About that gold

In my prior post on Venezuelan gold, I should have included a couple links that are probably worth posting here rather than making an update:

Caracas Chronicles put up a clever post about the many arbitration cases that Venezuela is facing. Companies say the suits are a result of the Chavez administration’s inconsistency on gold mining policy, while the most charitable interpretation is that they are the result of a series of unserious gold (and copper) miners getting their hands on Venezuelan concessions. This probably isn’t the place for the debate, but anyway, go read their post. It’s good.

Rusoro says more or less what they told me, but this time telling people with the good taste to avoid such disreputable corners of the internet.

Devil’s Excrement also touches on gold, but in this case is looking at repatriation, rather than nationalization.

The folks at BBO, an investment bank in Caracas, published an analysis of Venezuela’s foreign reserves this week that focuses particularly on gold holdings. Very nice timing! It can’t be downloaded, but if you really want a copy, contact moctavio@bbo.com.

But the real news comes, as usual, from the Chiguire. If you don’t speak Spanish, this is a very good reason to learn.

One last little note. Chavez’s government normally offers book value for expropriated assets. This usually works out well for the Bolivarians because most companies take maximum advantage of depreciation in order to dodge taxes. You have to be financially sophisticated to find the book value Rusoro carries…but let’s just say shareholders wouldn’t be sobbing.

5 thoughts on “About that gold

  1. Francisco Toro

    Takes an unserious government to grant a multi-billion dollar concession to an unserious miner.

    Takes a disastrously bungling government to grant the same multi-billion dollar concession to two unserious miners in a row.

    But by the time you’ve written up and torn up not one, not two, but three concessions on the same mine you’ve crossed the threshold from incompetence to criminality…

  2. Jim

    One would have to be very optimistic, sarcastic, or dumb to put money in Venezuela.
    Obviously the Ruskie is lining Hugo’s and others pockets to keep operating.
    There may be $$$ to be made here but I’ll leave it to those with stronger stomachs than I.

    1. sapitosetty Post author

      Why do you think you can come here and slander people? What do you mean “obviously”? If you’re going to make a charge like that, you better have evidence. Please provide some.

  3. sapitosetty Post author

    Yes, obviously I am Hugo Chavez, you outed me. Just to be clear, the reason this website is able to break news like this, hours ahead of the official announcement and beating all wire services, is because around here we treat people fairly. I don’t ignore the bad news, as you’ll see if you read that post, but there’s a difference between pointing out bad news (the $19.6 million potential fine) and stating that there is corruption without evidence. If you are stating an opinion, you don’t say “obviously,” you say “maybe.” I have followed Rusoro since the company entered Venezuela, and I have yet to see any evidence of corruption. Not saying it’s impossible, but you need to do more than assert that everyone working in Venezuela is doing so in a corrupt manner. Do you say the same about Chevron? In any case thanks for reading and for taking part in the discussion.

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