Venezuela’s government on Wednesday announced that Canada’s Gold Reserve had agreed to resolve its arbitration case with the country as part of a multibillion-dollar agreement.
The deal with the mining company includes a $2 billion loan to Venezuela and a $2 billion investment in a mining joint venture, Oil Minister Eulogio Del Pino said at an event on mining investments broadcast on state television. Venezuela did not specify how it would pay Gold Reserve to resolve the case. Telephone calls to Gold Reserve after business hours were not returned.
“From a lawsuit, we are now partners in a win-win situation to develop a project worth more than $5 billion,” President Nicolas Maduro said at the event at which Gold Reserve President Doug Belanger was in attendance.
Venezuela is seeking to develop sectors beyond petroleum as it endures its deepest recession in a decade after oil prices slumped amid a global supply glut. Seeking to increase government revenues, Maduro last week raised gasoline prices for the first time in almost two decades and devalued the nation’s currency to get more bolivars for its petrodollars.
A World Bank arbitration court ruled in 2014 that Venezuela must pay $740 million to Gold Reserve for taking its Brisas gold and copper project in 2008.
Gold Reserve said it acquired and began developing the Brisas mine, which it considers one of the world’s largest undeveloped gold and copper deposits, in 1992, according to its website.
Former President Hugo Chavez nationalized assets in Venezuela’s energy and mining industries to increase state control over the economy before he died in 2013.
Gold Reserve in November said the World Bank court denied Venezuela’s motion to dismiss, confirming the award, which had grown to $760 million.
Gold Reserve will certify two blocks for gold and other minerals as part of the overarching agreement, according to a broadcast on state television.