Canada court stops Rusoro takeover of Gold Reserve
(Associated Press WorldStream Via Acquire Media NewsEdge) CARACAS, Venezuela_Russian-financed gold miner Rusoro Mining Ltd. has been legally blocked from buying out a company with rights to develop a lucrative Venezuelan gold mine.
Rusoro said in a statement Tuesday it has withdrawn its purchase offer for Spokane, Washington-based Gold Reserve Inc.
Gold Reserve has been waiting since May for a permit to begin construction on its Brisas gold mining project in Venezuela's southern Bolivar state. And as President Hugo Chavez's government announces plans to expand control over the sector, the future of this and other gold mining concessions have become increasingly doubtful.
Last month, Chavez said a joint venture between the Venezuelan state and Rusoro _ based in Vancouver, Canada _ would exploit the country's gold resources.
Rusoro has declined to comment on any specific deals, but the company in December offered to buy all of Gold Reserve's outstanding shares and equity units. Gold Reserve refused, and sued to stop the hostile takeover from progressing.
The Ontario Superior Court of Justice granted an injunction restraining Rusoro from the takeover, saying Rusoro had access to confidential information from Endeavour Financial International Corp. _ a financial adviser that had been assisting both companies.
The decision by Justice Peter Cumming also blocked Endeavour, based in the Cayman Islands, from future involvement in a takeover bid for Gold Reserve.
Rusoro, founded by private Russian investors, trades on Canada's TSX Venture Exchange. The company has recently expanded its presence in Venezuela, purchasing Idaho-based Hecla Mining Corp.'s Venezuelan subsidiaries for $25 million in June.
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