RTGAM
Crystallex International Corp. says its contract to develop a major gold mine in Venezuela has been terminated.
The Toronto-based miner says it received a letter from state company Corporacion Venezolana de Guayana, or CVG, saying its operating contract for the Las Cristinas mine has been "unilaterally terminated."
It said that enclosed with the letter was a copy of a Feb. 3 CVG resolution formalizing the decision, citing a lack of activity by Crystallex on the project for more than a year and also "reasons of opportunity and convenience" as the basis for termination.
In a statement released Sunday, Crystallex said it has upheld its obligations under the contract and has prepared the site to a "shovel ready" state while awaiting a government environmental permit.
The environment ministry denied the request for a permit in April 2008 despite "Crystallex's fulfillment of the conditions to receive the permit," the company said.
Crystallex has considered the Las Cristinas mine in southern Bolivar state to be its principal asset, estimating it holds about 17 million ounces of gold.
There was no immediate reaction from President Hugo Chavez's government. Mr. Chavez last year threatened to take over gold mining concessions in the country, accusing mining companies of harming the environment and violating workers' rights.
Crystallex said it was "reviewing its position in light of this correspondence" from Venezuela.
The company said it is "considering all steps necessary to protect its investment on behalf of all its stakeholders including the filing of the international arbitration claim."
The company's shares closed at 23 cents on the Toronto Stock Exchange on Friday.
With files from The Associated Press
