At least one Canadian mining company could be affected by the outcome of a petition, filed in the Supreme Court of Venezuela, which challenges the authority of a state holding company to assign mineral rights in the country.
The petition, brought by local interests, alleges that the country’s mining law does not allow for the granting of exploration (and subsequent exploitation) contracts by the holding company, Corporacion Venezolana de Guayana (CVG). The petition alleges that concessions can be granted only by the Ministry of Energy and Mines, or directly by the central government. CVG has granted more than 400 work contracts to private interests in Venezuela, including a high-profile gold project being explored by Placer Dome (TSE). The major said the petition challenges the legality of a decree which forms the basis of its mineral tenure of its Las Cristinas gold property in the Kilometre 88 district. Although the petitioners claim no rights to Las Cristinas, they claim their rights to other properties are impaired by the decree.
Placer Dome holds a 70% interest in a Venezuelan company which was granted the right by CVG to explore for and mine surface and bedrock deposits of gold on Las Cristinas, plus four adjacent properties. CVG owns 30% of the same company.
The major has been assured by senior mines ministry officials that its rights to Las Cristinas will be confirmed in the event the decree is held to be defective. CVG also petitioned the country’s interim president to intervene in support of its position and to seek a speedy resolution.
Expected soon is a new mining code clarifying and streamlining procedures for acquiring concessions in Venezuela. Analysts speculate, however, that progress is likely to be slow until after the national election in December.
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