this is the first vheadline article i've seen worth posting in years.... interesting...confusing......if it's true, then roy actually may have broke a story, but his recent history has'nt been without question.....

i wonder if rusoro stopped payment on a check to him or if they are just getting po'd at the situation too....this article seems to help kry (in a legal sense) and it certainly does'nt help rusoro....

more fodder, BS, and shady business in venezuela....

CVG-Minerven president Luis Herrera et.al. accused of clandestine negotiations behind the backs of Miraflores Palace AND President Hugo Chavez Frias.

VHeadline Venezuela News reports: A press release from the Venezuelan Mining Observatory claims that the state-owned Venezuelan Guayana Corporation (CVG) gold mining subsidiary CVG-Minerven has been negotiating with trans-national corporations behind the backs of the National Executive (Miraflores Palace) and President Hugo Chavez Frias.

A number of clandestine meetings have taken place in which offers were made to sell several mines ...including some that can not be commercially exploited because of an express prohibition put in place by the National Executive ... as a result, the Venezuelan State could face legal action and international arbitration if it closes any agreement with US, European and/or Russian investors.

The Venezuelan mining observatory claims that a senior executive from a leading Colorado-based firm was brought secretly to Venezuela under the pretext of international arbitration to determine the value and potential of gold mines in the south of the country, aiming to offer concessions on the international market and attract US and European capitalists to exploit the gold in direct conflict with policies laid down by President Hugo Chavez.

Top executives at the CVG -- including the president of CVG-Minerven, Luis Herrera -- played host on the occasion of several visits to CVG offices in (south-eastern) Bolivar State to mining expert Neal Rigby, chairman of SRK Consulting, a mining group that specializes in the worldwide sale of mines.

Rigby's visit is said by the Venezuelan mining observatory to have been part of a low-profile strategy by CVG-Minerven which including other (clandestine) meetings in several European cities. According to intelligence sources and people close to the talks between CVG-Minerven and Rigby, (Luis) Herrera offered to deliver several projects for sale ... including Las Cristinas, which is already contracted by the CVG to Canadian gold-mining corporation Crystallex.

Rigby was also taken to other mining concessions which are currently under dispute, such as the Las Brisas del Cuyuni gold field which (until last year) was under the control of USA-based Gold Reserve. Rigby's visit, which was unknown to senior officials in Caracas, was just one of several rounds of negotiations with international gold production companies that have taken place in and outside Venezuela. In mid-June, a special commission traveled to Paris-France for confidential meetings with representatives from several Russian companies.

Engineer Ramon Olivares, (who was) liaison between Crystallex and the CVG, reported on August 31 about an inspection at the Las Cristinas facilities associated with an exploitation conflict that has been on-going at the mine since 2004 between Vanessa Ventures and the Venezuelan government. Olivares reported that an Attorney General's Office commission would come with Neal Rigby (purported to be a representative of the international arbitration tribunal) to settle the dispute under direction of CVG official Francisco Hernandez who was responsible for implementing the operation. After notification, a group of a dozen officers, plus an interpreter hired by CVG-Minerven arrived in Las Cristinas with Rigby. Depsy Cortez and Francisco Chavez were present as a representatives of the Bolivar state Attorney General's Office.

Although the meeting was (supposedly) related to arbitration between Vanessa Ventures and the CVG, it was noted that, strangely, there was no representative of the company among the visitors and no record was made of the arbitration session, as confirmed by the regional Attorney General's Office. The meeting lasted almost two hours and, according to intelligence reports, (Luis) Herrera gave SRK Consulting's Neal Rigby the concession to operate the mine and a significant amount of information and valuable confidential documents about the Las Cristinas project. According to a report on the event, one of the lawyers attending the meeting said "the conversation turned to topics that seemed to have no connection with any arbitration hearing."

"Without written permission from the ministries concerned with regard to regulation and administration of mining concessions, Herrera contacted international companies that undertake risk assessments and feasibility studies for mining projects around the world. That can mean dozens of international mining companies, investment banks or capitalists and speculators operating in the world's mining exchanges," a report of the situation indicates. Herrera maintains a team of advisers and contributors that includes Antonio Urbina, Francisco Hernandez and Ramon Olivares, working as line-managers in the CVG.

To date -- claiming that projects are under total control of the Venezuelan State -- Herrera has offered projects such as Las Cristinas and Brisas del Cuyuni, free of any prior contractual obligation with third parties, a situation that experts say could push CVG-Minerven over the edge into a legal conflict with international implications. "There is documented evidence of the extensive use of this tactic of invasion," a situation report says.

Among these cases is Idaho-based Hecla, which had had a legal gold mining concession but was invaded by illegal miners who were subsequently removed by order of CVG-Minerven when Hecla was forced to surrender the concession. Shortly afterwards, Hernandez signed a provisional operating contract with Russian-Venezuelan Rusoro that took it over.

In El Callao, CVG-Minerven grappled with union squabbles promoted by the invasion of Revemin which was under Crystallex' control. A third intervention was against Las Brisas del Cuyuni, which was legally under the control of Gold Reserve. A few days later, Herrera asked the Basic Industries & Mining (Mibam) Ministry to transfer control of the mine to Minerven. According to sources close to Mibam, it is currently negotiating with potential European investors, although there is a ban on exploitation of the mine.

The Venezuela mining observatory says that Herrera's strategy has been accelerated following the appointment on August 1 of ministers Diosdado Cabello, Jesse Chacon and Yubirí Ortega (currently Environment Minister), as directors of the CVG by decision of President Chavez.

The legal scenarios for Venezuela

According to Charles Espinatelli, an expert on international and corporate law "clearly, offering for sale a concession previously granted by the National Government to a legal entity without formal termination of the operating contract would constitute an illegal act according to Venezuelan law, and could be a source of international legal dispute, especially in the World Bank's investment arbitration tribunals."

According to Espinatelli, the situation could get worse "if we add to it the fact that the area allegedly being negotiated with third parties can not be exploited for mining purposes, because there are administrative orders from the Environment Ministry, which expressly prohibit mining activities for environmental reasons." For example, the Las Cristinas and Brisas del Cuyuni mines are located in the jurisdiction of the Imataca Forest Reserve. "If knowing this ban, the use of these resources in an ecological reserve is negotiated, any international tribunal (would see it) as fraud or swindle since the beneficiary of a potential deal would be prevented from developing any project on land forbidden by Venezuelan law."

The closure of mining agreements in these areas would also entail criminal liability, civil or administrative officials involved in negotiations, and also for Venezuela.

"In the case of Las Cristinas, an operating contract exists between the CVG and the Canadian company, Crystallex, signed on September 17, 2002. The business plan, development and processing of gold-bearing material prepared by the Canadian firm to pursue the project, received full approval by the Ministry of Basic Industries & Mining (Mibam) in 2006 (see Mibam office of BMM-193-2006). Also in May 2007, a comprehensive environmental impact study, prepared between Crystallex and the CVG, and overseen by the CVG and the Ministry of Environment (MinAmb), was fully approved in all its details. Crystallex also (according to official document 328 dated May 16, 2007) deposited a bond of more than 5,200 million bolivares at the Ministry of Environment,.

Despite the approval of both the technical project and the environmental impact study and payment of the bond, the Environment Ministry's permit office agreed to back off and disapprove the exploitation of Las Cristinas by the CVG and Crystallex, arguing (among other things), that the mine was located within the Imataca Forest Reserve, according to official document number 1427, sent on April 14, 2008 to the CVG.

A similar case occurred with the Las Brisas de Cuyuni mine, originally consigned to Gold Reserve. The company received approval from Mibam of its technical project, but was never given an environmental permit for the same reasons used against the development of Las Cristinas project. So far, both the Las Cristinas and las Brisas de Cuyuni are still considered by the Environment Ministry as being within the Imataca Forest Reserve and are therefore off-limits to mining. However, a ministerial report says that Herrera himself has openly said he would get environmental permits to operate these mines, once the concessions have been revoked.

The record

On taking over the presidency of the CVG in 2008, Rodolfo Sanz almost immediately designated engineer Luis Herrera as president of Minerven and then appointed him as auditing director of at the Ministry of Basic Industries & Mining (Mibam).
Almost immediately, Herrera designated his own team, includes officials led by Orlando Ortegano who had already been there since 2005 who had acted as inspectors within the so-call 'Ortegano Plan' ... a strategy developed by the then Deputy Minister to set up dossiers on alleged contractual violations against transnational mining companies, to then revoke their contracts, and offer them to other foreign firms in return "certain benefits."

Herrera sold the idea to Sanz that he had to resume and again implement the 'Ortegano Plan' ... also including the promotion and control of gold mining activity under a single authority, itself the jurisdiction of Mibam. Besides, the 'Ortegano Plan' also included creating an atmosphere of distrust against whichever trans-nationals would submit to their demands.

Herrera also advised Sanz that the gold mining projects should be given to countries with ideological similarities, such as Russia, China and Arab countries. With influence over illegal miners who had conducted a campaign of violence since 2005, they promoted the invasion of concessions controlled by private companies protected by formal agreements, such as Albino 1, Bisquitarra and Las Cristinas. During these invasions, the violence reached such a pitch that took place on road closures and attacks on military personnel stationed in the zone. The disturbances generated a presidential order to eliminate Mission Piar and cost vice Minister Ortegano his job ... he was transferred to another position at PDVSA and consequentially Herrera was (temporarily) marginalized.

The conflicts also generated the opening of a judicial process against former Mayor Carlos Chancellor, William Saud, and other mining leaders and groups currently indictment. According to intelligence reports, Herrera presented inaccurate documentation to both the CVG and Mibam on mining projects that he was (personally) interested in revoke for alleged breach of contract. He also set up committees that, in turn, offered the projects to other corporations to obtain certain benefits ... "involving other CVG officials acting in their own behalf and ready to violate the law."
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Who is Neal Rigby?

He is chairman of the SRK Group -- a mining consulting firm based in England and USA. Neal Rigby has served as a consultant mining engineer for 30 years. Rigby has served as advisor on mine exploitation projects for iron ore, coal, diamonds and industrial minerals. His main focus for the last 15 years has been to act as principal consultant to conduct audits and reports on mines throughout the world, to support streamlining processes, corporate mergers or takeovers by international mining companies and mine finance firms. Particularly, Rigby is an expert in ensuring banking and financial viability as well as risks and opportunities in mining projects. More recently, Rigby's work has been oriented on the restructuring and sale of mining assets, and identifying and implementing strategies to improve business in mines at an international level. He has served as advisor on the sale of mines in over 50 countries in Europe, Africa, Australasia, Latin America, the Middle East, Russia and China.