This is the very first article that started it all. I wanted to see exactly what was said about Rusoro being linked to LC. I think the confusion comes from the fact that they simply state that Rusoro has "inked agreements with the government" which I am assuming they were talking about their recent 50/50 with the state of La Camorra and Isadora.

CARACAS (Dow Jones)--Canadian miner Crystallex's (KRY) long effort to d evelop one of the largest gold deposits in Latin America came to an apparently fruitless end after President Hugo Chavez's government said Wednesday it's taking back the Las Cristinas project.

Crystallex's shares, the price of which has come to reflect a
challenging labyrinth of official permits and government threats to
the project amid nationalizations in many other sectors of the
economy, plunged 38% to $0.28. They are down 90% over the last 12 months.

The mining ministry made the announcement in the 10th paragraph of an emailed statement dedicated mostly to the government's efforts to improve Venezuela's mining industry.

In the statement, Mining Minister Rodolfo Sanz insisted
in "rescuing the most important mining deposits in Venezuela in order to increase production capacity in strategic minerals like gold, diamonds, bauxite and uranium."

The Las Cristinas gold mine, which according to Crystallex has
reserves r e aching 16.8 million ounces of gold, "will be recovered
and will be operated by the state," starting in 2009, according to
the statement.

Josue Fernandez, a spokesman for Crystallex in Caracas, said the
company had not received any official notification from the
government.

Crystallex's future in Venezuela had been hanging by a thread since May, when the company was blind-sided by the environmental ministry's decision to halt licenses for open-pit mining in the vast natural reserve where Las Cristinas is located.

As late as August, however, the company issued a press release
saying the government was reconsidering the environmental permit.

Taking over Las Cristinas, which Crystallex controlled under an
operating contract signed with the government in 2002, represents the government's most imposing entry into the mining sector.

Mining in Venezuela had been largely untouched despite looming
threats that i t would be hit by Chavez's nationalization drive,
which has swept up telephone and utility companies, the cement
industry, joint oil ventures, rural lands and one of the country's
largest banks.

But the government's presence in the industry has been expanding in recent months by way of joint ventures with mining companies. It has stopped granting concessions and is reviewing all private sector mining projects.

The government has inked agreements with Russian company Rusoro Mining Ltd. (RML.V) and with a group of Italian investors to jointly develop mining projects. Under the agreements the government receives a hefty share of the profits without putting any cash into the ventures.

Despite booming commodity prices in recent years, investment in
Venezuela's mining industry has suffered as labor problems and
nationalization threats have scared domestic and foreign investors
away.

Concerns abound that the new mining law , which the government has been drafting since last year, could force them into joint ventures with the government and undercut operational control and profitability for private companies.


-By Darcy Crowe, Dow Jones Newswires; (58) 212 905 6304;