Sulliden shifts into high gear at Shahuindo

After five long years, dozens of trips to the courthouse and a $13.5 million-settlement, Sulliden Exploration (SUE-T) can finally move ahead with its Shahuindo gold-silver project in Peru.

Sulliden has just raised $7.4 million, and the new president and CEO, Peter Tagliamonte, is going full speed ahead to get out a preliminary economic assessment, expand the resource and move on to a feasibility study for a project that’s been essentially stopped in time.

“This was a rising star six years ago at a lower gold price and it got bogged down in litigation,” Tagliamonte says. “I think once investors and the mining community see things are happening at Sulliden (they’ll see that) it’s a very exciting story.”

Tagliamonte, who is a part of the new operation-focused management team with no personal ties to the court battle, says the Shahunido project was worth fighting for.

It’s a near surface deposit with an indicated resource of 38 million tonnes grading 0.95 gram gold per tonne and 23 grams silver per tonne totaling 1.2 million oz. gold and 28 million oz. silver.

Shahuindo also has an inferred resource of 17.2 million tonnes grading 0.62 gram gold and 12.83 grams silver per tonne for 342,000 oz. gold and 7.1 million oz. silver.

It took Sulliden more than 40 separate cases, petitions, motions, appeals and administrative challenges to settle the legal battle, which was over a property transfer. The company also fought off a hostile takeover bid from Century Mining (CMM-V), which got involved with Algamarca, the Peruvian company that claimed it had titled to the Shahuindo project. To settle things once and for all, Sulliden agreed to pay Algamarca $13.5 million, plus 10% interest in Sulliden and a 1.5% net smelter returns royalty should the project ever reach projection.

“I think both parties at the end of the day felt it would be in the best interest to develop the project rather than stand on the sidelines,” Tagliamonte says.

And that has worked to Sulliden’s advantage. When Tagliamonte went down to Peru in May to find an engineering company to do some bulk testing he found a firm that already knew about the Shahuindo project.

“We went to see them about doing some work for us and the president said, ‘Well, I know your project very well,’ and he brought out a couple of big binders,” Tagliamonte explains. “This was work they had done for Algamarca.”

In the midst of the legal face-off, both company’s were secretly moving ahead with the project to some degree, Tagliamonte says. But with the settlement agreement, it’s in Algamarca’s interest for the project to succeed, so Sulliden received about $1 million worth of metallurgical test results at no cost.

Tagliamonte says the $7.4 million financing will be enough for it to do some exploration work and complete the preliminary economic assessment by the fall. Exploration work will include about 3,000 metres of drilling – a combination of reverse-circulation and diamond drilling, plus some trenching and geophysics. Then Sulliden will be raising money for a full feasibility study and a more aggressive exploration program

Sulliden has about 80 mostly Peruvian field and office staff who are working on Shahuindo, the company’s sole project. Shahuindo is located in northern Peru about 80 km south of Cajamarca, the capital of the region, and about 15 km west of Cajabamba city. At about 2,800 metres elevation, the project is a much more pleasant working environment compared to that of Barrick Gold‘s (ABX-T, ABX-N) Lagunas Norte mine or Newmont Mining‘s (NMC-T, NEM-N) Yanacocha mine, which are at 4,200 metres, and 20 and 35 km away, respectively.