Hello Mike;.....Newsrelease??
Crystallex president addresses shareholders
Crystallex International Corporation KRY
Shares issued 36,433,966 Jun 17 close $0.95
Fri 18 Jun 99 News Release
Mr. A. Richard Marshall reports
Crystallex International Corporation held its annual shareholder's meeting
June 18, at 8:30 a.m. PT, in Vancouver.
Shareholders re-elected Robert A. Fung, Marc J. Oppenheimer, Robert A.
Nihon, Dr. Enrique Tejera Paris, Daniel R. Ross, Mitchell Klein, Harry J.
Near and Armando F. Zullo to the board of directors, and reappointed
Davidson & Company as auditors of the company.
Shareholders approved all of the resolutions laid before the meeting
including, the approval of employee options, the extension of a call write
agreement originally adopted in 1997, the restructuring of the payment
arrangement in relation to Crystallex's Inversora Mael unit, and,
authorized the board to pursue further legal proceedings in respect to the
Cristinas 4 and 6 concessions, if considered advisable. A decision on the
legal proceedings is expected in the next few weeks.
Chairman of the board, Mr. Fung welcomed shareholders and introduced
Crystallex's president and chief executive officer, Mr. Oppenheimer.
Mr. Oppenheimer gave shareholders an overview of the company's activities
during 1998 and an update on the 1999 first quarter. Reiterating the
company's overall strategy of growing the company through medium-sized gold
mining projects that represent potentially profitable opportunities, Mr.
Oppenheimer pointed to the acquisition of the San Gregorio mine as an
excellent example of the strategy at work. He said that because of
productivity improvements commenced by the company even before the
acquisition was complete, gold production had increased 17 per cent, to
over 20,000 ounces and cash cost per ounce had been reduced 32 per cent, to
below $200 (U.S.) by the end of the first quarter of 1999, as compared with
the first quarter of 1998. He sighted improved blasting as one example of
how the San Gregorio mining operation had been made more efficient.
Mr. Oppenheimer said that the improved revenue in 1998 (the second highest
in company history) and the excellent first quarter 1999, which generated
earnings of nearly $1.5-million, were due to the efficient operation at San
Gregorio and to the higher price for gold afforded by the company's hedging
program. Hedging enabled the company to obtain approximately $300 (U.S.)
per ounce in fourth quarter 1998 and first quarter 1999, despite the
average spot market prices of $294 (U.S.) and $287 (U.S.) per ounce in the
respective quarters.
Mr. Oppenheimer said that although a great deal of effort had been
concentrated on improving the company's results over the past 15 months,
Crystallex was also engaged in a variety of activities that should yield
benefits in the longer term. He sighted drilling programs at San Gregorio
to identify additional reserves to extend the mine's life; exploration in
the Rivera Crystalline Island; a joint venture with SouthernEra to explore
for diamonds in Uruguay; and an engineering review in preparation for an
underground mine at Albino 1 in Venezuela, among other activities. He
mentioned that the underground development at Albino 1 could begin later
this year, possibly with the assistance of a joint venture partner.
In regard to the Cristinas 4 & 6 concessions, Mr. Oppenheimer told
shareholders that the board had thoroughly reviewed the background of the
concessions and received advice from the legal team, and the board's
decision not to write off the investment in Inversora Mael (the registered
owner of Cristinas 4 & 6) still stands. He said the board considered the
issue in the context of several facts:
1. Crystallex, in good faith, acquired Inversora Mael, a company that
remains the registered owner of the Cristinas 4 and 6 concessions.
2. This ownership claim has been supported by three separate decisions of
the Venezuelan Supreme Court and the June, 1998, decision did not
overrule these previous Supreme Court decisions.
3. The Supreme Court's June, 1998, decision was procedural in nature and
did not address the main issues involving rights to Cristinas. Those
issues remain to be decided in a Venezuelan court.
4. The June, 1998, decision included a dissenting opinion, which stated
that the majority opinion contradicted the essence of the three
previous decisions made by the same Supreme Court.
5. Litigation regarding this issue may take a long time and although
there are significant risks and uncertainties involved in any such
litigation, the value of the Cristinas concessions to Crystallex
shareholders would be significant if the outcome was favourable.
"In the company's view, it has several legal remedies open to it that, if
advanced successfully, could lead to the enforcement of its rights over the
concessions," Mr. Oppenheimer said.
Acknowledging that the company enjoyed a much higher stock price before its
acquisition of Mael than after the June, 1998, court decision, Mr.
Oppenheimer said, "We believe inaccurate public perception regarding the
effect of this decision on our core business has kept the full value of
Crystallex from being recognized by investors, even though the company is
stronger and more geographically diverse than ever before." The company
plans to address this perception by taking its story directly to the
investment community and the media. "We want the market to know that the
Cristinas issue is important because of the magnitude of its potential, but
it is not the driver of our strategy," Mr. Oppenheimer said.
Summing up, Mr. Oppenheimer said that the company plans to increase gold
production at San Gregorio, to approximately 80,000 ounces for 1999, and
through acquisitions and internal development to nearly double annualized
production in the year 2000 and move toward a new goal of 250,000 ounces of
annualized production.
"We will move ahead with our drilling programs to increase our reserves at
San Gregorio and extend the life of the mine. We will continue with work at
Albino and begin exploration at our other Venezuelan concessions once
confirmation of our title rights is received. And if the board decides to
proceed with litigation regarding Cristinas, we will work tirelessly to
effect a favourable outcome for Crystallex and its shareholders," Mr.
Oppenheimer said.
WARNING: The company relies upon litigation protection for
"forward-looking" statements.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com
With regards,Frank |
