TORONTO (miningweekly.com) – Spokane, Washington-based Gold Reserve, which has been trying for years to permit its Brisas gold project, in Venezuela, has notified the country's government of a dispute between under investment agreements signed by Venezuela with both Canada and Barbados.

The dispute was based on the Venezuelan Ministry of Environment's decision in May last year to revoke a key permit that was granted in 2007 for the Brisas project, Gold Reserve said.

A few months later, both Gold Reserve and Crystallex International, which is having similar trouble permitting its Las Cristinas project, said that the Venezuelan government had indicated that the permits would be reconsidered if the companies were prepared to make certain concessions.

However, there has been little to no progress reported since then.

“The company has taken this action as a result of the Venezuelan government's failure to reinstate the March 2007 authorisation and the lack of any meaningful dialogue to resolve the prolonged obstruction of our rights to the Brisas project,” Gold Reserve said in a statement on Tuesday.

The firm intends to settle the dispute “amicably”, but may file for international arbitration at any time under the Barbados-Venezuela treaty, or in six months time under the Canada-Venezuela treaty.

“In the event the company is compelled to file for international arbitration, we would make a claim for the fair market value of our investment at the time of the revocation,” which could be more than $5-billion, the firm said.

Earlier this year, Gold Reserve successfully sought and was granted an injunction against a hostile takeover bid by Vancouver-based Rusoro Mining, which has Russian ties and has been identified as the Venezuelan government's 'partner of choice' for gold mining.

The Brisas project contains reserves of 10,2-million ounces of gold and 1,4-billion pounds of copper.

The mine is expected to produce a yearly average of 457 000 oz of gold and 63-million pounds of copper over an estimated mine life of approximately 18,25 years, according to a technical report update completed in March last year.

At the time, initial capital costs were estimated at about $731-million.