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Crystallex International Corporation is a Canadian-based gold company with a successful record of developing and operating gold mines in Venezuela and elsewhere in South America

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Message: Follow the money (or the lack of it in this case).....

Follow the money (or the lack of it in this case).....

posted on Dec 15, 2008 03:25PM

RML has no cash and they need it badly. They do have plenty of shares and are as happy to print more. They are also prepared to "do what it takes" (which actually means " to pay who they need to") in order to get favours and permits.

Venezuela has little cash, but they have gold in the ground which is unavailable to them due to existing agreements and the lack of political will to respect those agreements. They have plenty of "facilitators" who for the correct inducements, will make sure that permits move "to the top of the pile" or alternatively "get buried" at will.

KRY has a contract but no permit, plenty of debt and shares and a little cash. It does have a legal case against Venezuela if their contract is broken, but they would have to "last the distance" in order to cash in and that might pose some problems because Venezuela never moves fast and in a law suit like this the slower the better for them.

GRZ has cash and owns the data and engineering but their permit to build the mine while initially approved was rescinded without real cause. GRZ does have a strong legal case against Venezuela in their agreements are broken. GRZ has more cash and therefore more time to wait out the legal process so their law suit would be a far greater problem in the longer term.

So if by some chance, RML managed to takeover GRZ then they would have the cash, Brisas, Choco and all of the equipment, data and engineering (plus an already written and approved permit which could be reinstated at the stroke of a pen) all for a few shares issued at no cost to the company. They wouldn't have the means to actually build a mine at Brisas but they could simply dilute further and virtually wipe out all the shareholders.

But the real winner is the Venezuelan government. RML getting GRZ would get a law suit that could cost the government half a billion and which they couldn't win off their backs, and get a mill and mine started at Brisas to provide jobs and make them look good. You can be sure that RML has had a nod and a shake from Sanz and Hugo before they started on this path.





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