Placer Dome to suspend construction at Las Cristinas

Placer Dome (PDG-T) has announced that its operating company, Minera Las Cristinas (Minca), has decided to suspend mine construction at the Las Cristinas gold property in Venezuela until an ownership dispute is settled by that country’s Supreme Court.

The company’s rights to a portion of Las Cristinas have been challenged by Inversora Mael, a Venezuelan company held by Crystallex International (CRY-T).

The major intends to suspend construction until the Supreme Court ratifies its decision of July 15, which ruled that Mael’s challenge was inadmissible because a resolution that cancelled concessions previously held by Mael was not opposed within the set time limit. The same ruling stated that the time limit with respect to copper rights had not expired and, as a result, this aspect of the case was admitted to be heard.

Mael appealed the inadmission of the gold claim, and the outcome of that appeal is awaited. The decision will either uphold Placer Dome’s claims on Las Christinas or allow the dispute to be heard in the Supreme Court. Placer Dome states that it does not know when a ruling will be handed down.

“Minca has so far spent US$110 million on the project since exploration started in 1992, including the construction camp,” says John Willson, president of Placer Dome. “While we remain as confident in our legal position as ever, it is prudent for us to wait for clarity from the appeal decision before we continue the next stage of the project. We will go on to arrange financing for the balance of the project as soon as the final and satisfactory decision has been made.”

Placer Dome has a 70% interest in Las Cristinas, with the remainder held by partner Corporacion Venezolana De Guayana (CVG). Production is expected to average 450,000 oz. gold annually for more than 14 years at an average cash production cost of US$200 per oz.