Rusoro Mining (TSX-V:RML) was quick to reassure investors Thursday that Venezuelan President Hugo Chavez’s plan to nationalize gold mining in his country will have no effect on the company.
The Vancouver-based gold explorer said Chavez’s comments were targeted toward “serious ongoing problems” with illegal miners that smuggle gold out of the remote southeastern edge of the South American nation.
“We believe the government’s announcement is targeted toward the many illegal mining operations in Bolivar State that operate without government permits, and continue to cause significant environmental damage through indiscriminant deforestation and the use of mercury,” Rusoro president and CEO Andre Agapov said in a statement.
“Gold produced by these illegal operations is often smuggled out of the country or sold illegally, and the government is now taking action.”
Rusoro operates two gold mines in Venezuela, the open pit Choco 10 mine and underground Isidora mine, which is a joint venture between the company and the Venezuelan government.
Rusoro’s stock bounced back 8% to $0.13 per share Thursday following a 17% drop Wednesday after Chavez’s comments were made public.
Joel McKay
Twitter:jmckaybiv