The civil servant said Wednesday that the Government will take control from the Cristinas and that anticipates to initiate its activity in the area in the 2009.

“We must terminate our relation with a company that has come working in the zone”, it said in apparent reference to Crystallex. “We have a legal problem there”, added.

Taking these statments at face value...

1. The only way to mine in 2009 is if a deal was done and necessary engineering studies, environmental studies, equipment, etc. was turned over as part of that deal.

2. Yes Venezuela does have a legal problem. The way to make that legal problem go away is with a deal.

I might add (as I have stated many times before)...Gold is a strategic asset. It could even be considered a military asset in the context of being the "un-dollar" and therefore anti-America (just look at how the central bankers and Larry Kudlow hate gold if you need any proof). Russia wants to move to a gold backed currency along with China, and the Middle East. Hugo has runaway inflation. Gold will solve this. It's win, win, win for Hugo. Insist on payment for oil with gold.....solve the problem of runaway inflation and develop economic strength as the dollar is about to collapse...develop closer ties with Russia....screw the U.S. and avoid having oil paid for in deflating dollars by transacting in gold. This is MUCH BIGGER THAN A SILLY CONTRACT. Imo....unless Hugo wants to abandon any sense of law and have this action displayed to the world....he will work a deal (probably already done) to make the "legal problem" go away. It is a small (but necessary) price to pay for the win, win, win upside he is anticipating. I think KRY management is playing stupid. The deal is done....the option strike price will make management whole....the question is what will the terms of the deal be and how will it affect us as shareholders. Good luck to all. I would be shocked if Venezuela just told us to "F" off and go find a lawyer.