Venezuela takes over Canadian managed gold mine (Updated)

Venezuela's government has said it will take over the country's largest gold mine, as Hugo Chavez' administration attempts to boost foreign reserves amid the global financial crisis. Rodolfo Sanz, a mining minister, told state radio on Wednesday that the government will nationalise the Las Cristinas mine, bringing it under state control by the beginning of 2009. Due to the financial crisis that has extended throughout the world, it's necessary to attempt to recover our gold to increase our international reserves," he said.  Las Cristinas mine, which is rich with gold, diamonds, iron and other minerals, is currently operated by Canadian firm Crystallex International Corp.

Clashes:  Crystallex issued a statement following the announcement saying they had "not been notified of any changes". The company also said that Crystallex representatives had met Venezuelan officials on Wednesday and that "no issues were raised with regard to the control of Las Cristinas".  Chavez's government has clashed with other international gold-mining companies operating in Venezuela in recent months as it pursues pro-nationalisation policies. Las Cristinas, thought to be venezuela's biggest gold mine, is located within the Imataca Forest Reserve, which is also home to unique plant and animal species. Environmentalists have raised concerns that major mining operations could cause irreversible damange to the area's senstive ecosystem.

Venezuela's government has decided to put Las Cristinas gold mine, operated by Crystallex International Corp. under state control.  “This mine will be recovered and will be operated under state administration,'' the Mining and Basic Industries Ministry said on Wednesday in a statement.   Las Cristinas gold mine is estimated to have about 31 million ounces of gold ore and valued at about $35 billion. Las Cristinas is owned by the government but under a contract, it is operated by Toronto based Crystallex. It is located in a huge forest reserve in southeastern Venezuela.  The company said it had not been informed of any change to its status in Venezuela.   The Venezuelan government has nationalized industries that President Hugo Chavez has deemed to be ``strategic.''  Mining Minister Rodolfo Sanz said in the statement that the government plans to seize other mining deposits to increase production of gold, diamonds, bauxite and uranium.  SG/RE, Original source at PressTV

Crystallex International Corporation (TSX: KRY, AMEX: KRY) is a Canadian corporation engaged in gold mining and exploration. It operates open-pit mines and exploration sites in Venezuela. Its current level of output characterizes it as a junior gold producer. Las Cristinas exploration & development:  On 14 June 2007, Crystallex announced that it had completed all necessary steps in the permitting process and had received approval from the Venezuelan Ministry of the Environment to begin mining operations at its Las Cristinas site. Las Cristinas exploration denied:

On 30 April 2008, Crystallex has become aware that the Director General of the Administrative Office of Permits at the Ministry of the Environment and Natural Resources of Venezuela ("MinAmb") has issued a communication to the Corporacion Venezolana de Guayana ("CVG"), the owner of the Las Cristinas concessions, denying a request for the authorization to affect natural resources to carry out exploration activities in the mining area of Las Cristinas in Sifontes, Bolivar State. In issuing the communication, the Director General cites sensitivities surrounding indigenous peoples, the small miners and the environment in the area generally known as the Imataca Forest Reserve, which contains a number of mining projects, which like those of Crystallex, are seeking the required permits to continue their development and exploitation. The communication by the Director General appears to be in conflict with the Las Cristinas EIS approval, Construction Compliance Bond Request and Environmental Tax request issued by the MinAmb (that Crystallex posted and satisfied last summer) and the communication appears to be in opposition to all mineral mining in the Imataca Region.

The communication is subject to several avenues of response, including an application for reconsideration by interested parties under Venezuelan law. Crystallex is currently working with various levels of the CVG to develop strong submissions in support of the authorization to affect natural resources. Crystallex is committed to defending its rights in the Las Cristinas project and intends to respond to this matter vigorously in accordance with its legal entitlements to protect the interests of our shareholders.