Vannessa voices Las Cristinas rights

Vancouver — Legal issues are once again brewing over the Las Cristinas property in Venezuela. With 30%-owner Corporacion Venezolana de Guyana (CVG) tabling new plans for the development of the gold deposit, Vannessa Ventures (VVV-V) claims that it owns 95% of the only company legally empowered to advance the project.

According to Vannessa, the 20-year mining lease for alluvial and hard-rock gold over Las Cristinas is granted to Minera Las Cristinas C.A. (MINCA), which Vanessa has a 95% stake in through its July purchase of Placer Dome’s (PDG-T) Venezuelan holding company. The junior controls both the management, as well as the board of directors of MINCA and is convinced that the contract between the CVG and MINCA is in good standing.

Vannessa further claims that CVG’s approval was not required for the sale. Citing recent comments from the Vice Minister of the Venezuelan Ministry of Energy and Mines: “We have to preserve the legal system so that other companies interested in investing in the country are guaranteed the observance of law and private property. We cannot terminate concessions that are currently valid nor rescind contracts granted by the CVG,” Vanessa remains optimistic that its legal rights will prevail.

Under the deal, Placer retains a 2% net smelter return on Vannessa’s portion of copper revenues from the project and a net smelter return on Vannessa’s share of the gold revenues. This starts at 1% if the gold price is below US$276 per oz., moves up to 3% if the gold price is between US$276 and US$350, and runs to 5% if gold goes over US$350. Placer also has a retained back-in right, which kicks in if a bankable feasibility study shows a 250,000-oz.-per-year gold mine is profitable. The right can be exercised for Vannessa’s capital costs and “pre-production soft costs,” plus 10%. Vannessa would then be entitled to 2% of Placer Dome’s net smelter return on gold and copper production — provided it has spent a minimum of US$2 million in capital costs on the project and maintained the mining rights for more than a year.

Vannessa is looking at the possibility of a 100,000-oz.-per-year mine, a much smaller operation than had been planned by Placer. The junior estimates that a project on that scale, which would only exploit near-surface mineralization, would cost between US$35 million and US$50 million to go into production.

CVG subsequently rejected Placer’s sale to Vannessa and is now setting its sights on a macro-mining project that combines Las Cristinas with Gold Reserves‘ (GLR.A-T) Brias deposit.

“With this initiative Venezuela would have the second largest mine in Latin America and sixth in the world,” says CVG’s president Rangel Gomez. “We are not going to rest until we accomplish this.”

With proven and probable reserves of 235 million tonnes grading 0.14% copper and 0.79 gram gold per tonne, Brisas lies adjacent to Las Cristinas and in fact, is part of the same ore body.

“The combined project is the most rational and economic way to exploit this orebody with the least environmental impact,” says Gold Reserve’s president, Rockne Timm. “We are committed with CVG to the successful development of this world class mine.”