Venezuela, Canadian gold miner settle dispute in $5 billion deal

Las Brisas gold and copper project holds about 10 million ounces of the precious metal. (Image from archives)

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.

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