For Immediate Release 

TORONTO, ONTARIO, August 29, 2003 – Crystallex International Corporation (TSX, AMEX: KRY) today reported its second quarter 2003 results.  

HIGHLIGHTS 

• Gold production was 21,011 ounces for the second quarter at a total cash cost of US$316 per ounce.
• Las Cristinas Feasibility Study will be completed on schedule by mid September.  The Preliminary Environmental Impact Study is scheduled for completion by the end of September.
• Metallurgical testing of Las Cristinas ore at SGS Lakefield confirmed the selection of a conventional carbon-in-leach circuit processing circuit.  Gold recovery averages 89%.
• As previously reported on July 31,2003, reserves at Las Cristinas have increased to 246 million tonnes at an average grade of 1.29 grams/tonne, containing 10.2 million ounces.
• Debt during the second quarter was reduced from $31.3 million to $15.1 million.
• Net loss for the quarter of $4.9 million. 

Management’s Discussion and Analysis

For the Six Month Period Ended June 30, 2003

(in Canadian dollars, except where noted)

Management’s Discussion and Analysis (“MD&A”) of the financial condition and results of the operations of Crystallex International Corporation (“Crystallex” or the “Company”) should be read in conjunction with the unaudited consolidated financial statements and the notes.  The Company prepares and files its consolidated financial statements and MD&A in Canadian dollars.

Crystallex and its subsidiaries are engaged in gold mining and related activities, including exploration, extraction, processing and reclamation.  Crystallex produces gold in Uruguay and Venezuela. 

KEY STATISTICS 

¹ Includes Royalties and Production Taxes.

² Total Cash Costs and Total Production Costs are calculated in accordance with The Gold Institute Standards.  For an explanation, refer to the section of NON-GAAP measures.

³ Includes Working Capital changes.

 SUMMARY FINANCIAL RESULTS

 During the second quarter 2003, Crystallex incurred a loss, prior to adjustments for non-hedge derivative gains/losses, of $2.9 million, as compared with a loss of $3.6 million in the second quarter of 2002.  A non-cash adjustment for non-hedge derivative losses of $1.9 million, (and a loss of $5.3 million in 2002)  resulted in a net loss of $4.9 million, or $0.05 per share for the second quarter, as compared with a net loss of $8.9 million, or $0.11 per share, for the same period in 2002. 

Revenue for the second quarter was $11.7 million on gold sales of 21,011 ounces, compared to $13.3 million in revenue on gold sales of 23,531 ounces for the year earlier quarter.  The decrease in sales revenue was attributable to fewer ounces sold, a stronger Canadian dollar and a lower realized gold price.  The average realized gold price during the quarter was US$294 per ounce as compared with $327 per ounce in 2002.  The Company’s average realized price per ounce was below the average quarterly spot price of US$347 per ounce as a result of delivering against forward sales positions with exercise prices below the prevailing spot gold price.  

Cashflow from operating activities (after changes in working capital) was a utilization of $214,000 during the second quarter of 2003.  For the first six months of 2003 cashflow from operating activities was a utilization of $5.7 million, as compared with a utilization of $8.5 million for the similar period in 2002.  The utilization of cash was due, in part, to operating costs that exceeded realized revenue, (during the second quarter), increasing general and administrative expenses and a stronger Canadian dollar.  

LAS CRISTINAS 

The Las Cristinas Feasibility Study being undertaken by SNC-Lavalin Engineers and Constructors (SNCL) will be completed, as scheduled, by mid September.  Once completed, it will be presented to the CVG for review and approval.  The metallurgical testwork and pilot plant testing at SGS Lakefield Research was completed in June and the results confirm the choice of a conventional carbon-in-leach gold processing circuit for the Las Cristinas ore.  Further details will be released with the Feasibility Study results in mid September. 

Social program projects for the benefit of the local communities are being advanced.  Medical equipment and medicines have been supplied to the Las Claritas medical clinic.  Detailed engineering is in progress for upgrading the sewerage system for surrounding communities and for building thirty houses for residents of the area.  An upgraded water treatment system and road upgrading in local villages are also planned.

OPERATIONS REVIEW

San Gregorio

Gold production from the San Gregorio mine in Uruguay was 14,452 ounces during the second quarter, as compared with 16,841 ounces for the comparable period in 2002.  Reduced production was due largely to the processing of lower grade ore and to six lost production days in June resulting from the failure of the ball mill gear reducer shaft.  A temporary solution allowed for processing to re-start, but only continue until July 6.  While a new shaft was on order, the mill was down between July 6 and August 11.    As a result of the shutdown, third quarter production will be lower than budget, and operations, originally scheduled to be completed by year end, will now continue into the first quarter of 2004.

 Total cash operating costs averaged US$296 per ounce for the second quarter, an increase from US$211 per ounce in the first quarter due, in part, to the processing shutdown late in June and a drop in the grade of ore processed from 2.09 g/t in the first quarter to 1.79 g/t in the second quarter. 

The current life of mine plan forecasts production in 2003 of approximately 58,000 ounces.  Mining is planned to be completed by the end of the year, however, there will be modest production (between 5,000 and 10,000 ounces) during the first quarter of 2004 through processing of stockpiled ore.  The Company is continuing its evaluation of mining the west extension of the San Gregorio pit by underground mining methods.  A drilling program and an independent underground engineering and cost study are presently underway to determine the viability of this option.  The study report should be completed during the second half of September.  Presently, there is a resource in the west extension of approximately 450,000 tonnes grading 2.8 grams per tonne, representing about 40,000 contained ounces.   

Environmental closure and severance costs at San Gregorio are estimated at approximately US$2.3 million.  These costs will be incurred in late 2003 and during 2004.   

Venezuela Overview

During the second quarter of 2003, the Revemin Mill processed ore from the La Victoria open pit mine and the Charlie Richards underground and Mackenzie open pit mines on the Tomi concessions as tabled below:

Total gold production from the Revemin Mill was 10,885 ounces for the first six months of 2003, approximately 23% less than produced during the comparable period in 2002.  Gold production from the Venezuelan operations continued to be below budget due to a lack of capital investment.  This impacted the availability of contractor mining equipment at La Victoria, equipment for underground development at Tomi and general operating performance at Revemin.  The mill operated at approximately 50% of its 1,500 tonne per day capacity during the first half of 2003, due largely to insufficient ore feed from the La Victoria mine.  Although gold recoveries have been below historical levels since April of last year when the milling of sulphide ore from La Victoria began, the second quarter 2003 average recovery of 82% was considerably higher than 71% achieved in the first quarter.  This was attributable to processing a higher proportion of ore from the Mackenzie open pit mine on the Tomi concession, which does not have the refractory characteristics as the ore from La Victoria. 

The Company has commenced a comprehensive program to determine the extent of the refractory ore at La Victoria and the optimum processing design circuit for Revemin.  The program will include pilot plant testwork.

La Victoria

 Gold production from the La Victoria open pit mine was 1,402 ounces during the second quarter of 2003 and 4,578 ounces for the first six months of the year.  For the comparable six month period in 2002, gold production was 9,798 ounces.  Ore production was low due principally to insufficient funding and, to a lesser extent, from a shift to mining at the Mackenzie pit on the Tomi property.  Recovery of gold from La Victoria remained low, averaging 72% for the first half, due to processing the refractory sulphide ore. 

Tomi

The Mackenzie pit on the Tomi concession was reactivated late in the first quarter and produced 3,779 ounces of gold during the second quarter of 2003.  Mining was initiated at the Mackenzie pit to supplement ore feed from La Victoria.  During the second quarter, Mackenzie provided higher grade ore, at 3.24 grams per tonne, and higher recoveries than La Victoria.  Mining is continuing at Mackenzie during the third quarter as well as opening the Milagrito deposit, also on the Tomi concession.

Development continued on the first ore stope at the Tomi underground mine.  Development work produced approximately 4,900 tonnes of ore during the second quarter.  Gold production for the quarter was 575 ounces.  Production at design levels of about 200 tonnes of ore per day has been delayed due to a change in the mining method from cut and fill to longhole stoping, inconsistent development funding and poor equipment availability due to a shortage of spare parts.  The mining change was initiated after a review of the project by the Company’s new mining team upon reaching the first mining stope.  With capital funding, it is anticipated that continuous production from the first stope can be achieved by October, reaching design levels by November 2003.  

At the Venezuelan operations, low gold production for the quarter resulted in high unit operating costs, which averaged US$365 per ounce for the second quarter of 2003, as compared with US$353 per ounce for the similar period in 2002.  However, both production and operating costs in the second quarter improved from the first quarter 2003.  Production increased from 4,325 ounces in the first quarter to 6,559 ounces in the second quarter, while operating costs improved from US$461 per ounce to US$365 per ounce.  The improvement is attributable to mining and processing a higher proportion of ore from the Tomi open pit deposits during the second quarter.  The Tomi ore is higher grade and has higher recovery rates than the La Victoria ore.  Total cash costs per ounce are an average for Venezuelan production, including La Victoria and Tomi.  Ore from both mines is processed at the Revemin Mill.

The Company’s consolidated cash and total production costs per ounce of gold, calculated in accordance with the Gold Institute Standard, are as follows: