Saturday, 27 September 2014

Arbitration stuff

Metro Baltic 19p return as expected ( more to come next year ) .

24. Subsequent event (cont’d)
The Company and its former auditors, Ernst & Young LLC (“EY”) have agreed terms for
the settlement of proceedings issued by EY against the Company on 4 July 2012 in the
High Court of Justice of the Isle of Man, and the Company's counterclaim against EY in
those proceedings. Under the terms of the settlement agreement, the Company and EY
have agreed to settle their respective claims, and the Company will receive £425,000 in full
and final settlement of all claims and counterclaims. In entering into this settlement
agreement, neither EY nor the Company have admitted liability or wrongdoing. No
amounts have been recognised in the 2013 financial statements regarding these settlements

Gold Reserve Arbitration Result is in why is it not $8 yet ?????

On Monday in other gold developments in Venezuela, the International Centre for Settlement of Investment Disputes (ICSID), an arbitration court of the World Bank for investment disputes, ruled that Venezuela needs to immediately repay $740 million to a US mining company called ‘Gold Reserve’. This repayment is because Venezuela  terminated Gold Reserve’s Las Brisas gold concession project in 2009 as part of the then President Hugo Chavez’s nationalisation of Venezuelan energy and mining projects.
This ICSID ruling could now set a precedent for other companies to seek compensation from the Venezuelan government during a time in which Venezuelan economy remains weak and heavily indebted. The ruling and earlier confiscation also highlights the stock specific risk inherent in precious metals mining stocks and the risks that these companies face when operating in politically unstable countries.
As the Venezuelan currency and bond market lurches into another possible crisis, it looks like the large international investment banks are waiting to provide increased financing or restructuring while the hedge funds look to profit on the sovereign debt.
The Chinese also supply financing to Venezuela on the understanding of getting continuous oil deliveries in return. Just last weekend the Joint Chinese – Venezuela Fund got an inflow of $2 billion from China to help with Venezuelan infrastructure and housing spending.
With China on one side and US banks on the other, it will be interesting to see who ends up financing the lions share of any needed Venezuelan sovereign financing packages.
Venezuela’s gold reserves may then come into play in some way or another.

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