More on Venrus:
The nature of the assets to be effectively contributed into Venrus C.A. and the timing of their contribution is still pending. Due to the existing Mixed Enterprise Agreement that requires the contribution of the assets into Venrus C.A. and also requires that the Company pledge 50% of its shares in Minera Rusoro and El Callao Gold Mining in favour of the Venezuelan government until that contribution occurs, the incorporation of Venrus C.A. on December 23, 2008, and due to the ongoing collaboration of the Venezuelan government in determining the strategic operating, investing and financing policies of the mixed enterprise, management has determined that starting December 23, 2008 proportionate consolidation of 50% of the net assets acquired in the Hecla-Venezuela Acquisition is appropriate.
MIBAM has agreed in the Mixed Enterprise Agreement to contribute the La Camorra mill to Venrus C.A. Since this contribution is pending and it is uncertain whether this contribution will be made, the Company's interest in the La Camorra mill has not been recognized. Should the La Camorra mill be contributed to Venrus C.A., the accounting treatment will be determined based on the facts and circumstances at the point of contribution. The Venezuelan government has had significant involvement in determining the terms and conditions associated with the Hecla-Venezuela Acquisition. Resolution of these terms and conditions have not yet been finalized due to uncertainty of the transfer of the La Camorra mill to Venrus C.A and uncertainty of the nature and timing of the contribution of other assets (including the Isidora Mine) to Venrus C.A.
Due to the delay in the contribution of the assets to Venrus C.A. as required in the Mixed Enterprise Agreement, additional agreements as described below were signed in the year ended December 31, 2009 which allow Venrus C.A. to operate the assets acquired in the Hecla-Venezuela acquisition and the La Camorra mill for a period of one year from the dates of these agreements which are extendable in one year increments.
