Gold Reserve Enters into Memorandum of Understanding with the Government of Venezuela to Settle Gold Reserve’s Arbitration Award and Jointly Develop the Brisas and Las Cristinas Projects (2/29/16)
SPOKANE, Wash.--(BUSINESS WIRE)--Gold Reserve Inc. (TSX.V: GRZ) (OTCQB: GDRZF) (“Gold Reserve” or the “Company”) announces that it has entered into a Memorandum of Understanding (the “MOU”) with the Bolivarian Republic of Venezuela (“Venezuela”) that contemplates settlement, including payment and resolution, of the arbitral award (the “Award”) granted in favor of the Company by the International Centre for Settlement of Investment Disputes in respect of the Brisas Project, the transfer of the related technical mining data previously compiled by the Company, as well as the development of the Brisas and the adjacent Cristinas gold-copper project, which will be combined into one project (the "Brisas-Cristinas Project") by the Company and Venezuela.
Under the terms proposed by the MOU, Venezuela would proceed with payment of the Award including accrued interest and enter transactional (settlement) and mixed company ("joint venture") agreements, which are expected to be executed in approximately 60 days, subject to various conditions, including without limitation receipt of all necessary regulatory and corporate approvals and the successful negotiation and execution of definitive agreements. In addition, Venezuela would pay an amount to be agreed upon for the Company's contribution of its technical mining data to the Brisas-Cristinas Project.
Following completion of the definitive agreements, it is anticipated that Venezuela, with the Company's assistance, would work to complete the financing to fund the contemplated payments to the Company pursuant to the Award and for its mining data and $2 billion towards the anticipated capital costs of the Brisas-Cristinas Project. Upon payment, the Company will cease all legal activities related to the collection of the Award.
The Brisas and Cristinas properties, together with the technical data with respect to the Brisas project owned by Gold Reserve, would be transferred to a Venezuelan mixed company, which is expected to be beneficially owned 55% by Venezuela and 45% by Gold Reserve. The Company is also expected to be engaged under a technical assistance agreement to provide procurement, engineering and construction services for the project. The parties would also seek, subject to the approval of the National Executive Branch of the Venezuelan government, the creation of a Special Economic Zone providing the establishment of a special customs framework for the mixed company and other tax and economic benefits.
The combined Brisas-Cristinas Project, a gold-copper deposit located in the Kilometer 88 mining district of Bolivar State in south eastern Venezuela, when constructed, is anticipated to be the largest gold mine in South America and one of the largest in the world.
Doug Belanger, President of Gold Reserve, stated, “This is a tremendous opportunity for the Company and Venezuela to jointly develop the Brisas-Cristinas Project while providing economic growth in the region and the creation of a new industry complementary to the Republic's existing oil industry. After settlement of all of the Company's obligations, substantially all of the net proceeds of the payment related to the Award and technical mining data is expected to be distributed to our shareholders.”
Further information regarding the Company can be located at www.goldreserveinc.com, www.sec.gov and www.sedar.com.
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