Highlights mine -Let's see if this is the week Sanz prevails - ZM

Crystallex Says Only Chavez Can Permit New Gold Mine (Update2)

By Stewart Bailey

March 5 (Bloomberg) -- Crystallex International Corp., the Canadian miner awaiting approval to develop Venezuela's biggest gold mine, said only President Hugo Chavez can award the permits needed to proceed with Las Cristinas.

The process has stalled in the office of Environment Minister Yubiri Ortega, who opposes international companies extracting Venezuela's resources, Crystallex Chief Executive Officer Gordon Thompson said yesterday. The company hopes that Rodolfo Sanz, the new minister of basic industries and mining, will intervene on Crystallex's behalf, Thompson said.

Sanz ``has to satisfy himself that there is no political liability,'' Thompson said in an interview in Toronto, where his company is based. ``Our view is that he'll walk into Chavez's office and say, `Issue it.'''

Ortega's representatives didn't respond to calls to her communications office seeking comment.

Crystallex rose 1 cent to C$2 at 4:15 p.m. in Toronto Stock Exchange trading. The shares have declined 13 percent this year.

Crystallex has sold shares to fund operating costs during its four-year wait for permits for Las Cristinas. Delays have persisted even after Vice Minister of Mines Ivan Hernandez pledged in May to boost mining's economic role to help reduce the South American nation's reliance on crude-oil revenue.

Ortega's ministry approved Crystallex's final environmental-impact assessment in June and requested taxes and bonds to secure a permit, the company said in October. While the money has been paid and security lodged, the permit hasn't been issued, Thompson said.

Visit to Mine

The company isn't likely to get a meeting with Chavez to plead its case and will have to rely on Sanz to press for permission to go ahead with the mine, Thompson said. The minister requested a visit to Las Cristinas during a meeting with Crystallex's management three weeks ago, Thompson said.

``He's a tough, no-nonsense businessman who will make things happen one way or another,'' Thompson said. ``He's not the man who will sit on the file.''

Crystallex said it expects Las Cristinas to yield an average 233,000 ounces of gold a year at a cost of $346 an ounce during a life of about 64 years.

To contact the reporter on this story: Stewart Bailey in New York at sbailey7@bloomberg.net.

Last Updated: March 5, 2008 16:53 EST