Cardero Resource Corp.: Exhibit 99.1 - Filed by newsfilecorp.com

All resource related investments in shares are classified as available-for-sale, unless otherwise indicated. All resource related investments in warrants are classified as held-for-trading.

	Mexico			Argentina	Peru	U.S.A.	Africa	Total
	Baja	Other	Total		Iron Sands/ Marcona	Longnose/ TiTac	Ghana Sheinie Iron Ore	Total
Balance, October 31, 2009	$ 7,336,527	$ 231,978	$ 7,568,505	$ 894,114	$ 8,727,626	$ 309,347	$ -	$ 17,499,592
Acquisition costs	302,911	10,966	313,877	4,887	649,772	70,714	-	1,039,250
Deferred exploration costs: Camp Drilling and analysis Personnel and geology	111,473 654,228 92,944	12,075 - 6,108	123,548 654,228 99,052	298,536 784,761 489,337	658,584 27,097 191,016	318,650 1,614,088 336,178	- - 220,916	1,399,318 3,080,174 1,336,499
Total exploration costs	858,645	18,183	876,828	1,572,634	876,697	2,268,916	220,916	5,815,991
Total expenditures for the year	1,161,556	29,149	1,190,705	1,577,521	1,526,469	2,339,630	220,916	6,855,241
Total before write-offs	8,498,083	261,127	8,759,210	2,471,635	10,254,095	2,648,977	220,916	24,354,833
Write-offs – Acquisition costs Write-offs – Exploration costs	(3,567,578) (4,930,505)	- -	(3,567,578) (4,930,505)	- -	- -	- -	- -	(3,567,578) (4,930,505)
Total write-offs	(8,498,083)	-	(8,498,083)	-	-	-	-	(8,498,083)
Balance, October 31, 2010	-	261,127	261,127	2,471,635	10,254,095	2,648,977	220,916	15,856,750
Acquisition costs	-	1,059	1,059	-	818,713	-	-	819,772
Deferred exploration costs: Camp Drilling and analysis Personnel and geology	- - -	- - -	- - -	44,009 99,126 61,402	312,445 50,528 2,699	116,877 138,945 53,996	1,095,408 45,797 56,957	1,568,739 334,396 175,054
Total exploration costs	-	-	-	204,537	365,672	309,818	1,198,162	2,078,189
Total expenditures for the period	-	1,059	1,059	204,537	1,184,385	309,818	1,198,162	2,897,961
Costs recovered – Exploration		(222,000)	(222,000)	-	-	(75,383)	-	(297,383)
Total	-	(220,941)	(220,941)	204,537	1,184,385	234,435	1,198,162	2,600,578
Balance, January 31, 2011	$ -	$ 40,186	$ 40,186	$ 2,676,172	$ 11,438,480	$ 2,883,412	1,419,078	$ 18,457,328
Represented by: Acquisition costs Exploration costs	$ - -	$ 64,518 (24,332)	$ 64,518 (24,332)	$ 186,412 2,489,760	$ 3,505,493 7,932,987	$ 243,036 2,640,377	$ - 1,419,078	$ 3,999,459 14,457,869
Balance, January 31, 2011	$ -	$ 40,186	$ 40,186	$ 2,676,172	$ 11,438,480	$ 2,883,413	$ 1,419,078	$ 18,457,328

Pursuant to a joint venture/option agreement dated November 22, 2010 between the Company and Emmaland Resources Ltd (“Emmaland”), the parties entered into a joint venture for the purpose of applying jointly to the Minerals Commission of Ghana for a mining lease in respect of the Sheinie Iron Ore deposit and, if successful in obtaining such mining lease, thereafter exploring and, if warranted, developing and mining such deposit.

Republic of Ghana will hold a ten percent free carried equity interest in the property under the mining lease.

The weighted average remaining contractual life of options outstanding at January 31, 2011 was 1.3 years (October 31, 2010 – 1.3 year).

		January 31, 2011				October 31, 2010
						(audited)
				Exercisable				Exercisable
		Exercise	Number of	at Period-		Exercise	Number of	at Year-
Expiry Date		Price	Options	End		Price	Options	End
December 9, 2010	$	1.16	-	-	$	1.16	575,000	575,000
April 9, 2011	$	1.39	225,000	225,000	$	1.39	225,000	225,000
September 11, 2011	$	1.30	1,000,000	1,000,000	$	1.30	1,000,000	1,000,000
December 1, 2011	$	1.31	360,000	360,000	$	1.31	360,000	360,000
February 2, 2012	$	1.41	500,000	500,000	$	1.41	500,000	500,000
July 27, 2012	$	1.16	1,525,000	1,525,000	$	1.16	1,525,000	1,525,000
August 11, 2012	$	1.16	1,125,000	1,125,000	$	1.16	1,125,000	1,125,000
January 28, 2013	$	1.83	1,000,000	1,000,000			-	-
			5,735,000	5,735,000			5,310,000	5,310,000

At January 31, 2011, the aggregate intrinsic value of outstanding and exercisable stock options is $2,564,950 (October 31, 2010 - $258,000).

The Company uses the fair value method for determining stock-based compensation for all options granted during the fiscal years. The fair value was determined using the Black-Scholes option pricing model based on the following assumptions:

Stock-based compensation charges for the three months ended January 31, 2011 totalled $605,383 (January 31, 2010 - $261,879), of which $348,095 (January 31, 2010 - $207,321) was allocated to salary expenses, $15,135 (January 31, 2010 - $54,558) was allocated to consulting expense, and $242,153 (January 31, 2010 - $Nil) was allocated to investor relations expense. The weighted average fair value of options granted during the period was $0.61 (October 31, 2010 - $0.48) .

At January 31, 2011, there was $7,700 (October 31, 2010 - $7,700) included in accounts payable and accrued liabilities. Professional fees include amounts paid to a law firm of which a director is a shareholder.

The valuation allowance reflects the Company’s estimate that the tax assets, more likely than not, will not be realized.

The Company has available approximate non-capital losses that may be carried forward to apply against future years' income for income tax purposes in all jurisdictions. The losses expire as follows:

The Company’s exposure to risk on its financial instruments is summarized below:

The credit risk associated with cash and cash equivalents is minimized substantially by ensuring that these financial assets are placed with major financial institutions with strong investment-grade ratings given by a primary ratings agency. The Company does not hold any asset-backed securities.

		January 31, 2011			October 31, 2010
					(audited)
Total assets per Canadian GAAP	$	158,231,600		$	136,205,154
Exploration expenditures on resource properties expensed under US GAAP		(14,457,869	)		(12,677,063	)
Total assets per US GAAP	$	143,773,731		$	123,528,091
Total liabilities per Canadian and US GAAP	$	26,988,553		$	27,679,401

Total shareholders’ equity per Canadian GAAP		131,243,047			108,525,753
Exploration expenditures on resource properties expensed under US GAAP		(14,457,869	)		(12,677,063	)
Total shareholders’ equity per US GAAP		116,785,178			95,848,690
Total liabilities and shareholders’ equity per US GAAP	$	143,773,731		$	123,528,091

INDEX	Page

Consolidated Financial Statements	1-5
Consolidated Balance Sheets	1
Consolidated Statements of Operations	2
Consolidated Statements of Shareholders’ Equity	3-4
Consolidated Statements of Cash Flows	5
Notes to Consolidated Financial Statements	6-45

		January 31,			October 31,
		2011			2010
					(audited)
ASSETS
Current
Cash and cash equivalents	$	34,079,389		$	52,264,003
Accounts receivable		478,081			267,431
Due from related parties (note 8)		921,284			1,361,550
Loan receivable (note 8)		8,105,977			-
Prepaid expenses		330,005			335,493

Total Current Assets		43,914,736			54,228,477

Fixed Assets (note 3)		283,595			197,737
Resource Related Investments (note 4)		87,760,358			60,685,650
Equity Investments (note 5)		7,815,583			5,236,540
Resource Properties (note 6)		18,457,328			15,856,750

Total Assets	$	158,231,600		$	136,205,154

LIABILITIES
Current
Accounts payable and accrued liabilities (note 8)	$	637,853		$	832,087
Income taxes payable		26,350,700			26,847,314

Total Current Liabilities		26,988,553			27,679,401

SHAREHOLDERS’ EQUITY
Capital Stock (note 7)		70,949,741			69,890,947
Contributed Surplus		14,940,174			14,726,585
Accumulated Other Comprehensive Income		47,323,011			30,227,593
Retained Earnings (Deficit)		(1,969,879	)		(6,319,372	)

Total Shareholders’ Equity		131,243,047			108,525,753

Total Liabilities and Shareholders’ Equity	$	158,231,600		$	136,205,154

Nature of operations and going concern (note 1)
Commitments (note 11)
Subsequent events (note 13)

“Hendrik Van Alphen”		“Lawrence W. Talbot”
Hendrik Van Alphen, Director		Lawrence W. Talbot, Director

		2011			2010

Administrative Expenses
Amortization	$	18,119		$	16,723
Bad debt		-			104,835
Consulting fees (note 8)		252,489			238,365
Insurance		28,133			45,135
Investor relations		554,761			170,738
Office costs		241,100			278,132
Professional fees (note 8)		110,281			132,369
Property evaluations		280,557			51,054
Regulatory and transfer agent fees		17,975			23,203
Salaries		801,293			556,779

Loss Before Other Items and Income Taxes		(2,304,708	)		(1,617,333	)

Other Items
Foreign exchange loss		(17,534	)		(241,012	)
Interest income, net of bank charges		42,158			411
Realized gain on sale of available-for-sale investment (note 4)		2,196,898			136,092
Unrealized gain on derivative investments (note 4)		3,702,823			119,537
Unrealized gain on held-for-trading investment (note 4)		23,000			46,000
Gain on sale of resource property (note 6(c)(ii))		-			89,406,016
Loss on equity investment (note 5)		(182,922	)		-

		5,764,423			89,467,044

Income Before Income Taxes		3,459,715			87,849,711

Income Taxes (Expense) (note 10)
Current		(2,127,060	)		(26,791,603	)
Future		3,016,838			1,203,467

		889,778			(25,588,136	)

Net Income for period	$	4,349,493		$	62,261,575

Basic Income Per Share	$	0.07		$	1.06
Diluted Income Per Share	$	0.07		$	1.02

Weighted Average Number of Common Shares Outstanding		58,547,215			58,611,140

	Capital Stock													Accumulated
														Other			Total
					Obligation to						Contributed			Comprehensive			Shareholders’
	Shares		Amount		issue shares			Deficit			Surplus			Income			Equity

Balance, October 31, 2008	57,782,847	$	68,824,822	$	795,000		$	(51,015,714	)	$	11,912,309		$	2,617,740		$	33,134,157

Net loss for the year	-		-		-			(254,628	)		-			-			(254,628	)
Other comprehensive loss
Unrealized loss on available-for-sale investments	-		-		-			-			-			12,043,882			12,043,882
Transfer to income of realized gain on sale of resource related investments	-		-		-			-			-			(1,658,126	)		(1,658,126	)
Comprehensive income for the year																	10,131,128
Shares issued for cash
Exercise of options	25,000		36,750		-			-			-			-			36,750
Exercise of warrants	92,500		127,500		-			-			-			-			127,500
Shares issued for non-cash
Reclassification of contributed surplus on exercise of options	-		14,088		-			-			(14,088	)		-			-
Reclassification of contributed surplus on exercise of warrants	-		32,059		-						(32,059	)		-			-
Investment acquisition	500,000		795,000		(795,000	)		-			-			-			-
Obligation to issue shares	-		-		111,500			-			-			-			111,500
Debt settlement	143,130		204,676		-			-			-			-			204,676
Stock-based compensation	-		-		-			-			1,192,109			-			1,192,109

Balance, October 31, 2009	58,543,477		70,034,895		111,500			(51,270,342	)		13,058,271			13,003,496			44,937,820

		2011			2010
Operating Activities
Net income for period	$	4,349,493		$	62,261,575
Items not involving cash
Amortization		18,119			16,723
Bad debt		-			104,835
Stock-based compensation		605,383			261,879
Realized gain on sale of available-for-sale investments		(2,196,898	)		(136,092	)
Unrealized gain on derivative investments		(3,702,823	)		(119,537	)
Unrealized gain on held-for-trading investment		(23,000	)		(46,000	)
Gain on sale of resource property		-			(89,406,016	)
Loss on equity investment		182,922			-
Future income recovery		(3,016,838	)		(1,203,467	)
Unrealized foreign exchange loss		27,040			14,450
Changes in non-cash working capital items
Accounts receivable		(210,650	)		(32,080	)
Due from related parties		440,266			138,551
Loan receivable		(8,105,977	)		-
Prepaid expenses		5,488			17,729
Accounts payable and accrued liabilities		(44,071	)		2,857,917
Income taxes payable		(496,614	)		26,791,603
Cash Provided by (Used in) Operating Activities		(12,168,160	)		1,522,070

Investing Activities
Investment in and expenditures on resource properties		(2,897,741	)		(2,304,339	)
Proceeds from resource property transactions, net of costs		-			90,046,685
Proceeds from sale of investments		2,859,808			156,492
Purchase of resource related investments		(2,632,063	)		(816,982	)
Purchase of equity investments		(3,882,443	)		-
Purchase of equipment		(103,976	)		(2,599	)
Cash Provided by (Used in) Investing Activities		(6,656,415	)		87,079,257

Financing Activities
Proceeds from shares issued		667,000			-
Cash Provided by Financing Activities		667,000			-

Effect of Foreign Exchange on Cash		(27,040	)		(14,450	)

Increase in Cash and Cash Equivalents		(18,184,615	)		88,586,877
Cash and Cash Equivalents, Beginning of Period		52,264,004			5,823,196

Cash and Cash Equivalents, End of Period	$	34,079,389		$	94,410,073
Supplemental Cash Flow Information
Accounts payable related to property expenditures	$	142,815		$	21,365
Shares issued for property option payments	$	-		$	111,500
Shares received for property option payments	$	147,000		$	-
Income taxes paid	$	2,127,060		$	-

1.	NATURE OF OPERATIONS AND GOING CONCERN

	Cardero Resource Corp. and its subsidiaries are engaged in the exploration of mineral properties, primarily in Mexico, Peru, Argentina and the United States. The Company considers itself to be an exploration stage company.

	These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assume that the Company will be able to continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

	The Company had a net income of $4,349,493 for the three months ended January 31, 2011 (January 31, 2010 - $62,261,575). The Company has working capital as at January 31, 2011 of $16,926,183 (October 31, 2010 - $26,549,076), has a deficit of $1,969,879 (October 31, 2010 - $6,319,372).

	As the equity market improving, with the fair value of the Company’s investments, Management believes it has sufficient funding for operations in the near future, which results in the going concern assumption being an appropriate underlying concept for the preparation of these consolidated financial statements.

	The business of mining and exploration involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. The Company has no source of revenue, and has significant cash requirements to meet its administrative overhead and maintain its mineral interests. The recoverability of amounts shown for resource properties is dependent on several factors. These include the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development of these properties, and future profitable production or proceeds from disposition of mineral properties or resource related investments.

2.	SIGNIFICANT ACCOUNTING POLICIES

	(a)	Basis of presentation

		These consolidated financial statements are prepared in accordance with Canadian generally accepted accounting principles (“GAAP”) and are stated in Canadian dollars. As described in note 15, accounting principles generally accepted in Canada differ in certain material respects from accounting principles generally accepted in the United States (“US GAAP”).

		These consolidated financial statements include the accounts of Cardero Resource Corp. (“Cardero”) and its wholly-owned integrated subsidiaries, Cardero Argentina, S.A. (“Cardero Argentina”), Minerales Y Metales California, S.A. de C.V. (“MMC”), Cardero Iron Ore Company Ltd., Cardero Peru S.A.C. (“Cardero Peru”), Cardero Hierro Del Peru S.A.C. (“Cardero Iron Peru”), Cerro Colorado Development Ltd., Compania Minera Cardero Chile Limitada (“Cardero Chile”), Cardero Iron Ore (USA) Inc. (“Cardero Iron US”), Cardero Iron Ore Management (USA) Inc., Cardero Iron Ore Company (BVI) Ltd. and Cardero Hierro Peru (BVI) Ltd. (collectively, the “Company”). All significant inter-company transactions and balances have been eliminated.

	(b)	Cash and cash equivalents

		Cash and cash equivalents includes cash and highly liquid investments, with maturities of three months or less from the date of purchase, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

	(c)	Use of estimates

		The preparation of financial statements in conformity with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Areas requiring the use of estimates include the rates of amortization for fixed assets, the recoverability of resource property interests, the recoverability of accounts receivable and amounts due from related parties, the recoverability of equity investments, the assumptions used in the determination of the fair value of financial instruments and stock-based compensation, and the determination of the valuation allowance for future income tax assets and accruals. Management believes the estimates are reasonable; however, actual results could differ from those estimates and could impact future results of operations and cash flows.

	(d)	Amortization

		Amortization of equipment is recorded at the following annual rates:

Computer equipment	-	30% declining balance basis
Office equipment	-	20% declining balance basis
Metallurgy lab	-	20% declining balance basis
Leasehold improvements	-	over the term of the lease on a straight-line basis

		Additions during the year are amortized at one-half the annual rates.

	(e)	Investments

		Investments over which the Company exercises significant influence are accounted for using the equity method. Resource related investments, not including derivatives, are principally classified as available-for-sale, and are carried at quoted market value, where applicable, or at an estimate of fair value. Resulting unrealized gains or losses, net of applicable income taxes, are reflected in other comprehensive income, while realized gains or losses are reflected in operations. Share purchase warrants included in investments are derivative financial instruments and are classified as held-for-trading and, accordingly, unrealized gains or losses, net of applicable income taxes, are included in operations.

	(f)	Resource properties

		The Company capitalizes all costs related to investments in mineral property interests on a property-by-property basis. Such costs include mineral property acquisition costs and exploration and development expenditures, net of any recoveries. Costs are deferred until such time as the extent of mineralization has been determined and mineral property interests are either developed, the property is sold or the Company’s mineral rights are allowed to lapse.

		All capitalized costs are reviewed, on a property-by-property basis, to consider whether there are any conditions that may indicate impairment. When the carrying value of a property exceeds its net recoverable amount (as estimated by quantifiable evidence of an economic geological resource or reserve or by reference to option or joint venture expenditure commitments) or when, in the Company’s assessment, it will be unable to sell the property for an amount greater than the deferred costs, the property is written down for the impairment in value.

		From time to time, the Company may acquire or dispose of a mineral property interest pursuant to the terms of an option agreement. As such options are exercisable entirely at the discretion of the optionee and the amounts payable or receivable are not recorded at the time of the agreement. Option payments are recorded as property costs or recoveries when the payments are made or received.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

	(f)	Resource properties (Continued)

		The amounts shown for acquisition costs and deferred exploration expenditures represent costs incurred to date and do not necessarily reflect present or future values.

		Capitalized costs are depleted over the useful lives of the properties upon commencement of commercial production, or written off if the properties are abandoned or the applicable mineral rights are allowed to lapse.

	(g)	Foreign currency translation

		The functional and reporting currency of the Company is the Canadian dollar. Amounts recorded in foreign currency are translated into Canadian dollars as follows:

		i.	Monetary assets and liabilities, at the rate of exchange in effect as at the balance sheet date;

		ii.	Non-monetary assets and liabilities, at the exchange rates prevailing at the time of the acquisition of the assets or assumption of the liabilities; and

		iii.	Interest income and expenses (excluding amortization, which is translated at the same rate as the related asset), at the rate of exchange on the transaction date.

		Gains and losses arising from this translation of foreign currency are included in the determination of net income (loss) for the period.

	(h)	Stock-based compensation

		The Company accounts for stock-based compensation using a fair value based method with respect to all stock-based payments measured and recognized, to directors, employees and non-employees. For directors and employees, the fair value of the option is measured at the date of grant. For non-employees, the fair value of the options is measured on the earlier of the date at which the counterparty performance is complete or the date the performance commitment is reached, or the date at which the equity instruments are granted if they are fully vested and non-forfeitable. For directors, employees and non-employees, the fair value of the options is accrued and charged either to operations or mineral property interests, with the offset credit to contributed surplus, over the vesting period. If and when the stock options are exercised, the applicable amounts from contributed surplus are transferred to capital stock.

	(i)	Basic and diluted loss per share

		Basic loss per share is calculated using the weighted average number of common shares outstanding during the period. The Company uses the treasury stock method to compute the dilutive effect of options, warrants and similar instruments. Under this method the dilutive effect on earnings per share is calculated presuming the exercise of outstanding options, warrants and similar instruments. It assumes that the proceeds of such exercise would be used to repurchase common shares at the average market price during the period. However, the calculation of diluted loss per share excludes the effects of various conversions and exercise of options and warrants that would be anti-dilutive. Shares held in escrow, other than where their release is subject to the passage of time, are not included in the calculation of the weighted average number of common shares outstanding.

	(j)	Revenue recognition

		Interest income is recorded as earned at the effective rate of interest of the term deposits over the terms to maturity.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

	(k)	Asset retirement obligations (“ARO”)

		The Company recognizes an estimate of the liability associated with an ARO in the consolidated financial statements at the time the liability is incurred. The estimated fair value of the ARO is recorded as a long-term liability, with a corresponding increase in the carrying amount of the related asset. The capitalized amount is depleted on a unit-of-production basis over the life of the proved reserves. The liability amount is increased each reporting period due to the passage of time and the amount of accretion is charged to earnings in the period. The ARO can also increase or decrease due to changes in the estimates of timing of cash flows or changes in the original estimated undiscounted cost. Actual costs incurred upon settlement of the ARO are charged against the ARO to the extent of the liability recorded.

	(l)	Income taxes

		The Company follows the asset and liability method of accounting for income taxes. Under this method of tax allocation, future income tax assets and liabilities are determined based on differences between the financial statement carrying values and their respective income tax basis (temporary differences). Future income tax assets and liabilities are measured using the tax rates expected to be in effect when the temporary differences are likely to reverse. The effect on future income tax assets and liabilities of a change in tax rates is included in operations in the period in which the change is enacted or substantially assured. The amount of future income tax assets recognized is limited to the amount of the benefit that is more likely than not to be realized.

	(m)	Financial instruments

		All financial instruments are classified as one of the following: held-to-maturity, loans and receivables, held-for-trading, available-for-sale or other financial liabilities. Financial assets and liabilities held-for-trading are measured at fair value with gains and losses recognized in net income (loss). Financial assets held-to-maturity, loans and receivables, and other financial liabilities are measured at amortized cost using the effective interest method. Available-for-sale instruments are measured at fair value with unrealized gains and losses recognized in other comprehensive income (loss) and reported in shareholders’ equity. Any financial instrument may be designated as held-for-trading upon initial recognition.

		Transaction costs that are directly attributable to the acquisition or issue of financial instruments that are classified as other than held-for-trading, which are expensed as incurred, are included in the initial carrying value.

	(n)	Future accounting changes

		i.	International Financial Reporting Standards (“IFRS”)

			In 2008, the Canadian Accounting Standards Board confirmed that the transition to IFRS from Canadian GAAP will be effective for fiscal years beginning on or after January 1, 2011 for publicly accountable enterprises. The Company will therefore be required to present IFRS financial statements for its January 31, 2012 interim financial statements. The effective date will require the restatement for comparative purposes of amounts reported by the Company for the interim periods and for the year ended October 31, 2011. The Company is currently evaluating the impact of the conversion on the Company’s consolidated financial statements and is considering accounting policy choices available under IFRS.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

	(n)	Future accounting changes (Continued)

		ii.	Business Combinations

			In January 2009, the Canadian Institute of Chartered Accountants (“CICA”) issued Handbook Section 1582, “Business Combinations”, Section 1601, “Consolidated Financial Statements”, and Section 1602, “Non-Controlling Interests”. These sections replace the former Section 1581, “Business Combinations”, and Section 1600, “Consolidated Financial Statements”, and establish a new section for accounting for a non-controlling interest in a subsidiary.

			Sections 1582 and 1602 will require net assets, non-controlling interests and goodwill acquired in a business combination to be recorded at fair value and non-controlling interests will be reported as a component of equity. In addition, the definition of a business is expanded and is described as an integrated set of activities and assets that are capable of being managed to provide a return to investors or economic benefits to owners. Acquisition costs are not part of the consideration and are to be expensed when incurred. Section 1601 establishes standards for the preparation of consolidated financial statements.

		iii.	Consolidated Financial Statements

			In January 2009, the CICA issued Handbook Section 1601, “Consolidated Financial Statements”, which replaces the existing standards. This section establishes the standards for preparing consolidated financial statements and is effective for interim and annual consolidated financial statements beginning on or after January 1, 2011.

		iv.	Non-Controlling Interests

			In January 2009, the CICA issued Handbook Section 1602, “Non-Controlling Interests”, which establishes standards for the accounting of non-controlling interests of a subsidiary in the preparation of consolidated financial statements subsequent to a business combination. This standard is equivalent to IFRS on consolidated and separate financial statements. This standard is effective for interim and annual consolidated financial statements beginning on or after January 1, 2011.

			The preceding three new sections apply to interim and annual consolidated financial statements relating to fiscal years beginning on or after January 1, 2011. Earlier adoption of these sections is permitted as of the beginning of a fiscal year. All three sections must be adopted concurrently.

3.	FIXED ASSETS

	Shares			Warrants
January 31, 2011	Number		Fair Value	Number		Fair Value		Total
International Tower Hill Mines Ltd.	4,465,723	$	41,129,308	-	$	-	$	41,129,308
Trevali Resources Corp.	6,359,432		13,736,373	2,788,866		2,976,576		16,712,949
Wealth Minerals Ltd.	5,022,806		5,625,543	-		-		5,625,543
Dorato Resources Inc.	2,416,000		2,681,760	-		-		2,681,760
Indico Resources Ltd.	50,000		35,500	-		-		35,500
Kria Resources Ltd.	20,875,000		8,871,875	9,125,000		2,477,742		11,349,617
Corvus Gold Inc.	1,880,711		1,466,955	-		-		1,466,955
Abzu Gold Inc.	8,934,007		7,147,206	3,782,000		1,361,520		8,508,726
Ethos Capital Corp.	250,000		250,000	-		-		250,000
		$	80,944,520		$	6,815,838	$	87,760,358

	(a)	International Tower Hill Mines Ltd. (“ITH”)

		ITH is considered to be a related party as a result of common officer and director relationships (note 8).

		During the year ended October 31, 2009, the Company sold 1,481,800 common shares for net proceeds of $3,752,030, realizing a gain of $2,637,280, and purchased 120,000 common shares at a cost of $423,849.

		During the year ended October 31, 2010, the Company sold 99,000 shares of ITH for net proceeds of $640,244 resulting in a gain on sale of $460,094. Meanwhile, the Company acquired 1,207,423 shares of ITH at a cost of $7,328,514.

		During the period ended January 31, 2011, the Company sold 125,500 shares of ITH for net proceeds of $1,262,568, resulting in a gain on sale of $1,034,157.

								October 31, 2010
		January 31, 2011						(audited)
				Accumulated						Accumulated
		Cost		Amortization		Net		Cost		Amortization		Net
Computer equipment	$	171,624	$	125,840	$	45,784	$	171,624	$	122,128	$	49,496
Office equipment		99,853		50,974		48,879		99,853		48,402		51,451
Metallurgy lab		103,976		-		103,976		-		-		-
Leasehold improvements		210,530		125,574		84,956		210,530		113,740		96,790
	$	585,983	$	302,388	$	283,595	$	482,007	$	284,270	$	197,737

4.	RESOURCE RELATED INVESTMENTS (Continued)

	(a)	International Tower Hill Mines Ltd. (Continued)

		At January 31, 2011, the quoted market value of ITH common shares was $9.21 (October 31, 2010 - $7.59) per share, or a total market value for the Company’s ITH shares of $41,129,308 (October 31, 2010 - $34,847,383). The Company held 4,465,723 common shares (October 31, 2010 – 4,591,223), or 5.23 % (October 31, 2010 – 6.79%) of the issued and outstanding common shares of ITH as of January 31, 2011. Fair value adjustments for the period ended January 31, 2011 amounted to unrealized gains of $6,125,832 (October 31, 2010 - $10,340,676) on the shares, net of tax, as other comprehensive income.

	(b)	Trevali Resources Corp. (“Trevali”)

		On May 11, 2009, the Company purchased 1,250,000 units of Trevali at $0.80 per unit and allocated $0.60 and $0.20 to each common share and warrant, respectively. Each unit consists of one common share and one-half of one common share purchase warrant. Each whole warrant is exercisable to acquire one common share of Trevali at a price of $1.30 until May 11, 2011.

		On May 29, 2009, the Company purchased 134,000 units of Trevali from a company related by virtue of common officers and directors at a price of $0.75 per unit and allocated $0.57 and $0.18 to each common share and warrant, respectively. Each unit consists of one common share and one-half of one common share purchase warrant. Each whole warrant is exercisable to acquire one common share of Trevali at a price of $1.20 until December 29, 2010. The Company exercised 67,000 warrants on the expiry day.

		On August 31, 2009, the Company purchased 300,000 Trevali common shares at a cost of $185,732.

		On October 9, 2009, the Company settled an outstanding $1,000,000 loan to Trevali (advanced on July 30, 2009) on the basis of 1,470,588 units at a price of $0.68 per unit and allocated $0.51 and $0.17 to each common share and warrant, respectively. Each unit consisted of one common share and one-half of one common share purchase warrant. Each warrant is exercisable to acquire an additional common share of Trevali at a price of $1.00 until October 9, 2011.

		On September 1, 2010, the Company purchased 2,857,144 units of Trevali at a price of $1.05 per unit and allocated $0.85 and $0.20 to each common share and half-warrant, respectively. Each unit consists of one common share and one-half of one common share purchase warrant. Each whole warrant is exercisable to acquire one common share of Trevali at a price of $1.50 until September 1, 2012.

		During the period ended January 31, 2011, the Company acquired 117,000 common shares of Trevali, of which 50,000 shares are from the open market at a cost of $73,566 and 67,000 shares from exercising its warrants at a cost of $80,400. Meanwhile, the Company sold 790,000 shares of Trevali for net proceeds of $1,597,240 resulting in a gain on sale of $1,162,740.

		At January 31, 2011, the quoted market value of the Trevali common shares was $2.16 per share (October 31, 2010 - $1.42), or a total market value for the Company’s shares of $13,736,373 (October 31, 2010 - $9,986,053). Fair value adjustments for the period ended January 31, 2011 amounted to an unrealized gain of $3,911,151 (October 31, 2010 - $3,927,133), net of tax, recorded as other comprehensive income. The Company held 6,359,432 common shares (October 31, 2010 – 7,032,432), or 10.17 % (October 31, 2010 – 12.44%) of the issued and outstanding common shares of Trevali as of January 31, 2011.

		At January 31, 2011, the fair value of 625,000 Trevali warrants (purchased on May 11, 2009) was $537,500 (October 31, 2010 - $175,000). Fair value adjustments for the period ended January 31, 2011 amounted to an unrealized gain of $362,500 (October 31, 2010 - $($62,500)).

		On December 29, 2010, the Company exercised 67,000 Trevali warrants at a cost of $80,400. Fair value adjustments upon exercise amounted to an unrealized gain of $38,860 (October 31, 2010 – ($12,060)).

4.	RESOURCE RELATED INVESTMENTS (Continued)

	(b)	Trevali Resources Corp. (Continued)

		At January 31, 2011, the fair value of 735,294 Trevali warrants (purchased on October 9, 2009) was $867,647 (October 31, 2010 - $397,059). Fair value adjustments for the period ended January 31, 2011 amounted to an unrealized gain of $470,588 (October 31, 2010 - $73,529).

		At January 31, 2011, the fair value of 1,428,572 Trevali warrants (purchased on September 1, 2010) was $1,571,429 (October 31, 2010 - $657,143). Fair value adjustments for the period ended January 31, 2011 amounted to an unrealized gain of $914,286 (October 31, 2010 - $85,714).

	(c)	Wealth Minerals Ltd. (“Wealth”)

		On June 2, 2009, the Company purchased 2,841,400 common shares of Wealth, a related party (note 8), at $0.30 per share.

		On October 23, 2009, the Company purchased 2,380,953 units at $1,000,000 and allocated $0.26 and $0.16 to each common share and warrant, respectively. Each unit consisted of one common share and one non-transferable common share purchase warrant, with each warrant being exercisable to acquire one additional common share until October 23, 2011 at an exercise price of $0.60.

		During the last quarter of 2009, the Company sold 2,580,500 common shares of Wealth for net proceeds of $855,124 resulting in a gain on sale of $80,974.

		On August 25, 2010, the Company exercised 2,380,953 warrants of Wealth at $0.60 per share, totalling $1,428,572. A fair value loss of $537,937 was recognized on exercise of the warrants.

		At January 31, 2011, the quoted market value of Wealth common shares was $1.12 per share (October 31, 2010 - $0.63), or a total market value for the Company’s shares of $5,625,543 (October 31, 2010 - $3,164,368). Fair value adjustments for the period ended January 31, 2011 amounted to an unrealized gain of $2,091,998 (October 31, 2010 - $310,586), net of tax, recorded as other comprehensive income. The Company held 5,022,806 shares (October 31, 2010 - $5,022,806), or 10.21% (October 31, 2010 - 12.08%) of the issued and outstanding common shares of Wealth as of January 31, 2011.

	(d)	Dorato Resources Inc. (“Dorato”)

		In October 2009, the Company purchased 596,000 common shares of Dorato, a related party (note 8), at a cost of $311,825.

		During the year ended October 31, 2010, the Company purchased 2,045,000 common shares of Dorato at a cost of $1,702,725. Meanwhile, the Company sold 225,000 shares of Dorato for net proceeds of $255,671 resulting in a gain on sale of $89,621.

		At January 31, 2011, the Company held 2,416,000 common shares (October 31, 2010 - 2,416,000), or 3.30% (October 31, 2010 – 3.49%) of the issued and outstanding common shares of Dorato. The quoted market value of Dorato common shares was $1.11 (October 31, 2010 - $1.25), or a total market value for the Company’s shares of $2,681,760 (October 31, 2010 - $3,020,000). Fair value adjustment at the period ended January 31, 2011 amounted to an unrealized loss, net of tax, of $287,504 (October 31, 2010 - $1,015,023).

	(e)	Indico Resources Ltd. (“Indico”)

		During the year ended October 31, 2010, the Company purchased 50,000 common shares of Indico, a related party (note 8), at a cost of $29,954.

4.	RESOURCE RELATED INVESTMENTS (Continued)

	(e)	Indico Resources Ltd. (“Indico”) (Continued)

		At January 31, 2011, the quoted market value of Indico common shares was $0.71 (October 31, 2010 - $0.62), or a total market value for the Company’s shares of $35,500 (October 31, 2010 - $31,000). Fair value adjustment at the period ended January 31, 2011 amounted to an unrealized gain, net of tax, of $3,825 (October 31, 2010 – $889).

		The Company held 50,000 common shares (October 31, 2010 – 50,000), or 0.22% (October 31, 2010 - 0.39%) of issued and outstanding common shares of Indico as of January 31, 2011.

	(f)	Kria Resources Ltd. (“Kria”)

		During the year ended October 31, 2010, the Company acquired 15,000,000 units of Kria at a cost of $1,500,000 (allocation - $900,000 and $600,000 to common shares and warrants, respectively). Each unit consists of one common share and one warrant. Each warrant entitles the holder thereof to acquire one common share at a price of $0.20 until July 29, 2012 (note 13(e)).

		During the period ended January 31, 2011, the Company exercised 5,875,000 Kria warrants at a cost of $1,175,000.

		At January 31, 2011, the quoted market value of Kria common shares was $0.43 (October 31, 2010 - 0.21), or a total market value for the Company’s shares of $8,871,875 (October 31, 2010 - $3,150,000). Fair value adjustment at the period ended January 31, 2011 amounted to an unrealized gain, net of tax, of $2,848,323 (October 31, 2010 - $1,912,500). The Company owned 19.91% (October 31, 2010 - 15.23%) of issued and outstanding common shares of Kria. At January 31, 2011, the fair value of 9,125,000 (October 31, 2010 – 15,000,000) Kria warrants was $2,477,742 (October 31, 2010 - $2,400,000). Fair value adjustments for the period ended January 31, 2011 amounted to an unrealized gain of $1,273,649 (October 31, 2010 - $1,800,000).

		On January 17, 2011, Trevali and Kria announced the signing of a definitive agreement whereby Trevali intends to acquire all of the issued and outstanding common shares of Kria (the “Kria Shares”) on the basis of 0.2 of a common share of Trevali (the “Trevali Share”) for each one (1) Kria Share (the “Exchange Ratio”). In addition each of Kria’s outstanding incentive stock options to purchase a total of 6,535,000 Kria Shares at prices between $0.14 and $3.40 per share and warrants to purchase a total of 21,699,483 Kria shares at exercise prices between $0.14 and $1.25 per share will be adjusted to be exercisable for Trevali Shares on the basis of the Exchange Ratio. The Transaction will occur by way of a plan of arrangement and will be subject to receipt of all necessary regulatory, court, and shareholder approvals, including disinterested shareholder approval by the Kria shareholders, to be determined at shareholders’ meetings to be held on March 20, 2011.

	(g)	Corvus Gold Inc. (“Corvus”)

		During the year ended October 31, 2010, ITH transferred its non-Livengood Alaska and Nevada assets to Corvus through a plan of arrangement under the Business Corporations Act (B.C.) (“Arrangement”). Under the arrangement, each shareholder of ITH received one Corvus common share for every two ITH common shares held as at the effective date of the Arrangement. The Company received 2,295,611 common shares of Corvus upon the completion of the Arrangement. The shares were initially recorded at $0.75 per share with a corresponding reduction in the carrying value of the ITH shares.

		During the year ended October 31, 2010, the Company sold 1,414,900 common shares of Corvus for net proceeds of $1,281,474 resulting in a gain on sale of $220,298. At October 31, 2010, the Company held 880,711 common shares, or approximately 2.62% of the issued and outstanding common shares of Corvus.

		During the three months ended January 31, 2011, the Company acquired 1,000,000 common shares of Corvus from the open market at a cost of $880,000.

4.	RESOURCE RELATED INVESTMENTS (Continued)

	(g)	Corvus Gold Inc. (“Corvus”) (Continued)

		At January 31, 2011, the quoted market value of Corvus common shares was $0.78 per share (October 31, 2010 -$0.99), or a total market value for the Company’s Corvus shares of $1,466,955 (October 31, 2010 - 871,904). Fair value adjustments for the period ended January 31, 2011 amounted to unrealized loss of $242,207 (October 31, 2010 – unrealized gain of $179,665) on the shares, net of tax, as other comprehensive loss.

	(h)	Totem Minerals Inc. (“Totem”)

		On September 10, 2010, the Company participated in a private placement in Totem and subscribed for 3,782,000 Subscription Receipts of Totem at an aggregate cost of $1,891,000. The Subscription Receipts were not exercised until the acquisition by Totem of all of the issued shares of Abzu Resources Ltd on December 21, 2010. Upon completion of the Abzu acquisition, Totem changed its name to “Abzu Gold Inc.”(note 4(i), the Company received 3,782,000 common shares and warrants to purchase an additional 3,782,000 common shares. This investment was valued at cost at October 31, 2010.

	(i)	Abzu Gold Inc. (“Abzu Gold”)

		During the period ended January 31, 2011, the Company acquired an aggregate of 8,934,007common shares of Abzu Gold Ltd. (“Abzu Gold”), of which included 3,782,000 shares of Abzu Gold were issued upon exercise of 3,782,000 previously purchased Totem subscription receipts (note 4(h)), 352,006 shares from debt settlement at a cost of $105,602, 300,000 shares from open market at a cost of $ 317,495 and the balance were received upon the purchase by Abzu Gold of the Company’s 9,000,002 shares of Abzu. On December 21, 2010, Totem acquired Abzu and changed its name to “Abzu Gold Inc.” with Abzu being maintained as a subsidiary. Accordingly, Abzu Gold now owns all of the issued shares of Abzu.

		At January 31, 2011, the quoted market value of Abzu Gold common shares was $0.80 per share, or a total market value for the Company’s shares of $7,147,206. Fair value adjustment at the period ended January 31, 2011, amounted to an unrealized gain, net of tax, of $3,766,531.

		On December 21, 2010, the Company received 3,782,000 Abzu warrants from previously purchased Totem subscription. At January 31, 2011, the fair value of Abzu warrants was $1,361,520. Fair value adjustments for the period ended January 31, 2011 amounted to an unrealized gain of $642,940.

	(j)	Ethos Capital Corp. (“Ethos”)

		During the year ended October 31, 2009, the Company received 100,000 common shares of Ethos valued at $17,000 pursuant to a property option agreement (note 6(a)(iv)).

		During the period ended January 31, 2011, the Company received another 150,000 common shares of Ehtos valued at $147,000 pursuant to the same property option agreement above mentioned. This investment is classified as held-for-trading.

		At January 31, 2011, the quoted market value of Ethos common shares was $250,000 (October 31, 2010 - $80,000). Fair value adjustments for the period ended January 31, 2011 amounted to an unrealized gain, of $23,000 (October 31, 2010 - $52,000).

	(a)	Abzu Resources Ltd. (“Abzu”)

		During the year ended October 31, 2010, the Company acquired 9,000,002 shares of Abzu at a gross cost of $1,350,000. The Company’s proportionate share of the net book value of Abzu’s assets at the acquisition date totaled $1,220,272. The difference between investment cost and the Company’s share of net assets is attributed to resource properties. The Company accounts for its investment in Abzu using the equity method and recorded the investment at a gross cost of $1,350,000. For the year ended October 31, 2010, the Company’s share of Abzu’s results of operations amounted to a loss of $218,748 based upon Abzu’s financial statements as of October 31, 2010. As at October 31, 2010, the Company held approximately 31.36% of the outstanding common shares of Abzu.

		On December 21, 2010, Totem acquired Abzu and changed its name to “Abzu Gold Inc.”. Between November 1, 2010 and December 20, 2010, the Company’s share of Abzu’s results of operations amounted to a loss of $10,775 based upon Abzu’s financial statements as of December 31, 2010.

		Upon acquisition, the Company held 16.32% of Abzu Gold and changed this investment classification to “available-for-sale” from the equity method (note 4(i)).

	(b)	Coalhunter Mining Corporation (“Coalhunter”)

		During the year ended October 31, 2010, the Company acquired 14,200,000 shares of Coalhunter at a gross cost of $4,370,000. The Company’s proportionate share of the net book value of Coalhunter’s assets (liabilities) at the acquisition dates totaled $(60,669). The difference between investment cost and the Company’s share of net assets is attributed to resource properties resource properties. The Company accounts for its investment in Coalhunter using the equity method and recoded the investment at a gross cost of $4,370,000. For the year ended October 31, 2010, the Company’s share of Coalhunter’s results of operations amounted to a loss of $264,713 based upon Coalhunter’s financial statements as of October 31, 2010. As at October 31, 2010, the Company held approximately 42% of the outstanding common shares of Coalhunter.

		During the period ended January 31, 2011, the Company participated in a private placement in Coalhunter and acquired 5,600,000 special warrants of Coalhunter (“Special Warrants”) at a cost of $2,800,000 on December 16, 2010. Each Special Warrant is exercisable to acquire one common share of Coalhunter, and will be automatically exercised upon the third business day after the issuance of a receipt for a prospectus of Coalhunter qualifying the issuance of the common shares upon the exercise of the Special Warrants. If such receipt has not been issued by June 27, 2011, each Special Warrant will thereafter be exercisable to acquire 1.1 common shares, and if such receipt has not been issued by September 27, 2011, each Special Warrant will thereafter be exercisable to acquire 1.11 common shares.

		Pursuant to its “top-up” right, on December 21, 2010, the Company acquired by private placement an additional 3,608,143 common shares of Coalhunter at a cost of $0.30 per share, for an additional investment of $1,082,443.

5.	EQUITY INVESTMENTS (Continued)

	(b)	Coalhunter Mining Corporation (Continued)

		For the three months ended January 31, 2011, the Company’s share of Coalhunter’s results of operations amounted to a loss of $172,147 based upon Coalhunter’s financial statements as of January 31, 2011. As of January 31, 2011, the Company held approximately 45.5% (October 31, 2010 - 42%) of the outstanding common shares of Coalhunter. Subsequent to January 31, 2011, the Company entered into a letter of intent (the "LOI") whereby Cardero will acquire all of the outstanding securities of Coalhunter not held by Cardero (note 13 (a)).

	(c)	IMM Gold Ltd. (“IMMG”)

		Pursuant to a Memorandum of Understanding dated August 8, 2008 (but effective as and from April 25, 2008) between the Company and International Minerals and Mines Ltd. (“IMM”), a private Gibraltar company, the Company has the right to acquire up to a 30% interest in IMMG, a subsidiary of IMM, which is presently engaged in reconnaissance exploration programs in the Caucasian Region. The Company is the manager of the exploration programs, but no properties have yet been acquired by IMMG. A director of Cardero is a director and significant shareholder of a private company, which is the major shareholder (67%) of IMM (note 8).

		The Company acquired a 15% interest in IMMG by issuing to IMM 500,000 common shares upon acceptance for filing of the transaction by the Toronto Stock Exchange (“TSX”) and the NYSE Alternext (formerly the American Stock Exchange) (“NYSE-A”) The shares were issued on November 24, 2008 valued at $795,000, and the Company received 123,530 ordinary shares of IMMG, representing a 15% interest. The Company may also be required to issue up to an additional 250,000 common shares as consideration for the initial 15% interest in IMMG if, on November 24, 2009, the volume weighted average trading price for the Company’s common shares on the TSX for the five trading days immediately prior to such date (“Final VWAP”) is less than $1.83. In such case, the Company is then required to issue to IMM such number of additional common shares of the Company (up to a maximum of 250,000 additional shares) as is equal to the difference between the $1.83 and the Final VWAP, multiplied by 500,000 and divided by the Final VWAP.

		The Company has the option to acquire an additional 15% of IMMG by issuing an additional 1,000,000 shares to IMM on or before December 31, 2009.

		For the year ended October 31, 2009, the Company’s share of IMMG’s results of operations amounted to a loss of $199,677 (2008 - $Nil) based upon IMMG’s audited financial statements for the year then ended. After consideration of current market conditions and IMMG’s operating loss, the Company recorded an impairment charge of $595,323 to reduce the carrying value of the investment to $Nil.

		The Company has determined that it has an obligation to issue an additional 214,843 common shares to IMM pursuant to the acquisition of its 15% investment in IMMG, the final issuance of which is currently the subject of on-going negotiations with IMM. The Company determined not to acquire an additional 15% interest in IMMG and did not, therefore, issue the additional 1,000,000 common shares on or before December 31, 2009.

6.	RESOURCE PROPERTIES

	The Company’s capitalized acquisition and exploration expenditures on its resource properties are as follows:

6.	RESOURCE PROPERTIES (Continued)

	(a)	Mexico (Continued)

		i.	Baja IOCG Project, Baja California State, Mexico (Continued)

			Effective May 30, 2006, Anglo elected to terminate the Anglo Agreement and thereby forfeited any interest in, or rights to earn any interest in, the mineral concessions that were the subject of that agreement. Accordingly, the Company is now the owner of a 100% interest in the concessions comprising the Baja IOCG Project.

			On May 20, 2004, Western Telluric Resources Inc. (“WTR”) and Minera Olympic, S. de R.L. de C.V. (“Minera”) (collectively, the “Plaintiffs”) commenced an action (the “Action”) in the British Columbia Supreme Court (Vancouver Registry, No. S042795) against the Company and James Dawson, Murray McClaren and their respective companies, Dawson Geological Consultants Ltd. and 529197 B.C. Ltd. (carrying on business as Crockite Resources). The relief claimed against the Company is the setting aside of an agreement dated December 12, 2001 between the Company and Minera regarding the acquisition of mineral concessions. The Company filed a Statement of Defence, in which it denied any liability, as well as a counterclaim (the “Counterclaim”) against the Plaintiffs. Pursuant to an agreement dated October 17, 2007 (“Settlement Agreement”) among the Plaintiffs, the Company and all other parties to the various actions, all actions (including the Action and the Counterclaim) have been settled. As its part of the settlement, the Company has agreed to issue an aggregate of 500,000 shares to WTR and to grant to WTR a 1.5% net smelter return (“NSR”) royalty over its existing and future acquired Baja California properties, of which the Company can acquire one-half (0.75%) for $2,000,000. Fulfillment by the Company of its obligations under the Settlement Agreement was subject to the acceptance for filing thereof by the TSX (received on November 20, 2007) and the NYSE-A (formerly, the American Stock Exchange) (received on November 13, 2007). Effective May 23, 2008, the transaction closed and the 500,000 shares were released to WTR.

			During the year ended October 31, 2010, the Company wrote-off its remaining investment in the property in the amount of $8,498,084.

		ii.	Corrales Property, Chihuahua State, Mexico

			The Corrales property consists of one exploitation concession (100 hectares) located in the Municipality of Lopez, Chihuahua State, plus an additional 8,400-hectare exploration concession held 100% by the Company.

			Pursuant to an agreement dated October 23, 2007 between the Company and three Mexican individuals, the Company has been granted a five-year lease of the exploitation concession, with the right to purchase a 100% interest by making aggregate payments of USD 657,000 over five years to October 23, 2012, as follows:

			- USD 24,000 on execution (paid);
			- USD 18,000 on or before January 23, 2008 (paid);
			- USD 15,000 on or before October 23, 2008 (paid); - USD 60,000 on or before October 23, 2009 (note 6(a)(iv)); - USD 90,000 on or before October 23, 2010; - USD 100,000 on or before October 23, 2011; and - USD 350,000 on or before October 23, 2012.

			The Company has granted to a public company the option to acquire up to a 70% interest in the Corrales property (see note 6(a)(iv)).

(b)	Argentina (Continued)

		-	USD 5,000 on signing (paid);
		-	USD 10,000 on November 30, 2007 ( paid);
		-	USD 50,000 on November 30, 2008 (see below);
		-	USD 150,000 on November 30, 2009;
		-	USD 250,000 on November 30, 2010; and
		-	USD 500,000 on November 30, 2011.

		The Company has relinquished or abandoned, or is in the process of relinquishing or abandoning, all properties relating to its investment in the Huachi Project, resulting in a charge to operations of $1,917,437 during the year ended October 31, 2009.

	iii.	Other Argentinean Properties

(a)	Organullo Property, Salta Province, Argentina

	Pursuant to an agreement dated October 1, 2004 between the Company and an Argentinean individual, the Company purchased a 100% interest in eight minas in Salta Province, Argentina, in consideration of the issuance of 70,000 common shares. These common shares were issued during the year ended October 31, 2005.

(b)	Los Manantiales Property (formerly “Mina Angela”), Chubut Province, Argentina

	Pursuant to an agreement dated April 25, 2004 between the Company and a private Argentinean company, the Company can acquire a 100% interest in 44 mineral concessions in Chubut Province, Argentina, subject to a 1% NSR to the vendor, in consideration of aggregate cash payments to the vendor of USD 400,000, as follows:

		USD 50,000 on or before April 25, 2005 (paid);
		USD 50,000 on or before April 25, 2006 (renegotiated, with $10,000 paid on April 25, 2006 and the balance of USD 40,000 paid in October 2006);
		USD 150,000 on or before April 25, 2007 (paid); and
		USD 150,000 on or before April 25, 2008 (paid).

	The Company has the option to purchase the 1% NSR royalty from the vendor for the sum of USD 500,000 at any time.

	Pursuant to a binding LOI dated March 12, 2007, the Company has granted to a public company the option to acquire up to a 70% interest in the property. Pursuant to the LOI, the optionee had a period of 60 days to carry out due diligence. The Company received a payment of USD 40,000 on signing of the LOI, which was refundable to the optionee if it declined to proceed. The optionee elected to proceed. The optionee may earn an initial 60% interest in the property by incurring an aggregate of USD 3,500,000 in expenditures over four years (including making all payments required pursuant to the underlying agreement). Upon the optionee having earned an initial 60% interest, the Company may elect to either participate at its 40% interest level, or request the optionee to fund the preparation of a bankable feasibility study within four years of such request and thereby earn an additional 10% interest in the joint venture. Upon such request being made by the Company, the optionee may elect to fund the bankable feasibility study. If it does so, it will earn the additional 10% interest upon completion of the bankable feasibility study. Following the formation of the joint venture and the completion of its earn-in requirements by the optionee, each participant is responsible for funding its share of joint venture expenditures. If it does not do so, its interest will be diluted. Upon the interest of a participant being diluted to less than 10%, such interest will be converted to a 2% NSR.

6.	RESOURCE PROPERTIES (Continued)

	(c)	Peru (continued)

		ii.	Pampa de Pongo Property, Caraveli Province, Peru

			Pursuant to an option agreement dated February 2, 2004 between the Company and a private Peruvian company, the Company can acquire a 100% interest in mineral concessions covering approximately 7,970 hectares in Caraveli Province, Peru. The private Peruvian company holds the exclusive right and option to acquire a 100% interest in these concessions from Rio Tinto in consideration of the payment to Rio Tinto of aggregate payments of USD 500,000 over four years as follows:

				USD 50,000 on or before January 27, 2005 (paid);
				USD 50,000 on or before January 27, 2006 (paid);
				USD 100,000 on or before January 27, 2007 (paid); and
				USD 300,000 on or before January 27, 2008 (paid).

			The Company can earn a 100% interest in the property by assuming all of the obligations of the private company pursuant to the underlying agreement with Rio Tinto, and making the following payments and share issuances:

			Payments aggregating USD 130,900 as follows:

				USD 65,900 on or before March 12, 2004 (for back taxes on the property) (paid); and
				USD 65,000 on or before March 12, 2004 (paid).

			Issuance of an aggregate of 70,000 common shares, as follows:

				35,000 shares on or before March 12, 2004 (issued); and
				35,000 shares on or before September 12, 2004 (issued).

			In January 2008, the Company gave notice to Rio Tinto that it was exercising the option, and made the final USD 300,000 payment as required to do so. Rio Tinto transferred title to the concessions to a Peruvian subsidiary of the Company in November 2008, subject to their continuing right of first refusal concerning any disposition of these concessions by the Company.

			In the summer of 2008, the Company made applications for ten additional concessions surrounding the Rio Tinto concessions (19,900 hectares), all of which form part of the Pampa de Pongo property.

			On October 24, 2008, the Company entered into an agreement with Nanjinzhao Group Co., Ltd., (“Nanjinzhao”), a private Chinese enterprise located in Zibo City, Shandong Province, PRC, whereby the Company agreed to sell the Pampa de Pongo property to Nanjinzhao for USD 200 million (subject to Rio Tinto declining to exercise its right of first refusal in respect thereof). The agreement requires an initial deposit of USD 10 million, payable on or before March 17, 2009, with a final payment of USD 190 million due on or before September 17, 2009. During the initial three-month period, Nanjinzhao will obtain the appropriate Chinese governmental consents to the transaction. The Pampa de Pongo property will be transferred to a Peruvian subsidiary of Nanjinzhao once the USD 10 million deposit has been received. The agreement permits Cardero to decline to proceed with the transaction at any time prior to the receipt of the USD 190 million final payment, provided that, if such decision is made at any time after the initial USD 10 million deposit has been paid, Cardero is required to return the deposit and pay Nanjinzhao an additional USD 20 million as a break-up fee. Upon repayment of the deposit (and break-up fee, if required), the Pampa de Pongo property will be retransferred to the Company. The Company will pay a finder’s fee to an arm’s length private company in consideration of the finder introducing Cardero to Nanjinzhao

6.	RESOURCE PROPERTIES (Continued)

	(d)	United States of America (Continued)

ii.	Longnose Property, Minnesota

	Pursuant to an agreement dated November 26, 2008 between the Company and an arm’s length individual on behalf of an arm’s length B.C. company, the Company was granted the option to acquire up to an 85% interest in the interest of the optionor in certain existing mineral leases, and in a lease to be entered into, covering 100% of the fee mineral rights (approximately 200 acres) located in St. Louis County, Minnesota, just north of the town of Hoyt Lakes. The Company can earn an initial 70% interest by incurring cumulative expenditures of USD 1,850,000 as follows:

		USD 100,000 on or before December 8, 2009 (incurred);
		USD 250,000 on or before December 8, 2010 (incurred);
		USD 500,000 on or before December 8, 2011(incurred); and
		USD 1,000,000 on or before December 8, 2012.

	A payment of USD 50,000 (paid) to the optionor is required on or before August 15, 2009 (and each and every August 28 thereafter) to be used by the optionor to make the annual USD 50,000 advance royalty payment due to the underlying landowners. The Company can earn an additional 15% interest (85% overall) by delivering a feasibility study (no time limit for delivery). Upon the Company having earned a 70% or 85% interest, the optionor can elect to convert its interest to a 10% net profits interest (if the Company elects not to earn the additional 15% interest) or a 5% net profits interest (if the Company elects to earn the full 85% interest). If the optionor does not so elect, upon the Company having earned its 70% or 85% interest, as applicable, the Company and the optionor will enter into a joint venture, with each party being responsible for its pro rata share of all joint venture expenditures. If a party to the joint venture is diluted to a 10% or lesser interest, such interest will be converted to a 2.5% net profits interest.

	During the year ended October 31, 2010, the Company issued 75,000 common shares valued at $111,500 as a finder’s fee in connection with the acquisition of its interests in the TiTac and Longnose properties in Minnesota.

6.	RESOURCE PROPERTIES (Continued)

	(e)	Africa – Ghana (continued)

		The Company shall pay, or cause to be paid, directly to Emmaland, aggregate option payments in the amount of $5,550,000, of which:

			$50,000 on or before September 16, 2010 (paid);
			$500,000 upon the execution of the agreement (paid);
			$1,000,000 on or before November 22, 2011;
			$1,000,000 on or before November 22, 2012;
			$1,000,000 on or before November 22, 2013;
			$1,000,000 on or before November 22, 2014; and
			$1,000,000 on or before November 22, 2015.

	(f)	Title and environmental

		Although the Company has taken steps to verify the title to mineral properties in which it has or had a right to acquire an interest in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee title (whether of the Company or of any underlying vendor(s) from whom the Company may be acquiring its interest). Title to mineral properties may be subject to unregistered prior agreements or transfers, and may also be affected by undetected defects or the rights of indigenous peoples. Environmental legislations are becoming increasingly stringent and costs and expenses of regulatory compliance are increasing. The impact of new and future environmental legislations on the Company’s operations may cause additional expenses and restrictions. If the restrictions adversely affect the scope of exploration and development on the mineral properties, the potential for production on the property may be diminished or negated.

	(g)	Asset retirement obligations

		The Company is not aware of any AROs as of January 31, 2011 and October 31, 2010.

7.	CAPITAL STOCK

	(a)	Authorized

		An unlimited number of common shares without par value.

		During the year ended October 31, 2010, the Company launched a normal course issuer bid to purchase up to 4,500,000 of its common shares through the facilities of the TSX. During the year ended October 31, 2010, the Company purchased 312,300 common shares for cancellation. At January 31, 2011, these common shares are still pending to return to treasury.

	(b)	Share purchase warrants

		The following common share purchase warrants entitle the holders thereof to purchase one common share for each warrant. Warrants transactions are as follows:

7.	CAPITAL STOCK (Continued)

	(b)	Share purchase warrants (continued)

		At January 31, 2011 and October 31, 2010 there were no outstanding warrants.

	(c)	Stock options

		The Company has a stock option plan whereby the Company may grant options to directors, officers, employees and consultants to purchase common shares, provided that the aggregate number of shares subject to such options may not exceed 10% of the common shares outstanding at the time of any grant (not including agent or broker options). The exercise price of each option is required to be set at the higher of the closing price of the Company’s common shares on the trading day prior to the date of grant and the five-day volume-weighted average trading price for the five trading days prior to the date of grant (without any discounts). The option term and vesting period is determined by the Board of Directors within regulatory guidelines (the maximum term is ten years). All options are recorded at fair value when granted and are vested at the date for grant.

		A summary of the status of the stock option plan as of January 31, 2011 and October 31, 2010 and changes during the periods ended on those dates is presented below:

7.	CAPITAL STOCK (Continued)

	(c)	Stock options (continued)

		Stock options outstanding are as follows:

	Period ended	Year ended	Year ended
	January 31, 2011	October 31, 2010	October 31, 2009
		(audited)	(audited)
Expected life (years)	2.0	2.0	2.0
Interest rate	1.84%	1.43%	1.32%
Volatility (average)	59.03%	72.33%	102.04%
Dividend yield	0.00%	0.00%	0.00%

8.	RELATED PARTY TRANSACTIONS

	(a)	Due to related parties

		During the periods ended January 31, 2011and 2010, the Company incurred the following expenses to officers or directors of the Company or companies with common directors: