Gold Reserve Breach Claim Against Rusoro Clears Dismissal Hurdle

Gold Reserve said Monday that a Delaware Chancery Court judge allowed its breach of contract claim against Rusoro Mining to proceed, rejecting Rusoro's bid to toss the lawsuit. The court dismissed five of the six claims Gold Reserve filed but kept the core contract claim alive.

The dispute traces to a consortium agreement the two miners signed for a joint bid on shares of PDVH, the holding company that indirectly owns Citgo Petroleum. The bid, called the Dalinar Bid, was submitted in the judicial sale of PDVH shares pending before the U.S. District Court for the District of Delaware in the Crystallex International enforcement action.

Monday's ruling found Gold Reserve had sufficiently alleged that Rusoro may have breached its contractual duty of confidentiality and its obligation to use commercially reasonable efforts to support the Dalinar Bid. Rusoro had argued the complaint failed to state a claim. The decision sends the case to the next stage, where the court will consider the merits. Discovery can now begin.

The survival of the breach claim matters as the PDVH auction continues in federal court. If Gold Reserve ultimately prevails on the contract, it could seek damages from Rusoro or potentially influence how proceeds from the sale are distributed. The consortium agreement set out each side's obligations to coordinate and support the joint bid. A finding that Rusoro undermined that agreement could give Gold Reserve leverage in the bidding process itself.