Crystallex drilling Las Cristinas

Toronto-based Crystallex International (kry-t) is proceeding with exploration work including drilling while it awaits approvals to build a mine at Las Cristinas, a bulk-tonnage gold deposit in Venezuela’s Kilometre 88 gold district.

The Ministry of Environment and Natural Resources is reviewing the final environmental impact statement, and Crystallex has awarded an engineering contract for a mine sized to produce 266,000 oz. annually over a mine life of 34 years, including 311,000 oz. in each of the first five years.

Crystallex plans to operate the mine under the terms of an operating agreement with Corporacion Venezolana de Guayana (CVG), a state-owned entity that has been involved in the project since the early 1990s.

An infill drilling program consisting of 4,000 metres in 10 holes is attempting to convert inferred resources in the proposed pit to the indicated category. A second phase, consisting of 1,800 metres in six holes, will evaluate panels of inferred resources below the proposed pit, which is predicated on a gold price of US$325 per oz.

Drill results are expected by the third quarter. More systematic exploration will begin in the second half of the year.

Las Cristinas has proven and probable reserves of 246 million tonnes grading 1.29 grams gold, or 10.2 million contained ounces. These reserves are included in a total measured and indicated resource of 439 million tonnes grading 1.1 grams gold. There is an additional, inferred resource of 208 million tonnes at 0.91 gram gold.

Vancouver-based Vannessa Ventures (vvv-v) has taken legal action to regain rights to Las Cristinas, which it acquired in 2001 from previous operator Placer Dome (pdg-t). Vannessa maintains it holds the mining and environmental permits for Las Cristinas through MINCA, a Venezuelan subsidiary previously held by Placer Dome, with a 70% interest, and CVG, with 30%

Crystallex, meanwhile, has appointed BNP Paribas to provide advisory services for project financing. The company has also launched a 24-hole, 7,500-metre program of infill drilling at its La Victoria deposit in Venezuela’s El Callao gold district. The goal is to upgrade inferred resources to the indicated category. Revised reserve estimates for this project are expected in the third quarter.

Crystallex mined portions of La Victoria in 2002 and 2003, but some unoxidized portions are refractory, resulting in poor recoveries from conventional cyanide processing.

Recent BIOX bench-scale tests have shown potential for recoveries to climb to more than 85% from about 60%. A larger, pilot-plant program is planned for later this year.