Despite promising early results from its Sheini iron ore project in Ghana, Cardero Resource (CDU-T) could be facing a few legal headaches.
The Royal Canadian Mounted Police (RCMP) has launched an investigation into how Cardero won the concessions after an unnamed third party made bribery and corruption allegations against the company.
The RCMP is acting under the Canadian Corruption of Foreign Public Officials Act, which lets it prosecute Canadian officials in any foreign country involved in corruption practices.
For its part, Cardero says it has acted legally and with integrity at all times.
“The company has robust corporate governance and business integrity policies in place to ensure that it conducts its activities with best practices and within the confines of the law,” Cardero says in a statement.
The company adds that it has launched its own independent review to verify that it acted in accordance with best business practices while it helped its joint-venture partner at the project, Emmaland Resources Ghana, win the right to explore and develop.
If Cardero can clear up the situation it would appear to have a highly prospective project on its hands, with initial drill results released on June 15 highlighted by 37 metres grading 35% iron, 38 metres grading 35.7% iron and 30 metres grading 45.6% iron from three separate holes.
The company is in the midst of a 10,000-metre, 42-drill-hole program with results already in for the first seven drill holes. It expects to have an initial resource estimate out on the project by this year’s fourth quarter.
Sheini was discovered in the early 1960s, and by 1965 the Soviet geological survey had outlined a deposit.
The project was abandoned after the government was overthrown in 1966.
On June 25 — the day news of the investigation was released — the company’s shares were off 6%, or 6¢ to 88¢, on roughly 90,000 shares traded.