TORONTO (miningweekly.com) – Canadian securities authorities suspended trade in TSX-V-listed Rusoro’s stock late on Tuesday, as a result of the company’s failure to file its 2012 full-year financial results, as required by Canadian continuous disclosure rules.
Rusoro on Wednesday said the filing of its financial statements for the year ended December 31, was delayed pending the company’s auditors issuing an unqualified opinion, prompting the British Columbia Securities Commission to suspend trading in its shares.
However, as a result of the nationalisation of the company's ongoing operations and assets in Venezuela, the auditor was unable to obtain sufficient verification of the company's ongoing liabilities in the country to issue an unqualified opinion before the April 30 filing deadline.
Rusoro, in March, filed a $3.03-billion claim in its arbitration against the Bolivarian Republic of Venezuela before the World Bank's International Centre for Settlement of Investment Disputes (ICSID).
The Russian-owned company filed the claim under the provisions of the Canada–Venezuela Bilateral Investment Treaty (BIT) for compensation over the nationalisation of the company’s gold assets in 2011.
The late President, Hugo Chavez, had put large parts of Venezuela's economy under State control and was targeting the gold industry after his government quarrelled with foreign companies that complained about State-enforced limits on how much gold they could export, which was hurting their efforts to secure financing and develop projects.
Chavez had decreed that half of all gold production had to be sold to the central bank, which some companies said made it much harder for them to get financing abroad, develop projects and create jobs.
The country faced several claims for compensation after it nationalised gold mining in August 2011. However, it had, by February 2011, already expropriated Las Cristinas from Canadian miner Crystallex, which had tried to develop the mine since 2002, after it had been confiscated from Canada-based Vanessa Ventures in November 2001. Crystallex had sued Venezuela at the ICSID for $4.3-billion.
The country also faced multibillion-dollar claims by US oil companies Exxon Mobil and ConocoPhillips.
Rusoro, owned by Russia's Agapov family, was the only large-scale gold miner operating in Venezuela. It produced about 100 000 oz and 80 000 oz of gold in the country during 2010 and 2011 respectively.
The company on Wednesday said it was working with its auditors to obtain confirmations from the outstanding creditors of the company's Venezuelan subsidiaries, after which the auditor expected to be able to issue an unqualified opinion.
Rusoro’s TSX-V-listed shares stood frozen at C$0.035 apiece on Wednesday, down significantly on highs of C$4 apiece six years ago.