News

Update on Shahuindo Litigation - Steady progress on many fronts
• Constitutional Tribunal denies Algamarca Motion
• Mining Concessions and Lands re-registered in Sulliden’s name
• Nullity Petition appeal to be heard in March 2007
• Shares Issued for Debt

Toronto, Canada, February 7, 2007– Sulliden Exploration Inc. (“Sulliden” or the “Company”) (TSX:SUE) provides the following update on the ongoing legal dispute concerning the Company’s Shahuindo gold property in Cajamarca, Peru.

In summary, since the last update press release dated December 15, 2006, the most significant developments are that the mining concessions and lands have been re-registered in Sulliden’s name; the Constitutional Tribunal has denied Algamarca’s Motion to stop the Arbitration Process; and the hearing of the Nullity Petition appeal has been scheduled to be heard by the Commercial Chamber of the Superior Court in early March 2007.

“Although frustrated by the ongoing delays, Sulliden is satisfied with the legal progress and remains confident that this dispute will be finally resolved in Sulliden’s favour”, said John Kearney, President.

For background please refer to the disclosure contained in the Company’s Financial Statements for the quarter ended October 31, 2006 filed via www.sedar.com on December 15, 2006.

ARBITRATION DECISION AND AWARD - Background

In July 2006 the Arbitration Tribunal issued its decision and award that Sulliden has fully met the terms and obligations of the Transfer Agreement dated November 11, 2002 between Minera Sulliden Shahuindo SAC and Compañia Minera Algamarca SA and its subsidiary Compañia Exploraciones Algamarca SA (collectively “Algamarca”), including fulfillment of the payment of the full purchase price.

The Arbitration Tribunal ordered that Algamarca, and any third party that could have acquired any rights from Algamarca, must fulfill the obligations of the Transfer Agreement (see Sulliden Press Release dated July 24, 2006).

In order to ensure the Arbitration Award is recognized and can be enforced and executed, on July 25, 2006 Sulliden obtained an injunction from the 55th Civil Court of Lima ordering Algamarca to comply with the Award rendered by the Arbitration Tribunal (see Sulliden Press Release dated August 1, 2006).

Following receipt of the Arbitration Award and the issue of the Award Injunction, Algamarca and its affiliated companies initiated legal claims and challenges in various courts, in different locations, in attempts to stop or delay the execution of the Arbitration Award (see Sulliden Press Release dated November 23, 2006).

CONSTITUTIONAL TRIBUNAL DECISION – Petition of Algamarca Denied

On December 18, 2006, the Constitutional Tribunal (Peru’s Highest Constitutional Court) issued its Judgment in respect of an appeal by Algamarca against an earlier decision of the Superior Court of Lima which had rejected a petition by Algamarca to stop the Arbitration process on constitutional grounds, including assertions of the absence of due legal process.

In summary, the Constitutional Tribunal dismissed the Petition of Algamarca and ruled that the Appeal to the Commercial Chamber of the Superior Court (see below) must be finalized before any Constitutional Petition could be considered.

The Constitutional Tribunal ruled that any petition for nullity of an Arbitration Award must be considered as an appeal of the Award and not a separate process and stated that the Commercial Chamber of the Superior Court is the appropriate forum to consider the validity of any decision of an Arbitration Tribunal with regard to the competence of the Arbitration Tribunal.

COMMERCIAL CHAMBER – Nullity Petition to be heard March 2007

The hearing by the Commercial Chamber of the Superior Court of the Nullity Petition filed by Algamarca has been scheduled to be heard in early March 2007.

In this Petition, Algamarca seeks to have the Arbitration Decision and Award declared null and void and argues that the Arbitration Tribunal did not have the competence to hear the dispute and that the members of the Arbitration Panel were conflicted and did not properly deal with Algamarca’s objection to such conflicts. In summary, Algamarca argues that this legal dispute should be dealt with in the Civil Courts and not by the arbitration process. Sulliden has filed its reply to the Nullity Petition (see Sulliden Press Release dated December 15, 2006).

This Nullity Petition is an appeal procedure provided for under the General Arbitration Law of Peru and is applicable to all arbitrations and is available to all parties. The hearing will deal with the procedural legal process only and the merits of the case will not be reconsidered. This Petition will be heard by a panel of three Superior Court Judges.

MINING CONCESSIONS – Registration in Sulliden’s Name

Following the Arbitration Award, the Registry Tribunal of the National Superintendente of Public Registers (SUNARP) (the official Peruvian Government State Registry) issued an Administrative Order dated August 2, 2006, directing the Regional Registrar at Trujillo (where twenty of the Shahuindo mining concessions are registered) to register the transfer into Sulliden’s name of the twenty mining concessions. This registration was effected on September 8th, 2006 (see Sulliden Press Release dated September 13, 2006).

Following the issue of the Administrative Order and the registration of the concessions in Sulliden’s name, Algamarca, and their associate companies, commenced various actions against SUNARP Registry Tribunal (not Sulliden), seeking the declaration of nullity of the registration of the concessions in Sulliden’s name and obtaining various injunctions/orders from various Courts suspending the registration in favour of Sulliden, including injunctions and orders obtained by Inversiones Mineras Sudamericanas SA (“Sudamericanas”) an associate company registered in Panama and Minera Pilacones SA, another associate company registered in Peru (see Sulliden Press Release dated November 23, 2006).

In response, Sulliden has contested the various Court actions, has filed appeals against the Court orders, and in turn initiated its own action against Algamarca for breach of the Transfer Agreement. Sulliden also presented a complementary petition to the 55th Civil Court of Lima which on December 14, 2006 ordered the Registrar to restore and maintain all twenty mining concessions in Sulliden’s name.

In compliance with the Arbitration Decision, the Arbitration Award, the Administrative Order of the SUNARP Registry Tribunal, and the Injunction of the 55th Civil Court of Lima, the twenty mining concessions have been re-registered in the name of Sulliden, effective November 2002, and Minera Sulliden Shahuindo is now recorded as the registered owner of the twenty Shahuindo mining concessions in the SUNARP Registry in Trujillo and of the other six Shahuindo mining concessions in the SUNARP Registry in Lima.

MINISTRY OF ENERGY AND MINES (INACC) – Sulliden Registered as Owner

In compliance with the Judicial Order of the 55th Civil Court of Lima, the Ministry of Energy and Mines on January 10, 2007 recorded Sulliden as the owner of the twenty mining concessions in the “Mining Rights System and 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 and Minera Sulliden Shahuindo is now recorded in the INACC as the owner of the twenty six mining concessions.

SURFACE LAND – Sulliden Registered as Owner

In compliance with the Judicial Order of the 55th Civil Court of Lima in January the SUNARP Registry at Cajamarca registered Sulliden as the owner of the superficial (surface) lands at Shahuindo.

ENFORCEMENT OF ARBITRATION AWARD – Legal Process

Sulliden has taken the appropriate steps in order to protect execution of the Arbitration Award. However, under the laws of Peru, the Arbitration Award cannot be fully perfected (enforced) until such time as the Nullity Petition has been determined (see above).

It should be noted that under the laws of Peru an appeal to the Supreme Court against a decision of the Commercial Chamber of the Superior Court in this case may be taken by the Respondent (Sulliden) but not by the Petitioner (Algamarca).

It should be further noted that, under the laws of Peru, following determination of such appeal, it would remain open to any party, including Algamarca, to institute constitutional proceedings against the decision of the Arbitration Tribunal. However, as confirmed by the Judgment of the Constitutional Tribunal issued December 18, 2006, such proceedings may only be initiated after the conclusion of the Nullity Petition by the Superior Court or the Supreme Court (as the case may be). Any such proceedings can only deal with constitutional rights or legal process (e.g. denial of legal rights) and not with the merits of any particular case.

On two previous occasions aspects of the Sulliden Shahuindo dispute have been heard by the Constitutional Tribunal and on both such occasions [March 10, 2006 and June 8, 2006] decisions favourable to Sulliden have been issued (see Sulliden Press Releases dated March 31, 2006 and June 12, 2006).

OTHER LEGAL ACTIVITY

Sulliden is aware that Algamarca has purported to try to transfer some of the mining concessions to various associated companies, including Inversiones Mineras Sudamericanas SA (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 has purported to grant a mortgage to yet another Panamanian company, Import & Export A.C.D. SA. All of these transfer contracts are ineffective against Sulliden as per the Arbitration Award and are subject to the Transfer Agreement and to the prior registration of the Transfer Agreement from Algamarca to Sulliden Shahuindo of November 11, 2002. It is of interest to note that, notwithstanding such purported transfers to its associated companies, Algamarca itself continues to fight the Arbitration Award and has filed the Nullity Petition.

COMMENT

The legal process in this dispute is continuing in accordance with the laws and legal procedures of Peru. Such laws are complex and the procedures can be confusing. In many respects there are very different than the laws and procedures in Canada.

The next important step is the hearing and determination of the Nullity Petition by the Commercial Chamber of the Superior Court. In the meantime the Courts of Peru have acted to protect Sulliden’s interests by the registration of the concessions and lands pending the hearing of the Petition. However there can be no assurance that Algamarca or its associate companies will not seek to take other steps or seek other orders or injunctions in an attempt to suspend such registrations or delay execution of the Arbitration Award.

In view of the Arbitration Award and its strong legal position, Sulliden remains confident that the outcome of all legal actions in this dispute will be favourable to Sulliden. Although frustrated by the ongoing delays, Sulliden is satisfied with the outcome and results of the arbitration and legal actions to date. All issues on the merits and bona fides of the case, and most of the procedural issues, have to date been decided in Sulliden’s favour. Sulliden will take whatever further legal action may be necessary to ensure enforcement of the Arbitration Award and to secure full ownership of the Shahuindo Property in Sulliden’s name. However, as in any litigation where there is a dispute, Sulliden cannot predict with certainty the outcome of the various legal actions or the impact of these actions on Sulliden’s rights and entitlements to the Shahuindo property.

ISSUE OF SHARES FOR DEBT – 297,372 common shares at $0.87 per share

Sulliden reports that, following receipt of regulatory approval, it has issued 297,372 common shares at a deemed issue price of $0.87 per share, for a total consideration of $258,714 in part payment of legal and advisory fees to six arm’s length service providers in Peru. Such payables were accounted for in Sulliden’s financial statements for the quarter ended October 31, 2006.

CAUTION TO SHAREHOLDERS / INVESTORS:

The information contained in this Press Release is presented in summary form only and is not a complete description of the legal actions or legal issues in this dispute. Sulliden cannot and does not intend to comment or report every separate step, procedure or development in the multiple legal actions. Shareholders are again reminded not to rely on information provided in press releases issued by other parties to the litigation dispute (which are not reporting issuers in Canada and not subject to the disclosure laws of Canada) or comments in internet chat rooms or internet websites and to treat any such comments with caution.

ABOUT SULLIDEN:

Sulliden Exploration Inc. is a mineral exploration company focused on the development of its Shahuindo gold-silver project located 25 km north of Alto Chicama and 70km south of Yanacocha in northern Peru. The resource stands at 1.5 million ounces of gold at an average grade of 0.85 g/t Au and 35.2 million ounces of silver at an average grade of 19.83 g/t Ag, for a total gold equivalent of 2.1 million ounces of gold at a gold to silver ratio of 1:60.

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 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 thes 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 please contact:

John F. Kearney, President
Tel: (416) 703-8287
e-mail: contact@sulliden.com

James H. Coleman, Chairman
Tel: (403) 267-8373