Spat over Cristinas gold deposit nears resolution
Reuters Story - June 24, 1997 19:33
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By Huw Jones
NEW YORK, June 24 (Reuter) - The battle between Crystallex
International and Placer Dome over the
lucrative Las Cristinas gold property in Venezuela may be
resolved soon as each side looks to a Supreme Court to rule in
its favor.
Marc Oppenheimer, President and CEO of Crystallex, the
Candian junior mining company whose common stock began trading
on the American Stock Exchange Tuesday, has asked the
Venezuelan high court to knock out any claim the country's
state-owned CVG company has on the deposit.
"I think they are going to do it in the near future,"
Oppenheimer told Reuters.
CVG is in partnership with Canada's Placer Dome to
develop Cristinas, but Crystallex insists it is the rightful
owner through its subsidiary Mael.
Last month the Venezuelan government's own Official Gazette
confirmed the property's transfer to Mael in published
documents, Oppenheimer said.
Placer Dome spokesman Hugh Leggatt said the Supreme Court
will rule that Crystallex has no rights whatsoever to
Cristinas, which belongs to the state and whose transfer to
Mael was faulty.
"We believe our position is secure," Leggatt said.
CVG, it was reported in the Venezuelan press, was going to
sue Crystallex for allegedly delaying the Cristinas project
with its claims to the property.
"We have not received a copy of any suit," Oppenheimer
said. "Saying that we are obstructing the project is a little
bit ridiculous."
For Crystallex, winning the battle is crucial - the
property accounts for 9.5 million of the company's proven gold
reserves of 10 million ounces.
Oppenheimer said Cristinas would produce 250,000 to 450,000
ounces of gold a year at cash costs of $200 an ounce.
Placer has estimated Cristinas' resource is in excess of 20
million ounces, Oppenheimer said.
At present Crystallex operates the small Albino mine in
Venezuela, next to Cristinas, with 350,000 ounces of proven
reserves and 15,000 to 20,000 ounces a year of output.
"There are additional zones at Albino that will
significantly increase the size of these deposits," Oppenheimer
said.
The company has other properties in Venezuela and Brazil
and is looking to acquire new deposits and mines in Asia and
Europe later this year, Oppenheimer said.
At present Crystallex has C$10 million in the bank.
This sum is rising because institutional investors are
exercising warrants, but the tally is still short of the $600
million or so that may be needed to develop Cristinas.
"Capital markets and money should not be a problem for this
company," Oppenheimer said. "The U.S. stock exchange said there
will be multiple days when we will be in the 10 most-active
list."
Crystallex has already been approached by larger mining
companies for possible takeover, Oppenheimer said. A "poison
pill" and asset protection plan are already in place.
The Bre-X fallout in the metals finance world has prompted
some junior mining companies now finding it difficult to raise
cash to investigate possible ventures with Crystallex,
conferring a major's role on a junior miner, Oppenheimer added. |
