Crystallex to buy out rest of El Callao (June 25, 2004)

Crystallex International (KRY-T) has launched a bid to acquire the rest of the shares of El Callao Mining (ECM-V) that it doesn’t already own.

El Callao Mining’s assets are centred around the venerable gold mining town of El Callao in southeastern Venezuela, a short drive north of Crystallex’s flagship Las Cristinas gold project.

Crystallex operates the Revemin gold mill in El Callao, deriving its feed from a variety of sources in the district.

Under the proposal, El Callao shareholders will receive 0.01818 of a Crystallex common share for every El Callao common shares, and El Callao will become Crystallex’s wholly-owned subsidiary.

Crystallex currently owns 36,575,832 El Callao shares, representing a 79% stake. If Crystallex succeeds in scooping up the remainder, it will have to issue 172,975 new shares valued at C$435,900 (based on Crystallex’s closing price of C$2.52 on June 25).

The proposed transaction must be approved by a majority of the votes cast by El Callao’s minority shareholders who will gather at a special meeting to be held on July 27, 2004.

In early 2001, Crystallex acquired an initial 45% interest in El Callao Mining from Bema Gold (BGO-T) for US$7.6 million and the assumption of US$14.3 million in debt. The company quickly followed with a partially succesful bid for the remainder of El Callao’s publicly traded shares.

In other news, Crystallex was recently added to the S&P/TSX composite index, the S&P/TSX smallcap index, the S&P/TSX capped materials index, and the S&P/TSX capped gold index.