Crystallex tallies Las Cristinas reserves (April 07, 2003)

Vancouver — Crystallex International (KRY-T) has tabled a new reserve estimate for the long-stalled Las Cristinas gold project in southeastern Venezuela.

An independent study by Reno, Nev.-based Mine Development Associates points to proven and probable reserves of 224 million tonnes grading 1.33 grams gold per tonne, based on a cutoff grade of 0.5 gram gold. The measured and indicated resource totals 439 million tonnes grading 1.09 grams gold.

“The data confirm that Las Cristinas is one of the world’s largest undeveloped gold deposits, with excellent potential to grow,” says Crystallex President Marc Oppenheimer. “With additional drilling, at least a portion of inferred resource will likely be upgraded to the measured and indicated category, which should add to the reserves.”

Most of the mineralization is hosted in the Conductora-Cuatro Muertos deposit, which has a proven reserve of 34.1 million tonnes grading 1.43 grams gold and a probable reserve of 167.96 million tonnes averaging 1.31 grams gold, equivalent to a total of 8.6 million oz. gold. The deposit also holds a resource of 48.3 million tonnes grading 1.21 grams gold in the measured section, 343.59 million tonnes grading 1.09 grams gold in the indicated category, and 187.38 million tonnes grading 0.94 gram gold in the inferred category.

A shear zone containing foliation-parallel pyrite disseminations and crosscutting quartz-carbonate-pyrite-chalcopyrite veinlets hosts the mineralization at Conductora. The 3-km-long zone is moderately dipping with widths of up to 400 metres.

Mesones-Sofia

The nearly contiguous Mesones-Sofia zone hosts a probable reserve of 21.86 million tonnes grading 1.28 grams gold. The zone also contains a measured resource of 9.4 million tonnes grading 1.2 grams gold, an indicated resource of 37.6 million tonnes grading 0.91 gram gold, and an inferred resource of 20.5 million tonnes averaging 0.65 gram gold.

Mineralization in this zone lies predominantly in tourmaline-bearing breccia pipes associated with intense silicification and potassium feldspar alteration. Gold mineralization is associated with coarse pyrite and chalcopyrite.

Development will require two separate pits. The Conductora pit will be the deeper of the two, at 300 metres below surface, and carry a stripping ratio 1.3-to-1. The smaller Mesones pit has a stripping ratio of nearly 1.9-to-1.

“This is a deposit of impressive size,” says Chief Operating Officer Ken Thomas. “I look forward to working with our government partners in Venezuela to bring this important property into production.”

Crystallex has hired SNC-Lavalin Engineers & Constructors to complete a feasibility study for the project. Projections call for an initial 20,000-tonne-per-day operation capable of processing oxide and sulphide ores.

In September 2002, Crystallex was granted the right to negotiate an operating contract for the disputed project by Venezuelan state-owned Corporacion Venezolana de Guayana (CVG). Under the agreement, Crystallex has the exclusive right to develop and mine zones 4, 5, 6 and 7.

Ministry

The junior miner will control the reserves and resources, as well as all production, with a 3% royalty payment going to Venezuela’s Ministry of Energy and Mines.

For its part, CVG gets a sliding-scale royalty ranging from 1% when the price of gold is under US$280 per oz. to 3% when it exceeds US$400. The agreement has an initial term of 20 years, with two renewals good for an additional 10 years each.

Over the past 18 months, the project has been the object of a bitter dispute between CVG and Vancouver-based Vannessa Ventures (VVV-V). The junior purchased a 95% stake in Minera Las Cristinas (Minca), the company that held the rights to the property, from Placer Dome (PDG-T) back in 2001.

Minca’s partner in the project, CVG, refuses to recognize the sale, accusing Placer of selling its interest in Las Cristinas without its written approval. Placer claims no such approval was required. The proposed sale was made just days before Placer’s rights to the deposit were scheduled to expire.

Placer had planned a US$600-million operation from which 470,000 oz. gold and 16,000 tonnes copper would be produced annually, based on reserves of 323 million tonnes grading 1.1 grams gold per tonne with 0.14% copper. However, the company halted development when gold prices entered a prolonged slump.

The impact of ongoing legal actions over the property remains unclear, with Vannessa seeking court action to protect its claim (T.N.M., Sept. 16/02).