Crystallex told Cristinas contract cancelled

Exploration & Development

Publishing Date: 07 Feb 2011 11:38am GMT
Author: Mining Journal

Venezuela's state mining company has told Crystallex International Corp that it has terminated the operating contract for the much-disputed Las Cristinas gold project.

The reason given by Corp Venezolana de Guayana for termination of the operating contract apparently includes failure to progress the project for more than one year, and "for reasons of opportunity and convenience".

Crystallex was awarded the contract to mine the 16.8Moz deposit in 2002, but has been waiting for the final permit to begin operations.

Crystallex said it had fulfilled the conditions required for issuance of the permit as long ago as June 2007, but the country's Ministry of Environment and Natural Resources refused to issue the permit.

Members of Venezuela's government have previously indicated it would take control of the project, and suggested that it would take as a partner Rusoro Mining Co.

Crystallex last year enlisted the help of a Chinese group to resolve the stalemate, offering two-thirds of its assets in return for the capital required to build the mine and infrastructure, and assistance in "unblocking the stalled environmental permitting process".

Crystallex was "reviewing its position", and considering all steps, including filing an International Arbitration claim.