Due Diligence

Expert Witness - Gold Reserve v. Venezuela Government

Gold Reserve Inc. announced on September 22, 2014 that it won US$740.3 million in compensation for the expropriation of its Brisas project by the Venezuelan government; one of the largest international arbitration awards ever granted to a mining company in a treaty case.

Gold Reserve had invested US$300 million in the Brisas project when it was expropriated by the Venezuelan government in May 2008. In 2009, RPA was retained by White and Case LLP to act as an expert witness and to prepare an expert report on behalf of Gold Reserve for the arbitration case against Venezuela (Gold Reserve Inc. v. Bolivarian Republic of Venezuela), in which Gold Reserve was seeking compensation for losses caused by the expropriation. RPA’s expert report examined all technical work on the project to date, and commented on the reasonableness and feasibility of the technical and cost assumptions for the Brisas project. As part of the assignment, an RPA Principal Mining Engineer and a Principal Metallurgist attended and testified as experts at the Arbitration Tribunals of the International Centre for Settlement of Investment Disputes (ICSID), part of the World Bank.

The Brisas project consists of a proposed gold-copper open pit mine, located in southeastern Venezuela. Gold Reserve acquired in the initial claims in 1992, and subsequently acquired adjacent properties, carried out exploration, drilling programs, environmental and social studies, and engineering studies, including completion of a feasibility study in 2005. As of October 2008, the project contained mineral reserves of 485 million tonnes containing 10.3 million ounces of gold and 1.4 billion pounds of copper, at average grades of 0.66 g/t Au and 0.13% Cu.

RPA has extensive experience providing mining companies, legal firms, and governments with expert opinion and expert witness services for projects at various stages of exploration and development, located worldwide. RPA also provides mineral property valuations in connection with mineral property disputes and compensation for expropriated claims. These valuations have been relied on by governments to determine appropriate compensation for the parties involved.