Crystallex, Rusoro, deny news report of planned concession withdrawal

Business News Americas, quoting an unnamed official at Venezuela’s basic industries and mining ministry, or Mibam,  reported today that the country plans to withdraw the Las Cristinas mining concession from Crystallex International (KRY-T) and will take control of its operations with Russian-controlled Rusoro Mining (RML-V, RMLFF-O). 

The bilingual news service, headquartered in Santiago, Chile, also reported that the government planned to withdraw the Brisas concession from Gold Reserve (GRZ-V, GRZ-X), as well as concessions from Hecla Mining (HL-n).   

Business News Americas said the unnamed official described the decision as a move to “recover the country’s mining resources, primarily gold and diamonds, which is why it formed a JV between Rusoro and Mibam through [state mining company] Empresa Minera Nacional.”

Doug Belanger, chief executive of Gold Reserve, did not return telephone calls requesting comment. But senior management at both Crystallex and Rusoro said they had not been informed of any changes to the concessions.  

“We’ve read a number of things like this for years,” Richard Marshall, Crystallex’s head of investor relations, told The Northern Miner. “It’s an unnamed source and there appears to be a number of inaccuracies in the article. We’ve not been advised of any changes.”

Similar news hit the headlines in early November when Venezuela’s minister of mines, Rodolfo Sanz, reportedly said the country would mine the Las Cristinas project under state administration. 

Crystallex has tried to move Las Cristinas into production since it won the contract in 2002, but has yet to secure an environmental permit for the project.

George Salamis, president of Rusoro, said it was the first he had heard of the story published by Business News Americas and couldn’t confirm its validity. But he said rumors like this one are a frequently curculate in the country.  

“It’s not much different than comments we’ve heard from the government in the past to media down there,” he explained. “This seems to be a weekly event and it’s hard to really determine what is spin, and what is a real communiqué from the government, or what are just comments from one official to a journalist. It is very, very hard to say who is speaking from what level of government.”

Even if the news is true, Salamis said, it would not have an impact on Rusoro’s bid for Gold Reserve. On Dec.15, Rusoro launched an all-stock takeover bid for Gold Reserve. In response, Gold Reserve filed for an injunction to prevent the hostile takeover from moving forward.

The Russian-controlled, Vancouver-based company has offered to acquire all of the outstanding shares and equity units of Gold Reserve in exchange for three shares of Rusoro for each Gold Reserve share or equity unit.

The offer represents a 140% premium based on the Dec. 12 closing prices for Rusoro and Gold Reserve on the TSX Venture Exchange and the Toronto Stock Exchange, respectively, and a 209% premium over the 30-day volume-weighted average trading prices for Rusoro and Gold Reserve.