Manhattan pulls out after US$60mn Tambogrande loss - Peru

Manhattan pulls out after US$60mn Tambogrande loss - Peru

BNamericas

Monday, February 7 2005

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Vancouver-based exploration company Manhattan Minerals (TSX: MAN) is pulling out of Peru forever after losing US$60mn in its failed Tambogrande polymetallic project, company CEO and president Dr Peter Guest told BNamericas.

Manhattan had originally planned to build a US$405mn base and precious metals mine at Tambogrande but announced last week that its shareholders had approved a proposal to sell off all the company's Peruvian assets and interests, including all rights to Tambogrande and the Lancones and Papayo mineral properties.

Manhattan made the decision to leave due to Peruvian state mining company Centromin's decision to terminate Manhattan's option for Tambogrande in December 2003, citing the company's failure to meet certain conditions of the contact, including having a 10,000t/d treatment plant and US$100mn in equity.

"The company was trying hard to find a major partner which would allow us to qualify for those conditions. The trouble for us was that we weren't able to find a partner like that because the social conditions were so anti-mining that nobody wanted to touch it," Guest said.

Manhattan subsequently launched arbitration proceedings against Centromin's ruling but Guest said the company is currently considering whether or not to continue with the arbitration process given the cost and the perceived unlikelihood of victory.

"We're wondering if it's worth the cost. If it was in Canada, we'd probably have more chance [of victory] but in Peru we've probably got no chance," he said.

Manhattan is currently in negotiations to sell its Peruvian mineral rights to Vancouver-based Solar Energy (OTCBB: SLRE) but this deal has not yet been closed, Guest said.

Peru Pullout

Given the company's experience in Peru, Manhattan will never invest in the country again, although Guest said it might consider investing in other South American countries in future, should the opportunity arise.

"The company spent US$60mn in Peru and has nothing to show for it," he said. "That does not preclude us from going back into back into South America, just Peru."

Manhattan Transfer

The company is now turning its attention to Turkey, a country that Guest described as far more mining-friendly.

At the company's recent extraordinary shareholder meeting, shareholders also agreed to change the company's name to Mediterranean Minerals Corporation.