Gold Reserve Inc. announced in early August that it has reached an agreement with the government of Venezuela regarding its Brisas gold-copper project, which was expropriated by the government in 2009. The agreement includes payment of an arbitral award granted in favor of the company by the International Centre for Settlement of Investment Disputes.
The arbitral award is valued at $769,681,823, including accrued interest up to February 24. Payment is to be made in two installments, $600 million on or before October 31 and the remainder on or before December 31. How the Venezuelan government would raise the money to make these payments was not immediately clear.
The agreement also calls for Venezuela to acquire Gold Reserves’ mining data for $240 million and for the government and the company to form a jointly owned company (55% Venezuela, 45% Gold Reserve) to develop the Brisas project. Gold Reserve, under a Technical Services Agreement, will provide engineering, procurement, and construction services to the joint venture.
The Brisas project has historic estimated resources of more than 11 million oz of gold and 1.6 million lb of copper. Venezuela and Gold Reserve will work together to raise the estimated $2.1 billion capital funding required to develop the project.
Subsequent to the announcement of the government/Gold Reserve agreement, a Reuters report indicated that Venezuela President Nicolas Maduro was working on deals worth as much as $4.5 billion with Canadian, South African, U.S., and Venezuelan companies to develop mining projects in the country.