The Daily Journal.- U.S. investment firm Heeney Capital secured rights to develop and operate the Chocó mine in El Callao, Bolívar state, and export its gold under a 30-year agreement with the Venezuelan government and the Venezuelan Mining Corporation (CVM). The project calls for an initial investment of up to $1 billion.
Venezuela’s Minister of Ecological Mining Development, Héctor Silva, and Heeney Capital co-founder and partner Sean Pi signed the agreement Wednesday in Houston on the sidelines of the G20 Energy Ministers’ Meeting. Henry Heeney, co-founder and chief investment officer of the U.S. firm, also attended the signing.
The agreement includes a partnership between Heeney and international commodities trader Mercuria Energy to develop the project and market its production.
The New York-based firm presented the project as part of its investment strategy in minerals it considers strategic. The planned investment could reach up to $1 billion, although the companies have not publicly disclosed the disbursement schedule, expected production capacity, or the project’s financial structure.
The agreement expands international operators’ participation in Venezuela’s gold sector. In March, state-owned mining company Minerven signed an agreement with commodities trader Trafigura to supply between 650 and 1,000 kilograms of gold doré to the U.S. market.
The companies later expanded that agreement through a program in which Trafigura and Minerven agreed to work under a responsible gold-sourcing framework. In early March, the United States authorized certain purchases of gold produced by Minerven, its subsidiaries, and the Venezuelan government for subsequent refining.
The Heeney deal differs from the Trafigura agreement because it goes beyond marketing gold produced by the state-owned mining company. Instead, it grants Heeney rights to develop and operate a mining site for three decades, along with authority to export the mineral.
Heeney’s expansion in Venezuela also involves Mercuria. In May, the two companies announced offtake agreements for commodities and gold projects in Venezuela as part of a Washington-backed initiative to revive the country’s energy and mining sectors. According to the companies, the agreements included commitments that could generate about $2.2 billion annually in mineral export value.
The new agreement came on the same day that Continental Resources, another U.S. company, signed a memorandum of understanding with PDVSA to develop the Ayacucho 2 oil block in the Orinoco Oil Belt.
With information from news agencies
