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October 18, 2006

Crystallex under the microscope, Wed., Oct. 18, 2006, 9:28 AM

Mike pointed me to a Bloomberg article from Venezuela that seems to imply that maybe Crystallex is going to get caught up in changes to the new mining law in that country.

I have written a lot about this in the past, saying that the position of Crystallex management is clear: they own the mining rights under a contract they expect becomes enforceable as soon as the environmental approval is received, which they believe will happen soon.

Nevertheless, I asked the company for a statement, although I don't think the matter requires a news release because nothing's changed.

Richard Marshall, VP of Crystallex, replied as follows:

"I don't think there's anything new or surprising in the Peter Wilson (Bloomberg) editorial dated October 17, 2006. The Venezuelan government has been clear that existing mining contracts and operations in compliance will be respected and run their original term. Crystallex has an approved Mine Operating Agreement (MOA) for Las Cristinas awarded in 2002 green lighted for compliance by MIBAM in 2006. The draft Mining Law amendments have been in discussion for over a year and it remains difficult to predict how much longer that process could take. To date, the draft amendments have been made public at the National Assembly, the process has been transparent and I don't believe there's anything in the draft or in discussion that should alarm investors or change Crystallex's expectations. The final Environmental Permitting process we're in with MARN is not governed by the Mining Law but by the Environmental Law and thus should not be impacted. Crystallex remains well prepared to launch the construction and operating phase at Las Cristinas upon receipt of the final MARN permit."

I hope that covers it.

Just in case you might be new to Crystallex, why not spend an hour reviewing the past three years' presentations of the company to the world's leading investment analysts at the Denver Gold Forum (DGF) in late September each year.

This stock (KRY) is on my Buy list. Of course, by that I mean Accumulate when the technical indicators are so aligned.

Enjoy.

Crystallex - DGF2006
Crystallex - DGF2005
Crystallex - DGF2004

Crystallex [GICS 15]
(KRY: Yahoo Finance file)
(KRY: StockChart chart)
(KRY: Investertech chart)
(KRY: ADVFN Financial Data)
(KRY: ADVFN Financial Data)

Posted by Posted by Bill Cara on October 18, 2006 09:28:39 AM | Category: Goldminer Producers

Discourse

Bill,

You have been providing an invaluable service by helping us understand the various risks involved in investing in 3rd World resource development projects, and particularly how important it is to understand the background and modus operandi of the promoter. Today, your observations and repeated calls for patience on IVN have produced the results you expected as Rio Tinto has stepped up to take a + $billion stake in their Mongolian mine. I'll stand behind your observations re KRY and let history unfold as it should. Thanks again!

Posted by: TerryC [TypeKey Profile Page] at October 18, 2006 10:30 AM [link]

http://www.whiskeyandgunpowder.com/Archives/2006/20061017.html
Above is a link to yesterday's blog from "Whiskey and Gunpowder" referring to an unnamed seizure of a developing mine in Asia by the government. The blog continues with what is likely to result the seizure of oil interests in Russia (Shell and ExxonMobil have already invested $20 billion in development) by Russia and ends with the seizure of a private railroad by Guatemala. So be aware that KRY and its assets in Venezuela will always be at risk to the whims of a capricious government that has already wielded a heavy hand on the oil compnies.

Posted by: RDR [TypeKey Profile Page] at October 18, 2006 10:56 AM [link]

Thank you, Bill.

Your Blog is incredibly valuable -- a MUST READ in my daily comings-and-goings.

And, now as I have taken an interest in KRY, once again the information you freely provide...well, I cannot say enough, so...I'll simply say,

Thank you.

Sincerely,

Duane "duey" Wierenga

Posted by: duey [TypeKey Profile Page] at October 18, 2006 10:29 PM [link]

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