Currently Awaiting Results from MIDREX for Premium Direct Reduction Pellets

VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 10/16/08 -- Cardero Resource Corp. ("Cardero" or the "Company") (TSX: CDU)(NYSE-A: CDY)(FRANKFURT: CR5) is pleased to announce receipt of highly positive results from metallurgical testing at the Natural Resources Research Institute (NRRI), Minnesota. Results indicate that the physical, metallurgical and chemical properties of the Pampa de Pongo pellets exceed industry standards for high-quality blast furnace feed. Pellets have been shipped to MIDREX Technologies Inc. for further evaluation as potential Direct Reduction (DR) grade pellets. Direct Reduction pellets are premium products and typically attract higher value contracts than Blast Furnace grade pellets.

Pellet physical quality - that is, strength, reducibility, swelling and porosity characteristics - all meet or exceed industry standards. The chemistry of the pilot-scale Pampa de Pongo blast furnace pellets is excellent, and they do not contain any deleterious elements, exhibiting low silica (SiO2 equals 2.23%, which is some of the lowest silica available within the industry), low phosphorous (P equals 0.004%), and low sulphur (S equals 0.008%). In addition, the Pampa de Pongo pellets contain slightly elevated magnesium (MgO equals 3.65%) and are therefore saleable as self-fluxing pellets.

END-USER CONSIDERATIONS

Blast furnace operations generally source pellets globally through a network of purchasers. Operations are typically seeking a specific pellet chemistry to meet their needs and it is important that pellet chemistry be highly consistent. There are a number of specific needs that can be satisfied by the Pampa de Pongo pellet chemistry.

Deleterious Elements

Deleterious elements in iron ores and concentrates include silica, alumina, manganese, phosphorous, alkalis (such as sodium and potassium), and sulphur:

- Low Silica is critical. Typical pellets have a silica content ranging from 2.7 to 5.4%.

- Phosphorous content in iron at concentrations greater than 0.2% makes the product "cold short" (brittle at low temperatures). Phosphorous cannot be easily removed by fluxing, so it is critical that the iron ore must be low in phosphorous. The Pampa de Pongo pellets contain only 0.004% phosphorous and therefore should be highly desirable to most end-users.

- Sulphur is a frequent contaminant in coal and sometimes in iron ore. Sulphur causes iron to be "hot short" (brittle when hot). Commercial iron ore pellets should contain less than 0.05% sulphur. The Pampa de Pongo pilot-scale pellets contain only 0.008% sulphur and are a superior product in that respect.

Fluxed Pellets

Fluxed iron ore pellets are made by adding magnesium and/or calcium in the form of limestone and dolomite to the pelletizing feed mix. The lime and/or dolomite additions are made to improve blast furnace operation, hot metal sulphur control and furnace refractory life. Pellet producers are forced to pay extra for dolomite or limestone to produce fluxed pellets; therefore fluxed (basic) pellets are more costly to produce than standard (acid) pellets. Elevated MgO in pellets is desirable to a steelmaker as it means less dolomitic lime needs to be added to the Electric Arc Furnace (EAF) melter charge (load) in order to minimize the slag erosion of MgO refractory. The Pampa de Pongo pellets contain slightly elevated magnesium (MgO equals 3.65%) and are therefore saleable as self-fluxing pellets.

CURRENT METALLURGICAL TESTING

The initial step in the metallurgical testing process was to produce an iron ore concentrate - magnetic separation produced a 65.5% iron concentrate with a total iron recovery of 93.4%. This was achieved with only a simple two stage (rougher-cleaner) wet magnetic separation.

Bench scale testing was used to establish conditions for pilot plant operation. Batch balling and mini-pot induration testing were used to provide a basis for pilot-scale full pot grate tests. It was noted that the Pampa de Pongo concentrate balled very well, meaning good seed production, pellet growth rate and moisture control at all levels of additive.

Fired pilot-scale pellet quality averaged 421 pounds compression strength and 94.3% of material sizing greater than 1/4 inch after tumble testing. The metallurgical quality shows reducibility (0.94%/min), swelling (10.8%) and porosity (27.0%) that all meet industry standards for high quality blast furnace feed.

It should be noted that the induration furnace cycle utilized for the pellet manufacture was of a 'generic' type since the amount of concentrate was relatively limited. The heating cycle can be further developed to optimize pellet quality, and it is anticipated that additional metallurgical test work would lead to improvements in the physical characteristics of the pellets. According to NRRI, if sufficient material had been available (from a larger drill core sample), the preheat cycle time could have been optimized and NRRI expects that significantly higher pellet quality would have resulted.

FUTURE WORK

The pilot-scale pellets have been shipped to MIDREX Technologies Inc. for further evaluation through industry standard hot-load and Linder furnace testing.