Crystallex inks Las Cristinas deal (September 30, 2002)

Vancouver — Less than two weeks after being granted the “right to negotiate,” Crystallex International (KRY-T) and Corporacion Venezolana de Guayana (CVG) have agreed to advance the long-stalled Las Cristinas gold project in southeastern Venezuela.

Under the agreement, Crystallex has the exclusive right to develop and mine zones 4, 5, 6 and 7.

“We are pleased we could move to a definitive agreement so quickly,” says Marc Oppenheimer, chief executive officer of Crystellex.

Crystallex will control the reserves and resources, as well as all production, with a 3% royalty payment going to the Venezuelan Ministry of Energy and Mines.

For its part, CVG gets a sliding-scale royalty ranging from 1% when the price of gold is under US$280 per oz. to 3% when it exceeds US$400.

The agreement has an initial term of 20 years, with two renewals good for an additional 10 years each. CVG has agreed to help Crystallex obtain permits.

Crystallex agreed to pay US$15 million for the exclusive use of National assets related to the project, including digital drill data, drill core, and existing studies.

“We’ve arrived at an agreement which clearly sets forth our exclusive access to the reserves and resources of Las Cristinas and grants us the exclusive right to exploit the resource to its full potential,” says Oppenheimer. “We are confident the financial and investment community will quickly understand and support this agreement.”

The company is reviewing the data before completing a feasibility study.

The impact of ongoing legal actions over the property remains unclear (T.N.M., Sept. 16/02). Over the past year, the Las Cristinas project has been the object of a bitter dispute between CVG and Vancouver-based Vannessa Ventures (VVV-V), which purchased a 95% stake in Minera Las Cristinas (Minca), the company that held the rights to the property, from Placer Dome (PDG-T).