Rusoro Mining Takes Shape as Mid-Tier Producer
By James West
MidasLetter.com
Tuesday, May 5, 2009
Rusoro Mining (TSX.V:RML) has been taking some lumps this year. After having
their takeover bid for the outstanding shares of Gold Reserve Inc. (AMEX:GRZ)
quashed by an Ontario court, the company was chastised by regulatory agencies in
Canada for overstating its ambitions in Venezuela. The media seized the
opportunity to paint the company as a TSX Venture bad boy to watch out for – a
situation that has probably contributed largely to the company's lackluster
performance in the market of late.

But all that is likely to change, and last week's release of its annual results
bears testimony to the fact that while the company may have been guilty of
excessive hubris in its projections, it certainly didn't fail to achieve some
impressive milestones in the last year.

First and foremost the company produced 99,663 ounces of gold in a country where
no foreign company has ever successfully been able to mine gold consistently.
Despite a loss of $72.2 million for the year, the company continues to boost
production and chisel away at costs.

2008 saw Rusoro raise $80 million through Peter Hambro PLC, settle the dispute
with the Venezuelan government over the government's ownership interest in the
Choco Mine, to a final 5% indilutable ownership interest, held by the
government, and advance construction of the Alvarez underground ramp which will
provide access to main mineralized areas in the contiguous San Rafael and El
Placer concessions.

Rusoro plans to increase production to between 250,000 and 270,000 ounces by
next year, as it brings two new mines into production in the first quarter. The
company is reviewing investing in more deposits and mines in the South American
country, which would be developed through joint ventures with the government,
said CEO Andre Agapov.

The company recently attracted some heavy hitting mine management talent in the
form of mining engineer Roman Amosov to the role of Chief Operating Officer, and
Dmitry Ushakov as VP of Corporate Development.

Amosov is a Mining Engineer and graduate from the Moscow State Institute of
Nonferrous Metals and Gold. He has extensive experience in mining project
management in a number of regions in the world including Latin America and the
Former Soviet Union, specifically in the areas of technical auditing of gold
mine processing facilities, the organization and operation of underground gold
mines and in the area of mill and mobile fleet maintenance. He also has
significant experience in the preparation of environmental impact and
feasibility studies from gold projects located in a number of different mining
regions around the world.

Ushakov is the Director General of Interros Holding Company, a major Russian
private investment company which operates throughout Russia, Europe, Asia, and
North America and who are significant shareholders of Norilsk Nickel and Polyus
Gold.

"The extensive operational and financial experience of these gentlemen within
the mining industry will be of considerable benefit to the company as we
continue to execute our aggressive growth strategy in Venezuela, said Rusoro
President George Salamis.

During 2009, the Company expects to increase its gold production profile to
170,000 ounces of gold from its 95%-owned Choco mine and its 50%-owned Isidora
Mine. Total combined cash costs per ounce for 2009 are expected to be less than
$400 per ounce.

The company's prospects in Venezuela are positive in view of the statement by
President Hugo Chavez says he wants Las Cristinas to be developed as a joint
venture between the government and Rusoro.

Las Cristinas is a gold deposit in the Kilomtero 88 area of Venezuela that has
been bogged down in legal wrangling between its owner, Crystallex Mining, and
the Venezuelan government. There is a confirmed reserve of at least 21 million
ounces of gold there, of which a minimum of 10 million will be attributable to
Rusoro should Las Cristinas be developed by VenRus, the joint venture company
established by Rusoro and the government of Venezuela.

According to press reports in El Diario, a Venezuelan daily newspaper, Rusoro is
in discussion with Crystallex to reach an agreement.

SOURCE:
http://www.midasletter.com/news/0905...
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http://www.midasletter.com/news/0905...
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