Venezuela denies Gold Reserve concession extension

(Recasts with detail, background)

CARACAS, May 25 (Reuters) - Venezuela has ended U.S. miner Gold Reserve's concession for the large Brisas project, located in one of Latin America's largest gold deposits, part of a strategy to increase state control of key economic sectors.

Brisas is in the KM88 mining belt south of the Orinoco river and is adjacent to the legendary Las Cristinas project.

The government's official gazette said on Monday the concession was now "extinct," saying the company had failed to meet its contractual obligations.

Venezuela's socialist President Hugo Chavez said earlier this year that the gold industry should be in controlled by the state. He said the KM88 district will be exploited by a joint venture between the state and a Russian mining company.

"This should now become a joint venture controlled by the state, that's what we are looking for in the sector," a mining ministry spokeswoman said on Monday.

Gold Reserve's representative in Venezuela declined to immediately comment on the news. U.S. spokesmen were unavailable.

According to Gold Reserve's website, Brisas has an estimated 10.2 million ounces of gold. (Reporting by Ana Isabel Martinez, Enrique Pretel and Adriana Barrera' Writing by Frank Jack Daniel; Editing by Derek Caney)