Tuesday May 11, 6:34 pm Eastern Time
INTERVIEW-Placer sees 13 pct output from Venezuela
By Omar Lugo
CARACAS, May 11 (Reuters) - Legal battles and financing concerns overcome, Canada's Placer
Dome Inc. (PDG.TO - news) expects the Las Cristinas property in Venezuela to go on to produce
about 13 percent of its global gold output, a top company executive said.
Placer, which has a 70 percent stake in the Minera Las Cristinas (MINCA) joint venture with the Venezuelan government,
resumed construction at the property last month to build one of Latin America's largest gold mines.
Proven reserves have been measured at 11.8 million ounces. ''There are indications of another two or three million ounces
but more information is needed before they can be added to the reserves,'' MINCA President Carl Gagnier said in an
interview.
Construction at the site in the southeastern Bolivar state is expected to cost $575 million, take two years and create a mine
with an annual output of about 450,000 ounces of gold at a cost of about $170 per ounce for 20 years.
''Venezuela is going to represent about 13 percent of our global production,'' said Gagnier, who added that the mine would
become Venezuela's largest single producer.
At a ceremony last month attended by Venezuelan President Hugo Chavez, MINCA finally resumed construction, which it had
halted more than a year ago over a rival rights claim by Canada's Crystallex International Corp. (KRY.TO - news).
The Venezuelan Supreme Court threw out Crystallex's suit last June and Placer finally agreed to assume all of the project's
financing costs earlier this year.
The Venezuelan government, through state holding company Corporacion Venezolana de Guayana (CVG), is building a
power transmission line from nearby hydroelectric generating facilities to partially fund its 30 percent stake in the venture.
''There's a commitment from the government which we have not seen before in this type of development,'' Gagnier said.
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