....they actually sold something.OK, it's not "sold" as yet (and I'd sure like to see the full terms of agreement) but according to the PR just released CDY has sold its Pampa de Pongo iron ore deposit for a cool $200m. They get $10m within the first three months and then the other $190m is supposedly due within nine months. During this time the buyers, Nanjinzhao Group of China, have to get the necessary paperwork from their government.
Nanjinzhao is a bit of a surprise name to play with here; Pampa de Pongo has an approximate U$3.3Bn (with a "B") construction cost attached to it, so the numbers quoted in the CDY press release this morning suggest that this is a big project for Nanjinzhao to take on relative to its present size. On the other hand, most of the Chinese metals buyouts in the last two years are headed up by this-or-that company but really it's China the Nation buying into and developing the mines.
Back to Cardero; with 57m shares out, this $200m deal would add a large, large chunk of cash to company assets. Shares are trading up 35%+ at C$1.97 this morning (Canandian stock CDU.to), and if the company receives the full $200m on schedule it's worth $3.50 a share in cash.....one to think about. I have to say here that I've never been comfortable with the arch-promo techniques used at CDY and the other companies in the "Cardero Group" (just check out the "anatomy of a canadian stock promotion" series to see where I'm coming from and remember DRI.v is the same stable).
But a signed deal is a signed deal, no arguing with that one. I'll certainly feel more convinced that CDY is going to close the deal when the first U$10m is handed over and if/when Nanjinzhao makes noises about getting its hands on the necessary Chinese paperwork. So for the moment you can slate me for being leery but I'm remaining sceptical on this deal, bird-in-the-hand and boy-who-cried-wolf and all that. However I'll be very happy to be eventually proved wrong on this; those who have read the story of the boy who cried wolf will recall that at the end of the story, the wolf actually turned up.