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Crystallex comments on Venezuelan mining policy
Petroleumworld
CARACAS
Petroleumworld.com 06 14 06
Crystallex International Corporation (TSX: KRY) (Amex: KRY) - commented today that there has been considerable confusion resulting from yesterday's press coverage on possible revisions to the Venezuelan mining law, namely the incorporation of mixed companies as an exploitation structure in the mining sector. The Government stake in such mixed companies would be at least 51%.The Crystallex share price has been negatively impacted as the market seems to have interpreted the comments about mixed companies in the mining sector to mean that this structure has now become the only model under which mining will be allowed in Venezuela.
It is important therefore to stress that the mixed company model under discussion is not applicable to the Crystallex Las Cristinas operating contract as the draft mining law provides express recognition of existing contracts which are in proper execution and good legal standing.
Furthermore Article 11 of the draft mining law specifically provides for exploitation by way of operating contract, in a manner separate and distinct from the mixed company structure contemplated elsewhere in the draft. A translation of Article 11 is provided as follows:
"Article 11: For the purposes of this Law, operation contracts shall be understood as those legal arrangements entered into between National Social Mining Production Corporation and private legal entities, for the rendering of services within the work frame of exploration activities and rational and sustainable exploitation of mineral resources."
Crystallex holds a valid and binding operating contract issued by the state through the Corporacion Venezolana de Guayana ("CVG"), its regional natural resource development arm, that was officially approved and endorsed by the Ministry of Basic Industries and Mining ("MIBAM") in March of this year. As noted in the Venezuelan press yesterday, MIBAM was the entity responsible for preparing the mining law reform working paper and providing it to the National Assembly.
Crystallex Confirms Las Cristinas Position
Crystallex International Corporatio - Todd Bruce, President and Chief Executive Officer, responded to the market reaction to yesterday's Bloomberg newswire articles by reiterating that, “The company has a valid and binding contract to operate the Las Cristinas project, which is 100% owned by the Nation of Venezuela.
We have been working closely with all the relevant institutions in Venezuela such as the Corporacion Venezolana de Guayana (“CVG”), the appropriate Ministries and the National Assembly to advance the Las Cristinas project. Just last week the Permanent Commission of the National Assembly petitioned the Minister of the Environment and Natural Resources (“MARN”) in support of Crystallex commencing the Las Cristinas project as soon as possible.
In addition the media in Venezuela reported last week that Deputy Ricardo Gutiérrez, President of the Commission of Mines of the National Assembly had met with the Mayor of Sifontes district to express their joint support for the rapid commencement of the Las Cristinas project by Crystallex. Deputy Gutiérrez also stated that he had arranged to meet with the Minister of MARN to express his commission's support for the rapid development of the Las Cristinas project by Crystallex.”“In working as closely as we have with all the relevant institutions of the nation, we have received no request or proposal for any change to our operating contract,” stated Mr. Bruce. He continued, “As recently as March, 2006 the Ministry of Basic Industries and Mining ("MIBAM") officially approved the Las Cristinas Feasibility Study and the terms and conditions of the Las Cristinas operating contract.”
About Crystallex
Crystallex International Corporation is a Canadian based gold producer with significant operations and exploration properties in Venezuela. The Company's principal asset is the Las Cristinas property in Bolivar State that is currently under development and which is expected to commence commercial gold production in 2008 at an initial annualized rate of some 300,000 ounces. Other assets include the Tomi Mine, certain Lo Increible properties and the Revemin Mill. Crystallex shares trade on the TSX (symbol: KRY) and AMEX (symbol: KRY) Exchanges.
Petroleumworld 06 13 06
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