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Venezuela may borrow against future gold production



March 31, 2010 By: Bloomberg News




Venezuela’s central bank is considering selling a bond backed by future gold production this year, Mining Minister Rodolfo Sanz said.

The size of a possible sale is being studied, Sanz told reporters today in Caracas before a meeting between Venezuelan and Russian ministers and business executives.

Venezuela has turned to borrowing against future output of oil and metals after its bond yields climbed. China Development Bank Corp. loaned the country $8 billion, which will be paid back with oil, and provided a $1 billion line of credit, payable with iron ore.

The South American country is seeking partners to develop the Las Cristinas gold deposit, one of the world’s biggest undeveloped deposits, Sanz said. Toronto-based Crystallex International Corp., which has a license to mine part of the site, is still being considered as a potential partner, he said.

President Hugo Chavez said last year that a joint venture between Rusoro Mining Corp. and the Venezuelan government would develop the site.