VHeadline Venezuela News reports: The Chinese investment group Jin Yan de Venezuela has decided to return the Mendez Sosa gold mine (at Caratal, near El Callao) to the Venezuelan Guayana Corporation's CVG-Minerven with immediate effect today, September 5, 2008, following a surprise decision that dropping production at the mine (from 2,250 troy ounces to just 643 per month) was not sufficient to carry a payroll of 325 employees. The mine was abandoned at a depth of 176 meters and is now extensively flooded.
Diario del Guayana reporter Isidro Casanova writes in today's edition of the local newspaper that until about three years ago there was "a kind of openness to investment in the gold industry" and some ventures had located their operations to areas ostensibly held by CVG-Minerven ... among them PMG, which is now included in a Russian joint venture with the Venezuelan government in the Rusoro Mining Company. Jin Yan says it has thrown in the towel and a special commission is performing an valuation of Chinese assets as a preliminary to the hand-back to the Venezuelan state-owned CVG gold-mining subsidiary.
The government commission now claims that the Chinese investment in the Mendez Sosa mine (first discovered in 1936) was minimal, since CVG-Minerven had built the El Peru gold processing plant and Jin Yan de Venezuela had simply delivered ore to it. CVG-Minerven is now left holding the baby and must assume the labor liabilities abandoned by Jin Yan. Committee member Rafael Angel Reyes says decisions are being taken by the CVG-Minerven president Luis Herrera and that the transfer process of assets etc., is "running smoothly."
"The Chinese are quitting ... they've left and taken everything with them ... I don;t know if the mine will continue to operate ... it had been producing 70 kilos of gold per month and now it has dropped to just 20!"
There are hints that Mendez Sosa will be combined with the La Camorra at El Dorado, which was earlier held by USA-Idaho-based Hecla and which is now part of the new National Mining Company ... La Camorra is being being reactivated under the Venezuela-Russia joint venture with the Agapov groups's Rusoro Mining.
VHeadline Venezuela News
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