Source: Market Watch
Toronto, June 14, 2006.- Crystallex International Corporation commented yesterday that there has been considerable confusion resulting from yesterday's press coverage on possible revisions to the Venezuelan mining law, namely the incorporation of mixed companies as an exploitation structure in the mining sector. The Government stake in such mixed companies would be at least 51%.
The Crystallex share price has been negatively impacted as the market seems to have interpreted the comments about mixed companies in the mining sector to mean that this structure has now become the only model under which mining will be allowed in Venezuela.
It is important therefore to stress that the mixed company model under discussion is not applicable to the Crystallex Las Cristinas operating contract as the draft mining law provides express recognition of existing contracts which are in proper execution and good legal standing. Furthermore Article 11 of the draft mining law specifically provides for exploitation by way of operating contract, in a manner separate and distinct from the mixed company structure contemplated elsewhere in the draft. A translation of Article 11 is provided as follows:
"Article 11: For the purposes of this Law, operation contracts shall be understood as those legal arrangements entered into between National Social Mining Production Corporation and private legal entities, for the rendering of services within the work frame of exploration activities and rational and sustainable exploitation of mineral resources."
Crystallex holds a valid and binding operating contract issued by the state through the Corporacion Venezolana de Guayana (CVG), its regional natural resource development arm, that was officially approved and endorsed by the Ministry of Basic Industries and Mining (Mibam) in March of this year. As noted in the Venezuelan press yesterday, MIBAM was the entity responsible for preparing the mining law reform working paper and providing it to the National Assembly.
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