Crystallex tallies Las Cristinas reserves (March 31, 2003)

Vancouver The Las Cristinas gold deposit has moved a step closer to development with Crystallex International (KRY-T) tabling a new reserve estimate for the long stalled Venezuelan project.

An independent study completed by Reno-based Mine Development Associates pegs the proven and probable reserves at 224 million tonnes grading 1.33 grams gold per tonne, using a cut off grade of 0.5 gram gold. The measured and indicated resources come in at 439 million tonnes grading 1.09 grams gold.

“The data confirms that Las Cristinas is one of the world’s largest undeveloped gold deposits with excellent potential to grow in size," says company President, Marc Oppenheimer. "More specifically, the report concludes that with additional drilling at least a portion of inferred resources will likely be upgraded to the measured and indicated categories, which should add to the reserves."

The bulk of the mineralization is hosted in the Conductora-Cuatro Muertos deposit with proven reserves of 34.1 million tonnes grading 1.43 grams gold and probable reserves of 167.96 million tonnes averaging 1.31 grams gold for a total of 8.64 million oz of gold. The deposit also holds resources of 48.3 million tonnes grading 1.21 grams gold in the measured section, 343.59 million tonnes grading 1.09 grams gold is indicated and 187.38 million tonnes grading 0.94 gram gold fall in the inferred category.

A shear zone containing foliation-parallel pyrite disseminations and crosscutting quartz-carbonate-pyrite-chalcopyrite veinlets hosts the mineralization at Conductora. The 3-km long zone is moderately dipping with widths of up to 400 metres.

The remaining estimate come from the nearly contiguous Mesones-Sofia zone, which hosts a probable reserve of 21.86 million tonnes grading 1.28 grams gold. The deposit also contains a measured resource of 9.4 million tonnes grading 1.2 grams gold, an indicated resource of 37.6 million tonnes grading 0.91 gram gold and an inferred resource of 20.5 million tonnes averaging 0.65 gram gold.

Minineralization in this deposit lies predominantly in tourmaline-bearing breccia pipes associated with intense silicification and potassium feldspar alteration. Gold mineralization is associated with coarse pyrite and chalcopyrite.

The development of the reserves will require two separate pits. The Conductora pit will be the deeper of the two, at 300 metres below surface and carry a strip ratio 1.3 to 1. The smaller Mesones pit has a strip ratio of nearly 1.9-to-1.

“This is a deposit of impressive size,” says Chief Operating Officer, Ken Thomas. “I look forward to working with our Government partners in Venezuela to bring this important property into production."

In Feb., Crystallex contracted SNC-Lavalin Engineers & Constructors to complete a feasibility study for the project using an initial 20,000 tonne per day operation capable of processing oxide and sulphide ores.

“SNC-Lavalin is well underway with its work on the feasibility study for the development, construction and operation of a mining and processing facility,” adds Thomas.

Crystallex began moving the project forward back in Sept. of last year when the junior was granted the right to negotiate an operating contract for the disputed project by Venezuelan state-owned Corporacion Venezolana de Guayana (CVG). Under the agreement, Crystallex has the exclusive right to develop and mine zones 4, 5, 6 and 7.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.

Over the last 18-months, the southeastern Venezualan project has been the object of a bitter dispute between CVG and Vancouver-based Vannessa Ventures (VVV-V). The junior purchased a 95% stake in Minera Las Cristinas (Minca), the company that held the rights to the property, from Placer Dome (PDG-T) back in 2001.

Minca’s partner in the project, CVG, refuses to recognize the sale, accusing Placer of selling its interest in Las Cristinas without its written approval. Placer claims no such approval was required. The proposed sale was made just days before Placer’s rights to the Venezuelan deposit were scheduled to expire.

Placer had planned a US$600-million operation, producing 470,000 oz. gold and 16,000 tonnes copper annually, based on reserves of 323 million tonnes grading 1.1 grams gold per tonne with 0.14% copper. However, the company halted development when gold prices entered a prolonged slump.

The impact of ongoing legal actions over the property remains unclear (T.N.M., Sept. 16/02) with Vannessa seeking court action to protect its claim.