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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: BEFORE YOU GET ALL BENT OUT OF SHAPE

Re: BEFORE YOU GET ALL BENT OUT OF SHAPE / Eddy

posted on May 17, 2009 12:22PM

"Crystallex can certainly pay VZ taxes and royalties in bolivars at the official dollar/bolivar rate. Most of other expenses (such as equipment, wage) reflect the black market rate, and for this the company needs to buy dollars at the official rate."

Eddy, this is a nonsensical statement.

ALL expenses in Venezula are paid in bolivars and the exchange rate is irrelevant. A bolivar is a bolivar when used in Venezuela, the issue only arises when one tries to repatriate currency into dollars.

Expenses payable in bolivars would include at least all wages paid in Venezuela, local supplies and equipment, fuel, electricity, taxes, and royalties, i.e. almost all operating expenses of the mine.

There are also some ways to mitigate the effect on remaining bolivars, like making local investments, but I won't waste my time on that until you understand the basic issues.

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