Hello Confluence
Impressive work thank you:
Here is another announcement on a related note. SUF mentioned about a two thirds of the way down.
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Crystallex Acquires Uruguay's San Gregorio Gold Mine
Acquisition Includes Proven Reserves, Operating Mine, and Exploration Lands
VANCOUVER, British Columbia, Oct. 23 /CNW/ -- Crystallex
International Corp. (Amex: KRY) (Toronto: KRY.) today announced that it has
acquired the San Gregorio assets of Rea Gold, which consist of an operating
mine and approximately 150,000 hectares of mineral properties.
The assets (which total at book value US$68.6 million) have been acquired
at a gross value of US$29 million satisfied by combining US$7 million cash
from Crystallex Capital Corporation, a newly formed subsidiary of Crystallex
International; US$6 million from the liquidation of certain acquired company
assets and US$16 million in non-recourse project finance (recourse only to the
project itself) underwritten by Standard Bank of London, Limited.
The San Gregorio mine commenced production in January 1997 and is
producing gold at an average rate of 70,000 ounces per year. It includes a
CIL mill facility with the capability to process 3,000 tons of ore per day.
For the first 8 months of 1998 the San Gregorio mine produced 47,615 ounces of
gold and 24,678 ounces of silver. Currently, San Gregorio has indicated
resources of 680,000 ounces of gold, including 420,000 ounces of mineable
reserves. Production at San Gregorio is projected to continue at current
levels during the next five years. The mine plan anticipates cash costs of
production to average US $220 per ounce over the existing life of the mine.
The cash cost of production for 1997 was US $281 and for the first eight
months of 1998 the cash cost had decreased to US $245 per ounce.
"The acquisition of San Gregorio in Uruguay will complement our production
plans in Venezuela as we move to deep rock production at our Albino property
once final approvals and construction of an underground mine have been
completed," said Crystallex President and CEO Marc J. Oppenheimer, commenting
on today's announcement. He added, "We continue to target additional
investment opportunities which will allow us to increase our production
profile as well as our reserve base."
The US$16 million in non-recourse financing carries an interest rate of
approximately 3%. The repayment schedule is tied to the project cash flow of
the mine and can be paid in equity, gold or cash, at Crystallex's discretion.
Crystallex anticipates that the project finance loan will be retired in 2003
although the Company has the option to accelerate the repayment, should it
desire to do so.
"As head of operations, I am particularly happy about this acquisition.
The value of this investment comes from securing proven operations, which have
substantial exploration potential and on-site management that we intend to
supplement," said Dr. Sadek El-Alfy, Crystallex Vice President of operations.
The San Gregorio mine operates under strict environmental guidelines and
was awarded first place for Latin America in the 27th World Mining Congress'
ecology and environmental contest.
Included in the purchase are the exploration rights for a total of
approximately 150,000 hectares of mineral properties covering the most
promising Precambrian terrains in Uruguay. These properties are located in
the Rivera Crystalline Island and the Florida Greenstone belt in southern
Uruguay. Rivera is an erosional window made up of Precambrian basement rocks,
metasediments, BIF, and younger syntectonic and postectonic granites related
to the Brazilian orogenic cycle. Airborne geophysical surveys, satellite
imagery and limited ground follow-up have identified a 2 km wide gold-bearing
shear system which runs the entire 90 km length of this Precambrian outlier.
The Florida Greenstone belt is a 250 km long and 30 km wide package of
supracrustal rocks and granitoids characterized by several high grade quartz
veins and auriferous shear zone targets.
As part of today's transaction, Crystallex will also have an opportunity
to continue agreements with SouthernEra Corporation to carry out diamond
exploration on mineral properties controlled by both companies.
Crystallex's near term objective is to review, compile and synthesize all
the geological, geochemical, geophysical and structural data on the Rivera
with the aim of pinpointing favorable structural/lithologic sites comparable
to the San Gregorio setting. It is also the company's objective to prioritize
the targets previously defined by Rea Gold for diamond drilling in 1999.
Exploration History
In the Rivera, little work outside the immediate vicinities of the San
Gregorio mine was carried out prior to 1996, when the Rea Gold/ARC
amalgamation took place. Work by Rea Gold in 1996 included regional airborne
geophysical surveys and a regional geochemical sampling program. Target areas
were followed up in 1997 by geologic mapping, soil and rock sampling, and
structural interpretations. Eighteen prospective areas were delineated, eight
of which can be characterized as drill targets. However, the financial
difficulties of Rea Gold precluded further exploration work.
The Florida Greenstone belt has been the object of exploration campaigns
for gold and base metals since the late 1970's. These exploration programs
led to the discovery of high grade quartz-vein gold deposits, later mined by
open pit methods in the 1990's, and a number of shear-hosted prospects.
Crystallex has now acquired several of these gold prospects. They include:
Colla, a gold prospect hosted by metasediments which returned 1.0 m of
90g/t Au in one trench sample; Crucera, a high grade vein where recent
drilling returned 1.9 m 15.0 g/t Au at a vertical depth of 100 m; and Zone
13, a broad kilometric shear zone in volcanics which returned values as high
as 1.7 g/t Au over 11 m in shallow drill holes.
Uruguay Background
Uruguay enjoys a key position as the gateway to the regional Mercosur
economy with its strong relative GDP, nearly universal literacy, and uniformly
high social indicators. The country has a vast transportation system,
advanced telecommunications and efficient ports which provide an easy base to
conduct business throughout the region. The country's tradition of respect
for private sector interests, and its open investment regime, which does not
discriminate between local and foreign interests, inspires investor
confidence. In short, Uruguay provides a dynamic and safe economy with a
developed financial sector that is supported by a sound legal framework.
Crystallex International Corporation is a gold mining and exploration
company. 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.
Note: This news release may contain certain "forward-looking statements"
within the meaning of the United States Securities Exchange Act of 1934, as
amended. All statements, other than statements of historical fact, included
in this release, including, without limitation, statements regarding potential
mineralization and reserves, exploration results, and future plans and
objectives of Crystallex, are forward-looking statements that involve various
risks and uncertainties. There can be no assurance that such statements will
prove to be accurate, and actual results and future events could differ
materially from those anticipated in such statements. Important factors that
could cause actual results to differ materially from the Company's
expectations are disclosed under the heading "Risk Factors" and elsewhere in
documents filed from time to time with The Toronto Stock Exchange, the United
States Securities and Exchange Commission and other regulatory authorities.
The Toronto Stock Exchange has not reviewed this release and does not
accept responsibility for the adequacy or accuracy of this news release.
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I have to dash but would like to discuss your post later.
Regards |
