Venezuela faces fresh $3.8 billion claim over nationalized gold mine

The late Hugo Chavez wanted to end the dictatorship of the dollar

The International Center for Settlement of Investment Disputes has advised Crystallex International Corp. that proceedings in its $3.8 billion case against Venezuela for nationalizing gold-mining assets has begun. The Toronto-listed company’s main asset is its interest in the Las Cristinas gold project located in Bolivar State, Venezuela.

Crystallex also holds interests in the Tomi and La Victoria mines in Venezuela and on Friday closed down 70% from its 52-week high. The stock was delisted in from the New York Stock Exchange earlier this year. Toronto-listed Rusoro (CVE:RML) is the only large producing gold miner operating in Venezuela and the country does not feature in the top 20 global gold producing states.

IB Times reports the Toronto Stock Exchange informed Crystallex it was beginning a review of the company that could result in delisting from the bourse if it determines that the company has discontinued a substantial portion of its business. Crystallex International Corp. is worth C$45.68 million on the Toronto stock exchange and on Friday closed down 4% or half a cent at 12c. The counter boasts a year high of 39c.

While gold mining is not a big industry in Venezuela by any stretch it does hold substantial gold reserves. MINING.com reported in August that the country faces a logistical and security nightmare bringing home the 211 tonnes of gold reserves, worth $12.3 billion, held overseas. Bullion traders are preparing for one of the largest transfers of physical gold in recent history – about 17,000 standard 400-ounce bars – from Europe back to the South American state. While billions of dollars worth of gold is traded every day, only a tiny proportion of it moves from vaults in London, New York and Zurich.

The International Centre for Settlement of Investment Disputes (ICSID) Convention is a multilateral treaty formulated by the Executive Directors of the International Bank for Reconstruction and Development (the World Bank). It was opened for signature on March 18, 1965 and entered into force on October 14, 1966.

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