Investing Activities
Cash used for capital expenditures for the Las Cristinas project was $11.1 million and
$2.3 million for the first nine months and third quarter of 2009 respectively, compared to
$17.0 million and $4.3 million for the corresponding periods in 2008.
The majority of the expenditures in 2009 represent ongoing costs for administering,
securing and maintaining the Las Cristinas camp, storage costs for long lead time
equipment stored outside of Venezuela, and construction activities related to the
medical facility and sewage treatment plant which have both been completed as
required under the MOC.
The Company has determined that it is in the best interest of all stakeholders to
continue to incur the expenditures necessary to remain compliant with the MOC until the
earlier of a satisfactory resolution of the Las Cristinas permitting matter, or until the
Company has submitted and registered its dispute with the International Centre for the
Settlement of Investment Disputes, (“ICSID”). The Company has been advised that noncompliance
with the terms of the MOC may limit the Company’s options for a settlement
of the dispute.
Subsequent to the recent sale of some mobile equipment, the Company has in storage
mining and milling equipment, purchased originally in 2004 and 2005 at a cost of
approximately $37 million. This equipment is stored outside of Venezuela. The
equipment is regularly inspected and maintained while in storage. All of the equipment
worldwide is insured under a marine insurance policy.