Manhattan takes Peruvian mine dispute to arbitration

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

Manhattan says it has notified government-run Centromin Peru of its decision to seek arbitration regarding Centromin’s decision late last year to terminate its option.

Centromin axed the deal after it concluded that Manhattan had failed to prove it had capital of US$100 million or the capacity to process 10,000 tonnes of ore per day. Centromin also said that 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; that pair will then select a third arbitrator. 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 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 to review all the issues, and may extend that by another 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 running 1.5% copper and 0.9% zinc, plus 0.5 gram gold and 25 grams silver.

During the arbitration process, Manhattan says it will focus its efforts on resuming drilling on the 32-sq.-km Papayo concessions to the south where it is earning a 51% interest from Compania de Minas Buenaventura. Manhattan recently extended until July 15, 2004, its option agreement at Papayo.

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.