Toronto-based Crystallex International, which is waiting for the Venezuelan government to issue a permit to enable it to start building its Las Cristinas project, in the country's Bolivar state, continues to receive encouraging intimations from various authorities, but has still not got its hands on the all-important permit, the company said on Thursday.

Las Cristinas, which is believed to be one of South America's biggest untapped gold deposits, has estimated proven and probable reserves (based on a $550 gold price assumption) of 16,86-million ounces of gold, according to a September update by Crystallex.

Crystallex signed a mining operation agreement with State-owned Corporacion Venezolana de Guayana in 2002, and completed a feasibility study on the Las Cristinas project in 2004, but is still waiting for government approval to start building the mine.

The company said in June last year that it had been informed that the Ministry of the Environment and Natural Resources of Venezuela (Minamb) had approved its environmental-impact study for Las Cristinas and that the final conditions to permitting approval were for the company to post a compliance-guarantee bond and pay certain taxes for the issuance of the environmental permit.

The bond has been posted and the taxes paid, but the permit has not been forthcoming.

However, “no impediments have been raised in discussions with government officials, and they've recently confirmed we're in good standing for the issuance of the permit," president and CEO Gordon Thompson said on Thursday.

The company had also met with the new Venezuelan Minister of Basic Industry of Mines, Rodolfo Sanz, and expected him to visit Las Cristinas “in the near term”, and had held talks with the newly-appointed Canadian ambassador to Venezuela, Perry Calderwood.

Crystallex revised the capital costs for the mine upward in November, to $356-million, of which it said $112-million had already been incurred.

Miners in Venezuela are faced with an uncertain legal regime, with President Hugo Chavez pushing for the government to have control of all new projects.

Gold major Gold Fields recently cashed in its chips, selling its problematic Choco 10 mine to Vancouver-based Rusoro mining, and, most recently, Anglo American had six concessions in the country withdrawn by the Ministry of Basic Industries and Mining.

READY TO GO

Crystallex has procured, and currently holds in storage, the initial mining fleet and all long-lead-time milling equipment required for the project.

“This should enable us to avoid any equipment related construction delays, as the delivery times for mining and related equipment have increased significantly, particularly for some milling components, which have delivery times of up to three years,” the company said.

It has also appointed a GM, Jose Diaz Daza, and contruction manager, James McMullan, for Las Cristinas, in preparation for “the pending Las Cristinas construction phase”.

Crystallex raised net proceeds of C$64,8-million in an equity financing earlier this month, which it expects will cover its working capital requirements for the next 18 months.

"The National Assembly hearings and subsequent report, the correspondence from the MinAmb and numerous meetings with senior government officials continue to confirm our expectation that the permit will be issued, which will allow us to launch the long anticipated construction phase for the benefit of the local communities, stakeholders and shareholders," Thompson said.

Crystallex shares rose 3,91% on Thursday morning, to C$1,86 a share by 9:44 in Toronto.