Gold Reserve Enters into Memorandum of Understanding with the Government of Venezuela to Settle Gold Reserve’s Arbitration Award and Jointly Develop the Brisas and Las Cristinas Projects |
Under the terms proposed by the MOU,
Following completion of the definitive agreements, it is anticipated that
The Brisas and Cristinas properties, together with the technical data with respect to the Brisas project owned by
The combined
------------------------------------ April 2016
Venezuela.
Late in February, I described how the Venezuelan government had created a new,military company for oil and mining ventures.
And late last week, the country’s central bank announced a major new initiative to revolutionize the country’s gold mining industry.
That involves a long-standing player in Venezuela’s gold sector: Spokane, Washington-based Gold Reserve Inc. A company that worked in the country from 1992 to 2009, proving up the 10 million-ounce Brisas gold project.
The Venezuelan government revoked Gold Reserve’s production permits for Brisas in 2008. Causing the company to file an arbitration claim — which was upheld by the World Bank in 2014, with an order for Venezuela to pay $740 million in damages to Gold Reserve.
But Venezuela’s central bank President Nelson Merentes told Bloomberg on Friday that there is a new approach to the project. With Merentes saying that a joint venture has been struck whereby Gold Reserve will retain 40 to 45 percent interest in the project, with the government taking a 55 to 60 percent stake.
The most intriguing part of the announcement however, was Merentes saying that Gold Reserve will partner with “the largest gold producer in the world and the largest copper producer” as part of mine development.
Merentes also said that the deal will bring $5 billion in investment funds into the country. With $2 billion going to project development, and $3 billion going to the state.
This sounds bizarre in the utmost — suggesting that incoming players are going to pay billions for the right to operate Brisas. Which would represent a heavy pricetag, even for a 10 million-ounce mine.
Equally interesting is the identity of the supposed backers here. With Merentes refusing to name names, but noting that the major partners will come from the U.S., Germany and Canada. (For the record, the world’s largest gold miner is Barrick Gold, while the world’s largest copper producer is Chile’s Codelco.)
All of which makes this an outrageous-sounding — but intriguing — story. Watch to see what details actually materialize here.
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Monday 29 February 2016
Gold Reserve & Venezuela settle up
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