(New throughout, adds details on loan, context on Venezuela
debt)
By Eyanir Chinea and Corina Pons
CARACAS, Feb 26 (Reuters) - Venezuela is in advanced talks
for a $5 billion loan from international banks and investment
funds, the head of the central bank said on Friday, potentially
providing an influx of cash for the OPEC member country, which
faces heavy debt payments this year.
The operation would provide $3 billion in liquidity for the
government and $2 billion to finance a gold mining joint venture
with Canada's Gold Reserve GRZ.V , Nelson Merentes said in an
interview.
Venezuela's international reserves fell to a 17-year low of
on Friday after the government paid in full its $1.5 billion
Global 2016 bond, according to central bank data.
On Wednesday, Venezuela and Gold Reserve signed a memorandum
of understanding to jointly develop the Las Brisas and Las
Cristinas gold mines, ending an arbitration dispute.
"We hope within a month to constitute the company, and in
parallel we are seeking the loan," Merentes said. "I can't say
for sure if it will be in a month, in two months. But it will
definitely be this year. We are moving quickly."
Gold Reserve was not immediately available for comment.
Merentes said the loan would be repaid with gold produced
from the mines. The mines would serve as the guarantee for the
loan.
He said banks from Germany, Canada and China had come to
Caracas to participate in a government-sponsored mining sector
event. It was not immediately clear whether these banks would be
involved in providing the loan.
Investors have grown more concerned that Venezuela or state
oil company PDVSA could default this year, pushing the country's
bond yields to the highest of any emerging market nation.
Merentes vowed Venezuela would meet all debt commitments,
adding that authorities were willing to use instruments such as
oil or gold warrants in efforts to refinance.
"These are commodities that can be sold in the future or in
the present," he said. "We have paid (the foreign debt) and we
continue working on financial architecture. We will continue
paying."
A spokeswoman for the company declined to comment on the
Venezuela situation, adding that the company planned to issue a
statement in the "near future."
Obtaining the financing may be difficult given that Gold
Reserve is a tiny exploration company with no assets in
production.
It had $2.2 million in cash on hand as of the end of
September, and in its third-quarter results warned of
"substantial doubt about the company's ability to continue as a
going concern."
Banks have been leery of funding the advanced projects of
major players in the sector, and precious metal exploration
companies have largely fallen out of favor with investors, stung
by the extended slide in bullion prices.
(Writing by Brian Ellsworth; Editing by David Gregorio)