Crystallex to buy out rest of El Callao (July 05, 2004)

Toronto-based Crystallex International (KRY-T) has launched a bid to acquire the rest of the shares of El Callao Mining (ECM-V) that it does not already own.

El Callao’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 various sources in the district.

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

Crystallex currently owns 36.6 million 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 requires the approval of most of the votes cast by El Callao’s minority shareholders on July 27.

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 successful 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.