Polyus Zoloto Invited to Venezuela
Russia's largest gold-mining company, OAO Polyus Zoloto, may become the owner of the Toronto, Canadia-based company Crystallex International. According to Canadian media, Polyus Zoloto has already hired an estimator for the company, although neither the Russian company nor BMO Capital, the purported estimator, has confirmed that information yet.
Crystallex International is a small company with promising reserves in Venezuela. It main reserve is the Las Cristinas deposit in Bolivar state. It other assets include the Tomi, Lo Increible, La Victoria, Revemin and Albino deposits in the same state. In 2005, it produced 55,200 ounces of gold. Its proceeds that year were $25 million, with net losses of $45.2 million and total debt of $100 million.
Market participants say that the deal is a good one, both economically and politically. Russia is a supplier to arms to Venezuela and a partner in oil production. Canadian experts say that the Russians' good relations with Venezuelan President Hugo Chavez may help speed along the development of Las Cristinas deposit, which has come to a standstill.
Crystallex's share of the gold in Las Cristinas deposit is 13.6 million ounces. The company had planned to begin work there in 2009 and produce 300,000 ounces of gold per year. Development of the deposit has been delayed for several years. One of the reasons for that is the possible nationalization of the deposit by the Venezuelan government.
www.kommersant.com
All the Article in Russian as of Mar. 13, 2007
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