Vancouver-based Rusoro Mining Ltd. (TSX-V:RML) has filed international arbitration against the government of Venezuela 10 months after it nationalized its gold industry and took over the company’s investments without compensation.
Rusoro filed a request for arbitration with World Bank’s International Centre for Settlement of Investment Disputes against the South American country concerning an agreement between the Government of Canada and the Government of the Republic of Venezuela for the promotion and protection of investments.
Rusoro is focused on the operation, acquisition, exploration and development of gold mining and mineral properties in Venezuela.
The junior gold-miner took action following the passing by the Venezuelan government of a series of measures in September 2011 that dismantled the legal regime for the marketing of gold in Venezuela and culminated in the outright nationalization and control of Rusoro’s investments in the country without remuneration.
The claim is for breach of the treaty’s protections against expropriation, unfair and inequitable treatment and discrimination and for breach of the guarantees of full protection and security and free transfer of investments.
“The Venezuelan government’s actions have resulted in significant loss to the company and its shareholders,” Rusoro president and CEO Andre Agapov said. “For several months we have attempted to find an amicable resolution to the dispute with the Venezuelan government, but in the end, in light of the government’s apparent unwillingness to look for an amicable resolution, it became the company’s sole recourse to commence international arbitration.
“Even though we are disappointed that we could not reach an amicable resolution to the dispute, we firmly believe in our arbitration case and the pursuit of fair-value compensation for the loss of our large investment in Venezuela.”
Shares of Rusoro were trading up 20% from $0.025 at market open to $0.03 at press time.
