Thought you all might like to see the latest from Reuter:
CARACAS, April 21 (Reuter) - Canadian mining company
Crystallex International Corp is optimistic that it
will ultimately win its legal quest for the hugely rich Las
Cristinas gold concession in Venezuela.
"We're going to continue to work to clear up the title ...
I believe we have a very strong case," Crystallex lawyer
Ricardo Cottin, of Cottin, Tejera-Paris and Assoc., told
Reuters.
In an escalating fight over mining giant's Placer Dome
Inc's hold on the area, both companies are locked in a
legal quagmire -- with no end yet in sight.
Venezuela's moth-eaten mining rules pit Crystallex, whose
claim is undermined by a muddled series of decrees, against the
Republic of Venezuela.
State company Corporacion Venezolana de Guayana (CVG) says
it has a concession to the land, granted in 1991 by the
Ministry of Energy and Mines. The CVG has in turn signed a
contract with Placer to develop the site's proven gold
reserves, valued at over $1.5 billion.
Placer has a seventy percent stake in the project, the CVG
the rest.
Crystallex of Vancouver first made moves to claim the site
years ago, the company says.
Crystallex says it has made a series of compromise
suggestions, but been rebuffed by Placer which, backed-up with
public government statements, has rejected such suggestions.
"A bad agreement is better than a good fight," said Cottin.
"And it is much better to sit around a negotiating table ... If
that's not possible, we'll seek to develop our claim."
Venezuela's notoriously opaque legal system has enmeshed
both sides in a murky battle over blocks 4 and 6, which contain
80 percent of Las Cristinas's gold.
The dispute centers around Crystallex's claim that it
gained concessions to the blocks by acquiring a company,
Inversora Mael CA.
But Venezuelan mining law has been muddied by a number of
decrees, issued in the early 1990s, that were designed to
jump-start the stalled industry. The decrees have left it
unclear whether Mael lost its rights to the concession.
Cottin said binding Venezuelan Supreme Court rulings in
1991 and 1996 have found against Ministry of Energy and Mines
decisions, confirming the legality of the transfer of the
property rights up through the years to Crystallex.
Although the concessions expired in 1989, they were
automatically renewable, Cottin contends.
"These are comparable to stake claims in the U.S. ... they
stem from the wild days of gold prospecting, and although you
can't get them anymore, they are still valid," he said.
Cottin said Crystallex will seek to prove the legality of
the concessions' renewal in 1989.
Crystallex lawyers said Placer has not been able to raise
financing for its $576 million project at Las Cristinas as
title is still unclear. Placer's slated May start looks likely
to be delayed, said Cottin.
The CVG, which granted the mining contract to Placer, is
liable for any eventual damages, Cottin said, but "obtaining
those damages is a lengthy process; first you have to sue the
Republic." Crystallex holds a neighboring property to the
blocks, and "an amicable solution is still possible," he said.
One mining source said Crytallex's legal claim is
compelling.
"That is the industry consensus," said the source, who
asked not to be identified. "It's extraordinary, but the losers
look to be Placer Dome stock, the company's former head of
operations here and the Venezuelan Executive, which comes out
looking ham-handed."
He added that Placer's first mistake was to rely on the
government's legal advice. But: "you still can't tell what
will happen," he added.
RUMOR::: Merrill Lynch will have comments on KRY tomorrow.
FWIW,
Steve |
