Sulliden owns Shahuindo Property; Refutes Century Mining press release
Thursday May 17, 10:12 am ET
biz.yahoo.com
TSX Symbol: SUE
TORONTO, May 17 /CNW/ - Sulliden Exploration Inc. ("Sulliden" or the "Company") (TSX:SUE - News) reaffirms that it is the registered lawful and proper owner of the Shahuindo gold project in Cajamarca Peru (the "Shahuindo Project"). Sulliden unequivocally states that the press release issued by Century Mining Corporation ("Century") dated May 16, 2007 is inaccurate and misleading where it says that five companies, which Century announced that it has purchased, apparently for US$52 million, own the 26 mining concessions and surface rights which include the Shahuindo Project, and where it says that it will move the Shahuindo Project forward, and that Century is going to build a mine at the Shahuindo Project which will be operational as early as the fourth quarter of 2009.
Sulliden is the owner of the Shahuindo Property
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The facts relating to the ownership of Shahuindo are as follows:
- In July 2006, a Peruvian Arbitration Tribunal, which had been hearing
the case for almost three years, issued its Decision and Award and
declared that Sulliden had fully met the terms and obligations of the
transfer agreement dated November 11, 2002 (the "Transfer Agreement")
between Minera Sulliden Shahuindo SAC and Compania Minera Algamarca
S.A. ("Algamarca"), as vendor of the Shahuindo Project. (See Sulliden
Press Release dated July 24, 2006, and the full text of the
Arbitration Decision and Award dated July 20, 2006 on Sulliden's
website at www.sulliden.com/Mining Projects/Litigation).
- The Courts of Peru have taken decisive action to protect Sulliden's
interests by the registration of the Shahuindo Project mining
concessions and surface lands in Sulliden's name.
- The 26 mining concessions are registered in the name of Sulliden's
wholly owned Peruvian subsidiary, Minera Sulliden Shahuindo S.A.C.,
in the "Mining Rights System at Catastro-Sidemcat" of the National
Institute of Mining Concessions and Cadastre- INACC, the official
register of owners of mining concessions maintained by the Ministry
of Energy and Mines.
- In addition, Sulliden Shahuindo is also registered as the owner of
the 26 mining concessions in the National Public Registry SUNARP (20
in the SUNARP District Registry in Trujillo and the other six
Shahuindo mining concessions in the SUNARP Registry in Lima).
- Sulliden Shahuindo is also registered as the owner of the superficial
(surface) lands at Shahuindo in the SUNARP Registry in Cajamarca.
- The Minister of Energy and Mines has issued to Sulliden an
exploration permit in respect of the Shahuindo property. The permit
was issued on April 17, 2007 and is valid for a period of nine
months.
In July 2006, Sulliden obtained an injunction from the 55th Civil Court in Lima in which the Court ordered Algamarca, or any third party that could have acquired any rights from them, to abstain from carrying out any act that limits, impedes or hinders the right of Sulliden to exercise any mining activity in the Shahuindo property.
Sulliden acknowledges that it does not own the mining concessions and surface rights identified by Century as the "Atimmsa Project", included in the Century transaction at an option price of US$21 million. The Atimmsa Project acquired by Century is adjacent to Shahuindo but does not include the Vikingo concessions which are held under option by Sulliden and which Sulliden believes may contain extensions of the Shahuindo deposit to the northwest.
Unlawful Transfers
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Sulliden is aware that Algamarca has purported to try to transfer some of the mining concessions to various associated companies, including Inversiones Mineras Sudamericanas S.A. (Panamanian) and Minera Pilacones SA. These companies in turn have attempted to transfer the concessions to another Panamanian company, Andean Mining Gold Inc. which in turn purported to grant a mortgage to yet another Panamanian company Import & Export A.C.D. S.A. All of these transfer contracts are ineffective against Sulliden as per the Arbitration Award and are all subject to the prior registration of the Transfer Agreement of November 11, 2002 from Algamarca to Sulliden Shahuindo. It appears that these are the five companies that Century Mining Corporation has agreed to acquire, as outlined in the Century press release of May 16, 2007.
Ongoing Litigation
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Sulliden acknowledges the statement in the Century press release that the companies purchased by Century, which are owned or controlled by the Sanchez-Paredes Group, are involved in extensive litigation in Peru, including criminal complaints and prosecutions. If indeed Century has purchased these companies it will inevitably be joined in such litigation and the legal forum may be extended to Canada or the United States.
Based on the Century press release, it would appears that Century has agreed to pay US $ 52 million, plus a 2% NSR, to buy into whatever litigation "rights" to Shahuindo are claimed by Sanchez Parades Group through these Panamanian companies. It would appear that US$ 1 million has been or will be paid immediately by Century and the balance of the payments appear to be optional and non resource to Century if it abandons the transactions, and are being financed by the seller (the Sanchez Paredes Group). As part of the transaction, it appears that the Sanchez-Paredes Group "will continue to manage the ongoing litigation in the Peruvian court system".
The transaction announced May 16, 2007 by Century follows an earlier press release dated May 7, 2007 in which Century announced an agreement, also reputed to be with the Sanchez Paredes Group to purchase Mina Rosario de Belen for US$20.5 million plus a 1.5% NSR royalty. The combined transactions would represent a total of US$72.5 million apparently payable to the Sanchez Parades by Century Mining Corporation.
Sulliden holds Shahuindo Exploration Permit
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As previously announced on April 17, 2007, the Ministry of Energy and Mines in Peru has issued to Sulliden's wholly-owned subsidiary, Minera Sulliden Shahuindo, an exploration permit in respect of the Shahuindo Project. The permit is valid for nine months and authorizes Sulliden to conduct an exploration program on the Shahuindo Project (See Sulliden Press Release April 23, 2007).
Sulliden purchased the Shahuindo property from Algamarca in November 2002. In May 2003 Sulliden received an official permit from the Ministry of Energy and Mines to initiate the first phase of drilling on the Shahuindo Project and in January 2004 Sulliden received an official permit from the Ministry of Energy and Mines of Peru to initiate the second phase of drilling at Shahuindo.
In 2003 and 2004, Sulliden conducted field work, surveys, soil sampling, geophysics and two drilling programs on the property. In 2003, the drilling program consisted of twenty-seven (27) diamond drill holes totaling 3,388 metres. In 2004, drilling consisted of fifty-six (56) diamond drill holes totaling 8,504 metres. As a result of this exploration work carried out by Sulliden, the resource on the property was doubled from the historical resource, as reported by Southern Peru in 1998, of 29.4 million tonnes at 0.88 g/t gold and 16.2 g/t silver to its current level of 38 million tonnes (indicated) 0.95 g/t gold and 22.99 g/t silver plus 17 million tonnes (inferred) at 0.62 g/t gold and 12.83 g/t silver. (Resource Estimation - Met-Chem Canada Inc., filed on www.sedar.com on April 29, 2005).
No permit has been granted by the Peruvian authorities to any other party, other than Sulliden, to explore the Shahuindo Project. Neither Century Mining Corporation, nor any other party, can lawfully carry out any exploration work on the Shahuindo Project, as the only valid exploration permit is held by Sulliden. A previous application for an exploration permit made by Algamarca/Pilacones was rejected by the Ministry of Energy and Mines on October 23, 2006 (Decision of October 20, 2006) (Report No. 200-2006 MEM-AAM/HSG/RC). For Century to infer in any way that they have obtained any right to undertake any work on the Shahuindo Project is false and misleading.
In July 2006, Sulliden obtained an injunction from the 55th Civil Court in Lima in which the Court ordered Algamarca, or any third party that could have acquired any rights from them, to abstain from carrying out any act that limits, impedes or hinders the right of Sulliden to exercise any mining activity in the Shahuindo Project.
Comment
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Sulliden has been advised by leading law firms in Peru that the Transfer Agreement between Sulliden and Algamarca is valid and enforceable and this has been confirmed by the Arbitration Panel in their Arbitration Decision.
Following the purchase of Algamarca by Atimmsa, ,and the subsequent purchase of the shareholding in Atimmsa by the Sanchez Paredes Group through a Panamanian company which took place after the execution of the Transfer Agreement with Sulliden, Algamarca through its new shareholders have acted in bad faith and have refused to recognise and sought to ignore the Transfer Agreement previously signed by Algamarca with Sulliden and sought to prevent by various means the transfer to Sulliden of the mining concessions and the registration of title in Sulliden's name Algamarca through its new shareholders objected to the Arbitration Process and sought various orders and injunctions from different courts and in different jurisdictions in an unsuccessful effort to stop the arbitration process. The Sanchez Paredes, in their continuing unlawful efforts to deprive Sulliden of the Shahuindo property, have now apparently sold Algamarca and its related companies to Century Mining Corporation.
Following the Arbitration Decision in Sulliden's favour, Algamarca and its related companies sought to challenge the Arbitration Award, and it is these legal actions that Century has apparently acquired. Sulliden will continue to defend any challenge to the Arbitration Award.
In view of the favourable Arbitration Award, Sulliden remains confident that notwithstanding the acquisition of rights related to this litigation by Century Mining Corporation the outcome of all legal actions in this dispute will remain favourable to Sulliden. The intervention of Century Mining Corporation, if concluded, may enable final resolution of this litigation in Sulliden's favour in the Canadian or United States Courts.
ABOUT SULLIDEN:
Sulliden Exploration Inc. is a mineral exploration company focused on the development of its Shahuindo gold-silver project located in northern Peru, in one of the world's most prospective gold and silver regions, sitting approximately 25 km north of Barrick's Laguanas Norte-Alto Chicama 500,000 oz/gold per year mine; 70km south of Newmont's multi-million oz/gold Yanacocha district and 200 km north of Barrick's Pierina 650,000 oz/gold per year mine.
The Shahuindo resource stands at 38 million tonnes grading 0.95 g/t Au and 22.99 g/t Ag, containing 1.2 million oz of gold and 28 million oz of silver (equivalent to 1.6 million oz of gold at a gold to silver ratio of 1:60) in the Indicated Category; and 17.2 million tonnes grading 0.62 g/t Au and 12.83 g/t Ag, containing 342,000 oz of gold and 7 million oz of silver (equivalent to 460,000 oz of gold at a gold to silver ratio of 1:60) in the Inferred Category - (Resource Estimation - Met-Chem Canada Inc., filed on www.sedar.com on April 29, 2005).
Sulliden's rights to the Shahuindo property are in dispute and are the subject of extensive litigation in Peru.
In addition, Sulliden has an option to acquire 66% of an adjacent 1,900 hectares known as the Vikingo concessions which brings the Company's land holdings in this exciting gold district to almost 10,000 hectares.
In southern Peru, Sulliden, through a subsidiary, has entered into an option agreement to earn a 50% interest in the Torrine gold project with Aruntani SAC.
Further information/Risk Factors:
For detailed information and background in the Shahuindo litigation please refer to Sulliden's Annual Information Form, the Notes to the Company's Annual and Quarterly Financial Statements and press releases which can be found at www.sedar.com. For further information on Risk Factors with regard to an investment in Sulliden please refer to Sulliden's Annual Information Form and to the summary of Risk Factors in the Company's Management Discussion and Analysis for the year ended April 30, 2006 and for the quarter ended January 31, 2007 which can be found at www.sedar.com.
Caution regarding forward-looking information:
Statements contained in this document which are not historical facts are forward-looking statements that involve risk, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. This forward-looking information includes, or may be based upon, estimates, forecasts, and statements as to management's expectations with respect to, among other things, the outcome of legal proceedings, the issue of permits, the size and quality of the company's mineral resources, progress in development of mineral properties, future production and sales volumes, capital and mine production costs, demand and market outlook for metals, future metal prices and treatment and refining charges, and the financial results of the company. Factors that could cause such differences, without limiting the generality of the following, include: volatility and sensitivity to market metal prices impact of change in foreign currency exchange rates and interest rates; imprecision in reserves estimates; environmental risks including increased regulatory burdens; unexpected geological conditions; adverse mining conditions; political risks arising from operating in developing countries; legal title to properties, outcome of litigation, changes in government regulations and policies, including laws and policies; and failure to obtain necessary permits and approvals from government authorities; and other development and operating risks.
Mineral resources that are not mineral reserves do not have demonstrated economic viability. Inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that mineral resources will be converted into mineral reserves.
Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this document. The Company disclaims any intention or obligation to update or revised any forward-looking statement, whether as a result of new information, future events or otherwise.
For further information
John F. Kearney, President, Tel: (416) 362-6686, E-mail: contact@sulliden.com
Jacques Trottier, Deputy Chairman, Tel: (514) 861-1953, E-mail: jacques_trottier@msn.com
James H. Coleman, Chairman, Tel: (403) 267-8373
Source: Sulliden Exploration Inc. |
