Century withdraws Sulliden offer (February 18, 2008)

Century Mining (CMM-V, CMNZF-O) has withdrawn its hostile offer for rival Sulliden Exploration (SUE-T, EXSDF-O).

The takeover would have put an end to a nearly 5-year legal battle between the companies over the Shahuindo gold-silver property, in northern Peru.

Just a week before Century pulled its bid, Sulliden had advised its shareholders to reject the offer, expressing doubts about the company’s financial wellbeing and the reliability of its technical assessments.

If the bid hadn’t been withdrawn, it would have expired at the end of January.

Century has disagreed with all of Sulliden’s accusations and says it is disappointed that Sulliden could not see any benefits in merging the two companies.

Sulliden argued it would be of better value to its shareholders if it developed Shahuindo itself.

The property has an indicated resource of 38 million tonnes grading 0.95 gram gold per tonne and 22.99 grams silver, or 1.2 million oz. gold and 28 million oz. silver.

The inferred resource is 17.2 million tonnes grading 0.62 gram gold and 12.83 grams silver, or 342,000 oz. gold and 7 million oz. silver.

Sulliden bought the property for $4.13 million from Companhia Minera Algamarca in 2002.

But Century bought Algamarca shortly afterwards, and launched a lawsuit declaring the property transfer invalid.

The litigation will continue, as neither company is willing to back down.

In early January, the Supreme Court of Peru ruled that a decision in Century’s favour made by the Civil Court of Cajamarca was invalid because it was not made by the appropriate court. The Supreme Court said the case should have been tried in the Superior Court of Lima.

Sulliden plans to issue a rights offering so that it can continue to fund the legal dispute and continue its exploration program.

In 2007, Sulliden drilled about 3,700 metres at Shahuindo, extending known mineralization by 1.3 km.

This year, Sulliden plans to do some infill drilling to upgrade the resource for the Main zone so the company can move to the feasibility stage.

Century shares slid 2 to 38 each on more than 67,000 shares traded, while Sulliden shares rose 1.5 to 28 on a volume of about 63,000 shares.