From the Circular;

3. Background to the Offer

In late 2006, Century met with certain Algamarca shareholders to assess their willingness to sell their interests in the Shahuindo Property to Century. Century received a favorable response from Algamarca and commenced negotiations.

In March 2007, the President and Chief Executive Officer of Century, Margaret M. Kent, met, on two occasions in Toronto, with Sulliden’s President, John F. Kearney and certain directors of Sulliden, to discuss the possibility of a transaction that would put an end to the Shahuindo Litigation. At those meetings, Ms. Kent proposed that Century purchase the Shahuindo Property from the Algamarca shareholders which would then be followed by a plan of arrangement between Century and Sulliden (subject to the approval of the shareholders of each of Century and Sulliden), reasoning that the resulting combined company would own the Peruvian companies on both sides of the Shahuindo Litigation, thereby facilitating an automatic resolution to the Shahuindo Litigation and finally allowing for the exploitation of the Shahuindo Property. There was no follow-up after those meetings from Sulliden management, despite efforts on the part of Century to contact Sulliden and to provide Sulliden with a number of pieces of technical information that Sulliden had requested.

On April 19, 2007, David Pyper of Blair Franklin Capital Partners Inc., acting as a representative of Century, arranged a meeting in Calgary with Philip Hodge, an executive of Sulliden shareholder, J.F. Mackie & Company. At that Calgary meeting, a business combination between Sulliden and Century was again proposed as an expeditious way to resolve the Shahuindo Litigation. There was no follow-up from Sulliden’s management after the Calgary meeting.

On May 6, 2007, Century, through its subsidiary Century Finance, proceeded with the acquisition of the two Peruvian companies and three Panamanian companies that claim ownership of the 26 concessions, the mortgages and/or litigation rights (see Section 4 of the Circular, "Strategic Rationale for the Proposed Combination – Litigation") over the Shahuindo Property which has been collectively defined herein as the "Shahuindo Acquisition".

Between May 8 and May 10, 2007, Ms. Kent, together with advisors to Century, met in Toronto with James Coleman, a director of Sulliden, and various other representatives of and advisors to Sulliden, to further discuss the possibility of concluding a plan of arrangement between Century and Sulliden.

On May 12 and 13, 2007, meetings were held in Calgary at which Century proposed to Sulliden’s management and J.F. Mackie & Company a share exchange of 0.8 of a Century common share for each Sulliden share outstanding. This formal presentation included financial statements and a proposed structure for the business combination.

On June 4, 2007, William Sheridan, a partner at Lang Michener LLP., a board member of Century and legal advisor to Century, spoke to Michael Tamblyn, Sulliden’s legal counsel and a partner at Macleod Dixon LLP, and conveyed his view that a business combination would be in both Sulliden’s and Century’s best interests.

During the third quarter of 2007, Century continued its efforts to engage Sulliden in negotiations for a business combination of the two companies. Three phone calls to Scott Riddell at J.F. Mackie by Century’s advisors during the third quarter of 2007 were not returned. As set out below, financial advisors and legal counsel to Century met with certain shareholders and a board member of Sulliden in an attempt to formulate an agreement on the terms of a business combination between the two companies.

On September 6, 2007, Dianne Prupas, Chief Corporate Counsel of Century, met with Sylvain Perreault and Lilianne Trudel of Socrate Capital Inc. ("Socrate") in Québec City. Mr. Perreault and Ms. Trudel are shareholders of Socrate and Socrate is a large minority shareholder of Sulliden. Mr. Perreault is also a director of Sulliden and the President of Socrate. Century’s objective at this meeting was to encourage communication between Century and Sulliden in order to re-establish negotiations between the two companies.

On September 17, 2007, Ms. Prupas again met with Mr. Perreault and Ms. Trudel to discuss what Socrate considered to be the possible terms for a merger between Sulliden and Century. Socrate proposed terms that included an equity investment in the combined company of over US$50 million provided that Century abandon its contemplated US$20 million private placement (See Section 1 of the Circular, "Century – Recent Developments").

On September 19, 2007, Riley Keast of M Partners, financial advisors to Century, spoke with Guy Chartier, advisor to Socrate, to further develop the structure of a possible business combination between Sulliden and Century.

On September 24, 2007, Mr. Keast presented to Mr. Chartier a proposal contemplating two alternative structures: one with post-closing financing through a rights offering and the other with post-closing financing through a debt offering. In both structures, a share exchange of 0.8 of a Century Share for each Sulliden Share was proposed. In response to Mr. Keast’s proposal, Mr. Chartier requested a meeting with Mr. Keast in Montreal.

On September 26, 2007, Mr. Keast and Mr. Thomas Kofman of M Partners met with Mr. Perreault and Ms. Trudel of Socrate, and their advisor, Guy Chartier. At that meeting Socrate and its advisor expressed concerns about dilution from the financing that Century was contemplating. Socrate recommended that the financing be raised after the merger so as to limit dilution of the combined entity. Socrate then proposed a one for one share exchange with a full warrant to the Sulliden shareholders.

Negotiations between Mr. Keast and Mr. Chartier continued through to the end of September. Various proposals between Socrate and Century were exchanged with Century proposing a ½ warrant to Sulliden shareholders provided that Socrate backstop the warrant issue in order to secure Century’s remaining payments on the Shahuindo Transaction without the issuance of any further warrants or new equity. Socrate indicated that it was not capable of backstopping a warrant issue.

On October 1, 2007, Century sent a letter to the board of directors of Sulliden apprising them of its recent discussions with Socrate and requesting an immediate meeting with other members of the Sulliden board of directors in order to pursue the next stage of negotiations. At this time, talks with Socrate ended.

On October 3, 2007, Mr. Coleman, on behalf of Sulliden’s board of directors, responded by letter to Ms. Kent stating that he would be traveling for the following ten days but would be available to meet upon his return. Concerned about ongoing delays in discussions with Sulliden in light of Century’s repeated attempts to convene a meeting with Sulliden’s board of directors, which would have been the first meeting since the meetings in Calgary in early May, 2007, Century issued a press release on October 4, 2007 announcing Century’s intention to make the Offer.

4. Strategic Rationale for the Proposed Combination

Benefits of the Offer

The key benefit from a combination of Century and Sulliden will be the resolution of the complex and lengthy litigation over title to the Shahuindo Property. Combining Century and Sulliden would bring an end to that litigation which has been ongoing since 2003 and which could reasonably be expected to continue until 2015 (and will likely continue at least until the year 2011), according to Payet Rey Cauvi (see "Expert Opinion" attached as Exhibit 1 of the Circular). Payet Rey Cauvi is a Peru law firm ranked highly both by Martindale Hubbell and by Chambers and Partners, established global directories of lawyers and law firms. Resolution of the litigation surrounding the Shahuindo Property, Century believes, will unlock the value of the Shahuindo Property for Shareholders and permit the development of a gold mine at Shahuindo.

The combination will also unencumber corporate resources and stop the future financial depletion of the Sulliden treasury due to ongoing legal costs associated with the 18 separate legal proceedings currently ongoing in Peru. This financial commitment by Sulliden could result in significant dilution to Shareholders if further funds are raised from private placements at low share values.

Resolution of the Shahuindo Litigation will also provide Shareholders and investors with greater confidence in the immediate prospect of mining the Shahuindo Property and extracting value from its gold resources during this existing strong gold market. Century anticipates that resolution of the Shahuindo Litigation will also facilitate the financing necessary to complete the payments on Shahuindo Property by creating a secure environment for investors.

A combination of Century and Sulliden will also permit Century’s local operating expertise to be applied to Shahuindo, as well as Sulliden’s other exploration properties. The staff at Century is seasoned in the operation of mines in Canada and in Peru. Century’s current operations at the San Juan Mine and Rosario de Belen Mine are administered from a regional office in Lima, Peru that coordinates exploration programs, geologists, accountants, engineers and other professionals from the United States, Canada and Peru. Integrating the development of the Shahuindo Property into the regional operations of Century’s office in Lima would eliminate uncertainty normally associated with the start-up of operations. It would also ensure that the necessary technical, operating and administrative infrastructure is available to effectively and efficiently develop Shahuindo and the other mining assets of the combined entity.

Century operates the Rosario de Belen Mine located approximately 35 km from the Shahuindo Property and interphases with the same governmental and permitting authorities that will be associated with the development and exploration of the Shahuindo Property. Furthermore, this operating mine uses the same processes, mining methods and suppliers that are expected to be used at Shahuindo.

Upon completion of a Compulsory Acquisition or a Subsequent Acquisition Transaction, the combined company will have four mines operating when production commences on the Shahuindo Property, offering lenders the diversification that is typically needed to ensure that bank lines of credit and funding packages are obtained at the best available rates. With production from four operations and a future market capitalization of over $100 million, combining Century and Sulliden should be able to attract large U.S. and European institutions and gold funds as shareholders and future investors.

It is expected that, upon completion of a Compulsory Acquisition or a Subsequent Acquisition Transaction, the combined company will have gold production of over 275,000 ounces per year by mid-2010 and thereby attain mid-tier status which should allow for higher trading multiples.

Century intends to pursue development of the Shahuindo Property even if it only acquires a simple majority of the Sulliden Shares but less than the 66 2/3% required to ensure approval of a Subsequent Acquisition Transaction.

Litigation

General Background

On May 6, 2007, Century, through the acquisition of the Algamarca Group by its wholly-owned subsidiary, Century Finance, acquired the rights and interests of the Algamarca Group to the Shahuindo Assets. The Algamarca Group’s title to the Shahuindo Property has been in dispute and subject to extensive litigation since 2003.

A list of the 19 ongoing court proceedings relating to or affecting the rights in the Shahuindo Property is set out below (the "Litigation List"). According to the Expert Opinion of Payet Rey Cauvi, the Shahuindo Litigation will likely continue in Peru at least until the year 2011 and could reasonably continue until the year 2015 (see Expert Opinion attached hereto in Exhibit 1). Payet Rey Cauvi is a Peru law firm ranked highly both by Martindale Hubbell and by Chambers and Partners, established global directories of lawyers and law firms.

The following is intended as a general summary of the Shahuindo Litigation and is not intended to be a definitive statement thereof nor a description of the relative strength of the parties legal position. Reference should be made to the Litigation List and the associated court documents for details of these legal proceedings.

On July 25, 2002, Sulliden signed a letter of intent with Compañía Minera Algamarca S.A. and Compañía de Exploraciones Algamarca S.A. (collectively, "Algamarca") to buy the mining concessions and surface lands of the Shahuindo Property.

On July 31, 2002, the shareholders of Algamarca granted Miguel De Orbegoso the authority to represent Algamarca in a contract for the transfer of the Shahuindo Assets to Sulliden (the Canadian entity).

On November 6, 2002, Mr. Orbegoso, on behalf of Algamarca, signed an agreement with Sulliden Shahuindo S.A.C. ("Sulliden Peru"), a Peruvian company, for the transfer of the Shahuindo Assets. (the "2002 Transfer Agreement"). Algamarca disputed the validity of the 2002 Transfer Agreement on the basis, inter alia, that the powers Mr. Orbegoso had been granted by the shareholders of Algamarca on July 31, 2002 had been limited to representing Algamarca in a contract for the sale of the Shahuindo Assets to Sulliden (Canada) and did not confer upon him the right to contract with Sulliden Peru, a separate legal entity.

According to legal counsel to Algamarca, the laws of Peru which govern these transactions require that powers of attorney granted to a legal representative be clear and unambiguous in respect of both the validity of and the scope of such powers; and that in the event of any ambiguity, the onus is on the party seeking to uphold the validity of such powers to prove that they were properly conferred.

In March 2003, ATIMMSA (a company which Century purchased an option to acquire on May 6, 2007) obtained an injunction in the Courts of La Esperanza Trujillo seeking to direct the public registry in Trujillo to register the suspension of the 2002 Transfer Agreement and to suspend the process of registering the transfer of the mining claims and surface lands of the Shahuindo Property to Sulliden Peru.

In April 2003, ATIMMSA commenced a lawsuit in Trujillo seeking nullity of the 2002 Transfer Agreement between Algamarca and Sulliden Peru. The Trujillo injunction however was revoked upon appeal by the 5th Civil Chamber of the Superior Court of Lima which dismissed the ATIMMSA lawsuit. ATIMMSA has appealed that decision and the matter has been referred to the 3rd Trial Court of the Civil Court in Lima for adjudication (file #3403, previously file #1426), more than four years following the initiation of that proceeding.

Nevertheless, in October 2003, Compañía Minera Algamarca S.A. sought and obtained an injunction in the Superior Court of Civil Court of Cajamarca to prevent Sulliden Peru from entering onto the Shahuindo Property and from doing any work or act that interferes with Algamarca’s peaceful possession of the Shahuindo Property. This injunction and restraining order remains in force.

On the basis of this injunction against Sulliden Peru, on September 12, 2007, the Superior Court of the Civil Court of Cajamarca ordered that the Ministry of Energy and Mines in Lima revoke the temporary permit it improperly issued to Sulliden Peru on April 17, 2007. It was on the basis of this permit that Sulliden Peru has engaged in the recent exploration work on the Shahuindo Property. The Ministry of Energy and Mines has confirmed by report dated June 26, 2007 to the General Director of Mining Environmental Affairs of Peru that there are questions regarding the status of the permit to Sulliden Peru and it requested that the permit be subject to the review of the Counsel of Mining, an administrative body that supervises the activities of the Ministry of Energy and Mining.

Nullity of the Arbitration Award

In July 2003, Sulliden Peru sought to rely on the arbitral provision in the impugned 2002 Transfer Agreement to bring the dispute to arbitration. Algarmaca, which refused to affirm the 2002 Transfer Agreement on which the arbitral proceedings relied, initiated proceedings on November 5, 2004 in the Civil Court, of Lima seeking a nullity of the 2002 Transfer Agreement.

The arbitral proceedings continued however, and on July 19, 2006, approximately three years after Sulliden Peru initially sought to refer the dispute over title to the Shahuindo Property to arbitration, the arbitration was concluded and a decision was rendered by the panel of arbitrators. The July 2006 arbitral award upheld the validity of the 2002 Transfer Agreement and declared it to be binding on the parties (the "Arbitration Award").

On August 9, 2007, however, the Commercial Chamber of the Superior Court in Lima rendered its decision regarding the validity of the Arbitration Award, determining that Mr. Orbegoso’s power of attorney to represent Algamarca did not, under any circumstance, extend to binding the company in arbitration, and therefore ruled that the Arbitration Award was null and void. On or before August 30, 2007 Sulliden Peru appealed to the Supreme Court the decision of the Superior Court to nullify the Arbitration Award.

Consequences of the Nullity of the Arbitration Award.

Prior to the Superior Court ruling nullifying the Arbitration Award on August 9, 2007, Sulliden Peru had obtained, on July 25, 2006, an injunction against Algamarca from the 55th Trial Court of the Civil Court of Lima ordering compliance with the Arbitration Award. The July 2006 injunction mandated that Sulliden Peru be given possession of the Shahuindo Property and that the Shahuindo mining concessions and surface lands of the Shahuindo Property be registered in Sulliden Peru’s name. It was on the basis of that injunction that the Peru National Public Registry ("SUNARP") then registered six Shahuindo concessions in Sulliden Peru’s name. Subsequently, the remaining Shahuindo concessions were registered in Sulliden Peru’s name.

However, on August 9 2007 Superior Court of Lima rendered its decision to nullify the Arbitration Award, and the 55th Trial Court of the Civil Court of Lima, on September 12, 2007, lifted the injunction it had issued to Sulliden Peru against Algamarca. These decisions established the basis for reverting the SUNARP registration of the Shahuindo concessions back to Algamarca since SUNARP had registered the Shahuindo concessions to Sulliden Peru only to comply with the requirements of the July 25, 2006 injunction that had been issued as a result of the Arbitration Award.

Sulliden Peru appealed the decision of the 55th Trial Court of the Civil Court of Lima to lift the September 12, 2007 injunction against Algamarca. It is Century’s understanding that this appeal by Sulliden Peru does not suspend the effects of the Superior Court’s judgment. Similarly, on October 17, 2007, Algamarca appealed against the decision by the 55th Trial Court of the Civil Court of Lima to grant Sulliden the right to appeal.

As a result of the nullity of the Arbitration Award and the 55th Trial Court of the Civil Court of Lima’s decision to lift the injunction against Algamarca, and because of the continued effectiveness of the injunction against Sulliden Peru and a former officer of Sulliden (Canada), Algamarca is requesting SUNARP to correct the registrations and revert recorded title of the Shahuindo concessions back into in the name of Algamarca and Andean Mining Gold. Century believes that these corrections are pending.

Legal Proceeding for the Nullity of the Contract

On November 5, 2004, Algamarca commenced legal proceedings in the 64th Division of the Civil Court of Lima seeking a declaration that the 2002 Transfer Agreement has no legal force or effect because of a defect in the power of attorney of Miguel de Orbegoso to sign such agreement. This legal proceeding on the nullity of the 2002 Transfer Agreement that began almost three years ago is still at the evidentiary stage of the trial at the first instance. It has recently been assigned to the 10th Division of the Civil Court of Lima (exp. No. 75489-2004).

Canadian Proceedings

Sulliden commenced an action in the Ontario Superior Court of Justice on June 20, 2007 against Algamarca, Century, Century Finance and others seeking damages of US$200 million for breach of contract and other demands. The claim relates to the validity and enforceability of the 2002 Transfer Agreement; an agreement in Peru between Peruvian parties to purchase the Shahuindo property in Peru and work performed in Peru, all of which is and has been the subject of various Peruvian legal proceedings involving various of the parties named in the Canadian proceedings. The Canadian proceedings attempt to extend the original dispute with Sulliden Peru over title to the Shahuindo Property both to persons not party to the original litigation and to a jurisdiction, Ontario, which is foreign to the courts of Peru where the material events subject of the litigation occurred. Century and Century Finance and their director, Margaret M. Kent, are opposing this attempted extension to Ontario.

List of Current Legal Proceedings

1. Supreme Court File # 4656-07 (previously file #1757-06)

Compañía Minera Algamarca SA, Compañía de Exploraciones Algamarca SA v. Minera Sulliden Shahuindo S.A.C.

Issue: Nullity of Arbitral Award

Date commenced: November 5, 2004

2. Superior Court File #3403-06

Alta Tecnologia e Inversion Minera Y Metalurgica S.A. v. Compañía Minera Algamarca SA, Compañía de Exploraciones Algamarca SA and Minera Sulliden Shahuindo SAC

Issues: Nullity of shareholders’ resolution and question of jurisdiction of trial court

Date commenced: July 18 , 2003

3. Superior Court File #114-04 / #1217-03

Minera Sulliden Shahuindo SAC v SUNARP

Issue: Validity of act by public registrar

Date commenced: February 4, 2003

4.
Superior Court File #686-04

Minera Sulliden Shahuindo SAC v. SUNARP

Issue: Validity of act by public registrar

Date commenced: June 10, 2004

5. Superior Court File #688-04

Minera Sulliden Shahuindo SAC v. SUNARP

Issue: Validity of act by public registrar

Date commenced: June 10, 2004

6. Superior Court File #690-04

Minera Sulliden Shahuindo SAC v. SUNARP

Issue: Validity of act by public registrar

Date commenced: June 10, 2004

7. Superior Court File #692-04

Minera Sulliden Shahuindo SAC v. SUNARP

Issue: Validity of act by public registrar

Date commenced: June 10, 2004

.

8. Superior Court File #698-04

Minera Sulliden Shahuindo SAC v. SUNARP

Issue: Validity of act by public registrar

Date commenced: June 10, 2004

9. Superior Court File #162-06

Minera Sulliden Shahuindo SAC v. SUNARP

Issue: Validity of act by public registrar

Date commenced: February 14, 2006

10. Superior Court File #1217-03

Minera Sulliden Shahuindo SAC v. SUNARP

Issue: Validity of act by public registrar

Date commenced: August 6, 2003

11. Superior Court File #691-04

Minera Sulliden Shahuindo SAC v. SUNARP

Issue: Validity of act by public registrar

Date commenced: June 10, 2004

12. Superior Court File #697-04

Minera Sulliden Shahuindo SAC v. SUNARP

Issue: Validity of act by public registrar

Date commenced: June 10, 2004

13. Superior Court File #747-04

Minera Sulliden Shahuindo SAC v. SUNARP

Issue: Validity of act by public registrar

Date commenced: June 10, 2004

14. Superior Court File #74-04

Minera Sulliden Shahuindo SAC v. SUNARP

Issue: Validity of act by public registrar

Date commenced: January 14, 2004

15. Trial Court File # 28573-2006

Minera Sulliden Shahuindo SAC v. Compañía de Exploraciones Algamarca SA y Compañía Minera Algamarca SA

Issue: Injunction against Algamarca prohibiting its registration of the Shahuindo concessions

Date commenced: June 20, 2007

16. Trial Court File # 75489-2004

Compañía Minera Algamarca SA and Compañía de Exploraciones Algamarca SA v. Miguel de Orbegoso Tudela and Minera Sulliden Shahuindo S.A.C.

Issue: Nullity of Juridical Act

Dated commenced: November 10, 2004

17. Trial Court File # 9178-06

Minera Sulliden Shahuindo S.A.C. v. Andean Mining Gold INC., Inversiones Mineras Sudamericanas SA., Compañía Minera Algamarca SA., Compañía de Exploraciones Algamarca SA. y Minera Pilacones SA

Issue: Nullity of Juridical Act

Date commenced: December 29, 2006

18. Trial Court File # 0012-2004

Compañía Minera Algamarca S.A. v. Stephane Amireault and Minera Sulliden Shahuindo SAC

Issue: restraining order against Sulliden Peru

Date commenced: October 13, 2003

19. Ontario Superior Court of Justice

Sulliden v. Century, Century Peru et al.

Issue: Breach of Contract inter alia

Date: June 20, 2007

The Shahuindo Litigation has been ongoing since 2003 and proceedings that are currently before the courts could reasonably be expected to continue until 2015 and will likely continue at least until the year 2011 (see "Expert Opinion" attached as Exhibit 1 of the Circular), costing a substantial amount in legal fees with no certainty of success. There are also new claims that are regularly filed by the various parties to the litigation; any new claim could extend the timelines for resolution by many additional years.

Combining Century and Sulliden would bring a resolution to this lengthy and complex litigation and, Century believes, will unlock the value of the Shahuindo Property for Shareholders and permit the development of a gold mine on the Shahuindo Property.