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Rusoro Mining Takes Shape as Mid-Tier Producer
By James West
MidasLetter.com
Tuesday, May 5, 2009
Rusoro Mining (TSX.V:RML) has been taking some lumps this year. After
having their takeover bid for the outstanding shares of Gold Reserve Inc.
(AMEX:GRZ) quashed by an Ontario court, the company was chastised by
regulatory agencies in Canada for overstating its ambitions in Venezuela.
The media seized
the opportunity to paint the company as a TSX Venture bad boy to watch
out for - a situation that has probably contributed largely to the
company's lackluster performance in the market of late.
But all that is likely to change, and last week's release of its annual
results bears testimony to the fact that while the company may have been
guilty of excessive hubris in its projections, it certainly didn't fail
to achieve some impressive milestones in the last year.
First and foremost the company produced 99,663 ounces of gold in a
country where no foreign company has ever successfully been able to mine
gold consistently. Despite a loss of $72.2 million for the year, the
company continues to boost production and chisel away at costs.
2008 saw Rusoro raise $80 million through Peter Hambro PLC, settle the
dispute with the Venezuelan government over the government's ownership
interest in the Choco Mine, to a final 5% indilutable ownership interest,
held by the government, and advance construction of the Alvarez
underground ramp which will provide access to main mineralized areas in
the contiguous San Rafael and El Placer concessions.
Rusoro plans to increase production to between 250,000 and 270,000 ounces
by next year, as it brings two new mines into production in the first
quarter. The company is reviewing investing in more deposits and mines in
the South American country, which would be developed through joint
ventures with the government, said CEO Andre Agapov.
The company recently attracted some heavy hitting mine management talent
in the form of mining engineer Roman Amosov to the role of Chief
Operating Officer, and Dmitry Ushakov as VP of Corporate Development.
Amosov is a Mining Engineer and graduate from the Moscow State Institute
of Nonferrous Metals and Gold. He has extensive experience in mining
project management in a number of regions in the world including Latin
America and the Former Soviet Union, specifically in the areas of
technical auditing of gold mine processing facilities, the organization
and operation of underground gold mines and in the area of mill and
mobile fleet maintenance. He also has significant experience in the
preparation of environmental impact and feasibility studies from gold
projects located in a number of different mining regions around the
world.
Ushakov is the Director General of Interros Holding Company, a major
Russian private investment company which operates throughout Russia,
Europe, Asia, and North America and who are significant shareholders of
Norilsk Nickel and Polyus Gold.
"The extensive operational and financial experience of these
gentlemen within the mining industry will be of considerable benefit to
the company as we continue to execute our aggressive growth strategy in
Venezuela, said Rusoro President George Salamis.
During 2009, the Company expects to increase its gold production profile
to 170,000 ounces of gold from its 95%-owned Choco mine and its 50%-owned
Isidora Mine. Total combined cash costs per ounce for 2009 are expected
to be less than $400 per ounce.
The company's prospects in Venezuela are positive in view of the
statement by President Hugo Chavez says he wants Las Cristinas to be
developed as a joint venture between the government and Rusoro.
Las Cristinas is a gold deposit in the Kilomtero 88 area of Venezuela
that has been bogged down in legal wrangling between its owner,
Crystallex Mining, and the Venezuelan government. There is a confirmed
reserve of at least 21 million ounces of gold there, of which a minimum
of 10 million will be attributable to Rusoro should Las Cristinas be
developed by VenRus, the joint venture company established by Rusoro and
the government of Venezuela.
According to press reports in El Diario, a Venezuelan daily newspaper,
Rusoro is in discussion with Crystallex to reach an agreement.
SOURCE: http://www.midasletter.com/news/09050506_Rusoro-Mining-takes-shape-as-mid-tier-gold-producer.php
For more information please contact:
Keith Schaefer
Vanguard Shareholder Solutions
Tel: 604 608 0824
Toll Free: 1 866 591 0825
www.rusoro.com
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