Crystallex pumps up Cristinas reserve (November 29, 2004)

Drilling and a revision of the economic cutoff grade have combined to increase the reserve and resource figures at the Las Cristinas gold project in Bolivar state, Venezuela.

Ongoing feasibility work by Mine Development Associates for operator Crystallex International (KRY-T) included revising the proposed mine plan and pit designs based on new drilling in the Conductora pit, one of two planned open pits on the property. A 7,100-metre drill program in 2004 and a 2,200-metre program in 2003 allowed previously inferred resources to be reclassified as indicated resources, and confirmed the continuity of resources at depth.

The consultants also revised the reserve figure based on a gold price of US$350 per oz., up from US$325. They plan to do a price-sensitivity analysis on the project this month.

The result of the revision is that proven and probable reserves at Cristinas have increased to 333 million tonnes grading 1.2 grams gold per tonne. A revised design for the larger Conductora-Cuatro Muertos pit, including some deeper mineralization verified by the recent drilling, has a stripping ratio of 1.45 and takes in 310 million tonnes. The balance, about 24 million tonnes, is in the Mesones pit, with a stripping ratio of 1.18.

The earlier concept for the Conductora pit, which would have mined 202 million tonnes at a grade of 1.3 grams per tonne, was 330 metres deep and had a stripping ratio of 1.34. The redesigned pit is designed to go to 390 metres, with an accompanying increase in waste tonnage.

Resource figures have also been revised based on the recent drilling. The measured and indicated resource at Conductora and Cuatro Muertos now stands at 415 million tonnes at an average of 1.1 grams gold per tonne, with an additional 152 million tonnes of 0.88 gram gold per tonne in inferred resources.

Mesones contains a measured and indicated resource of 47 million tonnes at 1 gram, plus 20.5 million tonnes grading 0.7 gram in the inferred category.

Final regulatory permits are under consideration and Crystallex hopes to have Cristinas in production by the first half of 2006, processing 20,000 tonnes of ore daily. About 38% of the engineering work is complete, including geotechnical and hydrogeological studies and a socio-economic impact study.

Crystallex posted a loss of US$9.4 million (US5 per share) on revenues of US$5.6 million in the quarter ended Sept. 30, an improvement over the third quarter of 2003, when it lost US$24.3 million on revenues of US$6.7 million. For the nine months ended Sept. 30, Crystallex is showing a loss of US$12.6 million on revenues of US$15.2 million.

The Revemin mill in Bolivar state processed 110,000 tonnes of ore in the third quarter, up slightly from the corresponding quarter of 2003. Despite improved recoveries — now 93%, up from 82% a year ago — and higher head grades, cash costs have increased to US$349 per oz. from US$329 in the third quarter of 2003.

Revemin produced 11,700 oz. gold in the quarter, up from 9,100 a year before. Of that, 9,800 oz. came from the Tomi open pit and underground mine, with just over 500 oz. coming from the Victoria project and 1,400 oz. from purchased ore.