Venezuela Cancels Crystallex Contract

Canadian miner Crystallex International says that the Venezuelan government has cancelled its mine operating contract (MOC) for the Las Cristinas gold project. The government cites Crystallex’s lack of progress on Las Cristinas for more than a year and “for reasons of opportunity and convenience” as reason for the termination. However, Crystallex says it has complied with all the obligations stated in the MOC. It also says that in June 2007, the government confirmed approval of the project’s environmental impact study, the posting of the construction guarantee bond and the payment of the environmental disturbance taxes. However, the local environmental ministry denied the request for the environmental permit in April 2008. Crystallex signed the MOC in September 2002. The contract granted Crystallex exclusive rights to develop and exploit the gold deposits on the Las Cristinas property. The miner raised CAD35m in June to finance the development of the project. Crystallex says it is considering all steps necessary to protect its investment, including filing an international arbitration claim. Las Cristinas was Crystallex’s only asset.