Venezuelan congressman challenges Crystallex — Congressional committee offers papers to OSC

Calling the court actions launched by Crystallex International (KRY-T) “judicial privateering,” a Venezuelan congressman told an investment conference here that the company’s claims to legal title to the Las Cristinas gold property are unfounded.

At a press conference, Rafael Rodriguez Acosta, president of the Sub-Commission on Mining of the Venezuelan Congress, said the question facing the Venezuelan Supreme Court was whether it should overrule a decision by a Supreme Court justice that said Crystallex had no standing to sue over gold exploitation rights on the Las Cristinas property.

Placer Dome (PDG-T) is currently developing the property, which has a resource of 232 million tonnes grading 1.2 grams gold per tonne. Production is expected to average 450,000 oz. gold annually for more than 14 years at an average cash production cost of US$200 per oz. The operating company, Minca, is owned 70% by Placer and 30% by state-owned development company Venezolana de Guyana.

Acosta’s remarks were immediately challenged by Crystallex: in a prepared statement, President Marc Oppenheimer said the congressman “does not speak for the government of Venezuela,” and that he had “become a fixture at North American mining conferences, with varied allegations regarding Crystallex.” Oppenheimer said the matter was before the Venezuelan courts, and that “Acosta’s personal views are irrelevant” to the decision the court will make. He did not, however, deny Acosta’s central charge that the motion before the Supreme Court, if allowed, would only signal the court’s willingness to hear Crystallex’s case, and would not decide the title to the mining property.

Acosta said that despite published claims in the Canadian press made by Crystallex and its promoters that a pending court challenge in Venezuela could give it the rights to the Las Cristinas 4 and 6 concessions, “these claims are not true.”

He continued, “Even if it prevailed in this court challenge, Crystallex has no right to the exploitation of gold on these parcels.”

In recent statements, Crystallex describes the legal motions to have the court hear the title challenge as motions to have a right of ownership recognized. In a Mar. 4 press release, Crystallex Chairman Robert Fung said, “Our motions to enforce ownership rights over the Las Cristinas 4 & 6 gold mining concessions in Venezuela are before the Political Administrative Chamber of the Venezuelan Supreme Court.”

Acosta took issue with Crystallex’s stand, saying the junior was only applying to the court to reverse an earlier decision. “There is no basis in fact or law to believe that this decision will be reversed, but if it is reversed, Crystallex would merely have the ability to file a lawsuit. It would not receive any rights.”

Acosta’s congressional commission has also written to the Ontario Securities Commission, offering to send copies of its findings in the event of an investigation.

Crystallex is still under attack by New York-based Asensio & Company, an investment firm noted for short selling. In its Mar. 4 statement, Crystallex said it had instructed legal counsel to seek remedies against Asensio in civil court, and would “pursue the matter” with exchanges and securities regulators in Canada and the United States.