Canadian sought a partner to stay in the mine
(0) Comments
Rate this article:

0 / 512345


Share | Facebook | Myspace | Google | Twitter


November 1, 2010, 02:20 AM | Marc Oppenheimer, Crystallex's president in 2002, welcomed the choice of the company by the Corporación Venezolana de Guayana (CVG) as an operator in Las Cristinas.

On that occasion, the president of the CVG, Francisco Rangel Gómez said that Crystallex had been chosen for the project because it offered the best proposal for a rapid development and the beginning of the mine.

Oppehenimer said: "This is a historic moment for our company and our shareholders. We are delighted to have been chosen to begin work on exploiting this project. We must also thank our shareholders who have supported the company in the process that has led to get the property legally. "

The contract signed between the CVG and Crystallex noted that this was the operating company for the Mining Act 1757 and the decree clearly ratified the legal property of the state over these gold reserves.

It's been eight years and Crystallex presents an annual report which states that has 100 people working in Las Cristinas, of which 80 are vigilant and are attached to a company (Security Gold), a cook, cleaning staff and two or three geologists who have eight years taking samples to confirm the explorations made earlier by Placer Dome.

Crystallex The company argues in its defense that the Environment Ministry has not finished delivering the environmental permit and therefore could not start the internet job.

The story is similar to Placer Dome, which used the same arguments at a time when the gold market was depressed and tried to get through a company, Venture Vanessa, investment to start the work, something that never happened and ended in the termination of the contract.

At that time was five years.

In June this year, Crystallex announced that it was associated with a Chinese group in the Las Cristinas project. This is the China Railway Group Resources Co Ltd (CRRC), a unit of the giant Chinese contractor and engineering company grows, it will own two thirds of the venture, while Crystallex will own the rest.

Option: associate

This time it was Crystallex International Corp. which took the lead in the communication and said that this partnership would boost its stalled gold project in Venezuela.

Canadian mining company, according to the note of the company, "had bought the rights to develop the Las Cristinas gold project in Venezuela's Bolivar state, but has been struggling to resolve a dispute with government permission."

CRRC Crystallex said it had advanced $ 2.5 million during the negotiation of this agreement and this investment was convertible into shares of Crystallex at a price of 40 cents Canadian action.

The conversion price is about a 27% discount to the value of the action of Friday's close of Crystallex, 55 Canadian cents on the Toronto Stock Exchange.

A month before the negotiations, in May, the company said it was seeking to address what the controversial permission and opt for seeking international arbitration if no agreement is reached.

President Hugo Chavez had earlier said it would develop the mines of Bolivar with Russian companies rather than Canadian firms.

Separately, I grew up running the rail network project valued at 7,500 million dollars in Venezuela, to join with Anzoátegui Cojedes.

History repeats itself

And Placer Dome left after five years without being able to claim anything else, eight years later following the same path Crystallex. Placer Dome sought Vanessa Venture Crystallex as financial muscle and did the same with the Chinese company.

Some believe that the CVG in the contract awarded to Crystallex gave more rights to the company that the Ministry of Energy and Mines gave the corporation.

Placer Dome tried in due course to seek arbitration, but this time the decree was not in effect in 1757, through which the state reserves the exploitation of Las Cristinas through the office of Energy and Mines and the CVG, in addition another being the exclusive property of the Republic.

That means that while Crystallex recourse to arbitration, which is the same as Gold Reserve has raised in Las Brisas del Cuyuni, in the end the Venezuelan state is the sole owner of these gold reserves.

Some would think that logic dictates that the Corporacion Venezolana de Guayana was not able to exploit the mine, but why seek a private partner if Article 6 of the 1757 was very clear? Had to be a state agency.

Right there in the gold zone is Minerven state enterprise, according to geological studies, possess even more gold than Las Cristinas, and for this reason, the South Africans want to be allowed to operate on the premises of the mine Isidora Well in Colombia, 1,000 meters down, and they assume all costs.

Take an equity stake, which was 30% with Placer Dome, the state wound up signing a contract for between 1% and 3% and all rights that CVG had given the Ministry of Energy and Mines, and CVG Crystallex delivered.

Experts will now have to discuss these issues and define which of the two was more business to the Venezuelan State, in the unlikely event that the contract of CVG and Crystallex is legal. CC