FOREST RESERVE PROTECTION CITED
Crystallex, Gold Reserve hammered in political shell game over Las Cristinas and Las Brisas gold projects
Two major gold projects suffered serious setbacks this week as Venezuela’s Ministry of the Environment announced it would rescind environmental and exploration permits near the Imataca Forest Reserve.
Author: Dorothy Kosich
Posted: Thursday , 01 May 2008

RENO, NV -
The protection of the Imataca Forest Reserve in northeastern Venezuela's Guayana region has been a bone of contention for years for environmental special interests and indigenous people's human rights groups, particularly in the wake of a mining boom in the region.
But, that boom may have gone bust for two North American mining and exploration companies as the Venezuelan Ministry of the Environment (MinAmb) used Imataca as an excuse to rescind the project permit for the Brisas gold project, and apparently has used the same excuse to halt exploration activities at the Las Cristinas gold project.

Last week, the president of Venezuela's mining chamber Camiven warned Business News Americas that the Venezuelan government may be planning to issue a decree to suspend all mining concessions in the country.

Although the controversy over mining in the Imataca Forest Reserve has been debated for more than a decade-and was addressed in a special presidential decree in 2004--the Director General of MinAmb this week cited the sensitivities surrounding indigenous peoples, small miners and the Imataca environment as the reason to oppose all mining in the Imataca region.

Crystallex Vice President Richard Marshall told Mineweb Wednesday that the Toronto-based miner has yet to receive official word from any senior government official that Venezuela has denied a permit to the Corporation Venezolana de Guayana (CVG)-which owns the property it leased to Crystallex--to carry out exploration at Las Cristinas.

In a news release, Crystallex said, "The communication by the Director General appears to be in conflict with the Las Cristinas EIS approval, Construction Compliance Bond Request and Environmental Tax requested issued by MinAmb (that Crystallex posted and satisfied last summer) and the communication appears to be in opposition to all mineral mining in the Imataca region."

The area was designated a mining zone in 2004 by Venezuelan President Hugo Chavez, who initially gave enthusiastic support to mining cooperatives in the area. There are also numerous illegal mineros (small miners) who also prospect in the region, but are not allowed to join the cooperatives unless they are Venezuelan citizens. The third category of miners in the region is international mining and exploration companies, which received government concessions.

In 2005, the Imataca Forest was believed to hold wood valued more than $6 billion, however, the region probably holds among the largest gold ore reserves in Latin America. In his 2004 presidential decree, Chavez set aside 12% of the forest reserve for mixed logging and mining use. The Imataca Forest is also home to several difference indigenous peoples, a number of who have expressed opposition to mining due to pollution of water resources by mineros.

On Wednesday, Gold Reserve's Doug Belanger said in a news release that MinAmb has communicated its plan to rescind the 2007 permit for the commencement of construction at the Brisas Project, referring to "the existence of environmental degradation and affectation in the area, the presence of small miners as well as the Imataca Forest Reserve as the basis for their decision."

In the news release, Belanger declared, "There are no small miners on Brisas and any environmental disturbances result from activities prior to the company acquiring the property. Such disturbances have been addressed by the company and are clearly documented in our operating plan already approved by the Venezuelan Government and are subject to future reclamation as outlined in our Environmental and Social Impact Study, previously approved by MinAmb."

"The Km88 area in which Brisas is located has been approved for mining previous to the company acquiring Brisas and most recently affirmed by President Decree No. 3110 which was published in the Official Gazette in 2004," Belanger explained. "Support for mining in the Km88 area is clearly evidenced of our Environmental and Social Impact Study (EISA) in early 2007, the issuance of the Authorization to Affect by MinAmb in March 2007 and the fact that MinAmb and the Ministry for Basic Industries and Mines (MIBAM) since 2004 have issued to the company and others a number of authorizations and other acts relating to mining exploration or exploitation in the Imataca."

"We are committed to invest during the life of the mine overt $1 billion to build the largest gold and copper project in Venezuela and directly create over 1,000 jobs," Belanger said. "After years of commitment to Venezuela, nearly $300 million invested in the development of Brisas, which adheres to the Equator Principles, multiple permit approvals including most recently the Permit to Affect and receipt of, in the third quarter of 2007, accreditation letters of technical compliance from MIBAM for all of the properties that comprise Brisas, it is unfathomable that the MinAmb suddenly attacks mining projects in the Imataca-impacting not only our investment and others in the industry, but the livelihood of those most affected by the project, the local and regional citizens of Venezuela."
Belanger declared, "We are prepared to protect our rights to Brisas through the Venezuelan legal system, and if necessary, other revenues to protect the interests of our shareholders will be pursued."

Meanwhile, Vicki Veltkamp, Vice President for Investor Relations for Hecla Mining, told Mineweb in an e-mail Wednesday that the company's LaCamorra Unit is not located near the Imataca Forest. All operating permits for the gold mine remain in place, she said, adding "We haven't heard anything at all about our exploration permits."

Venezuela's Chavez, however, has been on unapologetic and non-stop pattern of expropriation of foreign businesses since last year when he seized oil refineries from U.S. companies. He is currently threatening to expropriate the Sidor steel company and most recently nationalized three cement companies. He also imposed a windfall profits tax on oil.

However, Crystallex's Marshall told Mineweb that it doesn't make sense that Chavez would try to expropriate Las Cristinas since the property is actually leased from a domestic entity, CVG.

http://www.mineweb.com/mineweb/view/...