Venezuelan gov’t greenlights Gold Reserves Brisas

The Venezuelan Ministry of Environment has approved the Environmental and Social Impact Assessment (ESIA) for the exploitation and processing of gold and copper mineralization at Gold Reserves (GRZ-T, GRZ-X) Brisas project in the famed Kilometre 88 district of Venezuelas Bolivar State.

This approval is a major milestone and will result in immediate actions to commence our construction activities,” said Gold Reserve president Doug Belanger.

Situated beside the higher-profile, larger and long-delayed Las Cristinas gold project of Crystallex International (KRY-T, KRY-X), Brisas hosts National Instrument 43-101-compliant reserves of485 million tonnes grading 0.67 gram per tonne gold and 0.13% copper, or containing 10.4 million oz. gold and 1.3 billion lbs. copper.

This estimate uses a revenue cutoff grade of US$3.04 per tonne, a US$400-per-oz. gold price of US$400 and a US$1.15 per lb. copper price.

While Gold Reserve must still finance the mega-project (the company has US$23 million in cash and equivalents and no debt), plans are to carry out conventional open-pit mining, processing 70,000 tonnes of ore per day, yielding an average annual production of 456,000 oz. gold and 60 million lbs. over 18.5 years.

Gold Reserves shares responded to the good news accordingly, shooting up $2.53, or 49%, to $7.66 on 1.4 million shares traded on the Toronto Stock Exchange. On the Amex, shares closed up $2.16 to US$6.59.

Shares in Crystallex rallied in sympathy, closing rising 29% to $4.50 in Toronto and US$3.93 on the AMEX.

Commenting in a release, Gordon Thompson, Crystallexs new president and CEO said that the awarding of the Brisas environmental permit is a clear signal that Venezuela is fulfilling its promise to advance mining projects.