Company annualized production will grow to over 200,000 ounces as underground mines brought into production and operating costs decline
VANCOUVER, B.C. - CRYSTALLEX INTERNATIONAL CORPORATION (symbol KRY on the TSE and Amex) today reported the conclusions of a positive bankable feasibility study on the Albino and Charlie Richards underground deposits in Venezuela, prepared by Steve Ristorcelli P.Geo, a qualified person of Mine Development Associates ("MDA") Reno, Nevada. Charlie Richards is one of four deposits occurring on the Tomi concession.
According to MDA's study, the combined mineable reserves of the portion of the Albino and Charlie Richards deposits that were included in the study, calculated at a gold price of US $ 270 (Albino) and US $ 265 (Charlie Richards), total 435,700 tonnes grading 12.67 g/t Au (see table below). Included in the reserves are 341,630 tonnes of underground ore with a diluted grade of 14.62 g/t Au.
TABLE. Total Combined Reserve
Deposit Type of Ore Reserve Category Tonnes Grade Cutoff
(g/t Au) (g/t Au)
Albino Underground Proven 82,040 14.82 8.00
Probable 96,800 14.66 8.00
Charlie Richards Underground Probable 162,730 14.48 5.00
Charlie Richards Open Pit Probable 94,070 5.61 1.74
Project Total 435,700 12.67
The two underground deposits can each be mined at a rate of 350 tonnes/day, at a cash operating cost of US $ 137 per ounce including mining, milling, and transportation. The gross capital required to develop the Albino and Charlie Richards underground operations is US$15.28 million or US $ 86 per ounce. Mining Albino and Charlie Richards concurrently yields a pretax IRR of 84% using a gold price of US$300 per ounce in the cash flow model. Using a US$300 gold price is consistent with the price Crystallex has historically achieved, despite a challenging gold market.
According to MDA, the potential for increasing the high-grade underground reserves at Charlie Richards is very good. The study says" in addition to the high probability of defining additional resources in the near vicinity of the existing mineralization, there is the potential to add significant resources down plunge along the crest of the anticline."
" The launching of the Albino and Charlie Richards underground mines reflects Crystallex's continued growth, successful integration of our recent acquisitions and further development of the gold mining industry in Venezuela," said Marc J. Oppenheimer, President and CEO of Crystallex.
"These two projects will be the third and fourth mines to be put into production by Crystallex in Venezuela," Mr Oppenheimer added. "These additional mines are the perfect complement to our 'Hub and Spoke' strategy which we have been implementing in Venezuela, giving us the ability to process ore from multiple deposits at our Revemin mill, while expanding our production output and widening our margins."
"The annual production growth we have experienced over the past few years will continue to be augmented with these two new mines, moving our annualized production profile into the 200,000 ounce per year category with our overall costs of production declining," Mr. Oppenheimer said.
Crystallex has reviewed the studies and, subject to Board approval, will commence development of the two mines in the first quarter of 2002. The capital necessary for the two simultaneous developments will be financed from Crystallex's credit facilities and cash flows. Ore from the two new mines will be trucked by highway to the Revemin mill. The Company anticipates the first ore from Charlie Richards to be processed at Revemin in the third quarter of 2002, while the Albino ore will be available for daily processing at Revemin by the fourth quarter of 2002.
The Revemin Mill is currently operating at 1,500 tonnes per day and processing ore from the La Victoria open pit, one of several deposits within the Lo Increible project controlled by Crystallex through its 80 percent ownership of El Callao Mining Corp., acquired in February, 2001. The average grade currently being processed through Revemin is approximately 3.2 grams per tonne. Once the two underground mines are developed and attain full production, the feed from the La Victoria pit will be temporarily reduced to 1,000 tonnes per day and the balance will be made up of high-grade ore averaging 14.62 g/t Au from the underground operations. At this stage, production of gold from the Revemin mill will climb to an annualized output of 120,000 ounces.
Additionally, as part of Crystallex's corporate growth plan, the Company intends to expand the Revemin mill to 3,000 tonnes per day and to increase the throughput of the La Victoria pit from 1000 TPD to 2500 TPD in early 2003. To this end, the Company is currently undertaking a 10,000 metre diamond drill program at La Victoria to upgrade the existing probable reserves and indicated-inferred resources to mineable proven-probable reserves. MDA has been retained to carry out reserve estimates, and produce a stand-alone report suitable for inclusion into a project feasibility study.
"Crystallex will continue to grow in Venezuela," Mr. Oppenheimer said. "We have witnessed an excellent environment for investment in mining projects in the country, especially with the new mining laws and the streamlining of the permitting process. Venezuela is well known for its abundant mineral resources and has had a prolific history of gold mining and we are pleased to be a part of its continued growth."
About Crystallex:
Crystallex International Corporation is a gold mining and exploration company. The Company's strategy for growth is to develop its portfolio of properties in South America as well as to diversify geographically by investing in producing or near-production projects and by exploring properties of merit in other areas of the world.
On Behalf of the Board:
Marc J. Oppenheimer, President & CEO
Note: This news release may contain certain "forward-looking statements" within the meaning of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included in this release, including, without limitation, statements regarding potential mineralization and reserves, exploration results, and future plans and objectives of Crystallex, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed under the heading "Risk Factors" and elsewhere in documents filed from time to time with The Toronto Stock Exchange, the United States Securities and Exchange Commission and other regulatory authorities.
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release. Contact: A Richard Marshall, VP at (201) 541-6650 ext. 26 or Andrea Boltz at (604) 683-0672.
To receive previous Company releases: (800) 758-5804 ext.114620
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