Two new mines in Venezuela to be developed in first quarter 2002
VANCOUVER, BC - CRYSTALLEX INTERNATIONAL CORPORATION (KRY on T.S.E. and Amex) today reported C$13,632,900 in revenue and C$11,045 in net income in the third quarter ending September 30, 2001. This compares with third quarter 2000 revenue of C$14,511,703 and C$1,069,800 in net income. Third quarter 2001 earnings per fully diluted share were NIL, compared to C$0.02 in the third quarter 2000.
Third quarter 2001gold production was 28,077 ounces, in line with the third quarter of 2000. For the first nine months of 2001, gold production increased 25 percent to 81,240 ounces, compared to 65,264 ounces in the first nine months of 2000. The direct costs of production for the quarter were US$218 per ounce and for both the quarter and first nine months of 2001were higher than in the comparable 2000 periods due to the initiation of a number of projects designed to increase the Company's production profile and further improve cash flow.
"These projects are very important to the Company's growth strategy," said Marc J. Oppenheimer, President and Chief Executive Officer of Crystallex. "The expenses that we are incurring now will enable us to start developing two new underground mining operations in Venezuela. We will now have three mines operating in Venezuela in 2002."
"And equally significant," Mr. Oppenheimer added, " This will give us operating interests in all three of Venezuela's major gold producing regions, as a source of ore for our strategically located Revemin mill. With the mill upgrades commencing in the fourth quarter of this year, the Revemin mill will be adapted to process ore from all of these mines."
The Company also reported the first blast at the new Santa Teresa mine in Uruguay in this most recent quarter. This mine contributed to Minera San Gregorio production late in September 2001. "Our aggressive drilling programs are expected to add to the reserves at our existing operations in both Venezuela and Uruguay," said Mr. Oppenheimer.
Third Quarter 2001 Highlights
· Revenue C$13,632,900
· Net income C$11,045 or C$NIL per fully diluted share
· Operating Cash Flow C$1,618,118 or C$0.03 per share
· Gold production 28,077 ounces
· Direct cost to produce US$218 per ounce
· Average price per ounce realized US$313 per ounce
· Feasibility studies completed for Albino 1 and Charlie Richards mines with
development of
the two Venezuelan mines commencing in first quarter 2002
· 10,000 metre diamond drill exploration program commenced to convert additional
La Victoria resources to reserves
· Next Revemin mill expansion scheduled to begin in 4th quarter 2001 and be
completed in 1st half of 2002
· The Company was encouraged further by recent actions of Venezuelan authorities
regarding Cristinas
Cash flow from operating activities in the third quarter 2001 was C$1.6 million (C$0.03 per share) compared to C$4.8 million (C$0.09 per share) in 2000. Total assets increased in the 2001 third quarter to more than C$190 million compared with nearly C$166 million in the third quarter of 2000, and shareholder's equity rose to C$134.5million, versus nearly C$107 million in the comparable year-earlier period.
For the first nine months ended September 30, 2001 operating revenue was C$42,231,265 compared to C$31,366,024 in the year-earlier period. Net income for the first nine months of 2001 was C$900,824 or C$0.02 per share (fully diluted), compared to C$2,906,595 or C$0.05 per share (fully diluted) for the first nine months of 2000.
Uruguay: During the quarter, the San Gregorio mill processed 265,563 tonnes of ore grading 2.03 grams per tonne, yielding 15,634 ounces of gold at a 90 percent gold recovery rate and a direct cash operating cost of US$233 per ounce.
In July and August the Company initiated pre-stripping operations on the new Santa Teresa ore body, about one-mile west of the San Gregorio ore body. The ore from Santa Teresa yields similar metallurgical results as the San Gregorio ore body. Also in the third quarter, drilling near the Santa Teresa deposit, on a new zone designated Santa Claudia, indicated mineralization that could increase the Company's Uruguayan reserves.
Additionally, a plan to extend the sag mill pebble crushing circuit was taken to the design stage and was being readied for construction during the fourth quarter. This circuit is designed to boost mill throughput during 2002 by including additional resources available on the property.
Venezuela: The Revemin mill processed 125,025 tonnes of ore at a grade of 3.46 grams per tonne, recovering 12,443 ounces of gold at a 90 percent recovery rate and a direct operating cost of US$200 per ounce. Of this amount, 4,808 ounces came from the Tomi mine and 7,635 ounces came from La Victoria at the Lo Increible project. During the quarter, a 10,000-metre diamond drill program was commenced to convert more of Lo Increible's 24.1 million tonne resource averaging 3.3 g/t Au into reserves.
The Company also retained Mine Development Associates (MDA) of Reno, Nevada to conduct a bankable feasibility study on the Albino 1 and the Charlie Richards underground deposits in Venezuela. The results of this study were reported in November, 2001. According to MDA, the combined mineable reserves of the portions of the two deposits included in the study are 435,700 tonnes grading at 12.67 g/t Au. This includes 341,630 tonnes of underground reserves with a diluted grade of 14.62 g/t Au. Development of these two underground mining operations will begin in the first quarter of 2002 with ore for processing coming first from Tomi's Charlie Richards mine in the third quarter 2002 and then from Albino 1 in the fourth quarter 2002.
Revemin Mill: Ore from the Company's Venezuelan mines will be processed at the Revemin mill, which the Company plans to expand from its current capacity of 1500 tpd to 3000 tpd in two phases. The first phase of this expansion, which will take place during 2002, will involve an upgrade of the leach train and tailings pumping systems. This is planned to raise production to 1800 tpd by July, 2002. The second phase, which will be based upon the results of the Victoria diamond-drilling program, and which will consist of an additional crushing line, an additional milling line, and additional leach tanks. The expansion project will double production of the current mill from 60,000 ounces per year to an estimated 120,000 ounces per year.
"In the third quarter we continued on track to meet our production goals," Mr. Oppenheimer said. "By increasing our Venezuelan production some 12 percent, we were able to offset lower production from our San Gregorio mine as we prepared that site for continued mining activities. We anticipate that the annualized production rate from our combined Venezuelan and Uruguayan operations will have increased significantly by the end of 2002. With increasing amounts of the ore processed at our Revemin mill coming from higher grade deposits such as Albino 1 and Charlie Richards, we expect that our costs of production should return to our previous lows."
Las Cristinas: "We have been very encouraged by recent decisions of the Venezuelan authorities to cancel MINCA's mining rights to Las Cristinas and to give possession of the concessions back to the Venezuelan government," Mr. Oppenheimer said. "These decisions should bring the issue much nearer to a final resolution."
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 nine months periods are reported in the attached table.
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.
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