Court backs Sulliden’s arbitration win

The Civil Court of Lima has issued an injunction ordering Minera Algamarca and Exploraciones Algamarca to return the Shahuindo silver-gold mining concession in Peru to Sulliden Resources (SUE-T).

The injunction follows a unanimous arbitration decision confirming that Sulliden fully complied with the terms and obligations of the property’s 2002 transfer agreement, including payment of the full purchase price.

In late July, an arbitration tribunal ordered that Algamarca terminate a lien on the property mortgage, and return the mining concessions, surface lands, and mining camp to Sulliden. Algamarca is also prohibited from impeding Sulliden’s mining, exploration or exploitation of the concessions.

The court further ordered that the mining concessions and surface lands be registered in the name of Sulliden’s wholly owned subsidiary Minera Sulliden Shahuindo to allow for exploration and development to resume.

Algamarca must also pay the arbitrators’ fees, while the parties will share administrative and secretarial fees. Each party will cover its own legal expenses.

Sulliden president Jacques Trottier says Algamarca could ask Peru’s Superior Court to annul the entire arbitration process, but adds that such appeals rarely work, as the arbitration process is designed to keep cases out of court in the first place. Algamarca cannot appeal the court’s decision.

Trottier also said that his company is considering legal action of its own aimed at damages, as it believes Algamarca has acted in bad faith from the beginning.

Shahuindo, 70 km south of the Yanacocha gold deposit, is home to indicated resources totalling 38 million tonnes running 0.95 gram gold and 23 grams silver per tonne. Another 17.1 million tonnes of inferred material grades 0.62 gram gold and 19.8 grams silver. Both estimates are based on a cutoff grade of 0.3 gram gold.

Sulliden holds an option to acquire a 66% stake in the adjacent 19-sq.-km Vikingo concessions. The land package would bring Sulliden’s holdings in the district to more than 100 sq. km.

News of the court’s decision sent shares in Sulliden 12, 14.8%, higher to 93 in late afternoon trading in Toronto on Aug. 1.