Arbitration Proceedings
The Company is a party that is interested in, but is not a party to, an ongoing arbitration.
See “Legal Proceedings — Withdrawal of MINCA Litigation — Vanessa Arbitration” in
the 2008 AIF, available electronically at www.sedar.com and Hwww.sec.govH.
On November 28, 2008, the Company delivered a letter to the Government of
Venezuela notifying it of the existence of a dispute between the Company and the
Bolivarian Republic of Venezuela ("Venezuela") under the Agreement between the
Government of Canada and the Government of the Republic of Venezuela for the
Promotion and Protection of Investments (the "Treaty"). It is the Company’s desire to
settle the dispute amicably; however, with the expiration of the six month amicable
period, which commenced with the delivery of the notification letter on November 28,
2008, the Company now has the option of submitting the dispute to international
arbitration. The dispute has arisen out of various measures of Venezuela including
MinAmb's decision dated April 14, 2008 to deny the Permit and Venezuela's
subsequent media statements attributed to the Minister of MIBAM on November 5, 2008
regarding the status of the Project and the MOC.