Crystallex increases mining activities in Venezuela
Crystallex International Corporation KRY
Shares issued 60,068,886 Oct 18 close $1.51
Thu 19 Oct 2000 News Release
Mr. Marc Oppenheimer reports
Crystallex International has commenced several initiatives in Venezuela
designed to substantially increase the company's total gold production.
Chief among these initiatives are a diamond drilling program at its wholly
owned Tomi property and the resumption of work at the Albino 1 concession
in Venezuela's Kilometre 88.
The 4,000-metre drilling program, which is expected to be completed by
year-end, is designed to identify additional minable reserves on the Tomi
property and accelerate Crystallex's current plan for increasing its gold
production. Although the drilling program will investigate all three of the
major ore bodies on the property, McKenzie, Charlie Richards and Milagrito,
particular emphasis will be placed on the Charlie Richards deposit where
previous drilling has found thick mineralized zones containing average
grades in excess of 15 grams per tonne over substantial widths. Among the
high-grade intersections discovered were 39.04 grams per tonne over 9.0
metres and 16.48 grams per tonne over 20 metres. Such high-grade
intersections, and the structural continuity of the Charlie Richards
orebody, suggest that further close-spaced drilling may lead to the
definition of minable underground reserves. The company has hired an
outside consultant to prepare a feasibility study of the potential
underground development of this orebody.
Crystallex also has completed certain modifications to its Revemin mill,
which now allow for phased increases in mill capacity. During the year,
production throughput at the Revemin mill has averaged 1,400 tonnes per
day. Subsequent to the closing of the acquisition of the Tomi mine and
Revemin mill in July, 2000, the company has commissioned an engineering
firm to design a further expansion aimed at increasing the mill capacity to
3,000 tonnes per day.
Recently, Crystallex has begun dewatering the open pit at its Albino 1
concession in preparation for construction of the ramp into the high-grade
underground portion of the La Conductora deposit. The company plans to mine
and process the ore from its underground mining operation at Albino 1 by
mid-2001 through the expanded Revemin mill.
The company also has implemented programs that address the potential
represented by the numerous small mining operations in the El Callao mining
district. One of these programs offers miners within a 100-kilometre radius
of the company's Revemin mill the opportunity to process its ore grade
materials there on a toll basis. Yet another program will create joint
ventures with local miners to give them the benefit of the company's
experience with modern mining techniques so they can better develop small
orebodies.
Marc J. Oppenheimer, Crystallex's president and chief executive officer,
commented that the company is executing its strategy well. "In just a few
years, we have grown from an exploration company on a path to an
intermediate producer by executing a very well considered strategy of
acquisition and internal development. We are now at a point where our
development is accelerating. The Tomi mine acquisition was significant
because it tied together our line of Venezuelan concessions with a
productive mine and a strategically placed mill. From that we have been
able to initiate a number of projects that weren't available to us before.
The Tomi mine produced approximately 13,000 ounces of gold in the third
quarter of 2000. Now with the synergies of our properties and mill
improvements, we can significantly increase our gold output potential.
Without including contributions from Las Cristinas, our annual production
profile has gone from producing approximately 77,000 ounces of gold in
1999, to a target in excess of 200,000 ounces of gold with cash costs of
production under $200 (U.S.) per ounce in 2002.
"In addition, we are excited by the potential offered by the future
underground mining at our Albino 1 concession as well as the recent
proposed acquisition of the El Callao mining properties. The deposits of El
Callao, such as the La Victoria, are less than 10 kilometres away from our
Revemin mill. We plan to conduct a 16,000-metre diamond drilling program on
this property starting in the first quarter of 2001. This work will lead to
a full feasibility study enabling us to begin production through our
expanded Revemin mill by the fourth quarter of 2001.
"We now have an even stronger presence in Venezuela and possess an
understanding of the Venezuelan culture, environment and mining industry
that is shared by very few other international mining companies. It is this
understanding that drives our success in Venezuela, whether it is with a
midsized operation like Tomi and El Callao or a larger undertaking," Mr.
Oppenheimer said.
Concurrently Crystallex continues to work with the government of Venezuela
to confirm the company's ownership rights to the Cristinas 4 and 6
concessions and is encouraged by rulings of the Supreme Court and
subsequent discussions with Venezuelan authorities that have occurred over
the past several months.
WARNING: The company relies upon litigation protection for
"forward-looking" statements.
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