TORONTO (miningweekly.com) – Spokane, Washington-based Gold Reserve will “actively defend its rights” to a concession, El Pauji, near its Brisas project, in Venezuela, the company said on Tuesday.

But, in what may provide additional cause for concern for Gold Reserve shareholders, the firm also reported that the Venezuelan Ministry of Basic Industry and Mines (Mibam) recently requested all of the technical information for the company's flagship Brisas gold/copper project.

“At this time we do not see any benefit in transferring that information to Mibam,” the firm, which has been trying to get permission for years to build the mine, said in a statement.

Gold Reserve clarified that the El Pauji concession does not contain mineralisation, but would be used for “infrastructure purposes”, and is owned by another party, which has granted use of the concession to Gold Reserve.

The Venezuelan government said in an official gazette dated May 22 that an application for the extension of the El Pauji concession had been denied.

But Gold Reserve said that, as part of the arrangement with the owner of the concession, the company applied for an extension of the concession term on January 17, 2008.

According to Venezuelan law, Mibam has six months after an extension request is made to issue a denial.

In this case, the application for the extension of the concession could have been denied until July 20, 2008, Gold Reserve said.

However, Mibam did not respond the request.

“Our Venezuelan attorneys have advised us that, pursuant to Article 25 of the mining law, the extension is automatically granted,” the company asserted.

“Ignoring its own regulations and laws”, Mibam has now claimed that Gold Reserve is not in compliance with its obligations regarding the concession, the firm said.

“The company, acting on behalf of the owner of the El Pauji concession, will actively defend its legal rights as defined under Venezuelan law.”

Last month, Gold Reserve notified the Venezuelan government of a dispute between under investment agreements signed by Venezuela with both Canada and Barbados, over the State's failure to grant a mining permit for the Brisas project.

The firm intends to settle the dispute “amicably”, but may file for international arbitration at any time under the Barbados-Venezuela treaty, or in six months time under the Canada-Venezuela treaty.

Venezuelan President Hugo Chavez continues to nationalise sectors of the economy, and the ongoing delays in permitting Brisas have given rise to speculation that the project could be taken out of Gold Reserve's hands.

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