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 firstname.lastname@example.org; Jose Orozco in Caracas at email@example.com.
To contact the editor responsible for this story: Dale Crofts at firstname.lastname@example.org