Manhattan dealt Tambo Grande blow (December 11, 2003)

Vancouver The long road to developing the large Tambo Grande massive sulphide property may have been dealt a final blow with government-run Centromin Peru terminating Manhattan Minerals‘ (MAN-T) option agreement over the Peruvian ground.

The move came after the junior presented documentation aimed at demonstrating that the requirements of the option to earn a 75% interest in the ground had been met. Manhattan also delivered to Centromin the final draft feasibility study and the final draft finance plan for potential development of the project.

After reviewing the documentation, Centromin Peru concluded that Manhattan has failed to meet the requirements of the option agreement, and that the option agreement is terminated.

"We are very surprised by this decision," says company president, Lawrence Glaser. "Manhattan presented a carefully prepared and thorough submission that would ensure, subject to community approval, the responsible development of the Tambo Grande Project."

A feasibility study over the project envisions yearly production of 190 million lbs. copper and 90 million lbs. zinc. Mining is set to begin with the TG-1 oxide gold-silver deposit and end with the underlying sulphide reserve. The first phase is now expected to cost US$180 million to complete, and the second, US$145 million. Stripping ratios are pegged at 2.6:1 for the first phase and 1.1:1 for the second. On average, 7,500 tonnes of material will be sent to the mill daily in the first two years — 10,000 tonnes in the third year and 20,000 tonnes in the fourth, when the grinding line from the gold-silver circuit is converted.

Annual production from the oxide deposit, which will be depleted in 3.5 years, is forecast at 260,000 oz. gold and 3.2 million oz. silver. The base metal operation lasts nine years.

Probable reserves in the oxide portion of the TG-1 deposit total 8.2 million tonnes grading 3.34 grams gold and 58.7 grams silver per tonne. The sulphide portion has probable reserves of 57.8 million tonnes running 1.5% copper and 0.9% zinc, plus 0.5 gram gold and 25 grams silver per tonne.

The option agreement with Centromin Peru comprises 10 mineral concessions covering 100 sq. km.

The project has been plagued over the past few years by local opposition to development and Manhattan has now turned to its Peruvian legal counsel to find a solution to the matter.

While awaiting legal recourse, Manhattan plans to focus its activities on the planned exploration programs on its land to the south of the town of Tambo Grande, where the company has already discovered the B-5 prospect.