Cardero Resources (TSX: T.CDU, Stock Forum) today announced that it has entered into an agreement to sell its 100%-owned iron ore project, the Pampa de Pongo Iron Property in southern Peru, to a private Chinese enterprise called Nanjinzhao Group Co., Ltd., located in Zibo City, Shandong Province, PRC. Integrated iron and steel conglomerate Nanjinzhao Group has agreed to pay US$200 million for the property.

Shares of British Columbia miner Cardero climbed 31% to $1.90 on the news.

On the Cardero Bullboard, Stockhouse investors commented about how they felt the $200 million offer was too low. Here is one contribution from ValuePro, edited for clarity:

This deal is the start of the first inning in a new ball game, IMO. For shareholders, it may also be the start of the World Series.

For a property that should bring around a billion dollars, this offer is just the type of device that is often employed to get the big interests off their butts.

1) This looks to have been intentionally a low-ball offer to get attention and invite further bids.
2) The exit fee is typical in these instances where both sides understand what is truly behind the deal - to bring in other offers.

I think the offer is worth about US$3.00 per share just for PdP [Pampa de Pongo]. Bob Moriarty has offered that the property should be worth about a billion dollars, OR FIVE TIMES THE CURRENT OFFER.

The next offer will mark the close of the first inning. Then, things will get really interesting.

ValuePro is not the only one on the Bullboard speculating on a higher offer. DealNoDeal said in another post, edited below for clarity:

The NPV (Net Present Value) of the property is roughly $4 billion dollars. Industry standard is to sell around 30% of NPV and the current offer is $200 Million which is 5% of NPV. That means offers coming in around 4 to 6 times current value will be very reasonable especially since other companies were being bought at levels much higher than 30% of NPV. Good luck and hold on to the ride of your life in an ugly market.

Still, times are tough for miners these days, and perhaps getting $200 million in these market conditions no matter what the “true” value of the property is can be considered a success.

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