Bloomberg News

Gold Reserve to Seek Billions If Brisas Payment Fails

January 14, 2009

Gold Reserve Inc., owner of Venezuela’s Brisas del Cuyuni gold mining concession, said today in a statement the company may sue the country for billions of dollars in potential lost profits if the government fails to pay a “mutually agreeable purchase price” for the property.

The company, based in Spokane, Washington, is defending itself against a hostile takeover bid from Rusoro Mining Ltd. (RML) and Venezuelan President Hugo Chavez said last night that his country plans to mine Brisas in a joint venture with Rusoro.

Gold Reserve said the company has not received any communication from the Venezuelan government about the Brisas mine. The company has invested $230 million in “proprietary work” at Brisas for which compensation is expected, according to the statement.

Litigation could be avoided if the Venezuelan government or a joint partner purchases Gold Reserve’s assets and work, the statement said.

Gold Reserve shares traded in Toronto rose 14 Canadian cents, or 12 percent, to C$1.29 today.

To contact the reporter on this story: Steven Bodzin in Caracas at sbodzin@bloomberg.net; Jose Orozco in Caracas at jorozco8@bloomberg.net.

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net


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