Citic to develop the massive and frequently disputed, Las Cristinas gold mine. #GOLD NEWS
Next Chinese gold target - Venezuela's huge Las Cristinas project
China has entered into a number of resource related deals with the Venezuelan government, key among which is for Citic to develop the massive and frequently disputed, Las Cristinas gold mine.
Posted: Monday , 24 Sep 2012
LONDON (Mineweb) - Author: Lawrence Williams
Initially Chinese investment in foreign mining operations was largely focused on industrial metals - securing supplies to feed its huge industrial machine - but of late the emphasis on buying into mining outside the Middle Kingdom seems to have switched to gold. Seemingly in quick succession we have seen Chinese companies moving into Norton Gold Fields, African Barrick and Focus Minerals, but now one of the biggest prizes of all looks to have also fallen into Chinese hands - the huge Las Cristinas gold deposit in Venezuela.Las Cristinas, which is considered to be one of the world's great undeveloped gold deposits, is to be developed by China International Trust and Investment Corp. (Citic) as one of a series of deals signed between Chinese and Venezuelan officials on Friday.
According to an Associated Press report, Venezuela's President Chavez announced the deal, although no financial details were given. It was reported to specify engineering, construction and processing of the gold and associated copper in the deposit which is conservatively estimated to contain reserves of some 17 million ounces of gold (a reserve calculated at around $550 an ounce in 2008). Chavez, not one short on hyperbole, called it "one of the biggest resources of gold that exists - not only in Venezuela, not only in Latin America, but in the world."
Las Cristinas has had a chequered history though and some consider the deposit cursed in that virtually every claim on it since its discovery has fallen through due to legal challenges, financial manoeuvrings and protracted disputes with Venezuelan government agencies and the country's President. It was originally supposed to have been given to the pilots who discovered the Angel Falls. After passing through a number of hands, including then mining major, Placer Dome (later taken over by Barrick Gold) ownership eventually ended up with Canadian junior Crystallex International which started to develop it, but was continually thwarted in its aims by the Chavez government which would not grant the necessary final permits for the mine's construction, and eventually effectively expropriated it. (More details on the series of ownership changes and the problems faced by those who may have seemed to have gained title to the project were published here last November - see
The curse of Las Cristinas. Gold miner Crystallex faces TSX delisting).
Crystallex has since sought international arbitration before the Additional Facility of the World Bank's International Centre for Settlement of Investment Disputes against the Venezuela Government. It is seeking the restitution of its investments and the Mine Operating Contract and compensation for interim losses suffered, or, alternatively full compensation for the value of its investment in an amount in excess ofUS$3.8 billion.
The Venezuelan agreement with Citic certainly suggests that the restitution of the Mine Operating Contract is already a lost cause and even if the arbitrators find in Crystallex's favour, whether a Chavez government would be prepared to recognise the court's jurisdiction and/or honour anything but a trivial compensation award could be seen as doubtful.
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Next Chinese gold target - Venezuela`s huge Las Cristinas project - GOLD NEWS - Mineweb.com Mineweb
