Gold Reserve Inc. says it has entered into a memorandum of understanding with Venezuela that would secure a $765 million award while jointly developing the mine at the center of the legal dispute between the Spokane-based company and the South American nation.

Under terms of the proposed accord, Venezuela would proceed with payment of the award while entering into joint development of the Brisas-Cristinas project. The gold and copper deposit located in the southeastern part of the country is expected to be the largest gold mine in South America and one of the largest in the world, says Gold Reserve.

“This is a tremendous opportunity for the company and Venezuela to jointly develop the Brisas-Cristinas project while providing economic growth in the region and the creation of a new industry complementary to the republic’s existing oil industry,” says Gold Reserve president Doug Belanger in a written statement.

“After settlement of all of the company’s obligations, substantially all of the net proceeds of the payment related to the award and technical mining data is expected to be distributed to our shareholders,” Belanger says in the press release.

The agreement also calls for Venezuela to pay an amount to be agreed upon for Gold Reserve’s mining data that it had gathered previously at the Brisas-Cristinas project.

Gold Reserve claims it invested $300 million into Brisas from the early 1990s to the time the project was expropriated by the Venezuelan government in 2008. The company was in the process of clearing the Brisas site when the government revoked its construction permit.

Later in 2008, Gold Reserve sued the Venezuelan government for $2.3 billion after the country seized the company’s primary mining project, which it had been operating for 16 years.

Venezuela and Gold Reserve estimate it will cost $2 billion to develop the Brisas-Cristinas project.

Under the proposed agreement, the Brisas and Cristinas properties, together with the technical data Gold Reserve owns on Brisas, would be transferred to a Venezuelan mixed company that’s expected to be 55 percent owned by Venezuela and 45 percent by Gold Reserve.

Last July, Gold Reserve Board Chairman James H. Coleman and CEO Rockne J. Timm met with four members of Venezuela’s government and others to discuss settling the award.

In January, the Paris Court of Appeal moved up a hearing date to March 10 from Oct. 13 related to the $765 million award. Also in January, the U.S. District Court in Washington, D.C., issued an order ruling that Gold Reserve could register the judgment in other U.S. District Courts to pursue the award.