Vannessa seeks relief through World Bank

Vancouver — Vannessa Ventures (VVV-V) has registered a Request for Arbitration against the government of Venezuela through the International Centre for Settlement of Investment Disputes (ICSID), part of the World Bank Group. The action pertains to a rights dispute to the Las Cristinas gold project in the country’s southeastern region.

Vannessa Ventures alleges its contractual rights to develop Las Cristinas were expropriated by the government. Vannessa’s 95%-owned subsidiary, Minera Las Cristinas (MINCA), contests that it still holds the development rights to the proposed gold project.

The Venezuelan government and its agency Corporacion Venezolana de Guayana (CVG), which owns 5% of MINCA, are being called to the carpet by Vannessa, which claims the actions taken contravene the Bilateral Investment Treaty between Canada and Venezuela.

Vannessa alleges the expropriation was conducted without due process and in a discriminatory way.

In referencing the Bilateral Investment Treaty, as part of its application to the ICSID, Vannessa seeks restitution through the return of its contractual rights to develop Las Cristinas and all confiscated property, as well as monetary damages of US$50 million plus interest. Alternatively, in lieu of the above restitution, it seeks monetary damages of US$1.04 billion plus interest for out-of-pocket expenses of about US$180 million incurred by previous operators, including Placer Dome (pdg-t), and for lost profits of US$865 million.

The World Bank’s ICSID was established in 1966 to facilitate settlement of investment disputes between governments and foreign investors.

Las Cristinas is currently controlled by Toronto-based Crystallex International (KRY-T), which has completed a feasibility study and intends to start production in 2006 at the yearly rate of 300,000 oz.

Vannessa says it acquired Placer Dome’s Venezuelan operating company and all associated assets in 2001. The Venezuelan government, through CVG, has refused to accept the sale by Placer Dome to Vannessa, rejecting it outright. The points of contention between the opposing groups show little signs of abating and will likely continue for the foreseeable future.

Vannessa was also suspended from quotation on the Nasdaq bulletin board on Nov. 15. Nasdaq is waiting for Vannessa to file its annual report. Vannessa said in a release that its filings were delayed because previous auditors were no longer independent from the company, and that its new auditors required time to reconcile financial statements from previous years.

The company expects to file within 60 days, and to be reinstated to bulletin board quotation.