The government's decision, made in the past few hours, also includes withdrawing the Brisas concession from Canadian miner Gold Reserve (TSX-V: GRZ) and the La Camorra and Isidora projects from US company Hecla Mining (NYSE: HL).

"The decision was made as part of the national government's policy to recover the country's mining resources, primarily gold and diamonds, which is why it formed a JV between Rusoro and Mibam through [state mining company] Empresa Minera Nacional," he said.

The official said the initiative is part of the government's goals for 2008 and expects the decision to be officially announced before year-end.

The measure means the Venezuelan state will now control and oversee production for a total of 762t (24.5Moz) of gold reserves worth US$19.6bn, the official said.

The official added the government also expects the new areas to push state producer Minerven's gold production from roughly 4.2t/y to 8.2t/y in 2009.

Las Cristinas has 464Mt grading 1.13g/t gold or 16.9Moz contained in proven and probable reserves, in addition to 629Mt grading 1.03g/t gold or 20.8Moz contained in the measured and indicated categories.

The Brisas project holds proven and probable reserves of 10.2Moz of gold and 1.39Blb (630,039t) copper.

This week, Rusoso launched an all-stock takeover bid for Gold Reserve, which promptly filed for an injunction with a Canadian court to prevent the Russian firm from carrying out a hostile takeover.