Chavez's New Gold Export Rules May Help Rusoro Quadruple Output by 2013

Rusoro Mining Ltd., which mines for gold in Venezuela, expects to quadruple output of the metal by 2013 after President Hugo Chavez’s government relaxed export limits, Chief Executive Officer Andre Agapov said.

“Finally the miracle took place,” said Agapov in a telephone interview from London today. “It changes completely the financial aspects of operations.”

Venezuela will allow the largest mining companies and joint ventures with the government to ship as much as 50 percent of their gold output abroad, up from a previous cap of 30 percent. Current restrictions on smaller producers weren’t changed, the government said in the official gazette today, without specifying what constitutes a small producer.

Rusoro, based in Vancouver, will seek to expand annual production in Venezuela to 600,000 ounces by 2013 from 150,000 in 2009 following the change, Agapov said.

Venezuela has an official exchange rate of 2.6 bolivars per dollar for imports of essential medicines and food and a 4.3 rate for all other goods. Companies use a parallel exchange system, known as Sitme, to obtain dollars at 5.3 bolivars when they can’t get government authorization to buy U.S. currency at the official rates.

Rusoro reached an agreement with the Venezuelan government that will allow it to exchange up to $350,000 a month at 4.3 bolivars to the dollar, Agapov said.

To contact the reporter on this story: Charlie Devereux in Caracas at cdevereux3@bloomberg.net.

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