng. is a Principal Consultant - Mining with SRK in Vancouver. Mr. Doerksen has 23 years of experience in the mining industry, mainly at operating mines in North America and Africa. He has conducted and managed engineering studies for a variety of commodities in Asia, South America, North America and Africa.

Marek Nowak, P.Eng., has over 25 years of experience in the mining industry. Mr. Nowak specializes in natural resource evaluation and risk assessment using a variety of geostatistical techniques. He has worked on a variety of studies for operating mines and on advanced exploration projects, which included validation of large databases, studies of sample biases, resource estimates, reconciliation, and simulation of grade control models.