So that looks a bit crazy considering the depths we have sunk to but let's examine the situation and apply a little logic and examine the present fear and emotion that is driving the stock down.

There is absolutely no doubt that Ortega's actions are illogical and outside both Venezuelan and International law. In effect she has awarded a permit to build the Brisas mine in 2007, purposely delayed the implementation by withholding the Initiation Act and subsequently rescinded her own permit for completely illogical and unlawful reasons a year later. No reasonable court could rule that GRZ hasn't been damaged and is entitled to compansation.

That doesn't mean that any Venezuelan court would rule in GRZ's favour, and in fact I would expect them to reject any claim. That's exactly what we need, because we cannot make an ICIDS claim until we have exhausted the legal avenues in Venezuela.

Under ICIDS rules and the Canada/Venezuela treaty, GRZ is entitled to claim for costs already spent, interest on those funds and loss of profits. The loss of profits will be calculated on the prices of the metals that would be produced at the time of the rescision of the permit and the BFS would be used to calculate the output expected. GRZ is fortunate in this regard in that metal prices were high at the time and that the BFS has been recently updated and was produced by an independent expert, so it will be almost certainly accepted by a court as a reasonable estimate.

Do the sums, and you will find that the total settlement will be in the order of $3 to $4 billion. It will probaly take 4 years or so though the various court steps, but consider that GRZ won't need to raise any more capital, and even if Brisas went ahead as previously planned there is no way they would have even paid the mine off in four years let alone made $3 to $4 billion in profits!

$3 billion is $55 a share..... $4 billion is $72....

OK, I can hear the next objection.... "You may get the damage award but how will you make Venezuela pay?"

That isn't as much of a problem as you might think. The ICIDS can't threated jail time or anything like that but they do have direct influence through the international banking system. If Venezuela failed to pay up, their international credit and banking would be frozen, a huge problem for a country like Venezuela which needs international trade to exist. They would have huge problems getting letters of credit and that would impact the supply and/or delivery of everything they import. There would be export issues as well as cash paid for their oil may not become available to them throgh the normal banking system. Remember that their biggest export market for oil is still the US and the pressures to settle would be huge. That is more than sufficient incentive to get them to cough up the cash quickly!

In fact probably the worse outcome for GRZ is for Hugo to override Ortega and allow the Brisas mine to go ahead as originally envisaged. We then face the headaches of financing and building the mine and then operating for years before we get anything like the return possible from a court case. Doug B might not want to become a "litigation company" but it may bring the best result for the company and its shareholders in the medium term.