World Economy

Venezuela Signs $5.5b Mining Deals 

Canada’s Barrick Gold Corp.
Canada’s Barrick Gold Corp.

Venezuela has signed over $5.5 billion in mining deals with companies including Canada’s Barrick Gold Corp and China’s Shandong Gold, President Nicolas Maduro said during a ceremony held at the presidential palace in Caracas Friday.

Barrick, the world’s largest gold producer, said in a statement that “at the invitation of the government, we intend to review information pertaining to mining opportunities in the country”, Reuters reported.

Barrick was among several companies to sign letters of commitment for gold-mining ventures. The government would take a 55% stake in the proposed Barrick venture, Maduro said.

“At the invitation of the government, we intend to review information pertaining to mining opportunities in the country,” Andy Lloyd, a spokesman for Toronto-based Barrick, wrote in an e-mailed response to questions.

But he did not respond to questions about spending or development plans in the country.

The deals are part of a plan to ease the OPEC nation’s grave economic crisis that has caused food shortages and supermarket riots.

Earlier this month, Maduro said Venezuela had struck $4.5 billion in mining deals with foreign and domestic companies. He also said that he expected $20 billion in mining investment contracts to be signed in coming days.

It was unclear if the $5.5 billion were part of the broader $20 billion investments.

 Securing Financing

Earlier this month, Gold Reserve Inc. said it will get about $770 million as part of a settlement with Venezuela for the 2008 seizure of its Brisas gold and copper project in an arrangement that depends on the country securing financing. In that arrangement, Venezuela also agreed to buy the Spokane, Washington-based company’s mining data for $240 million and enter into a jointly owned company for a 18,000-hectar claim including the Brisas Cristinas deposit.

Gold has seen some serious sunshine in 2016 as its haven appeal keeps rising significantly. Gold has witnessed a surge of about 2% so far this year. Following the returns for gold, gold mining-based funds like the Direxion Daily Gold Miner and the Direxion Daily Junior Bull Gold 3X have also risen by a whopping 566% and 169%, respectively.

Meanwhile, amid ongoing global concerns, many countries like China and Russia are adding gold to their reserves. But a few countries like Venezuela are selling off their gold.