Rusoro Mining Ltd. [RML-TSXV] shares rose sharply in heavy trading Thursday after Venezuela voluntarily dismissed its appeal of the US$1.62 billion award rendered by the U.S. District Court in Washington, D.C. in favour of Rusoro over the 2012 expropriation of the Choco and San Rafael/El Placer Gold projects.
The U.S. judgement confirmed the award of an international tribunal based in Paris, which found that Venezuela had expropriated Rusoro’s mining-related investments in that country in violation of international law, and ordered Venezuela to compensate Rusoro for the damages it suffered as a result of Venezuela’s seizure of its investments.
“We are hopeful that Venezuela’s decision to withdraw its U.S. appeal reflects a decision on its part to respect international law and will lead Venezuela to finally compensate Rusoro in accordance with the rulings of the arbitration tribunal in the U.S. courts,” said Rusoro CEO Andre Agapov.
He went on to say that if Venezuela does not pay the U.S. judgement voluntarily, then Rusoro will continue its enforcement efforts against Venezuelan assets wherever they are found.
Rusoro shares advanced on the news, rising 33% or $0.015 to $0.06 on volume of 3.52 million. The shares are currently trading in a 52-week range of 13.5 cents and $0.35.
In August, 2016, Rusoro was awarded US$967.77 million by a tribunal operating under the Additional Facility Rules of the World Bank’s International Centre for the Settlement of Investment Disputes (ICSID) in the arbitration brought by the company against the Bolivarian Republic of Venezuela.
The tribunal awarded the company damages of US$967.77 million, plus pre-and post-award interest, which at the time equated to in excess of US$1.2 billion.
Rusoro filed its request for arbitration before ICSID in July, 2012 under the Canada-Venezuela Bilateral Investment Treaty. In its award, the Tribunal upheld Rusoro’s claims that Venezuela breached its obligations under the Bilateral Treaty by unlawfully expropriating the company’s investments without paying compensation and by imposing certain restrictions on the export of gold.
In addition to payment of damages, the Tribunal ordered Venezuela to contribute US$3.3 million towards Rusoro’s costs in the arbitration.
Rusoro has said it intends to vigorously pursue all available remedies to reinstate the award’s finding on damages in full or otherwise obtain a fair compensation for the unlawful expropriation of its investments in Venezuela.
The latest development in the Rusoro case follows reports that Venezuela has announced the gradual reactivation of its metals industry, following a year of inactivity.
Published reports by S&P Global Platts say Venezuela’s five hot-briquetted-iron (HBI) producers, Orinoco, Venprecar, BriqVen, Comsigua and Ferrominera were put back into production throughout September.