No end in sight for Las Cristinas dispute

A dispute over potential ownership of a major gold mine remains unsettled following a ruling by a Venezuelan court.

The proponents in this David-Vs.-Goliath affair are Crystallex International (KRY-T), a Vancouver-based junior that has claimed ownership of the mining concessions covering much of the 9-Million-oz. Las Cristinas gold deposit, and major gold producer Placer Dome (PDG-T), which operates Las Cristinas and is preparing to make a production decision on what is expected to be a 400,000-oz.-per-year gold mine.

In early March, Crystallex announced that its directors had acquired the privately owned Venezuelan company Inversora Mael, whose ownership rights to the concessions were said by Crystallex to have been reaffirmed by decisions of the Supreme Court of Venezuela in 1991 and again in October 1996.

Rights to the concessions are currently held under a joint-Venture agreement between Placer and Corporacion Venezolana de Guayana (CVG). Crystallex has the exclusive right to buy all the shares of Inversora Mael at cost.

Crystallex holds an undisputed 100% interest in the Albino open-pit gold mine, which adjoins Las Cristinas to the east, and runs several other Venezuelan gold projects.

On July 15, a Venezuelan court ruled that some of the motions filed by Crystallex regarding its claim on Las Cristinas had expired, but Crystallex was given the chance to appeal, which it has exercised.

Both sides, as has been the rule in this protracted legal battle, claimed victory following the ruling. A Crystallex statement claims the ruling “is a definitive step forward toward the enforcement of the company’s ownership rights.” Placer officials, however, remain undeterred, and continue to advance the project. They also say financial backing for the project remains solid.

“Our confidence in the system that granted our interest in Las Cristinas is well placed,” said Placer Dome President John Willson.

“We see this as confirming the position we have taken all along.” While noting that an appeal might keep the matter before the courts, Willson said the recent ruling “will allow us to expedite the Las Cristinas project, and is a strong signal for the international investment community.”