Chávez to announce takeover of Sosa Méndez, Crystallex's Revemin - Venezuela

By Harvey Beltrán, Business News Americas

Venezuela's President Hugo Chávez is expected to announce on Thursday (Sep 18) in El Callao city that the state will assume control of the Sosa Méndez mine and Revemin plant, a union leader confirmed to BNamericas.

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• Companies / Entities

  Crystallex International Corporation

  Rusoro Mining Ltd.

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  Gold/Silver Mining

  Privatization/Concession

"Sosa Méndez was in the hands of Chinese company Shandong Gold and the Revemin mill was controlled by [Canada's] Crystallex. Now both are scheduled to be transferred to state company Minerven," said Douglas Coriano, administrative union coordinator for Venezuela's Guayana region.

In Revemin's case, the government negotiated a takeover with Crystallex International (TSX: KRY) because the company's mineral deposits are exhausted.

Crystallex in fact had reported at the beginning of September that it had entered discussions with Venezuela's ministry of basic industries and mining (Mibam) regarding the future of the Revemin mill, as the miner's Tomi open pits, Tomi underground and La Victoria had run out of ore.

Meanwhile, the decision to negotiate the transfer of Sosa Méndez to state control emerged when the Chinese company did not comply with union commitments or Venezuelan law, Coriano said previously.

Minerven and Shandong Gold formed the company Venezuela Ordaz Jinyan in 2004 to reactivate Sosa Méndez which had been inactive for roughly 46 years.

For now, reports suggest that Sosa Méndez will be operated in equal parts by Minerven and Canada's Rusoro Mining (TSX-V: RML). The mine has reserves of 915,000t grading 12g/t gold.

Coriano added that nationalization measures aim to further propel community momentum in the zone and support development in El Callao.

Both Sosa Méndez and Revemin are situated in Bolívar state's El Callao.