Manhattan takes Peruvian dispute to arbitration

Manhattan Minerals (MAN-T) is in the midst of selecting an arbitrator in a bid to regain its option to earn a 75% stake in the embattled Tambo Grande massive sulphide property in Peru.

The company has notified government-run Centromin Peru of its decision to seek arbitration regarding Centromin’s decision late last year to terminate Manhattan’s option. Centromin axed the option after it concluded Manhattan had failed to prove it had capital of US$100 million or the capacity to process 10,000 tonnes of ore per day, as required under the agreement. Centromin also said Manhattan failed to line up a partner that met the requirements, which was allowed under the deal.

Under the arbitration process, Manhattan and Centromin will each nominate an arbitrator; they will then select a third member for the panel. Manhattan figures the whole process, which is provided for under the original option agreement, could take up to six months.

“This is not an international arbitration; it’s a contractual arbitration,” says Manhattan Minerals CEO Lawrence Glaser. “The arbitration is done under the auspices of the professional legal society in Peru, not under government auspices.”

The arbitrators have 60 days in which to review all the issues and may extend that period by an additional 60 days if there’s a compelling reason to do so. There is no appeal under the process.

At last count, probable reserves in the oxide portion of the TG-1 deposit at Tambo Grande totalled 8.2 million tonnes grading 3.34 grams gold and 58.7 grams silver per tonne. The sulphide portion contains reserves totalling 57.8 million tonnes grading 1.5% copper and 0.9% zinc, plus 0.5 gram gold and 25 grams silver.

Manhattan Minerals intends, during the arbitration process, to resume drilling on the 32-sq.-km Papayo concessions, to the south, where it is earning a 51% interest from Compania de Minas Buenaventura (BVN-N). Manhattan recently extended its option agreement at Papayo to July 15.

The Papayo concessions are home to the B-5 prospect, where an initial round of drilling returned 86 metres grading 2.7% copper in hole B5-014 and 52.8 metres of 4.6% copper in hole B5-008. Negotiations with local communities to resume exploration are under way.