UPDATE 1-Venezuela, Gold Reserve to settle arbitration dispute with joint venture

(Adds quotes from Maduro, comment from Gold Reserve, details)
By Alexandra Ulmer
CARACAS, Feb 24 (Reuters) - Venezuela and Canadian mining
company Gold Reserve signed a memorandum of understanding on
Wednesday to settle a protracted arbitration dispute through
creation of a joint venture in the South American country.
Venezuela will seek to use the mining property as collateral
to obtain financing, the company said. The government said the
company was investing $5 billion in Venezuela. Gold Reserve
declined to give an estimate of how much it would invest.
Specific details of the deal were not immediately clear,
although Gold Reserve's GRZ.V president, Doug Belanger, told
Reuters the company would be receiving compensation.
A final settlement was expected soon, he added.
The small Canadian miner was awarded $750 million by the
International Center for Settlement of Investment Disputes for
the 2009 termination of its Las Brisas gold concession by the
OPEC nation.
"We're working on a joint venture with the government,"
Belanger said after signing the memorandum of understanding.
"They're using the property as collateral to obtain
financing for not only the project but their other financial
needs. ... We're in agreement to settle."
Belanger added the total amount owed was now about $760
million because of interest.
"It's the resolution of a conflict," Venezuelan President
Nicolas Maduro said during a speech. "Now we are partners."
Oil Minister Eulogio Del Pino added Gold Reserve would have
a 45 percent stake in a joint venture, with the remaining 55
percent going to the state.
Del Pino said the deal proved Venezuela was acting
responsibly toward investors, some of whom are worried about a
potential default amid the country's economic crisis.
"(This agreement) demonstrates this country's responsibility
toward international investors," added Del Pino.
Sources told Reuters earlier on Wednesday that the country
had the funds to pay $1.5 billion due on Friday on its Global
2016 bond VE260216=RR .