KRY - Sector: Basic Materials --- Industry: Gold & Silver

njshiva · October 15, 2006, 07:47:36 AM

Here at 3SOF people talk a lot about 3 magic lines...what is it? $:-\$
I do see 3 lines here

setravis · November 15, 2006, 05:09:29 PM

Press Release Source: Crystallex International Corporation

Crystallex Reports Third Quarter 2006 Results
Tuesday November 14, 4:15 pm ET

TORONTO, ONTARIO--(MARKET WIRE)--Nov 14, 2006 -- Crystallex International Corporation (TSX:KRY.TO - News)(KRY - News) today reported unaudited financial results for the quarter ending September 30, 2006. All dollar figures are in US Dollars unless otherwise indicated.
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Commenting on the Company's progress and activities, Todd Bruce, Crystallex President and CEO noted that, "The meetings the company attended at the recent Venezuelan Canadian Business Forum were extremely constructive and the Governments of Canada and Venezuela deserve to be commended for the success of this Forum. The Forum provided us with the opportunity to attend a meeting with the Canadian Ambassador to Venezuela, representatives from the Venezuelan Ministry of Environment and Natural Resources ("MARN"), the Corporacion Venezolana de Guayana ("CVG") and Gold Reserve Corporation to address the permitting process for the Las Cristinas and Las Brisas projects. At this meeting MARN advised all the parties it is expediting the process to issue the permit as soon as possible once the outstanding aspect of the efficient utilization of regional resources was completed. To this end Crystallex and Gold Reserve provided MARN with agreements in principle to implement mutually advantageous joint projects to further optimize utilization of regional infrastructure resources. MARN provided further clarity on the matter by confirming that the Las Cristinas and Las Brisas projects are separate and distinct projects which would each be issued its own Permit to Impact Natural Resources ("the Permit") and that neither project would be held up by the timing of the other should the timing aspects of the two projects diverge.

Mr. Bruce continued, "Crystallex and Gold Reserve have completed the agreements in principle to implement six joint regional projects and have officially submitted these agreements to MARN, MIBAM, the CVG, the Ministry of Basic Industries and Mining ("MIBAM") and the Canadian Ambassador.

Mr. Bruce reiterated, "We remain actively engaged in pursuing this initiative with MARN and the other interested Venezuelan and Canadian authorities in an effort to secure the Permit required to launch the construction and operating phase at Las Cristinas."

Mr. Bruce also confirmed, "The drills are turning on the 11,500 metre drill program at Las Cristinas that we commenced at the end of last month as we continue to pursue all opportunities to create shareholder value while we work with all the interested parties to secure the Permit as soon as possible. All of the necessary approvals required for the drilling have been granted including the required environmental permit from MARN. The goal of the program is to upgrade inferred mineral resources to measured and indicated mineral resources and undertake a revised gold reserve estimate. We expected that the drilling will be completed by the end of January 2007 and the new gold reserve estimate should be available by the end of May 2007."

During the third quarter, Crystallex successfully raised additional capital through a public offering of units and warrant exercises collectively generating $47 million in capital.

Management's Discussion and Analysis
For the Nine Month Period Ended September 30, 2006
(All dollar amounts in US dollars, unless otherwise stated)
This Management Discussion and Analysis ("MD&A") of the financial condition and results of the operations of Crystallex International Corporation ("Crystallex" or the "Company") is intended to supplement and complement the unaudited interim consolidated financial statements and the related notes for the nine month period ending September 30, 2006. This MD&A should be read in conjunction with both the annual audited consolidated financial statements of the Company for the year ended December 31, 2005, the related annual MD&A included in the 2005 Annual Report and the most recent Form 40-F/Annual Information Form. All dollar amounts in this MD&A are in US dollars, unless otherwise specified. This MD&A was prepared on November 7, 2006.

Overview

- Continuing discussions with Venezuelan government officials to advance the process for obtaining the Las Cristinas permit to impact natural resources (the "Permit").

- Subsequent to quarter end, commenced an 11,500 metre drilling program at Las Cristinas.

- Received net proceeds of $48.1 million from a unit offering and the issue and exercise of warrants during the third quarter.

- Increased revenues in the third quarter and first nine months due to higher realized gold prices.

- Net loss for the third quarter of $8.8 million.

Key Statistics
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Three months Nine months
ended Sept. 30, ended Sept. 30,
2006 2005 2006 2005
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Operating Statistics
Gold Production (ounces) 12,040 13,740 36,600 39,782
Gold Sold (ounces) 15,661 15,934 37,158 42,253
Per Ounce Data:
Total Cash Cost(1) $546 $344 $510 $396
Average Realized Gold Price $624 $440 $602 $437
Average Spot Gold Price $621 $439 $601 $431

Financial Results ($ thousands)
Revenues $9,769 $7,020 $22,367 $18,366
Net Loss ($8,815) ($10,338) ($24,067) ($26,623)
Net Loss per Basic Share ($0.04) ($0.05) ($0.11) ($0.14)
Cash Flow from Operating
Activities(2) ($8,554) ($11,079) ($28,391) ($24,562)
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Financial Position At Sept. 30, At Sept. 30,
($ thousands) 2006 2005
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Cash and Cash Equivalents $43,382 $4,616
Restricted Cash and Cash
Equivalents --- $39,197
Total Debt $87,453 $89,805
Shareholders' Equity $205,440 $126,373
Shares Outstanding
-- Basic (millions) 244.8 194.3
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(1) For an explanation of Total Cash Costs, refer to the section on
Non-GAAP measures. The calculation is based on ounces of gold sold, not
ounces produced.

(2) Cash flow after working capital changes and before capital
expenditures.
Financial Results Overview

The Company recorded a net loss for the first nine months and third quarter of 2006 of $24.1 million, (($0.11) per share) and $8.8 million, (($0.04) per share) respectively, as compared with net losses of $26.6 million, (($0.14) per share) and $10.3 million (($0.05) per share) for the comparable periods in 2005. The losses in the first nine months and third quarter of 2006 are principally attributable to the aggregate of mine operations costs, corporate general and administrative costs and interest expense. The $24.1 million loss for the first three quarters of 2006 was less than the $26.6 million loss in the year earlier period primarily because of increased operating income from mining operations due to realizing higher prices on gold sales.

Gold sales revenue was $22.4 million and $9.8 million for the first nine months and third quarter of 2006 respectively as compared with $18.4 million and $7.0 million for the same periods in 2005. Although gold sales volumes were lower in the 2006 periods, higher average realized gold prices more than offset the fewer ounces sold. For the first nine months of 2006, the average realized gold price was $602 per ounce, an increase of 38% over the same period in 2005.

Cash flow from operating activities was a deficit of $28.4 million for the first nine months of 2006 as compared with a deficit of $24.6 million for the same period in 2005. The cash flow deficit for the three quarters of 2006 was largely attributable to cash corporate general and administrative expenses of $12.6 million, (general and administrative expenses of $14.1 million for the nine months of 2006 included a $1.5 million non-cash charge representing the fair value of warrants issued as a component of a project finance advisory fee), cash interest payments of approximately $9.9 million and $12.1 million of cash used in working capital accounts, principally due to decreased accounts payable. The cash flow deficit in the third quarter of 2006 was $8.6 million, which similarly reflects the aggregate of cash payments for general and administrative expenses, interest expense and working capital utilization.

The Company's cash position at September 30, 2006 was $43.4 million, an increase of $18 million since the beginning of the year. The increase in the Company's cash position is due to receiving net proceeds of $84.4 million during the first nine months of 2006 from common share and warrant unit offerings, the exercise of warrants and options and a draw under the Company's equity draw-down facility.

Project Development

Las Cristinas

Project development slowed during the first three quarters of 2006 while the Company continues to wait for the Permit. The Permit is required to commence earthworks and building activities at site. Engineering work and the ordering of long lead time equipment was largely complete at the end of 2005. The remaining purchasing of supplies and awarding of service contracts will be undertaken following receipt of the Permit.

Reflecting the reduction in development activity, expenditures for the third quarter and first nine months of 2006 were less than half the level for the comparable periods in 2005. Expenditures for Las Cristinas were $8.5 million during the third quarter of 2006 and $36.3 million for the first nine months of the year, as compared with $18.8 million and $75.2 million for the comparable periods in 2005. Additional equipment has been purchased, which increased the value of equipment in storage from approximately $51 million at the end of 2005 to $58 million at the end of September 2006. As the engineering work is largely complete, the level of staff and hours billed by SNC Lavalin, the EPCM contractor, have been reduced.

The Company has spent $173.0 million on Las Cristinas since the inception of the Engineering, Procurement and Construction Management, ("EPCM") contract in April 2004. Of this, approximately $112.6 million is related to equipment purchases, engineering services and certain owner's costs administered by the EPCM contract. The additional $60.4 million of costs incurred outside of the EPCM contract relates to owners costs that were not included in the August 2005 $293 million capital cost estimate which covered those items governed by the EPCM contract. These additional Crystallex managed costs include site security, legal and consulting fees, social and community development programs, airstrip construction and environmental work. Costs in a majority of these areas are expected to continue although reductions are expected after the Permit is received and construction is well advanced.

The delay in receiving the Permit is expected to result in an increase to the remaining capital cost required to complete the project. In addition to those owners' costs that will continue through the construction phase, costs are expected to be affected by the inflationary impact on prices of supplies and equipment not yet ordered and on contracts that are stale dated since they were negotiated eighteen to twenty-four months ago. The overall cost to complete the project will be assessed after the receipt of the Permit when the balance of equipment orders are placed and contracts renegotiated.

Subsequent to the end of the third quarter, the Company participated in a meeting attended by the Canadian Ambassador to Venezuela and representatives from the Venezuelan Ministry of Environment and Natural Resources ("MARN"), the CVG and Gold Reserve Inc, ("Gold Reserve") who hold the Brisas concession to the south of Las Cristinas. The principal purpose of the meeting was for Crystallex and Gold Reserve to reach an understanding for developing agreements in principle on sharing a limited number of regional infrastructure projects with the aim of reducing the overall environmental impact of the two projects. MARN stated that such agreements in principle would allow it to accelerate the permitting process. MARN also confirmed at the meeting that it recognized Las Cristinas and Brisas as separate and distinct projects that will be issued separate permits. The companies have since completed agreements in principle for six shared projects and have officially submitted the agreements to MARN and all the other participants at the meeting. The projects include the development of an integrated subsurface and surface hydrological database, the sharing of the Las Cristinas airstrip, utilizing a single explosives magazine (and associated National Guard facility) for use by both projects, designing and establishing a solid waste landfill facility which will be handed over to the local authorities, and implementing the proposal submitted in May 2006 by Crystallex to move a portion of the surface water drainage channel approximately 340 metres north of its current planned course.

On November 1, 2006, the Company announced it had commenced a $1.6 million, 11,500 metre drill program at Las Cristinas having received the necessary environmental permission from MARN to conduct the drilling program. The aim of the program is to upgrade inferred mineral resources to measured and indicated mineral resources and undertake a revised reserve estimate. It is expected that the drilling will be completed by the end of January 2007 and the new reserve estimate will be available by the end of May 2007.

Operations Review

Production Summary

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Three months ended Nine months ended
Sept 30, Sept 30,
Gold Production (ounces) 2006 2005 2006 2005
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La Victoria 0 71 2,100 1,491
Tomi Open Pits 5,086 6,958 15,269 23,519
Tomi Underground 6,196 6,312 17,207 13,401
Purchased Material 758 399 2,024 1,371
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Total Gold Production (ounces) 12,040 13,740 36,600 39,782
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Total Ore Processed(1) (tonnes) 87,056 95,402 279,868 323,941
Head Grade of Ore Processed (g/t) 4.63 4.78 4.41 4.09
Total Recovery Rate (%) 93% 94% 92% 93%
Total Gold Recovered (ounces) 12,040 13,740 36,600 39,782
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Total Cash Cost Per Ounce Sold $546 $344 $510 $396
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Mine Operating Cash Flow ($,000) $1,176 $1,535 $3,075 $1,050
Capital Expenditures(2) ($,000) --- --- --- $856
Mine Cash Flow After Capital ($000) $1,176 $1,535 $3,075 $194
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(1) Ore from Tomi, La Victoria and purchased material is processed at the
Company's Revemin mill.

(2) Capital expenditures at the El Callao operating mines, excludes Las
Cristinas. Since the second quarter of 2005, all costs at the El Callao
operations have been expensed due to the short reserve life of these mines.

Tomi

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Three months ended Nine months ended
Sept 30, Sept 30,
2006 2005 2006 2005
Tomi Open Pits
Tonnes Ore Mined 77,381 74,522 190,314 256,955
Tonnes Waste Mined 618,505 406,570 1,803,088 1,671,868
Strip Ratio (Waste:Ore) 8.0 5.6 9.5 6.5
Tonnes Ore Processed 56,195 74,019 170,647 246,801
Average Grade of Ore
Processed (g/t) 3.1 3.2 3.0 3.2
Recovery Rate (%) 92% 93% 91% 93%
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Production (ounces) 5,086 6,958 15,269 23,519
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Tomi Underground
Tonnes Ore Mined 26,628 18,112 67,292 45,663
Tonnes Ore Processed 21,833 18,117 64,295 42,889
Average Grade of Ore
Processed (g/t) 9.4 11.4 8.9 10.3
Recovery Rate (%) 94% 95% 94% 95%
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Production (ounces) 6,196 6,312 17,207 13,401
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The Company produced 12,040 ounces of gold during the third quarter of 2006 as compared with 13,740 ounces for the same period last year. With the exception of gold produced from purchased material, all the Company's gold production during the third quarter was from the Tomi concession located near El Callao in south-eastern Venezuela.

Production for the nine months ended September 2006 was 36,600 ounces, a decrease of 8% from the 39,782 ounces recovered in the year earlier period. Gold recovered from the open pit operations decreased by 8,256 ounces, or 35%. The total volume of material mined (waste and ore) in the pits was similar for the first nine months of 2006 and 2005; however, the proportion of waste mined in the 2006 nine month period increased significantly. The strip ratio (the ratio of waste to ore) increased by 46% from 6.5:1.0 for the first nine months of 2005 to 9.5:1.0 for the same period in 2006. The Company is stripping a significant amount of waste in 2006 to allow for continuous open pit operations in 2007.

Lower production from the pits was partially offset by higher production from the underground mine. The Company recovered 17,207 ounces from underground operations during the first three quarters of 2006 as compared with 13,401 ounces for the comparable period in 2005. A 50% increase in tonnes processed more than offset a decrease in the average processed grade of underground ore. The average underground processed ore grade decreased from 10.3 grams per tonne to 8.9 grams per tonne.

Cash flow from mining operations (revenue less operating expenses) was $3.1 million and $1.2 million for the first nine months and third quarter of 2006 respectively as compared with cash flow of $1.5 million and $0.2 million for the comparable periods in 2005. The increase in cash flow in the current year was attributable to higher gold prices (see the Revenue section below). Cash costs, however, increased to $510 per ounce sold in the first nine months of 2006 as compared with $396 per ounce for the same period in 2005. For the third quarter of 2006, cash costs were $546 per ounce. Costs were higher in most areas of the El Callao operations including costs for mining (due in part to mining higher volumes of waste material relative to ore and an increase in the mining contract rate), site general and administrative expenses, maintenance, mill consumables, (notably cyanide, grinding media and lime), explosives and higher exploitation taxes and royalties which are tied to the price of gold.

Income Statement

Revenue

Mining revenue was $9.8 million and $22.4 million for the third quarter and first nine months of 2006 respectively, compared with $7.0 million and $18.4 million for the corresponding periods in 2005. The increase in revenue in 2006 for both the third quarter and first nine months was due to realizing higher prices on gold sales, which more than offset fewer ounces of gold sold.

For the third quarter of 2006, gold sales were 15,661 ounces and the Company's average realized price was $624 per ounce. Gold sales for the same period in 2005 were 15,934 ounces at an average realized price of $440 per ounce. Higher revenues in the third quarter of 2006 were directly attributable to the 42% increase in the average realized gold price.

During the first nine months of 2006, the Company sold 37,158 ounces at an average realized price of $602 per ounce. Although sales volumes were 12% lower than the nine month period in 2005, the average price realized of $602 per ounce was 38% higher than the $437 per ounce realized in the prior year nine month period. As a result, mining revenue increased to $22.4 million for the first three quarters of 2006 from $18.4 million for the comparable period in 2005.

Operating Expenses

Mine operating expenses were $8.6 million and $19.3 million for the third quarter and first nine months of 2006 respectively, as compared with $5.5 million and $17.3 million for the comparable periods in 2005. Fewer ounces of gold were sold during the first nine months of 2006 as compared with the same period in 2005; however, operating costs increased in the 2006 period due to higher costs across most areas of the operations, including contract mining, processing consumables, maintenance and mine general and administrative expenses, (as detailed in the Operations Review section). All costs at the El Callao operations are expensed, rather than capitalized given a reported proven and probable reserve life of less than one year.

The total cash cost per ounce sold in the third quarter of 2006 increased to $546 per ounce from $344 per ounce in the third quarter of 2005. For the first nine months of 2006, the average operating cost was $510 per ounce as compared with $396 per ounce for the same period in 2005.

Corporate General and Administrative Expenses

General and Administrative expenses were $6.2 million and $14.1 million for the third quarter and first nine months of 2006 respectively, as compared with $5.3 million and $12.5 million for the comparable periods in 2005. The increase in both periods of 2006 is due largely to including a $1.5 million charge representing the fair value of warrants issued as a component of a fee for project finance advisory work.

Liquidity and Capital Resources

Cash and Equivalents

On September 30, 2006, the Company had cash and cash equivalents of $43.4 million.

The change in the cash balance during the first nine months of 2006 is reconciled as follows ($ millions):

Cash, Cash Equivalents and Restricted Cash on December 31, 2005 $25.4
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Shares Issued for Cash $81.6
Warrants Issued for Cash $6.0
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Total Sources of Cash $87.6

Cash Used in Operating Activities ($28.4)
Capital Expenditures -- Las Cristinas ($36.3)
Principal Debt Repayments ($4.

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Total Uses of Cash ($69.6)
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Net Addition to Cash and Cash Equivalents $18.0
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Cash and Cash Equivalents on September 30, 2006 $43.4
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At September 30, 2006, the Company's debt included $100 million of 9.375% senior unsecured notes due December 2011, $3.5 million outstanding under a bank term loan facility due December 2008 and a $1.8 million exchangeable promissory note.

Cash Flow from Operating Activities

Cash flow from operating activities (before capital expenditures) is principally affected by general and administrative expenditures, interest expense, the level of gold sales, realized gold prices, cash operating costs, and movements in non-cash working capital.

Cash flow from operating activities was a deficit of $8.6 million for the third quarter of 2006. The cash flow deficit in the third quarter was primarily attributable to cash interest payments of $4.8 million, cash general and administrative costs of $4.7 million (general and administrative expenses of $6.2 million for the third quarter included a $1.5 million non-cash charge representing the fair value of warrants issued as a component of a project financing advisory fee), and a $2.5 million net working capital utilization, principally a decrease in accounts payable and an increase in prepaid expenses. These were partially offset by mine cash flow of $1.2 million. For the comparable quarter in 2005, the operating cash flow deficit was $11.1 million. The decrease in the deficit in the current year third quarter is due primarily to a smaller net utilization of working capital.

For the first nine months of 2006, the Company had a cash flow deficit of $28.4 million as compared with a deficit of $24.6 million for the comparable period in 2005. General and administrative cash costs of $12.6 million, cash interest payments of $9.9 million and a net million working capital utilization of $12.1 million, principally a decrease in accounts payable, contributed to the cash flow deficit in the third quarter of 2006.

These were partially offset by $3.1 million of mine operating cash flow. The cash flow from operations deficit was $3.8 million greater for the nine month period of 2006 as compared with the same period in 2005. Although the Company did not incur any expenditures on settling gold contracts in the first nine months of 2006, as compared with expenditures of $11.5 million for the same period in 2005, this saving was offset in 2006 by cash used for reducing accounts payable and higher interest payments.

Investing Activities

Capital expenditures were $8.5 million and $36.3 million for the third quarter and first nine months of 2006, compared with $18.8 million and $75.2 million for the comparable periods in 2005. As illustrated in the table below, the decrease in the third quarter and first nine months of 2006 is attributable to lower spending on the Las Cristinas project.

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Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
$ millions 2006 2005 2006 2005
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Las Cristinas $8.5 $18.8 $36.3 $74.3
Revemin/Tomi/Albino --- --- --- $0.9
Total $8.5 $18.8 $36.3 $75.2
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At September 30, 2006, Crystallex projected a financing requirement of approximately $300 to $325 million to provide funding through the end of 2008 when commercial production is forecast to be achieved at Las Cristinas if the environmental permit is received in the fourth quarter of 2006. The funding estimate includes amounts for completing the development of Las Cristinas (based on the August 2005 $293 million capital cost estimate), for other Las Cristinas costs not covered by the EPCM contract, including site security, legal and consulting fees, ongoing camp costs and social and community development programs, for corporate general and administrative requirements and for financing fees and interest costs during the construction period. Crystallex intends to fund the overall requirement with a combination of limited recourse project debt financing, other forms of public market debt financing, and equity financing.

Financing Activities

The Company made $0.40 million of regularly scheduled principal payments to Standard Bank Plc during the third quarter of 2006. The terms of the Standard Bank loan agreement require the Company to make additional mandatory loan prepayments upon the issue of equity or equity linked debt securities. Following the completion of an offering of common shares and common share purchase warrants in August 2006, the Company made a mandatory prepayment to Standard Bank of $1.9 million. At the end of the third quarter of 2006, the balance remaining under the Standard Bank loan was $3.5 million.

In August 2006, the Company raised net proceeds of $26.9 million in a public offering of 10,125,000 units, with each unit consisting of one common share of the Company and one half of one common share purchase warrant. Each whole warrant entitles the holder to purchase one common share of the Company at a price of C$4.25 on or before February 10, 2008.

The Company received proceeds of $21.3 million during the third quarter from the exercise of common share purchase warrants.

Outstanding Share Data

At November 7, 2006, 244.8 million common shares of Crystallex were issued and outstanding. In addition, at November 7, 2006 options to purchase 10.5 million common shares of Crystallex were outstanding under the Company's stock option plan and warrants to purchase 19.2 million common shares of Crystallex were issued and outstanding.

Quarterly Data

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2006
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Q3 Q2 Q1 Q4
Revenue 9,769 $5,520 $7,079 $6,623
Net Loss ($8,815) ($8,296) ($6,956) ($18,585)
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Quarterly Data

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2005 2004
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Q3 Q2 Q1 Q4
Revenue $7,020 $6,301 $5,046 $5,037
Net Loss ($10,338) ($8,295) ($7,989) ($44,115)
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The quarterly trends are consistent with the explanations of the annual trends set out in the Company's 2005 40-F/Annual Information Form.

Critical Accounting Policies and Estimates

Critical accounting estimates are those estimates that have a high degree of uncertainty and for which changes in those estimates could materially impact the Company's results. Critical accounting estimates for the Company include property evaluations, capitalization of exploration and development costs and estimates of asset retirement obligations and stock based compensation.

There were no changes in accounting policies or methods used to report the Company's financial condition in the nine months of 2006 that impacted the Company's financial statements.

Special Note Regarding Forward Looking Statements

Certain statements included or incorporated by reference in this Management Discussion and Analysis, including information as to the future financial or operating performance of the Company, its subsidiaries and its projects, constitute forward-looking statements. The words "believe," "expect," "anticipate," "contemplate," "target," "plan," "intends," "continue," "budget," "estimate," "may," "schedule" and similar expressions identify forward-looking statements. Forward-looking statements include, among other things, statements regarding targets, estimates and assumptions in respect of gold production and prices, operating costs, results and capital expenditures, mineral reserves and mineral resources and anticipated grades and recovery rates. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause the Company's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company. Such factors include, among others, risks relating to additional funding requirements, reserve and resource estimates, gold prices, exploration, development and operating risks, illegal miners, political and foreign risk, uninsurable risks, competition, limited mining operations, production risks, environmental regulation and liability, government regulation, currency fluctuations, recent losses and write-downs and dependence on key employees. See "Risk Factors" in the Company's 2005 40-F/Annual Information Form. Due to risks and uncertainties, including the risks and uncertainties identified above, actual events may differ materially from current expectations. Investors are cautioned that forward-looking statements are not guarantees of future performance and, accordingly, investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein. Forward-looking statements are made as of the date of this Management Discussion and Analysis and the Company disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or results or otherwise.

Risk Factors

The business and operations of the Company and its affiliates are subject to risks. In addition to considering the other information in the Company's 2005 40F/Annual Information Form, which is available on SEDAR at www.sedar.com, an investor should carefully consider the following factors. Any of the following risks could have a material adverse effect on the Company, its business and future prospects.

Risks Associated with Operating in Developing Countries

The Company's mineral exploration, exploitation activities and mining operations are located in Venezuela and may be adversely affected by political instability and legal and economic uncertainty in such country. The risks associated with the Company's foreign operations may include political unrest, labour disputes, invalidation of governmental orders, permits, agreements or property rights, risk of corruption including violations under U.S. and Canadian foreign corrupt practices statutes, military repression, war, civil disturbances, criminal and terrorist actions, arbitrary changes in laws, regulations and policies, taxation, price controls, exchange controls, delays in obtaining or the inability to obtain necessary permits, opposition to mining from environmental or other non-governmental organizations, limitations on foreign ownership, limitations on the repatriation of earnings, limitations on mineral exports, high rates of inflation and increased financing costs. These risks may limit or disrupt the Company's projects or operations, restrict the movement of funds or result in the deprivation of contractual rights or the taking of property by nationalization, expropriation or other means without fair compensation.

Risks Specific to Operations in Venezuela

Political and Economic Instability

The Company's principal mineral properties are located in Venezuela and as such the Company may be affected by political or economic instabilities there. The risks associated with carrying on business in Venezuela, in addition to those highlighted above, include, but are not limited to violent crime, which is prevalent throughout the country and includes kidnapping, smuggling and drug trafficking especially in remote areas. Changes in resource development or investment policies or shifts in political attitudes in Venezuela may adversely affect the Company's business. Operations may be affected in varying degrees by government regulations with respect to restrictions in production, price controls, export controls, income taxes, expropriation of property, maintenance of claims, environmental legislation, land use, unauthorized mining activities, land claims of local people, water use and mine safety. The effect of these factors cannot be accurately predicted.

The Permit Still Required

MIBAM completed its overall technical, economic and financial approval process of Las Cristinas on March 26, 2006. However, the Company continues to await the issuance of the Permit, which is necessary to allow commencement of construction of the mine. The initial application for the Permit was submitted in April 2004. Continued development and the ultimate commencement of commercial production are dependent upon receipt of the Permit, which will allow the Company to proceed to put in place financing to fund construction. As the Las Cristinas project is the Company's primary development project, the failure to obtain the Permit or to obtain the Permit in a timely manner could have a material adverse affect on the future of the Company's business. There can be no assurance as to when or if the Permit will be granted.

Exchange Controls

Venezuela currently has exchange controls that affect the ability of companies doing business in Venezuela to convert Venezuelan source income into foreign currency. The Central Bank of Venezuela enacted such exchange control measures in 2003 in order to protect international reserves. The exchange rate, originally fixed at approximately 1,600 Bolivars /U.S.$, has since been adjusted twice upwards and presently stands fixed at 2,150 Bolivars/U.S.$. There can be no assurance that exchange controls will not continue and, if they do, that they will not adversely affect the Company's operations, including its ability to satisfy its foreign currency obligations.

Mine Operation Agreement

Lack of Ownership Rights. Under Venezuelan Mining Law of 1999 (the "VML"), all mineral resources belong to the Republic of Venezuela. In accordance with the VML, the Government of Venezuela has reserved for itself the right to directly explore and exploit the mineral deposits at the Las Cristinas project location (the "Las Cristinas Deposits") and has elected to do so through the CVG. The mine operation agreement entered into with the CVG on September 17, 2002 (the "Mine Operation Agreement") is an operation agreement and does not transfer any property ownership rights or title rights to the gold produced to the Company. Rather, the Company has been authorized to exploit the Las Cristinas Deposits for the CVG in accordance with the Mine Operation Agreement. The interests of the Company in the Las Cristinas Deposits are contingent upon the Company continuing to satisfy its obligations under the Mine Operation Agreement. Failure to do so could result in the CVG having the right to terminate the Mine Operation Agreement.

Lack of Copper Rights. In addition to gold, the Las Cristinas Deposits also contain very low levels of copper, 0.13% on average. Under the Mine Operation Agreement, the Company is only entitled to exploit the gold contained in the Las Cristinas Deposits. Based on the feasibility studies carried out by the Company and following discussions with the CVG, the Company has determined that exploiting the copper contained in the Las Cristinas Deposits would detract from the economics of the Las Cristinas project. The Company does not need the right to exploit the copper contained in the Las Cristinas Deposits in order to exploit the gold and does not currently intend to negotiate with the CVG for the right to exploit the copper contained in the Las Cristinas Deposits.

Although the Company does not believe that the MIBAM would do so, the MIBAM retains the right to grant exploitation and other rights with respect to the copper contained in the Las Cristinas Deposits to the CVG or a third party. The Company has been advised by its Venezuelan counsel that:

(a) if the MIBAM grants the right to exploit the copper contained in the Las Cristinas Deposits to the CVG, subject to fulfilling all necessary requirements of Venezuelan law (including the additional grant by the MIBAM to the CVG of the right to negotiate the exploitation of the copper with third parties), the CVG has agreed under the terms of the Mine Operation Agreement to negotiate the exploitation of the copper with the Company; and

(b) if the MIBAM grants the right to exploit the copper contained in the Las Cristinas Deposits to a third party, the Company's right under the Mine Operation Agreement to exploit the gold contained in the Las Cristinas Deposits would, as a matter of Venezuelan law, take precedence over the third party's right to exploit the copper.

If the MIBAM grants the right to exploit the copper contained in the Las Cristinas Deposits to the CVG, there can be no assurance that the MIBAM will grant to the CVG the additional right to negotiate the exploitation of the copper with third parties or that the Company will be able to negotiate an agreement with respect to the exploitation of the copper with the CVG. Also, if the MIBAM grants the right to exploit the copper contained in the Las Cristinas Deposits to a third party, or if the MIBAM grants the right to exploit the copper contained in the Las Cristinas Deposits to the CVG and the CVG grants the right to exploit the copper to a third party, there can be no assurance that the Company will be successful under Venezuelan law in asserting that its right to exploit the gold contained in the Las Cristinas Deposits takes precedence over the third party's right to exploit the copper.

Proposed Amendments to Mining Laws

In 2005, the Government of Venezuela announced that it would be changing the mining title regime from a system where title was granted in the form of either concessions or operating contracts to a system where all ''new'' economic interests would be granted in the form of operating contracts. In order to effect this change, the Government of Venezuela advised that it would need to create a national mining company which would be the nation's contracting party covering the entire country of Venezuela. The Government of Venezuela also indicated that, given this change in title regime, it would also be appropriate to review all existing mining companies in a single comprehensive exercise to ensure that only companies found to be in compliance with their existing title terms and conditions would continue to qualify under the new regime on the same terms and conditions. The Government of Venezuela further stated that all those companies found not to be in compliance would have their operations turned over to small mining cooperatives supported by the Government of Venezuela via the national mining company. The MIBAM issued its formal approval of the technical, economic and financial aspects of Las Cristinas on March 26, 2006.

The MIBAM presented draft amendments to the mining law to the National Assembly at the end of May 2006. This draft was superseded by a National Assembly draft, which has received a first reading in the National Assembly. The National Assembly will require further readings of the draft amendments which the Government has stated will likely take place in 2007. Although the Company's Venezuelan counsel have advised that the current draft of amendments to the mining law will not have any negative impact on the Company's rights under the Mine Operation Agreement, until such time as the National Assembly has passed the amendments into law it is not possible to assess what impact, if any, the revised law will have on the Las Cristinas project.

Arbitration Proceedings

The Company is a party that is interested in, but is not a party to, an ongoing arbitration. See ''Legal Proceedings -- Withdrawal of MINCA Litigation -- Vanessa Arbitration'' in the Company's 2005 40F/Annual Information Form, available electronically at www.sedar.com

Sale of Gold

For the past several years the Company sold all of its Venezuelan gold production to the Central Bank of Venezuela. In June 2006 the Central Bank of Venezuela temporarily suspended the purchase of gold from the Company. In August 2006, the Central Bank recommenced purchasing gold from the Company. During the period when the Central Bank suspended purchases, the Company sold its gold to accredited third parties within Venezuela. The Company is updating registration of its export licence which will also allow it to export and sell gold outside of Venezuela. Pending the update of its export licence, should the Company be unable to sell gold within Venezuela, it could have an adverse effect on the Company's revenues, cash flow and profitability in the short-term.

Unauthorized Miners

The Company's operations may also be affected by the presence of unauthorized miners; something that is not uncommon in the gold mining areas of the Guyana Shield area of Venezuela. The methods used by unauthorized miners to extract gold are typically harmful to the environment and may be disruptive of authorized mining operations. Although the Company, in conjunction with the local authorities, employs strategies to control the presence of unauthorized miners, there can be no assurance that these strategies will be successful or that the Company's operations will not be adversely affected by the presence of unauthorized miners.

Imataca Forest Reserve

In addition to the general risks associated with environmental regulation and liability (see "Environmental Regulation and Liability" under General Risk Factors below), the Las Cristinas Deposits are located within the Imataca Forest Reserve (the "Reserve"). On September 22, 2004 Presidential Decree 3110, which establishes an ordinance plan and regulations for the use of the Reserve, permits various activities (including mining) in up to 13% of the Reserve and establishes the legal framework for such activities, was issued. Presidential Decree 3110 was issued in response to previous Presidential Decree 1850, the latter of which was issued in May 1997. Decree 1850 reserved an even larger part of the Reserve for various activities and became subject to a legal challenge before the Venezuelan Supreme Court. The Venezuelan Supreme Court issued a prohibition order on November 11, 1997 prohibiting the relevant government authorities from granting concessions, authorization and any other acts relating to various mining activities in the Reserve under Decree 1850 until the Venezuelan courts ruled on the merits of the nullity action. It is possible that Presidential Decree 3110 could be similarly challenged and that such challenge, if ultimately successful, could prevent the Company from exploiting or fully exploiting the Las Cristinas Deposits.

Venezuelan Decree No. 1257 establishes the environmental assessment requirements for mining projects. The Company was advised that the Las Cristinas project is not a new project and, accordingly Article 40 of Decree 1257 does not apply since no significant increase in environmental impact is predicted.

General Risk Factors

Title to Mineral Properties

Acquisition of title to mineral properties is a very detailed and time-consuming process. Title to, and the area of, mineral properties may be disputed or impugned. Although the Company has investigated its title to the mineral properties for which it holds concessions or mineral leases or licenses, there can be no assurance that the Company has valid title to such mineral properties or that its title thereto will not be challenged or impugned. For example, mineral properties sometimes contain claims or transfer histories that examiners cannot verify, and transfers under foreign law are often complex. The Company does not carry title insurance with respect to its mineral properties. A successful claim that the Company does not have title to a mineral property could cause the Company to lose its rights to mine that property, perhaps without compensation for its prior expenditures relating to the property. Furthermore, as noted above under ''Mine Operation Agreement -- Lack of Ownership Rights,'' the Mine Operation Agreement does not transfer any property ownership rights to the Company.

Environmental Regulation and Liability

The Company's activities are subject to laws and regulations controlling not only mineral exploration and exploitation activities themselves but also the possible effects of such activities upon the environment. Environmental legislation may change and make the mining and processing of ore uneconomic or result in significant environmental or reclamation costs. Environmental legislation provides for restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain mineral exploitation activities, such as seepage from tailings disposal areas that could result in environmental pollution. A breach of environmental legislation may result in the imposition of fines and penalties or the suspension or closure of operations. In addition, certain types of operations require the submission of environmental impact statements and approval thereof by government authorities. Environmental legislation is evolving in a manner which may mean stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their directors, officers and employees. Permits from a variety of regulatory authorities are required for many aspects of mineral exploitation activities, including closure and reclamation. Future environmental legislation could cause additional expense, capital expenditures, restrictions, liabilities and delays in the development of the Company's properties, the extent of which cannot be predicted.

In the context of environmental permits, in particular the approval of closure and reclamation plans, the Company must comply with standards and laws and regulations which may entail costs and delays depending on the nature of the activity to be permitted and how stringently the regulations are implemented by the permitting authority. In accordance with applicable laws, the Company has provided various forms of financial assurances to cover the cost of reclamation activities. However, there can be no assurance that the Company will not incur reclamation costs that are in excess of such financial assurances. While the Company plans to establish a reserve for reclamation activities, there can be no assurance that the combination of the reserve and financial assurances will be sufficient to meet future reclamation standards, if such standards are materially more stringent than existing standards. The Company does not maintain environmental liability insurance. The Company has adopted high standards of environmental compliance, however, failure with or unanticipated changes in Venezuela's laws and regulations pertaining to the protection of the environment in the future could adversely affect the Company.

Additional Funding Requirements

Under the terms of the Mine Operation Agreement, the Company is required, among other things, to make all necessary investments and complete all works necessary to reactivate the Las Cristinas Deposits, to design, construct and operate a processing plant to process gold for its subsequent commercialization and sale and to return the mine, its installations and equipment to the CVG upon termination of the Mine Operation Agreement. In order to carry out the Las Cristinas project and its other mining projects, the Company will need to raise substantial additional financing which may include one or more of non-recourse project debt and other forms of public markets debt and equity.

In September 2005 the Company issued C$10.0 million of 5% unsecured notes due March 13, 2006 to Azimuth Opportunity, Ltd ("Azimuth") and established a C$60.0 million equity draw down facility with the same entity. The agreements between Azimuth and the Company stipulate that, until the C$10.0 million principal value of the unsecured notes has been repaid, 50% of the proceeds of each draw under the equity draw down facility shall be applied to repay the unsecured notes. During the fourth quarter of 2005 the Company received gross proceeds of C$21.6 million under the equity draw down facility, a portion of which was used to repay the outstanding C$10.0 million principal value of the unsecured notes. In January 2006 the Company raised additional gross proceeds of C$5.0 million under the equity draw down facility. In February 2006 the Company received gross proceeds of U.S.$31.3 million under a private placement of units. In July 2006, the Company received net proceeds of 26.9 million from a unit offering of common shares and common share purchase warrants. During the third quarter of 2006, the Company received proceeds of $21.3 million from the exercise of common share purchase warrants. Despite these financings, the Company currently has limited financial resources and there can be no assurance that sufficient additional financing will be available to the Company on acceptable terms or at all. Failure to obtain such additional financing could result in a delay or the indefinite postponement of the Las Cristinas project and oth

setravis · November 15, 2006, 05:19:57 PM

SeekingAlpha
Crystallex Las Crisitnas Permit Virtually Guaranteed; Shares Jump on News
Wednesday November 15, 2:53 pm ET

Ant & Sons submits: Crystallex Corp. (AMEX: KRY - News) reported earnings late yesterday, announcing a net loss for the third quarter of $8.8 million, albeit less than the company's loss last year of $10.3 million during the same period. Despite the earnings release, shares of Crystallex are catching some momentum, higher by $.41, or 14.34%, to $3.27 on volume of more than seven million shares.

What is really moving the stock is the fact that Crystallex updated shareholders and commented on the company's recent progress and activities, specifically its progress towards receiving a mining permit for its Las Cristinas operation. Todd Bruce, Crystallex President and CEO noted that the company attended the recent Venezuelan Canadian Business Forum and that dialogue was "extremely constructive." Crystallex management was able to speak with representatives of the Ministry of Environment and Natural Resources (MARN) and confirm that MARN "is expediting the process to issue the permit as soon as possible." Mr. Bruce continued by saying that Crystallex has "completed the agreements in principle to implement six joint regional projects and have officially submitted these agreements to MARN, MIBAM, the CVG, the Ministry of Basic Industries and Mining and the Canadian Ambassador."

Despite the troubled past Crystallex has had in gaining approval, these statements should clear any doubt as to the future issuance of a permit to Crystallex. The stock is certainly reflecting this optimism and should finally be able to trade without the uncertainty over the permit weighing down on Crystallex shares.
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52wk Range: 1.48 - 6.25
Volume: 9,007,900
Avg Vol (3m): 2,134,900

Technicals
Most Actives
Percentage Gainer

Last Price Quote is:
12.18%above 13-day MA
12.36%above 50-day MA
RS Rating: 87

Fundamentals
Key Data:
Market Cap (M): $660.93
P/E Ratio: NA
PEG Ratio: N/A
Next Earnings: N/A
Last Analyst Rating: N/A

setravis · November 25, 2006, 02:09:54 PM

KRY Threads have been Merged.
Please use the search before starting new threads on a Stock Pick.
Chances are a thread already exist.
So why not post whatever you have to comment about on that pick to that thread.
"Simplicity" My fellow traders.

All history on a stock pick in 1 thread is awesome.

Thank You....and good luck with all your trades....make some $$$

setravis · December 04, 2006, 07:57:27 PM

KRY, shares continue to move substantially higher as investors await news from the company regarding its Las Cristinas mining permit. The company last stated on November 15 that it was progressing towards receiving a mining permit and that it had confirmed the Ministry of Environment and Natural Resources , is expediting the process to issue the permit as soon as possible.
Institutions buying in. Chavez

is not a real worry, he won't mess with what earns him money for now (gold and oil).....

The stock is up 8.89% on heavy volume of 8.3 million shares compared to daily average volume of 2.7 million shares.

52wk Range: 1.80 - 6.25
Volume: 8,362,500
Avg Vol (3m): 2,703,130

Support @ $3.74...3.43...3.34
Resistance @ $4.50

Technicals
MACD is Bullish
Stochastic is Bullish
Most Actives
Percentage Gainer

Last Price Quote is:
19.42%above 13-day MA
31.65%above 50-day MA
RS Rating: 96

Fundamentals
Key Data:
Market Cap (M): $660.93
P/E Ratio: NA
PEG Ratio: N/A
Next Earnings: N/A
Last Analyst Rating: N/A

Below is the 6 month and 1 year charts.

setravis · December 19, 2006, 04:20:13 PM

Still in an uptrend, bouncing off the 200-day MA.
The stock is off of its high of $6.25 back in April. It has suffered setbacks due to its mining location in Venezuela.

52wk Range: 1.80 - 6.25
Volume: 3,820,500
Avg Vol (3m): 2,620,470

Technicals
Most Actives
Percentage Gainer

Last Price Quote is:
5.53%above 13-day MA
15.77%above 50-day MA
RS Rating: 86

Fundamentals
Key Data:
Market Cap (M): $660.93
P/E Ratio: NA
PEG Ratio: N/A
Next Earnings: N/A
Last Analyst Rating: N/A

Here is a 6 month and 3 year chart....

setravis · December 26, 2006, 11:06:32 AM

Indicators moving toward a "Golden Cross"
Higher gold prices pushed shares of miners like Entree Gold Inc. and Crystallex International Corp. sharply higher.
Gold prices rose due to the uncertainty in Iran as investors fled to safety. Entree Gold rose 19 cents, or 13 percent, to $1.70, while Crystallex rose 17 cents, or 4.8 percent, to $3.81. Both trade on the American Stock Exchange.

Looks to have formed a Cup with Handle.....

cumulina · January 08, 2007, 06:13:11 PM

I was sitting today looking at the bottom of my watchlist, when all of a sudden KRY dropped down in front of my nose.

Whoa!

Feverishly placed a buy-order, and got a tiny portion at 3.13 - no time for reflection or checking on the news, just buy!
It's on your wish-list, stupid! Buy!

One gets lucky sometimes!

It turned out to be a fine buy, and maybe the basis for a later supplement.

On checking the news, I found this:

http://www.billcara.com/archives/2007/01/chavez_pushes_a_hot_button_mon.html

We'll see if I did something stupid by rushing like this. Crossing my fingers.

cocoloco69 · January 09, 2007, 01:15:24 AM

In my opinion it is suicidal to invest your money on anything that could be even remotely related with that bipolar and disfunctional Hugo Chavez. He is the total psycho.

Hugo Chavez tiene el coco loco.

cumulina · January 09, 2007, 07:45:54 AM

Quote from: cocoloco69 on January 09, 2007, 01:15:24 AM
In my opinion it is suicidal to invest your money on anything that could be even remotely related with that bipolar and disfunctional Hugo Chavez. He is the total psycho.

Hugo Chavez tiene el coco loco.

I am not afraid of Hugo Chavez.

I actually admire him quite a bit!

It seems to me that he is doing what any leader of a poor country with great natural resources should do: Keeping the money in the country, instead of letting big, foreign companies hoard the wealth abroad. Venezuela has done a lot better with him as president, than she ever have done before.

We'll see if buying KRY was a suicidal thing to do. It gave me 8.94% yesterday, so I'm not complaining - yet.

cumulina · January 11, 2007, 11:58:28 AM

KRY is recovering today.

And an opinion: http://www.antandsons.com/2007/01/time-to-buy-crystallex-hand-over-fist.html

January 10, 2007
Time to Buy Crystallex Hand Over Fist?
Late Monday, Crystallex Corp. (AMEX: KRY) shares took a plunge in the last few minutes of trading as word reached the investment community that Venezuelan President Hugo Chavez planned to nationalize the country's electrical and telecommunications companies, cratering shares of Venezuelan telephone company CANTV (NYSE: VNT). The news sparked fears that Chavez would also "socialize" the mining business. However, Crystallex quickly responded with management fighting back and stating that nothing had changed the status of their Las Cristinas mining operation. This back and forth mirrors the historical pattern in which Crystallex shares have been affected by Chavez comments. Take the following dates;

A. September 2005
Venezuelan President Hugo Chavez made comments that his government would cancel all mining licenses and stop issuing new ones to foreign companies, as well as accusing them of gaining rights to mines and then subsequently failing to work the mines.

B. June 2006
Word of possible revisions to the Venezuelan mining law, namely the incorporation of mixed companies as an exploitation structure in the mining sector in which the government stake in such mixed companies would be at least 51%.

Each of those times, the company forcefully responded and each time, those threats have never materialized and Crystallex has moved closer and closer to securing a permit for its Las Cristinas gold project. Though the share price was virtually cut in half each time, the effects were only short lived and the stock price dramatically appreciated (upwards of 100%) within six months. With the Ministry of Environment and Natural Resources expediting the process to issue a permit, Crystallex is as close as ever to launching the construction and operating phase at Las Cristinas. Though Crystallex is not a stock for those faint of heart, the potential for a good return awaits patient investors.

setravis · January 13, 2007, 07:45:53 PM

I still like gold: KRY

CDE, MNG

cumulina · January 17, 2007, 12:42:20 PM

Well, setravis. It seems KRY has been "Cramerized" but i'll hold on to mine.

Cramer Dumps Crystallex, Opts For Yamana Gold Instead

Posted on Jan 17th, 2007 with stocks: AUY, KRY

Ant & Sons submits:
Crystallex Corp. (KRY) has officially been dumped by Jim Cramer, investment guru and host of CNBC's popular Mad Money television show. Quoting from his Mad Money Lightning Round segment last night, Cramer said that he has "walked away from Crystallex and endorsed Yamana" because President Hugo Chavez of Venezuela "has proven to be a recalcitrant, pseudo-Communist."

Yamana Gold Inc. (AUY) shares are already higher by 1.7% today, while Crystallex is falling 6.47% on heavy volume of 3.7 million shares. Though Cramer has bailed on Crystallex because of Venezuela's unstable political situation, we at Ant & Sons feel there is no reason to believe that a permit for the company's Las Cristinas mining operation is in jeopardy.

cumulina · January 18, 2007, 03:47:38 PM

Another day with nervous investors....

Venezuela Also Eyeing Nationalization Of Mining - Minister
Dow Jones Newswires - January 18, 2007 1:53 PM ET

RIO DE JANEIRO (Dow Jones)--Venezuela, in addition to planning the nationalization of other key sectors of the economy, eyes the nationalization of the mining industry, the country's foreign minister said Thursday.

"The basic industries of minerals should be in the hands of the national state," Foreign Minister Nicholas Maduro said. He spoke at the sidelines of a summit of leaders of the Common Market of the South, or Mercosur trade block, taking place here Thursday and Friday.

Maduro, however, didn't elaborate on the issue of nationalizing the mining industry.

A number of Canadian, U.S. and Brazilian mining companies are operating in Venezuela.

cumulina · January 30, 2007, 04:24:38 PM

...and today's excitement was a FAKE post on yahoo's messageboard:

I'll post it for your amusement/information, in case yahoo decides to remove it. Remember, that it is a FAKE!

"Preliminary" Permit Received... (4 Ratings) 30-Jan-07 01:08 pm
DJ Venezuela Mining Min: Crystallex Receives "Preliminary" Permit

CARACAS (Dow Jones)--Canadian mining firm Crystallex International Corp. (KRY) has been granted a preliminary environmental permit to begin exploiting the Las Cristinas gold mine in the east of the country, the country's mining minister said on Tuesday.

"Right now, Crystallex is able to proceed with preliminary construction with the final environmental permit to be issued shortly," said Mining Minister Jose Khan, speaking to reporters in Caracas.

Khan said the state is no longer looking to set up a National Mining Company to regulate the mining industry.

Concerning Las Cristinas, where Crystallex plans to operate, he said the government is "reviewing" the property and said that Hugo Chavez is "cooling on the idea" of mining the property. Rather, he is "leaning toward" filling the mine with water and soaking his fat ass in it.

-By Raul Gallegos, Dow Jones Newswires; 58-212-564-1339; [email protected];

(END) Dow Jones Newswires

January 30, 2007 13:01 ET (18:01 GMT)

Copyright (c) 2007 Dow Jones & Company, Inc.- - 01 01 PM EST 01-30-07

**************************************

Pretty soon after, a denial came out (This is real enough, I copied it off of e*trade's news

)

***************************************

Crystallex's Share Price Jumps On Fraudulent News Report
Dow Jones Newswires - January 30, 2007 3:32 PM ET

Related Quotes
Symbol Last Chg
KRY Trade 2.88 +0.07
Real time quote.

CARACAS (Dow Jones)--A fraudulent news story Tuesday on the Venezuelan operations of Canadian miner Crystallex International Corp. (KRY) pushed the company's share price up nearly 10% before profit-taking pared the gains.

The fake article, which resembled a Dow Jones Newswires report, claimed that Venezuela had at last approved a long-awaited environmental permit for Crystallex to begin exploiting the Las Cristinas gold mine.

The phony report was posted on a Yahoo message board. Shortly after it appeared, Crystallex's share price on the American Stock Exchange rose as high as 9.3% to $3.07 before the gains were trimmed. The stock stood at $2.96 per share, up 6.1%, at 3:23 p.m. EST.

Crystallex officials have denied the report. "As of now we're just fielding questions from investors," said Richard Marshall, vice president of investor relations for Crystallex. The company has yet to decide on other actions such as contacting the U.S. Securities and Exchange Commission, he said. "We'll bring it up with our board and to (legal) counsel to see what we can do."

The bogus story included a fabricated quote attributed to Venezuelan Mining Minister Jose Khan.

-By Raul Gallegos, Dow Jones Newswires; 58-212-564-1339; [email protected]

> Dow Jones Newswires

01-30-07 1530ET

Copyright (c) 2007 Dow Jones & Company, Inc.

***************************************
This stock is far from dead!!! Lots of people sitting out there just waiting for news. Today 6.000.000 shares was traded.

Amazing, what a message-board can do.....

Below you'll see the intraday chart.

News:

KRY - Sector: Basic Materials --- Industry: Gold & Silver