Wednesday, August 13, 2008

Gold Reserve's "wishful thinking"? Either way, at present time, Crystallex International is sitting pretty...

VHeadline guest commentarist and gold mining investor Dan Russo writes: As each day passes permit delays continue to fuel more speculation, rumor and innuendo.What's next, maybe conspiracy theories...

It appears that, as each day passes, we learn more about the delays from the Venezuelan government as it relates to issuing the environmental permit ... Environment (MinAmb) Ministry officials -- several weeks ago -- had several areas of concern that stakeholders were informed about.

They are:

1. Enhancing social projects and programs planned for the area.

2. Reducing the environmental impact during operations

3. Improving the mitigating plans from the effect of current mine plans

4. Improving mine closure re mediation plans at the end of the mine which include environmental damage caused by illegal mining.

Does Venezuela want a combined Las Brisas and Cristinas project?

Sources have been hinting and, as you review the most recent SEC reports on Gold Reserve (GRZ), there may be another reason for the incessant delays ... a combined development of both the Las Brisas del Cuyuni and the Las Cristinas projects!

It appears, from what GRZ says, that the Venezuelan government is in favor of the latter approach ... but it opens up a whole new vein of problems, possibilities and procedures that will undoubtedly need to be established and coordinated between both companies and their partner, the Venezuelan Government.

If it's a matter of concessions versus contract, I'll take the contract!

It's important to remember that Gold Reserve had a concession to mine ... while Crystallex, on the other hand, has an exclusive operating contract signed and sealed with the Venezuelan Guayana Corporation (CVG) ... and President Hugo Chavez Frias has recently made it pretty clear about foreign companies with concessions.

This now begs the question, does Chavez kick Gold Reserve out and award the
entire Las Crisas del Cuyuni gold field to Crystallex?

Would/could both companies work as one major developer with deposits in excess of 40 million ounces?

Would/could either company (or both) get bought out by a bigger player? Maybe ... a Russian or Chinese company?

Since both companies have filed legal appeals which allow for the Venezuelan government (a.k.a. the Environment Ministry) a maximum period of 90 days to respond, will we be forced to wait until the last minute for an answer?

• Was Crystallex aware of any Venezuelan government proposal to combine the companies? And, if they did, why didn't they report this material event?

The appeal deadline runs out some time in September, 2008 ... but, in my heart of hearts, I believe we are already on the cusp of getting an answer and my best guess is that any declaration by Gold Reserve hinting at a combined Las Brisas del Cuyuni/Las Cristinas deal is simply "wishful thinking" or a throwaway attempt at a lifeline on the part of GRZ' president A. Douglas Bellanger and CEO Rockne J. Timm.

Either way, at present time, Crystallex International is sitting pretty...

Dan Russo
dtr1029@aol.com