Speculation is rife over the future of gold mining companies in Bolivar State ahead of today's visit by President Hugo Chavez

VHeadline Venezuela News reports: Speculation is rife ahead of President Hugo Chavez Frias arrival at the site of the La Camorra gold at El Dorado in Sifontes municipality this Thursday morning. He's scheduled to arrive at 10 o'clock local time to review the construction of new processing plant at La Camorra which was recently taken over from Idaho-USA-based Hecla Mining to become part of a 50/50 "socialist" mining joint venture between the Venezuelan government and the Russian Agapov Group's Rusoro Mining.

According to a report by Isidro Casanova published in this morning's editions of El Diario de Guayana, the President will make an announcement concerning the government's takeover of several gold companies that have previously been in the hands of Canadian, American and Chinese industrial-scale miners.

The takeover is said to be part of a wider picture to initialize a new National Mining Company as part of negotiations with those companies conducted by Basic Industries & Mining (Mibam) Minister, Rodolfo Sanz (who is also president and CEO of the Venezuelan Guayana Corporation-CVG heavy industry conglomerate) and the president of the CVG's gold mining subsidiary, CVG-Minerven, Luis Herrera.

According to El Diario de Guayana sources, the transfer of the affected gold companies to Venezuelan government control has seen no major problems ... in the case of Hecla, the US-based company closed down its operations in Venezuela and sold its assets to the Agapov Group under mutually acceptable agreements.

• President Chavez Frias visit is, however, expected to deal conclusively with continuing questions over the future of the Las Cristinas and Las Brisas del Cuyuni projects.

Sifontes Mayor Marlene Vargas has express the importance of both projects to southern Bolivar municipalities but that various difficulties raised by the Ministry of the Environment (which has not yet issued final permits for either mine to start operating), has left open possibilities to reformulate the Crystallex and Gold Reserve proposals. The Las Cristinas gold mine is 100% owned by the Venezuelan State through the Cenezuelan Guayana Corporation (CVG). Vargas says that Crystallex introduces a social element and the Canadian miner has a 20-year mine operating contract with a further two extensions of ten years each depending on the expected life of the mine. Gold Reserve, linked to the Las Brisas del Cuyuni project is still claiming a "concession" and insists that it owns the gold mine even though Venezuela insists that out-dated "concessions" do not imply ownership rights to the subsoil or gold in the ground. Nevertheless, any company that is brought under government control will be made subject to the government's central policy of socialist production.

Hecla de Venezuela had held a 20-year contracts at La Camorra, but in the 50/50 deal done with the Agapov Group, and with Russian capital, significant investments are being made in gold and kaolin (china clay) between Kilometer 88, El Callao and Guasipati as well as the Isidora mine. Chinese Jin Yan de Venezuela, although a smaller investment is now also part of the Mibam structure of socialist enterprise at the Sosa Mendez mine in El Callao via a contract with CVG-Minerven. The Chinese failed to build the required processing plant, so the transfer to the Venezuelan State was more convenient even though Chinese exploit the gold reserve for more than 10 years delivering ore to the CVG-Minerven plant for processing.

As regards Crystallex' Revemin-Tomi, Mibam reports that negotiations are not yet concluded but, in general, there is mutual agreement as to Crystallex' future in Venezuela where it has further interests in El Callao and Roscio municipalities. At the Tomi mine and other neighboring mines operated by the Crystallex subsidiary Minera Bonanza, Crystallex is processing ore from Bonanza, La Victoria and others mines.

VHeadline Venezuela News
vheadline@gmail.com

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