Monday 21st September 2020

Resource Clips

Week in review

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A Venezuelan nationalization gets World Bank approval

An international tribunal has dismissed a long-running claim against Venezuela’s takeover of a Canadian company’s gold project. The Wednesday decision by the World Bank’s International Center for Settlement of Investment Disputes found the country’s actions “did not amount to an expropriation. They were contractual responses to what the tribunal considers to be contractual breaches.”

A mining and exploration retrospect

According to a Friday Bloomberg report, “Venezuela’s National Guard seized control of … Las Cristinas mine, which has reserves of about 27 million ounces of gold, in November 2001 from Vannessa Ventures [now Infinito Gold TSXV:IG]. The rights were transferred to Crystallex International Corp [TSX:KRY] in late 2002 before being taken over again by Venezuela in 2011.”

In a February 2011 news release, Crystallex stated it seeks restitution of its assets and compensation for losses, otherwise it would seek full compensation totalling more than US$3.8 billion. The company referred to Las Cristinas as its principal asset. In January 2012 the TSX delisted Crystallex.

Other mining companies with ICSID disputes against Venezuela include Gold Reserve TSXV:GRZ and Rusoro Mining TSXV:RML, Bloomberg stated.

President Hugo Chavez pulled his country out of the arbitration process last year, but dozens of previous cases are still pending.

A partial gold standard could be the best of all worlds

“The world is moving step by step towards a de facto gold standard,” wrote Ambrose Evans-Pritchard in Thursday’s Telegraph. As the dollar and euro lose their lustre, central banks continue to acquire yellow metal—some 536 tonnes last year.

The European Monetary Union, Evans-Pritchard said, “is a dysfunctional construct, covering two incompatible economies, prone to lurching from crisis to crisis, without a unified treasury to back it up. The dollar stands on a pyramid of debt. We all know that this debt will be inflated away over time—for better or worse. The only real disagreement is over the speed.”

Meanwhile Germany prepares to repatriate some of the gold it stores in New York and Paris, an action he attributes to popular pressure. “The fact that this popular pressure exists—and is well-organised—reflects a breakdown in trust between the major democracies and economic powers. It is a new political fact in the global system.”

Evans-Pritchard doesn’t, however, foresee a complete breakdown of fiat currency. “A partial gold standard—created by the global market and beholden to nobody—is the best of all worlds. It offers a store of value (though no yield). It acts [as] a balancing force. It is not dominant enough to smother the system.”

He concluded, “Let us have three world currencies, a tripod with a golden leg. It might even be stable.”

Nothing like it

Big, near-surface nuggets in the region around Ballarat have provoked gold rushes since the mid-1800s. Now an especially big find might incite more madness in Australia’s Victoria state.

Armed with a metal detector, an amateur prospector found a 177-ounce nugget, the BBC reported on Thursday. For gold value alone, it’s worth about US$315,000. But its curiosity value might add a premium, according to another local, Cordell Kent.

“I have been a prospector and dealer for two decades and cannot remember the last time a nugget over 100 ounces has been found locally,” the BBC quoted him. “It’s extremely significant as a mineral specimen. We are 162 years into a gold rush and Ballarat is still producing nuggets—it’s unheard of.”

Kent attributed the unnamed man’s success to a state-of-the-art metal detector.

“I’ve got no doubt there will be a lot of people who will be very enthusiastic about the goldfields again. It gives people hope,” he said. “There’s nothing like digging up money—it’s good fun.”

Watch a short video of the great big nugget here.

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