Canadian embassy's "hands tied" in Vannessa-CVG dispute - Venezuela
Monday, July 15, 2002 12:34 (GMT-0300)
The Canadian embassy in Caracas "has its hands tied" with regard to the legal battle between Vancouver-based Vannessa Ventures (TSX: VVV) and Venezuela's state-owned heavy industries corporation CVG, an embassy spokesperson told BNamericas.
The war is being waged in Venezuelan courts, after CVG cancelled its contract with Vannessa de Venezuela for the Las Cristinas gold deposit in May and decided to invite other mining companies to participate in a tender to operate the project.
The deposit has more than 11Moz of gold and there are companies willing to invest some US$400mn-500mn to develop the resources, according to CVG
The official said the Canadian embassy is giving assistance to all Canadian interests in Venezuela, including to Vancouver-based Crystallex (Amex: KRY) which claims part of the Las Cristinas concessions, and to Gold Reserve (OTCBB: GLDR), which has rights to the neighboring Las Brisas deposit.
"There are many parties with an interest in the concessions [announced by CVG], and the embassy cannot favor one over the other, as that would cause a conflict of interests," said the embassy official.
While the embassy has tried to remain uninvolved, it did help Vannessa present a request for international arbitration, via the ministry of foreign relations, which is the entity responsible under the two countries' Foreign Investment Protection Accord (FIPA).
According to the embassy official, the Las Cristinas debacle sends an unfavorable message to the international business community about Venezuela.
"It is a very delicate situation, very thorny, and for the reasons explained before, we're not as active as we would like to be," he pointed out.
The dispute erupted last year after CVG refused to recognize the sale of Placer Dome's interest in Las Cristinas to Vannessa. The Venezuelan government believes the deposit requires more investment than the US$50mn proposed by Vannessa.
Placer Dome had been planning a US$570mn project at Las Cristinas, in eastern Venezuela's Bolivar state, but wrote off its investment of US$116mn before selling its 95% share in the venture to Vannessa last July for US$50. CVG has the other 5% plus an option to raise its stake to 30%.
By Harvey Beltran
BNamericas.com |
