Rumours may be fact: La Cristinas is in play! (KRY - Toronto )
CRYSTALLEX ACQUIRES RIGHTS TO LAS CRISTINAS PROPERTY
WITH REPORTED RESOURCE OF APPROXIMATELY 13 MILLION OZ. OF GOLD;
ADOPTS SHAREHOLDER RIGHTS PLAN
VANCOUVER, March 3 /CNW/ - CRYSTALLEX INTERNATIONAL CORPORATION (Toronto:
KRY) announced today that it has acquired the rights to Las Cristinas 4 & 6 concessions located in Kilometre 88, Venezuela. Las Cristina 4 concession is adjacent to Crystallex's Albino concession, which is currently being mined by Crystallex. Crystallex acquired the concessions by purchasing a corporation whose ownership rights have been confirmed by final and binding decisions of
the Supreme Court of Venezuela in 1991 and 1996.
Las Cristinas concessions have been under investigation and exploration for several years by Placer Dome under a joint venture agreement between Placer Dome and the Corporacion Venezolana de Guayana (CVG). Placer Dome's rights to investigate and explore the Las Cristinas concessions are based on contractual rights granted by CVG in connection with the joint venture agreement. Exploration data released by Placer Dome has identified a resource on Las Cristinas 4 & 6 concessions of approximately 13 million ounces of gold contained in saprolite (alluvial) material and deeper hard rock.
The concessions acquired by Crystallex constitute ownership rights that are recognized and protected under Venezuelan mining law. CVG does not have the authority to grant concession rights and the legal basis of contractual rights granted by CVG is unclear under Venezuelan law. Crystallex has made
Placer Dome aware of these matters on a number of concessions.
Las Cristinas 4 & 6 concessions cover the right to mine the Saprolite (alluvial) gold resources on the properties. Under Venezuelan mining law, the holder of such a concession has a preferential right to receive the deep or hard rock rights.
Because of the proximity of Las Cristinas 4 & 6 to Crystallex's Albino concession, Crystallex believes that it would be to the advantage of CVG and Placer Dome to enter into a joint venture with Crystallex for the exploitation of the properties. Crystallex has recently had discussions with Placer Dome to this end. To date, no arrangements have been made for the mining of these properties by such a joint venture. Crystallex intends to investigate constructive means of continuing the exploration work, and putting the project into production, including by identifying and actively pursuing potential
joint venture partners for the project.
Until a means for Crystallex to exploit the Las Cristinas 4 & 6 is settled, the marketplace may have difficulty accurately assessing the value of the ownership rights Crystallex has obtained. The Board of Directors of the Company is concerned that Crystallex's shareholders not be prejudiced by this uncertainty, and have adopted certain measures to prevent third parties from exploiting the current situation.
The concessions have been acquired through a privately held acquisition company. The shareholders of the company which made the acquisition are directors of Crystallex. These shareholders have granted to Crystallex an exclusive call right to acquire all of the shares of the acquisition company at their original cost at any time. This call right is irrevocable and unconditional unless, prior to its exercise, a person, together with any parties acting jointly or in concert with it, acquires 20% or more of the outstanding voting shares of Crystallex without the approval of the Crystallex Board. In such event, the call right will terminate and the acquisition company and its shareholders will be required to dispose of the investment in the Concessions in a commercially reasonable manner with a view to maximizing the proceeds of such disposition. The net proceeds of disposition, whether represented by cash or securities, would be distributed, after payment of liabilities, to those persons who were shareholders of Crystallex immediately prior to he 20% ownership threshold being surpassed. Under the call agreement, Crystallex has the right to vote the shares of the acquisition company and, subject to the recognition of the full value of the Concessions, the Board of Directors intends to treat the Concessions on the same basis as Crystallex's other assets. The call agreement will be submitted to shareholders of Crystallex for confirmation at the next shareholders' meeting expected to be held in June, 1997.
In addition, the Company's Board of Directors has adopted, subject to regulatory approval, a Shareholder Rights Plan designed to encourage the fair treatment of shareholders in connection with any take-over offer for the Company. The Rights Plan addresses the Company's concerns that existing Canadian legislation does not allow sufficient time, if a take-over bid is made, for either the Board of Directors or the shareholders to properly consider a take-over bid or for the Board of Directors to seek alternatives to such a bid.
The Rights Plan will provide the Board of Directors of the Company and the shareholders more time to fully consider any unsolicited take-over bid for the Company. It will also allow more time for the Board of Directors to pursue, if appropriate, other alternatives to maximize shareholder value.
Shareholders will also be asked to confirm the Rights Plan and approve an increase in the authorized capital of the corporation at the next shareholders meeting. The Rights Plan has a term of ten years, subject to reconfirmation by shareholders every three years.
The rights issued under the Rights Plan become exercisable only when a person, together with any party related to it, acquires or announces its intention to acquire 20% or more of the Company's outstanding common shares without complying with the ``Permitted Bid'' provisions of the Rights Plan or without approval of the Board of Directors of the Company. Should such an acquisition occur, rights holders, other than the acquiring person and related persons, can purchase common shares of the Company at half the prevailing market price at the time the rights become exercisable. Each right, upon
exercise, would entitle the purchase of 10 shares of the Company for the same price as it would take to acquire five shares at market price, as defined in the Rights Plan.
The Company's common shares that is open for acceptance for not less than 60 days. If, at the end of 60 days, at least 50% of the outstanding shares, other than those owned by the offeror and certain related parties, have been tendered, the offeror may take up and pay for the shares but must extend the bid for a further 10 days to allow other shareholders to tender. The Rights Plan is similar to plans adopted recently by several other Canadian companies.
Commenting on the use of the acquisition company as a means of maximizing the value of the Las Cristinas 4 & 6 concessions and on the adoption of the Rights Plan, Mr. Oppenheimer said, ``The Board of Directors considered that it was prudent to adopt these measures in order to protect the rights of Crystallex's shareholders and to ensure that any take-over offer for Crystallex reflects fully the value to shareholders of the Concessions and of the Company's other assets.'' Despite recent unusually high trading activity, no actual or proposed take-over bid for Crystallex is currently known to the
directors.
Crystallex International Corporation is a gold mining and exploration company. The Company's Albino Mine is the first foreign-owned gold mine operating in the km 88 region of Venezuela. The Company's strategy for growth is to develop its portfolio of properties in South America as well as to
diversify geographically by investing in producing or near-production projects and by exploring properties of merit in other areas of the world
Crystallex - A South American alternative (KRY - Vancouver )
(KRY) Crystallex International Corporation
Symbol: KRY
Company Type : Resource
Head Office Address : 303, 475 Howe Street
Vancouver
British Columbia
Canada
V6C 2B3
Telephone Number : (604) 683-0672
FAX Number : (604) 688-3128
Transfer/Agent :
--------------
The R-M Trust Company, Vancouver
Exchanges : TSE
Incorporation date and place
----------------------------
British Columbia May 22, 1984
Group : Gold & Precious Minerals
Holds interest in the Albino, El Tigre, Santa Elena, San Miguel, and
Carabobo properties in Bolivar State, Venezuela. The company's Albino
mine is the first foreign-owned gold mine operating in the Kilometre 88
region of Venezuela.
The company's principal property is the Albino 1 Concession, a
500-hectare gold property located near the village of Las Claritas. In
1995, the company produced 16,391 oz. of gold from a 400-tonne-per-day
mill on the concession. With delays experienced in completing mill
modifications, the company does not plan to achieve its production goal
for 1996. A total of 78,701 tonnes of proven and probable shallow
reserves averaging 14.80 grams gold per tonne and hard rock proven and
probable reserves of 247,428 tonnes grading 14.51 grams gold per tonne
have been identified on the property. Pursuant to an agreement dated
Aug. 14, 1995, the company acquired all outstanding shares of Eurus
Resource Corp. for consideration of 1,583,333 Crystallex common shares.
Shareholders of Eurus also received 1,583,333 Eurus warrants, each
entitling the holder to buy one share at $3.15 per share until Sept.
30, 1996.
The company has also signed an option agreement to acquire a 100%
interest in four concessions from the Associacion Cooperativa Minera
Mixta de Sur R.L.
In December 1996, the company announced its agreement to acquire 65%
interest in Delpet Resources Ltd.'s Mineiro gold property in Northern
Brazil, for US$250,000, 100,000 Crystallex common shares and spend
US$500,000 on exploration which is to begin January 1997.
The company's common shares commenced trading on the Toronto Stock
Exchange under the symbol "KRY.V" on Oct. 4, 1996.
PREDECESSOR DATA
Name changed from Petroflame International Resources Ltd., May 8,
1991; basis one new share for five old shares.
Directors
---------
P. R. Lacerte
Director, chairman, Plano, Texas.
M. J. Oppenheimer
Director, president & chief executive officer, Leonia, New Jersey.
R. A. Fung
Director.
R. A. Nihon
Director.
D. R. Ross
Director.
A. F. Zullo
Director.
Key Personnel
-------------
S. C. Goss
Vice-president.
Richard Marshall
Vice-president corporate development.
G. J. Fretwell
Vice-president & secretary.
Dr. Luca |Riccio
Vice-president exploration.
Ky Szetho
Chief financial officer.
Subsidiaries
------------
Wholly Owned Subsidiaries - Compania Minera Crystallex S.A.;
Crystallex de Uruguay S.A.; Crystallex de Venezuela C.A.; Eurus
Resource Corp., Vancouver, B.C.
Capital Stock
-------------
Authorized Outstanding (1) Par
Cl.A Pref. 20,000,000 shs. nil $50
Cl.B Pref. 20,000,000 shs. nil $250
Common 60,000,000 shs. 16,575,759 shs. n.p.v.
(1) At Oct. 3, 1996; 187,500 shs. held in escrow.
Long Term Debt
--------------
At Dec. 31, 1995, outstanding long-term debt totaled $1,124,221 (none
due currently) and was comprised entirely of 10% convertible five-year
debentures, convertible into common shares at prices ranging from $2.50
to $2.96 per share in the first year, escalating by 25c per share per
year over the five-year term.
Auditors
--------
Davidson & Co., Chartered Accountant, Vancouver, B.C.
Current Financial Position
--------------------------
For the nine months ended Sept. 30, 1996, net loss was $2,507,884, or
17c per share compared with net income of $1,309,032, or 11c per share,
for the corresponding year-earlier period. Operating revenue decreased
to $2,235,355 from $7,597,707.
Price Range - KRY
Year High Low Close
1996.... $3.64 $2.00 $2.50
1995.... 4.00 1.80 2.40
1994.... 9.25 2.53 3.60
1993.... 9.25 2.60 9.00
1992.... 2.80 0.78 2.50
1991.... 1.00 0.25 0.87
1990.... 5.75 0.25 0.30
1989.... 3.75 0.75 3.00
1988.... 1.90 0.50 0.85
1987.... 6.50 1.10 1.35
Capital Changes
---------------
In May 1995, the company adopted a formal stock option plan and the
authorized capital was increased to 100,000,000 shares, divided into
60,000,000 common shares without par value, 20,000,000 Class A
preference shares with a par value of $50 each, and 20,000,000 Class B
preference shares, with a par value of $250 each.
In 1995, common shares were issued as follows: 250,000 through
private placements for proceeds of $562,500, 411,000 on exercise of
warrants and options, 189,580 on conversion of debentures, 20,000 for a
loan bonus, and 1,583,333 for the acquisition of Eurus Resource Corp.
Subsequent to 1995 year end, the company issued 463,739 shares at a
value of $2.50 per share in settlement of outstanding debt.
In March 1996, the company announced a private placement of 1,100,000
units (one share and one warrant) at $2.50 per unit. Each warrant
entitles the holder to buy one share at $2.77 per share in the first
year and at $3.25 per share in the second year. The private placement
was closed in May 1996.
In June 1996, the company completed a private placement of 8,175,000
special warrants at a price of $2.57 per special warrant for gross
proceeds of $21,009,750. Each special warrant will be exchangeable, at
no further cost, for one share and one-half a warrant; and each whole
warrant will entitle the holder to buy one share at $2.75 per share in
the first year and at $3.20 per share in the second year.
In October 1996, the company received proceeds of $4,456,827 from the
exercise of two classes of warrants for the purchase of an aggregate of
1,473,806 common shares. The first warrant, exercisable at $3.15 per
share came from the acquisition of Eurus Resource Corp., while the
second warrant, exercisable at $2.50 in the first year and $3.00 in the
second year, was issued as part of a financing in 1994. Proceeds will
be used primarily to continue development of the Albino property in
Venezuela.
This is the most recent graph on Crystallex (tse):
<Picture>
Crystallex - Stk Price Rise
VANCOUVER (Dow Jones)--Crystallex International Corp. (T.KRY) said no change had occurred in its existing business which would account for the recent increase in its stock price.
In a news release, however, Crystallex linked the recent unusual trading activity in its shares to ''rumours that the company is currently in negotiations involving the acquisition of certain properties in Venezuela.''
Crystallex said it ''cannot at this time provide any assurances that such negotiations will be concluded in a manner acceptable to the company.''
Until the talks have been concluded, ''no further details can be disclosed without prejudicing the outcome of the discussions currently under way,'' it said.
The company made the statement at the request of the Toronto Stock Exchange, where trading in its shares is currently halted. On Monday, the company's stock rose 0.34 to 3.49. Crystallex is a mining company. |
