UPDATE 3-Venezuela ends Gold Reserve Brisas' concession

(Adds detail of El Pauji)

CARACAS, May 25 (Reuters) - Venezuela has ended a concession held by U.S.-based miner Gold Reserve (GRZ.A) in one of Latin America's largest gold deposits, part of a strategy to increase state control of key economic sectors.

The official gazette said on Monday the government had not granted an extension to the El Pauji concession of the large Brisas project, citing contractual failures.

The Brisas project covers several concessions in the KM88 mining belt south of the Orinoco river and is adjacent to the legendary Las Cristinas project.

"This should now become a joint venture controlled by the state, that's what we are looking for in the sector," a Mining Ministry spokeswoman said on Monday.

Gold Reserve's representative in Venezuela declined to immediately comment. U.S. spokesmen were unavailable.

Venezuela's socialist President Hugo Chavez said earlier this year that the gold industry should be controlled by the state. He said the KM88 district would be exploited by a joint venture between the state and a Russian mining company.

Chavez has steadily been nationalizing key sectors of Venezuela's economy, including energy and telecommunications, over the last two years. This month he took over several oil and iron companies.

One possible beneficiary of the decision on the El Pauji concession is Russian-owned Canadian miner Rusoro (RML.V), which is interested in developing the KM88 area and last year launched a failed takeover bid for Gold Reserve. Rusoro declined to comment on the news.