Gold production and Cash Flow Continue to Increase With Significant Boost From La Victoria Mine
VANCOUVER - CRYSTALLEX INTERNATIONAL CORPORATION (Amex: KRY; Toronto) today reported operating revenue increased 54 percent for the second quarter ended June 30, 2001 compared to the second quarter of fiscal 2000. Revenue for the first half of 2001 was up 70 percent over first half 2000.
Second quarter operating income was up 21 percent and 68 percent for the first six months of 2001. Net income was slightly lower due primarily to higher interest expense on long-term debt associated with acquisitions and capital expenditures.
``We're very pleased with our revenue growth and profitability that continues even while the gold mining industry is struggling with difficult market conditions,'' said Marc J. Oppenheimer, President and CEO of Crystallex. ``Of even greater significance is the growth of our production profile and our cash flow. These are the critical factors that are driving Crystallex to its near term objective of becoming a mid-tier gold mining company.''
``Our strategy of internal development and acquisition has placed the Company in an excellent position for continued growth. Our cash flow from operations and our financial affiliations give us flexibility to take advantage of valuable opportunities to further develop our current mining concessions,'' he added.
Total gold production increased 48 percent to 27,358 ounces in the 2001 second quarter and 46 percent to 53,240 ounces for the first half 2001. This compares with 18,475 ounces and 36,481 in the second quarter and first half of 2000 respectively.
Revenue for the second quarter ended June 30, 2001 was C$13,742,791 compared to second quarter 2000 revenue of C$8,903,943. Operating income increased to C$1,560,817 versus C$1,294,607 in last year's second quarter. Net earnings for the second quarter 2001 were C$464,814 or C$0.01 per share (fully diluted). This compares with net earnings in the second quarter of 2000 of C$633,341 or C$0.01 per share (fully diluted).
Cash flow from operating activities in the second quarter was C$0.8 million (C$0.01 per share) compared to C$0.8 million (C$0.01 per share) in 2000. Total assets increased in the 2001 second quarter to more than C$184 million compared with C$134 million, and shareholder's equity rose to more than C$128 million, versus C$99 million in the comparable year-earlier period.
For the first six months ended June 30, 2001, revenue of C$28,598,365 generated operating income of C$5,058,106 and net earnings of C$889,779 or C$0.02 per share (fully diluted). This compares to first half 2000 revenue of C$16,854,321, and C$3,015,217 operating income, which resulted in net earnings of C$1,836,795 or C$0.03 per fully diluted share.
Crystallex currently operates the San Gregorio open pit mine in Uruguay and the La Victoria open pit mine in Venezuela. Of the total ounces produced in second quarter 2001, 16,358 ounces came from San Gregorio and 11,000 ounces came from the Revemin mill and La Victoria. The latter is one of a string of deposits on the Lo Increible concessions acquired from Bema Gold Corporation and El Callao Mining Corporation (ECM) earlier this year. In February 1999, ECM released the results of a pre-feasibility study completed by Bema. A geological resource of 24.1 million tonnes grading 3.3 g/t gold, containing 2.6 million ounces of gold at a 1.0 g/t cut-off was outlined from 302 holes (49,377 metres of drilling) incorporated in the report. Further drilling on the Lo Increible concessions will commence in the third quarter to justify plans to expand the Revemin mill from its current capacity of 1500 tpd to 3000 tpd. The expansion will increase production at the mill from 60,000 ounces per year to an estimated 120,000 ounces per year.
In addition, diamond drilling reported earlier this year at the Tomi mine confirmed the existence of a high-grade underground extension to the Charlie Richard's deposit. MDA and Associates ('MDA') of Reno, Nevada have been retained to complete a reserve and resource estimate for this deposit as well as a bankable feasibility study.
In the second quarter, 2001, Crystallex also commissioned MDA to complete a bankable feasibility study for the Company's Albino 1 concession in Venezuela. It is expected that pre-production activities will commence at the Albino concession during the fourth quarter of this year and that gold will be poured from Albino within nine months from the start of these activities. All of the Company's Venezuelan concessions are within trucking distance to its Revemin mill, which is being upgraded to handle ore from each of these properties.
``The fact that our strategically located Revemin mill is easily accessible by all of our Venezuelan concessions makes for great efficiency, so we can continue to lower our costs of producing gold,'' Mr. Oppenheimer said.
``Crystallex has produced increased revenues and profits over 10 consecutive quarters in a soft gold market. As the gold market strengthens, and many analysts believe it will this year, any additional price increase should drop to our bottom line,'' Mr. Oppenheimer added.
Crystallex is also maintaining its concerted effort to assert its ownership rights to the Las Cristinas properties in Kilometre 88.
Mr. Oppenheimer continued, ``It is our opinion that the current issues relating to Minca and Las Cristinas as disclosed in the media are entirely internal to the shareholders of Minca and will have no effect upon the legal position and rights of ownership of Crystallex. Regarding Cristinas, we remain confident that a decision will be made that will be in the best interests of both the people of Venezuela and Crystallex, as our objectives coincide. We look forward to working together with the government of Venezuela in a project that will be to the advantage of all parties. Subject to final feasibility studies, our plans project capital expenditures of US$400 million over three phases, with production reaching approximately 500,000 ounces per year by the third phase. Crystallex stands prepared to expand investment and production to the benefit of all the people in the region and Bolivar State.''
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.
Financial results for the three and six months periods are reported in the attached table.
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 Visit us on the Internet:
CRYSTALLEX INTERNATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Expressed in Canadian dollars)
(Unaudited - Prepared by Management)
June 30, June 30, December 31,
2001 2000 2000
ASSETS
Current
Cash and cash equivalents $ 4,901,179 $ 14,642,818 $ 4,418,442
Accounts receivable 4,047,359 2,995,049 2,409,709
Production inventories 11,607,331 10,438,135 10,994,368
Supplies inventory and
prepaid expenses 745,537 1,159,942 2,957,347
Marketable securities 227,901 2,784,381 227,901
Due from related parties 81,630 35,523 35,618
21,610,937 32,055,848 21,043,385
Security deposits 216,168 191,299 255,131
Note Receivable 2,215,465 -- --
Long-term investment
securities 2,643,338 -- 2,643,338
Property, plant and
equipment 157,174,209 100,834,154 135,444,453
Deferred financing fee 536,923 833,905 101,453
Deferred acquisition costs -- -- 4,598,639
$184,397,040 $133,915,206 $164,086,399
CRYSTALLEX INTERNATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Expressed in Canadian dollars)
(Unaudited - Prepared by Management)
June 30, June 30, December 31,
2001 2000 2000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and
accrued liabilities $ 14,179,664 $ 8,146,248 $ 16,611,935
Due to related parties 371,626 27,559 292,184
Current portion of
long-term debt 492,051 5,823,173 487,338
Loan payable 300,000 -- 700,000
Due to Bema Gold 3,482,200 -- --
18,825,541 13,996,980 18,091,457
Reclamation provision 1,657,151 1,283,444 1,485,301
Long-term debt 25,997,992 19,926,952 32,656,570
Deferred Charges 805,937 124,028 797,127
47,286,621 35,331,404 53,030,455
Minority Interest 8,960,172 -- 142,886
Shareholders' equity
Capital stock
Authorized
Unlimited Common Shares, without par value
Unlimited Class "A" preference shares, par value $50
Unlimited Class "B" preference shares, par value $250
Issued
December 31, 2000 - 59,154,221 common shares
June 30, 2000 - 53,631,796 common shares
June 30, 2001 -
70,449,783 common
shares 148,201,675 122,130,180 130,732,129
Capital stock subscribed
December 31, 2000 - 1,025,000 common shares
June 30, 2000 - Nil common shares
June 30, 2001
- Nil common shares -- -- 1,955,644
Cumulative translation
adjustment 488,995 (648,415) (344,513)
Deficit (20,540,423) (22,897,963) (21,430,202)
128,150,247 98,583,802 110,913,058
$184,397,040 $133,915,206 $164,086,399
CRYSTALLEX INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Expressed in Canadian dollars)
(Unaudited - Prepared by Management)
Six Month Six Month Three Month Three Month
Period Period Period Period
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2001 2000 2001 2000
OPERATING REVENUE $28,598,365 $16,854,321 $13,742,791 $8,903,943
OPERATING EXPENSES
Operations 19,083,892 11,836,850 9,907,274 6,592,900
Amortization and
depletion 4,456,367 2,002,254 2,274,700 1,016,436
5,058,106 3,015,217 1,560,817 1,294,607
GENERAL EXPENSES
4,294,412 3,375,440 2,215,998 1,777,960
Income (loss) before
other items 763,694 (360,223) (655,181) (483,353)
OTHER ITEMS
Interest and other
Income 178,432 2,082,232 76,566 1,117,176
Foreign exchange
(loss)/gain (52,347) 11,930 1,043,429 (482)
Gain on sale of
marketable securities -- 102,856 -- --
126,085 2,197,018 1,119,995 1,116,694
Income (loss) for
the period $ 889,779 $ 1,836,795 $ 464,814 $ 633,341
Basic earnings
(loss) per share $ 0.02 $ 0.04 $ 0.01 $ 0.01
Fully diluted earnings
per share $ 0.02 $ 0.03 $ 0.01 $ 0.01
These financial statements should be read in conjunction with the notes to the consolidated financial statements.
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