Crystallex Says Venezuela Reconsiders Mine Permit (Update1)

By Stewart Bailey

June 24 (Bloomberg) -- Crystallex International Corp. said the Venezuelan government may overturn its denial of a permit for the development of the country's largest gold deposit. The shares soared.

The Ministry of the Environment was advised by the government to reconsider the permit if modifications are made to the Las Cristinas project, Toronto-based Crystallex said today in a statement. Changes include remediation of existing environmental damage and improvements to social plans for the area, the company said.

Crystallex waited more than four years for the permits to develop the 21-million ounce deposit. Minister of Environment Yubiri Ortega rejected the application on April 30 to protect a forest reserve and small-scale miners working in the area. Crystallex met with the ministry again on June 18.

``Crystallex welcomes the opportunity to help create additional solutions to the extensive environmental damage that already exists due to illegal mining in the Las Cristinas area, and to improve the project in order to respond to issues'' raised by the ministry, the company said.

Crystallex jumped 48 cents, or 74 percent, to C$1.13 at 9:31 a.m. on the Toronto Stock Exchange. Before today, the shares plunged 60 percent since April 29, the day before the permit was rejected.

The company also received minutes of a meeting held on June 4 by the Permanent Committee for the Economic Development of the National Assembly to discuss the mine's delay. They showed that the project has the support of the Ministry of Mines, the company said.

The Ministry of the Environment also had rejected permits for Gold Reserve Inc. to develop the Brisas copper and gold project near Las Cristinas.

To contact the reporter on this story: Stewart Bailey in New York at sbailey7@bloomberg.net.

Last Updated: June 24, 2008 09:42 EDT