Crystallex picks up new shareholders

Vancouver — Two major investment companies have taken down a $7 million financing in Crystallex International (KRY-T).

The Ontario Municipal Employees Retirement Board (Omers) and private holding company Kilmer Van Nostrand Company purchased 3.1 million units in the junior priced at $2.25 each. A unit holds one share and one warrant, which is exercisable at $3 until Dec. 24, 2003. The deal gives Omers a 3% stake in the company, while Kilmer takes at 1.2% interest.

In November shares of Crystallex were added to the materials sector of the S&P/TSE Canadian SmallCap Index.

“The addition of Crystallex to the TSE 300 is an important milestone, which reflects positively on the company’s consistent record of growth,” said Crystallex’s Chief Executive officer, Marc Oppenheimer. “As a TSE 300 company, we will be able to further broaden our shareholder base, at a time when the outlook for gold is starting to improve.”

The company tabled net income of $900,824, or 2 per share, for the first nine months of 2001, compared with $2.9 million, or 5 per share in the corresponding period of 2000.

Crystallex has seen rapid revenue growth over the past year on the back of mining at La Victoria on the newly acquired Lo Increible property. Crystallex took control of the property in February through a US$12 million share swap deal with El Callao Mining.

Located in southeastern Venezuela, La Victoria is one of six gold deposits on the property Last year, El Callao moved one step closer to developing the 40-sq.-km gold property following completion of geostatistical drilling of open-pit reserves.

Prefeasibility work arrived at a diluted mineable open-pit reserve of 11.4 million tonnes averaging 3.14 grams gold per tonne, or 1.1 million contained ounces. The waste-to-ore stripping ratio has been calculated at 6.74-to-1. The reserve was based on data culled from 268 holes drilled between 1994 and 1997.

The La Victoria and La Cruz deposits account for 780,000 oz., or 71%, of the recoverable gold.

Indicated and inferred resources from all six deposits — La Victoria, La Cruz, El Tapon, La Sofia, La Loca and El Extranjero — total 24.1 million tonnes grading 3.28 grams gold. The estimate is equivalent to a contained resource of 2.5 million oz. All the deposits remain open at depth and along strike in at least one direction.

Crystallex is using the ore to supplement feed for its nearby Tomi mine with both ores being treated at the Revemin mill.

The company holds a 51% stake in the central property that hosts the resource and a 70% interest in the surrounding properties. The junior also has the right to up its stake in the central portion to 70%. The remaining 49% and 70% respectively belongs to its Venezuelan partners.

On the year, the company’s shares have soared 163% and recently closed at $2.85.