Shahuindo suit heads to Lima (November 24, 2003)

Ruling that a lower court judge is legally incompetent, the Supreme Court of Peru has voided a previous decision favouring the plaintiff in a legal battle over the Shahuindo gold property.

The Supreme Court also ordered that arguments regarding the legal title to the property will take place in Lima, where Sulliden Exploration‘s (SUE-T) transfer of title to the property was formalized in November 2002. At that time, Sulliden agreed to acquire the property from Compania Minera Algamarca for US$4.13 million in six instalments. By May 6, Sulliden had paid US$830,000 under the first three scheduled payments. The final four instalments bear interest at an annual rate of 5%.

Subsequently, Algamarca claimed that the agreement was invalid and commenced legal action. Sulliden says Algamarca’s claims dispute its own act of entering into the agreement and are without legal merit.

Before its takeover by Grupo Mexico in 1999, Asarco outlined 29.4 million tonnes of oxide material grading 0.88 gram gold and 16.2 grams silver per tonne (T.N.M., Sep.1-7/03).

In mid-July, Socrate Capital acquired a 30% stake in return for US$1.5 million.

Earlier this month, some 90 line km of geochemical soil sampling on 50-metre centres turned up new target areas with elevated gold concentrations.

The survey identified soils with gold concentrations exceeding 0.2 gram per tonne immediately overlying known mineralization at the San Jose surface gold showing. The result confirmed the presence of a gold dispersion halo in soils above the Shahuindo mineralization. That anomalous zone extends about 300 metres north of the defined area of the Breccia zone occurrence, which was drilled earlier this year. There, six holes established a minimum strike length of 500 metres with grades ranging from 1.15 to 2.14 grams gold and 22-159 grams silver. The core lengths of the intersections ranged from 24 to 140 metres.

Two other geochemical anomalies coincided with the West zone and East zone occurrences, which were also drilled earlier in the year. At the West zone, an area of about 800 metres by 300 metres contained soils with gold concentrations of 0.12-3.5 grams. A single hole drilled mid-year at the West zone returned 0.95 gram gold and 2 grams silver per tonne over a core length of 30 metres.

At the East zone, a 400-metre anomaly lies to the north and along strike. Another zone of high gold values is north of the main contact of the Shahuindo porphyry body and coincides with a zone of high chargeability found in earlier induced-polarization surveying.

In our Nov. 14 issue, we failed to mention the location of the Ocampo project of Gammon Lake Resources (GAM-T). The property is in Chihuahua state, Mexico.