UPDATE:Cardero Resources Cuts Price For Iron Mine By Half

TORONTO (Dow Jones)-Cardero Resource Corp. (CDY) agreed Thursday to lower the purchase price for its Pampa de Pongo iron deposit by half, to $100 million from $200 million.

The company had agreed in October to sell the Peruvian property to a Chinese company, Nanjinzhao Group Co. But earlier this week, Nanjinzhao said it would not pay a $10 million deposit owed under the purchase agreement unless Cardero agreed to re-negotiate the sale price.

Cardero President Hendrik van Alphen said the board believes accepting the lower offer is in the best interest of the company and the shareholders, given the long-term projections for global iron ore markets.

"This is probably not a good time to sell assets like this. But if we didn't, we could sit around for another four or five years waiting for somebody else to show up," van Alphen said in an interview. He added the revenue could be used to help ramp up the company's exploration activities.

"It's better to have a company with cash on hand, than to have a company with a project that is costly, but has no money in the bank," van Alphen said.

Nanjinzhao has now paid the $10 million deposit, Cardero said, with the remaining $88 million to be paid after Nanjinzhao receives approval from the Chinese government.

Rio Tinto Mining and Exploration S.A.C. (RTP) has a right of first offer for the property, and has a 45-day period to match the revised terms. If it does, Cardero Resources will repay the $10 million deposit to Nanjinzhao Co.

In New York Thursday, Cardero is up 25 cents to $1.12 on volume of 947,000.

Company Web Site: http://www.cardero.com

-Jennifer Walter, Dow Jones Newswires, 416-306-2028 [e-mail]