Canada’s Rusoro Mining reaches $1.3B deal with Venezuela
Canadian junior Rusoro Mining (TSX-V: RML), which in March scored a major victory in its international arbitration complaint against Venezuela, has accepted the almost $1.3 billion offered by the country’s government as settlement for the seizure of the company’s gold projects.
The deal gives Venezuela Rusoro’s mining data and forces it to fully release the arbitral award issued in favour of the miner in August 2016.
Settlement creates partnership that could lead to restarting production at Rusoro’s former mines in the South American country.
It also creates a partnership between the parties that will assess the current status of Rusoro’s former gold projects and consider options of restarting production at two mines. A decision of the future of those assets will be made by the end of January, the company said.
The dispute between Rusoro and the South American nation goes back to 2011, when former president Hugo Chávez nationalized the gold industry and seized the company’s 95%-owned Choco 10 mine as well as its 50%-owned Isidora mine.
The Vancouver-based company attempted a series of negotiations with Chávez’s left-wing government but after they all failed, its legal team took the matter to the International Center for the Settlement of Investment Disputes Expropriation (ICSID).
That Tribunal upheld Rusoro’s claims that Venezuela had breached its obligations under the Canada-Venezuela Bilateral Investment Treaty. It also order the country’s government, in addition to pay compensation for damages, to contribute $3.3 million towards Rusoro’s costs in the arbitration.