Ownership dispute continues at Oro Uno gold concession

The interim results of an ongoing due diligence investigation into the ownership of the Oro Uno concession in Venezuela’s Kilometre 88 gold district show the complexities of acquiring concessions there.

Venezuelan Goldfields (VSE) reports that court action was launched to annul a claim to ownership of Oro Uno by Minex, a Venezuelan company which was to be indirectly acquired by International Kengate Ventures (VSE). Venezuelan Goldfields

(Vengold) previously paid US$300,000 to Minex for an exclusive option to negotiate a joint venture for the exploration and exploitation of both alluvial and hardrock rights to the Oro Uno concession. But these negotiations were later suspended by Minex, which subsequently entered into an agreement with Kengate.

Vengold said its legal due diligence revealed that Minex did not own the hardrock/vein rights to Oro Uno, and the acquisition of the alluvial rights was jeopardized by Minex’s alleged failure to make certain payments to the original owner.

The original owner filed suit, and was awarded a court injunction prohibiting any sale or disposition by Minex of rights to (and fixed assets on) the Oro Uno concession.

Vengold’s legal counsel thinks that this failure by Minex to meet its financial obligations could result in various legal claims, including an action for annulment of Minex’s contract with the original owner. Ivanhoe Capital, owned by Vengold’s largest shareholder Robert Friedland, recently purchased all rights owned by the original property owner as well as the rights to their litigation against Minex.

Ivanhoe agreed that Vengold will in turn have a priority right to acquire all Ivanhoe’s rights in the litigation and the residual interests of the original property owner relating to the Oro Uno concession. A definitive agreement is expected shortly.