Re: Now you may have your permit. - question
posted on
May 16, 2009 09:13PM
Edit this title from the Fast Facts Section
Vet I disagree in how you phrased Gold Reserve's reaction to the permit.
I say Gold Reserve Will accept the permit technically speaking, BUT will not do anything with it because it is uneconomical to us now and therefore impractical. Yes I am splitting hairs, the end result is the same just with a different label on it.
The granting of the permit will have little effect on the ICSID case. It is merely a political ploy by Venezuela to say that it is reasonable when in actuallity it is not.
Crystallex saying that they can produce a profit may give ammunition to Venezuela's defence and thus limit the compensation. I doubt that Crystallex can produce a profit and them saying so is probably another ploy, to what end, time will reveal. Perhaps they are counting on gold price to appreciate by the time they will start production to make them profitable. If there is any profit to be made out of Cristinas and Brisas with things as they are now, Gold Reserve's should be the more profitable one. This I base on the scale of the operation (efficiency), presence of copper credit and Crystallex not having all profits to themselves ( i.e. share with CVG).
The dispute centers on the fact that Gold Reserve owns the resource and is entitled profits from it. Venezuela has put in place an impediment to Gold Reserve's ability to have reasonable profits from that resource. Therefore the matter that has to be settled is the amount of loss to Gold Reserve from
Venezuela's actions or lack of. It does not matter what those actions are. All that should be proven is that the loss occured and the amount of it.
This is just my two bit opinion.