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Gold Production, Development and Exploration by The International Resource Journal

Gold Production, Development and Exploration

Author: The International Resource Journal
Posted: May 30, 2011

Rusoro Mining (TSXV RML) is a junior gold producer operating in the very challenging South American country of Venezuela. Where many have been unable to meet the challenge of navigating their way through the politics of the country, Rusoro has managed to operate and expand partly from being experienced privately in the country before going public and partly because of the principals of the company being Russian and the two countries sharing political ideals. There is no better example of this than the company’s most recent accomplishment where they were able to work with the Government to have policy changed essentially for them, as they are the only foreign gold producer in the country.

In November 2010, Rusoro Mining Ltd. announced its first offshore gold shipment, under the revised gold sale policy in Venezuela which allows the company to sell 50 per cent of its gold production offshore. The other 50 per cent must be sold in country in local currency, which is not a problem if the money is spent in country, but it presents challenges if the company has to convert to U.S. dollars at a discount in country. The ability to sell 50 per cent of production offshore in U.S. dollars alleviates this concern substantially and bodes well for Rusoro going forward.

The achievement was no small feat, as a previous change in the policy in 2009 had left Rusoro with a near unmanageable situation for selling its production. The result was nearly a year of good faith negotiations with the Central Bank of Venezuela (CBV) to clarify the company’s concerns, which saw the gold sales policy revised to allow the first authorized gold sales offshore under the current regime in Venezuela.

The milestone deal took place thanks in part to a strong relationship with Rusoro’s Russian management team and the government. “We are very pleased to have been able to work through the process with the CBV and reach this significant milestone for the company,” Rusoro President and CEO Andre Agapov said at the time.

The only foreign company producing gold in the country, Rusoro employees nearly 1,500 Venezuelans at its operations and has developed strong relations within the various communities in which they work. The company has built an impressive infrastructure to work with the various ministries (and now the Central bank), within the current government and has been able to work with the Government to find solutions to the various issues that arise, where others have failed.

The company has a large land position in the gold rich Bolivar state mining region in Southern Venezuela, operating the Choco 10 and the Isidora mines in the well-known El