Vannessa to seek international arbitration for Crucitas if necessary

Vannessa to seek international arbitration for Crucitas if necessary

January 24 2005

By Aiden Corkery - BNamericas.com

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Canadian minerals company Vannessa Ventures (TSX-V: VVV) will consider seeking international arbitration to resolve the legal issues blocking its stalled Cerro Crucitas gold project in Costa Rica if necessary, company president John Morgan told BNamericas.

"There is still the option open to us to go for international arbitration. That is something we have to consider to protect our rights," Morgan said.

The Cerro Crucitas project was dealt a serious blow in December 2004 when Costa Rica's supreme court overturned the mining permit allowing the project. The court ruled that the permit violated article 50 of Costa Rica's constitution guaranteeing the public a healthy environment and ordered the state to pay costs, damages and compensation to the concession holder.

However, the court also stated that the separate environmental assessment process currently before the country's environmental regulator Setena should not be affected by the decision to annul the exploitation permit.

Setena issued a resolution on January 20 asking Vannessa to file an addendum to its environmental impact study (EIS) to clarify certain queries raised by Setena while evaluating it.

Vannessa estimates it could prepare the addendum within six weeks but agreed that the supreme court's decision to allow the environmental assessment process to continue while overturning the exploitation permit is confusing.

The company would prefer to pursue international arbitration rather than give up on such a large project and attempt to begin the process of finding a completely new large project again, Morgan added.

Vannessa has already had a request for international arbitration to resolve the ownership of the Las Cristinas project in Venezuela accepted by the international center for the settlement of investment disputes (Icsid) in Washington last November and said it may also make a similar request for arbitration in relation to Cerro Crucitas.

"These projects are not that easy to find. When you look at whether we should persevere with these existing projects versus the other option of going out any trying to find another million ounce project, I'd take the former," he said.

Vannessa calculates gold extraction of at least 1Moz at Crucitas over a 12-year period with an average annual production of 100,000oz during the first four years and a production cost of US$160/oz.