(Adds quotes from Maduro, comment from Gold Reserve, details)

By Alexandra Ulmer

CARACAS, Feb 24 (Reuters) - Venezuela and Canadian mining company Gold Reserve signed a memorandum of understanding on Wednesday to settle a protracted arbitration dispute through creation of a joint venture in the South American country.

Venezuela will seek to use the mining property as collateral to obtain financing, the company said. The government said the company was investing $5 billion in Venezuela. Gold Reserve declined to give an estimate of how much it would invest.

Specific details of the deal were not immediately clear, although Gold Reserve's president, Doug Belanger, told Reuters the company would be receiving compensation.

A final settlement was expected soon, he added.

The small Canadian miner was awarded $750 million by the International Center for Settlement of Investment Disputes for the 2009 termination of its Las Brisas gold concession by the OPEC nation.

"We're working on a joint venture with the government," Belanger said after signing the memorandum of understanding.

"They're using the property as collateral to obtain financing for not only the project but their other financial needs. ... We're in agreement to settle."

Belanger added the total amount owed was now about $760 million because of interest.

"It's the resolution of a conflict," Venezuelan President Nicolas Maduro said during a speech. "Now we are partners."

Oil Minister Eulogio Del Pino added Gold Reserve would have a 45 percent stake in a joint venture, with the remaining 55 percent going to the state.

Del Pino said the deal proved Venezuela was acting responsibly toward investors, some of whom are worried about a potential default amid the country's economic crisis.

"(This agreement) demonstrates this country's responsibility toward international investors," added Del Pino.

Sources told Reuters earlier on Wednesday that the country had the funds to pay $1.5 billion due on Friday on its Global 2016 bond.

(Reporting by Alexandra Ulmer; Writing by Girish Gupta; Editing by Chris Reese and Peter Cooney)