Partnership news boosts Spokane firm’s stock

Shares of Spokane-based Gold Reserve Inc. soared Monday on news of a partnership between China Railway Resources Co. Ltd. and a company that, like Gold Reserve, has entangled mining claims in Venezuela.

The stock price jumped almost 18 cents to 90 cents, a 24 percent gain for the day. Volume, at 1.7 million shares, was more than 13 times the average.

Gold Reserve owns the Brisas project in Venezuela, but the prospective mine with 11 million ounces of gold and 1.4 million pounds of copper was taken over in October 2009 by the government of President Hugo Chavez.

Development of the nearby Las Cristinas mine owned by Crystallex International Corp. was also blocked by the Venezuelan government. Monday, Crystallex announced a deal with China Railway, which is majority-owned by the Chinese government, that will revive negotiations for the permits needed to construct the mine. Crystallex would have a one-third interest in the mine and China Railway would have two-thirds if the talks are successful.

Gold Reserve President Doug Belanger declined to comment on the Crystallex-China Railway deal, or the jump in Gold Reserve stock.

The company is open to a Brisas deal that would be favorable to shareholders, he said, but in the meantime the company will continue to seek compensation for the loss of the project, which had been in development for more than a decade.

Gold Reserve has filed for arbitration of its claims against the Venezuelan government at the World Bank’s International Center for Settlement of Investment Disputes. Belanger said the process should reach a hearing in December 2011.

“That’s pretty good,” he said, compared with arbitrations that have lasted five years or more.