Manhattan gives up on Peru, goes for Turkey

Vancouver – Having had its fill of difficulties in Peru, Manhattan Minerals (MAN-T) is saying adios and selling its portfolio of mineral projects in the country.

The company plans to liquidate its entire package of Peruvian mineral properties, including the Tambogrande massive sulphide project, for US$600,000, assumption of all of its debts (about $2.4-million) and a 2% NSR. The portfolio is being acquired by US-OTCBB listed Solar Energy. Manhattan will retain the accrued tax losses for a separate sale.

After seeing its 1996 option agreement to earn a 75-percent interest on Tambogrande terminated by the government agency Centromin Peru late last year, the company commenced arbitration proceedings on the ruling in an attempt to regain its rights, largely in vain.

Manhattan had completed a final feasibility study and finance plan for development of Tambogrande, fulfilling what it believed were the conditions of the earn-in, but Centromin concluded that the company failed to meet the terms of the agreement, and nullified it. The agreement had called for Manhattan to have the mine operating by December 2003 and have US$100-million in net assets. Both of which failed to occur.

The blow took much of the wind out of the company’s aspirations for operations in Peru. Tambogrande was envisioned as both a base and precious metals operation with annual production of 190-million pounds copper and 90-million pounds zinc over a nine-year mine life. The oxide zone would have contributed about 260,000 oz gold and 3.2 million oz silver annually over a 3.5 year period, until depleted. The Phase 1 development of the oxide-zone was expected to cost US$180-million, with a second phase targeting the sulphides pegged at US$145-million.

At the end of 2003, the company wrote down its entire US$60-million investment in the Tambogrande concessions.

Manhattan had launched other exploration programs in northern Peru, including the Papayo Joint Venture, located contiguously south of Tambogrande, where it had been earning a 51% interest from Compania de Minas Buenaventura. The B-5 project at Papayo had returned high-grade drill intercepts of up 4.6% copper over 53-metres. Unfortunately, in July 2004, when the company went to exercise its option, partner Cedimin (a subsidiary of Buenaventura) had a difference of opinion on the validity of the exercise. Resultantly, Manhattan decided to write down its US$2.7-million investment in Papayo.

The only property in its Peru portfolio that has clear and acknowledged title is the Lancones concessions, the majority of which were staked by the company in 1996 and adjoin Tambogrande.

Looking for a new region to refocus its exploration effort, attention towards Turkey arose and a deal was struck with Teck Cominco (TEK-T) for Manhattan to acquire 100-percent of the Tak and Corak gold projects in the Artvin Province. Gold mineralization here is hosted in vein and stockwork systems on the properties, which have seen a moderate amount of drilling and surface exploration by Teck in the early-1990s.

Subsequent to the new acquisitions, Manhattan entered into a $300,000 credit facility with Vancouver-based merchant bank Quest Capital (QC-T).

As of the latest figures, Manhattan Minerals reports 62.4-million shares outstanding, giving a market capitalization of $5.6-million at its recent trading level of 9 per share.