Montreal , Canada – July 27, 2004 . Sulliden Exploration Inc. (TSX: SUE) would like to clarify its legal position concerning its ownership of the Shahuindo gold/silver property in Peru following an article that appeared recently.
Firstly, Sulliden legally acquired the Shahuindo property from Compañia Minera Algamarca S.A. (“Algamarca”), the vendor, for US $4.13 million through a purchase agreement in November 2002 (the “Agreement”). All payments provided for in the Agreement have been completed and all other conditions have been satisfied for Sulliden to have complete and indefeasible title to the property. Secondly, Sulliden’s transfer of title to the Shahuindo property was duly executed and formalized before a notary public in Lima, Peru and remains valid in full force today. Thirdly, with respect to the two drilling programs, Sulliden was officially granted exploration permits for both drilling programs by the Ministry of Energy & Mines in full accordance with Peruvian law.
In response to the allegation in the above referenced article that Algamarca intended to mine the property, Sulliden wishes to state that no permit has been granted to any other party that would allow any party to explore, develop or mine the Shahuindo property other than Sulliden. On the contrary, the Ministry of Energy & Mines has officially ordered Algamarca to stop any work they intended to carry out on the property. With respect to the allegation that the claims at the land and mining property registry (SUNARP) are in the name of Algamarca, this is a misleading statement as a number of the titles to the property have already been registered in Sulliden’s name with the remainder pending registration due to the legal tactics of Alta Tecnología e Inversión Minera y Metalúrgica S.A . (“Atimmsa”) in their attempt to delay registration of Sulliden's title to the property. These tactics represent technical and legal irregularities that could be considered unusual and contrary to existing administrative practices.
Notwithstanding the valid and binding Agreement entered into between Sulliden and Algamarca in November 2002, a new group of shareholders controlled by Atimmsa subsequently acquired control of Algamarca on or around January 22, 2003 and have since attempted to renege on the valid and binding Agreement which was in force two months before they took control of Algamarca.
Sulliden has recently received a favourable and significant ruling from the Judge of the Tenth Civil Court in Lima, Peru nullifying the procedures initiated by Atimmsa, who brought an action to seek the nullity and inefficacy of the Agreement. This judgement is a consequence of the Supreme Court ruling in November 2003 in Sulliden’s favour declaring the incompetence of a judge in La Esperanza, Trujillo who had received the demand.
Sulliden has received legal opinions from leading Peruvian law firms that state the claims by Algamarca against title to the property have been made in bad faith and are without legal merit. Sulliden is therefore confident that its title to the Shahuindo property is valid and binding and will be recognized as such by the courts and regulatory/arbitration authorities in Peru. The question of the validity of Sulliden's title will be settled by arbitration, as requested by Sulliden, and is expected to be decided by the end of this year. In the meantime, Sulliden has continued with its phase two exploration work of 10,000 meters including diamond drilling on the property in accordance with the exclusive permits delivered by the Peruvian authorities.
Sulliden Exploration Inc. is a mineral exploration company focused on the development of its 100% interest in the Shahuindo gold-silver project located 25 km north of Alto Chicama and 70 km south of Yanacocha in northern Peru. The first phase of a 3,450 meter drilling program formed the basis of a resource calculation in March 2004 by Met-Chem Canada Inc. of 25.8 million tonnes of 1.07 g/t gold and 23.97 g/t silver in the indicated category, and 8.5 million tonnes of 0.92 g/t gold and 22.54 g/t silver in the inferred category for a total of 1.14 million ounces of gold and 26.1 million ounces of silver.
For Further information please contact:
Dr. Enrique Lastres, Vice-President
Corporate Development & Legal Affairs
Tel: +511 242-9778
Donna Yoshimatsu, VP Investor Relations
Tel: (416) 362-8809
E-mail: dyoshi@sulliden.com
Certain of the information contained in this news release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include without limitation, statements regarding estimates of reserves and resources, future plans and objectives, results of exploration, uncertainty with respect to changes in general economic or political conditions, title to properties, litigation, legislative, environmental and other judicial, regulatory and competitive developments in areas in which the Company operates. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Sulliden’s expectations are disclosed under the heading “Risk Factors” in its 2003 Annual Report as well as in its Annual Information Form (AIF) both of which are filed with Canadian regulators on SEDAR.
