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16

Russia & Venezuela Joint Gold Mining Venture

Venezuelan President Hugo Chavez revealed some information on Venrus, a joint venture of Rusoro Mining and the Venezuelan government

This joint company will develop Las Cristinas gold deposit, containing an estimated 35.2 million ounces of gold.

The mine covers five concessions, he said, naming four where Crystallex International of Toronto has been awaiting permits to begin mining and one concession belonging to Gold Reserve, which is also awaiting a mining permit.

The Moscow Times report Las Cristinas has been the subject of decades of changing corporate control. After Placer Dome was permitted to begin mining some of the concessions in 2001, it sold out to Vannessa Ventures. Chavez expropriated the site and awarded it to Crystallex. Gold Reserve has held its concession throughout the saga.

A fly-by of the site this week sponsored by Rusoro showed miners living in shacks and using high-pressure hoses to separate gold from the surface of the deposit, creating several square kilometers of swampy, deforested land amid a vast forest.

Rusoro is a Russian-funded company that is buying gold deposits in Venezuela and is in the midst of a hostile takeover bid for Gold Reserve. Venrus is a joint venture between Rusoro and Venezolana de Guayana, a state holding company.

Venrus currently operates the Isidora mine, which Rusoro bought from Hecla Mining last year.

Chavez wants gold mining and other commodity exports to compensate for falling oil prices, he said on Dec. 27. Oil made up 93 percent of Venezuela's export earnings in 2008.

Gold Reserve president Doug Belanger declined to make an immediate comment. Richard Marshall, a spokesman for Crystallex, did not immediately return a call for comment after business hours. Rusoro chief executive Andre Agapov did not immediately return a call to his mobile phone.

The concessions Chavez mentioned were Cristinas 4, 5, 6 and 7 and Brisas del Cuyuni.

Venezuela also plans to boost diamond mining, Chavez said. The country will rejoin the Kimberley Process, an international treaty meant to exclude from international trade those gems mined without permits in conflict areas.

"We are coordinated with international organizations to establish the technical assistance mechanisms so that Venezuela can reincorporate itself into the international certification process," Chavez said.

Venezuela left the Kimberley Process last year as nongovernmental organizations that lobby on diamond issues pressed other members to expel the South American nation.

Author: Ksenia Kochneva