In keeping with the theme of managing risk/reward, I am introducing a company that trades below its cash and investment value yet provides significant leverage to various popular commodities.
Cardero Resource Corp. (T.CDU High of $1.60 since profiled to Ticker Trax subscribers / Amex CDY $1.60) www.cardero.com
Snapshot: A cash-rich resource company with iron ore, titanium and copper projects. And large investments in companies associated with gold, silver, base metals, rare earths and uranium.
Financials as at July 31st
Net Value of Cash & Investments less debt = $1.39/share
Cash $63 million ($1.08/share)
Investments $46 million ($0.78/share)
Accounts payable $800k (-$0.01/share)
Income Tax $27 million (-$0.46/share)
Shares outstanding: 58.6 million
Since financials were last filed for the end of July, Cardero has invested another $9.5 million. Those additional investments are reflected in the total below. Of particular interest, pay attention to the investment in Coalhunter Mining. It appears this could be IPO’d early 2011 and my research indicates that there is tremendous growth potential there (based upon value of publicly-traded peer companies). I have detailed that investment near the end of today’s report (written Wednesday of this week and published Thursday).
Current market value of the investments is as follows:
-- International Tower Hill (TSX: T.ITH) - 4.6 million shares - $36 million
-- Trevali Resources (TSX: T.TV) - 7 million shares - $10 million
-- Wealth Minerals (TSX: V.WML) – 5.0 million - $3 million
-- Dorato Resources (TSX: V.DRI) - 2.2 million - $3 million
-- Coalhunter Mining (Private) – 12 million - $3.6 million
-- Kria Resources (TSX: V.KIA ) – 15 million - $3 million
-- Misc. Investments - $2 million
Cardero (TSX: T.CDU, Stock Forum) and (AMEX: CDY, Stock Forum) invested $9.5 million of its cash but current value of the investments is $60 million or $14 million higher than last quarter. This is a net gain of another $5 million that moves their cash and investment liquidation value (after accounting for income tax payable) to approx. $1.50/share.
