Canadian media claims Crystallex suspension could jeopardize Las Cristinas schedule
Posted: Friday, July 11, 2003
By: David Coleman
Canadian media claims Crystallex suspension could jeopardize Las Cristinas schedule
Mineweb's Tim Wood claims that Crystallex International (KRY) crunch time has arrived after the stock was again suspended from trading on the Toronto and New York exchanges over alleged regulatory problems. Wood opines "this looks to be the final nail in the coffin of company chief executive, Marc Oppenheimer" and goes on to say "key investors and company watchers are fed up with the slurry of 'sidebar issues' that have been a dead weight on Crystallex’s stock price."
As a result of a review by Crystallex' new auditors Deloitte & Touche, the Toronto-headquartered mining company will be restating three years of financials affected by "incorrect or inappropriate treatment of gold derivatives." The Toronto Stock Exchange has extended its review until July 16.
US Gold Stock Analyst newsletter publisher John Doody has called for Oppenheimer’s head ... he would like Crystallex' present COO Ken Thomas to be appointed interim president and says its "a view echoed by others" which are "apparently being funneled to the Crystallex board with increasing intensity."
Thomas us an accomplished engineer who only recently joined Crystallex, but has already gained the sort of Bay Street credibility that could set the firm on a new tack ... an influential (but unidentified) shareholder quoted by Mineweb says “the cumulative nature of Crystallex’s problems is destructive ... it draws attention away from the asset which is all that we should be talking about ... Las Cristinas in Venezuela."
Mineweb says that professional investors are betting on Las Cristinas being auctioned off at $101 per reserve ounce although Crystallex currently trades at about $16 on Las Cristinas alone. Las Cristinas’ metallurgical quality has been addressed by engineering studies undertaken by MDA and SNC-Lavalin and final feasibility study is due for publication in September, with indications that the reserve base could be expanded as much as 20% on already known reserves of 10.1 million ounces and a simplified extraction process will be cheaper and probably have higher gold recoveries than initially thought.
Rumors of interest from several buy-out companies include unspecified offers from Barrick, Gold Fields, Glamis and Kinross ... Newmont has also been named, since Endeavour Mining Capital had been linked to heavy trading in Crystallex. Mineweb enthuses that the Las Cristinas stock could soar to $4.90 but adds that it is much more likely to indicate a price of $7.84 and with a current weighted average market value of around $105 per ounce, Crystallex becomes a $1 billion company in the ranks of the top-50 most valuable gold companies worldwide.
Meanwhile the Vancouver Sun's usually negative David Baines reports that before trading commenced on Wednesday, the Toronto and American stock exchanges halted trading and TSX spokesman Steve Kee confirmed that trading will remain halted until the commission's cease-trade order is lifted. The TSX also announced it is extending a 4th review extension of Crystallex's eligibility for continued listing until Wednesday, July 16.
In April, Crystallex had replaced its auditors, Davidson & Co (Vancouver) with Deloitte & Touche of Toronto. Under Deloitte's supervision, the company issued audited statements in May for the year ending Dec. 31, 2002 including large retroactive write-downs on account of certain properties and equipment, and substantial losses on account of its gold call option program. As a result of these measures, the company's previously-reported loss of $7.3 million for the nine months ending September 30 swelled to $39.8 million by year end, and previously reported profits totaling $3.4 million for the years 2001 and 2000 reverted to a $37 million loss.
According to the British Columbia (Canada) commission, the restated financials "are not in accordance with generally accepted accounting principles" ... the commission said Crystallex advised it had found errors in accounting for its call options during the years 2000, 2001 and 2002. Although the nature of the errors was not revealed, but according to a source, the company failed to account for all its call options, which because of the recent rise in the price of gold are seriously out of the money. If true, a restatement would further exacerbate losses.
Of more immediate concern, however, are the cease-trade orders which Vancouver Sun reporter David Baines claims make it impossible for Crystallex to raise equity capital for the Venezuelan Las Cristinas project with a projected capital cost of at least $400 million ... "this could jeopardize the schedule the company must meet to keep the contract in good standing with the Venezuelan government."
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Posted: Friday, July 11, 2003
By: David Coleman
Canadian media claims Crystallex suspension could jeopardize Las Cristinas schedule
Mineweb's Tim Wood claims that Crystallex International (KRY) crunch time has arrived after the stock was again suspended from trading on the Toronto and New York exchanges over alleged regulatory problems. Wood opines "this looks to be the final nail in the coffin of company chief executive, Marc Oppenheimer" and goes on to say "key investors and company watchers are fed up with the slurry of 'sidebar issues' that have been a dead weight on Crystallex’s stock price."
As a result of a review by Crystallex' new auditors Deloitte & Touche, the Toronto-headquartered mining company will be restating three years of financials affected by "incorrect or inappropriate treatment of gold derivatives." The Toronto Stock Exchange has extended its review until July 16.
US Gold Stock Analyst newsletter publisher John Doody has called for Oppenheimer’s head ... he would like Crystallex' present COO Ken Thomas to be appointed interim president and says its "a view echoed by others" which are "apparently being funneled to the Crystallex board with increasing intensity."
Thomas us an accomplished engineer who only recently joined Crystallex, but has already gained the sort of Bay Street credibility that could set the firm on a new tack ... an influential (but unidentified) shareholder quoted by Mineweb says “the cumulative nature of Crystallex’s problems is destructive ... it draws attention away from the asset which is all that we should be talking about ... Las Cristinas in Venezuela."
Mineweb says that professional investors are betting on Las Cristinas being auctioned off at $101 per reserve ounce although Crystallex currently trades at about $16 on Las Cristinas alone. Las Cristinas’ metallurgical quality has been addressed by engineering studies undertaken by MDA and SNC-Lavalin and final feasibility study is due for publication in September, with indications that the reserve base could be expanded as much as 20% on already known reserves of 10.1 million ounces and a simplified extraction process will be cheaper and probably have higher gold recoveries than initially thought.
Rumors of interest from several buy-out companies include unspecified offers from Barrick, Gold Fields, Glamis and Kinross ... Newmont has also been named, since Endeavour Mining Capital had been linked to heavy trading in Crystallex. Mineweb enthuses that the Las Cristinas stock could soar to $4.90 but adds that it is much more likely to indicate a price of $7.84 and with a current weighted average market value of around $105 per ounce, Crystallex becomes a $1 billion company in the ranks of the top-50 most valuable gold companies worldwide.
Meanwhile the Vancouver Sun's usually negative David Baines reports that before trading commenced on Wednesday, the Toronto and American stock exchanges halted trading and TSX spokesman Steve Kee confirmed that trading will remain halted until the commission's cease-trade order is lifted. The TSX also announced it is extending a 4th review extension of Crystallex's eligibility for continued listing until Wednesday, July 16.
In April, Crystallex had replaced its auditors, Davidson & Co (Vancouver) with Deloitte & Touche of Toronto. Under Deloitte's supervision, the company issued audited statements in May for the year ending Dec. 31, 2002 including large retroactive write-downs on account of certain properties and equipment, and substantial losses on account of its gold call option program. As a result of these measures, the company's previously-reported loss of $7.3 million for the nine months ending September 30 swelled to $39.8 million by year end, and previously reported profits totaling $3.4 million for the years 2001 and 2000 reverted to a $37 million loss.
According to the British Columbia (Canada) commission, the restated financials "are not in accordance with generally accepted accounting principles" ... the commission said Crystallex advised it had found errors in accounting for its call options during the years 2000, 2001 and 2002. Although the nature of the errors was not revealed, but according to a source, the company failed to account for all its call options, which because of the recent rise in the price of gold are seriously out of the money. If true, a restatement would further exacerbate losses.
Of more immediate concern, however, are the cease-trade orders which Vancouver Sun reporter David Baines claims make it impossible for Crystallex to raise equity capital for the Venezuelan Las Cristinas project with a projected capital cost of at least $400 million ... "this could jeopardize the schedule the company must meet to keep the contract in good standing with the Venezuelan government."
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