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Venezuela will get $5 billion in investments as part of a settlement deal with Canada’s Gold Reserve (TSE:GRZ), which ends a sever-year-long dispute over a gold asset in the country’s southeast.
The deal would see Venezuela and Gold Reserve, which locked horns in 2009 over the termination of the company’s Las Brisas gold concession, embark on a joint venture, local newspaper El Mundo reported (in Spanish).
Venezuela and Gold Reserve will jointly exploit the Las Brisas and Las Cristinas mines.
The small Canadian miner began work on the Las Brisas gold and copper project in 1992, but defunct President Hugo Chavez revoked the permit in 2009, after the firm had invested more than $300 million on it. Gold Reserve took the case to international arbiters then.
Authorities in Caracas hailed the settlement deal, which includes a welcome $2 billion loan to the country. In an effort to lift government revenues, President Nicolas Maduro last week hiked gasoline prices for the first time in almost two decades and devalued the nation’s currency to get more bolivars for its petrodollars.
“It’s the resolution of a conflict,” Maduro was quoted as saying. “Now we are partners.” He added that Venezuela will work with Gold Reserve to jointly operate the Las Brisas and Las Cristinas mines.
Several other international companies are still seeking compensation for projects expropriated and halted by the socialist administration in recent years.
5 Comments
Altaf
I fail to understand the settlement. What I understand the events in sequence is :
Venezuela revoked the mining permit. Gold reserve went to arbitration expecting Venezuela to pay for the loss.
Now who is paying who? Any one with logic expect Venezuela to pay the miner if the settlement is to end in fair play. If that is the case, why would the miner paying Venezuela 5 billion US?
Are we missing some point here?
I think the agreement is about both Venezuela and the miner mended ways and agreed to carry on and on miners part, they agreed to invest 5 billion here including 2 billion loan to govt which is missing in this article.
Patient Canadian
I am waiting to hear directly from Gold Reserve. I bought 200 shares years and years ago and since the Venezuela ppty seizure have been waiting patently for this pending settlement. On Feb 2nd I decided it was likely getting close to settlement and bought another 200 shares. They have increased over 60% in 21 days. Now this good news. Here’s hoping I at minimum get back the total of my original investment. I think I’ll hold and see what happens.
marpy
And just where is Gold Reserve going to get 2 billion from??
patentbs
For me to go there now I would need a large reserve outside the country and to be going in with OPM. There is no rule of law in the country.The company got a ruling and tried to get cash from money owed to Venezuela as oil payments. I am not sure if they got any BUT really; would you finance a deal with this devil?
I believe the government tossed in another mining concession as well, but still – not me.
Anthony Alberga
Cristallex owned Las Cristina’s, does Gold Reserve own the shares of Cristallex?