Cardero Resources (CDU-T) has decided that paying a royalty and issuing shares to the company suing it over a copper-gold property in Mexico is cheaper and easier than going to trial.
Cardero has agreed to issue Western Telluric 500,000 shares and has granted the company a 1.5% net smelter returns royalty after three years of lawsuits and counter lawsuits over Carderos mineral claims in Baja California state.
Western Tellurics NSR includes Carderos existing and future acquired Baja California properties, though Cardero has the option to buy half the NSR (0.75%) for $2 million.
In May 2004, Western Telluric alleged that Cardero used confidential information to acquire additional mineral claims in Baja California, and sought a constructive trust over those claims.
Cardero stated in a release today that, in the long run, the anticipated cost and expenditure of managements time and effort in connection with any trial would be significant.
Carderro shares were up 10% today, or 19, to $2.08 on a trading volume of 68,000 shares.
Cardero says it settled the lawsuit so it could continue exploring on its claims. The company says it has defined a new Iron Oxide Copper Gold (IOCG) district covering more than 600 sq. km.
One borehole returned 273.5 meters grading 0.19% copper including 31 metres grading 0.96% copper. Another borehole returned 240.7 metres grading 0.22% copper, including 47 metres grading 0.74% copper.
There has been no drilling west of the boreholes though a similar permissive potassic alteration, where the boreholes are, extends at least 2.5 km further west.
The Picale prosect is 16 km south of the San Fernando vein.
Borehole intersections at Picale returned 6.5 metres grading 4 % copper and 0.4 grams gold per tonne, 9.8 metres grading 2.77% copper an d 0.2 grams gold per tonne, 2.5 metres grading 10.1% copper and 0.64 grams gold, 5 metres grading 1.43% copper and 144.15 metres grading 1.15% copper.
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