Crystallex improves economics at Las Cristinas (August 17, 2004)

Crystallex International (KRY-T) in conjunction with mining consultants SNC Lavalin Engineers & Constructors, have revised the September 2003 feasibility study, improving the economics of Crystallex’ Las Cristinas project, southeastern Venezuela.

Total cash costs are now estimated at US$190 per oz. over the life of the mine. During the first five years of operation this average is estimated to be US$130 per oz. The previous estimate was US$144 per ounce.

Two key changes in this re-assessment of the project are the use of owner-operated mining rather than contract mining and a change in the project design that will optimize future expansion of the operation to 40,000 tonnes per day from the initial 20,000 tonnes per day.

The capital cost estimate has increased by 9.5% to US$266 million, however the pre-tax and unleveraged internal rate of return has increased to 15.7% at a gold price of US$325 per oz.

The bulk of the saprolite ore will be mined in the first ten years and average mining costs are estimated to be US$1.82 per tonne milled (down from US$2.76 per tonne). The cost reduction over the 10 years totals US$70 million whereas the up-front mining capital cost is about US$5.4 million higher (because of in-house mining).

Total life of mine operating costs are now estimated at US$6.46 per tonne of ore milled (mine operating costs have been reduced to US$2.70 per tonne).

Design changes due to the anticipated 20,000 tonne per day future expansion will add US$5.9 million to the initial cost. Another US$6.8 million cost increase is due to firming up costs for equipment and construction materials. There has also been a US$2 million increase in the estimated cost of insurance premiums over the construction period of the mine.

Last year the proven and probable reserves at Las Cristinas were estimated to be 246 million tonnes grading 1.29 grams gold per tonne, or 10.2 million oz., using a gold price of US$325 per oz.

Crystallex is still awaiting an arbitrated decision under the Canada Venezuela Bilateral Investment Treaty regarding its rights to mine the Las Cristinas properties. Minera Las Cristinas has been disputing those rights for almost two years.