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Message: Minerven owes suppliers despite high gold prices - Venezuela

Minerven owes suppliers despite high gold prices - Venezuela

posted on May 05, 2009 05:33PM

I think is is safe to say that Venezuela could use some external expertise to help them with the management of their assets. Below is just more evidence of the problems the exist in Venezuela.

Minerven owes suppliers despite high gold prices - Venezuela

Published: Tuesday, May 5, 2009 17:43 (GMT-0400)

By Harvey Beltrán / Business News Americas

Venezuelan gold miner Minerven has joined the list of subsidiaries of state heavy industry holding CVG that owe their suppliers considerable debt, a company official told BNamericas.









"In addition to the companies in the aluminum and steelmaking sectors, now this mining company owes more than 40mn bolívares [US$18mn] to its providers," the executive said.



The executive said the situation is a sign of bad management at CVG's companies and has prompted an investigation at Minerven since current gold prices should provide the company with enough funds to fulfill its commitments.



"It's as if the company's priorities lie in squandering the money instead of maintaining itself operational," the executive said.



In February, Minerven announced plans to boost gold production this year to 8t (257,206oz) from 4.5t in 2008 with the addition of areas it has recovered, including the Sosa Méndez gold mine that was previously controlled by Chinese company Shandong Gold, and the Revemin mill previously held by Canada's Crystallex International (TSX: KRY).



Minerven also resumed control of Block B, which is composed of the La Laguna, Santa Rita, Panamá and Isidora gold mines. The area had been under the management of Minera Hecla Venezolana, a subsidiary of Hecla Mining (NYSE: HL).



The miner's output will also rise thanks to improved operations at the Colombia and Unión mines. All of Minerven's mines are located in the Guayana region of eastern Bolívar state.

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