Not a cat in hell's chance that Crystallex will get the final approval!

VHeadline editor & publisher Roy S. Carson writes:

I had particularly focused on the continuing Las Cristinas Saga when the news came down the line that the Russian-owned Agapov Group's Rusoro Mining had announced a bid to buy out Gold Reserve (GRZ) at the adjacent Las Brisas del Cuyuni concession.

The news was not particularly unexpected in either Puerto Ordaz when I arrived there late Monday evening, or when I arrived to El Callao (some 200 kilometers further south from Ciudad Guyana on the shores of the giant Orinoco River flowing eastwards to the Atlantic Ocean) early this morning.

I had already been advised of the situation on Sunday when I was met at Caracas (Simon Bolivar) International airport by an armed Venezuelan counter-intelligence agent who acted as my guide and bodyguard for a series of top-level meetings in the Venezuelan capital.

At a very early stage, I was told that the Venezuelan government (a.k.a. President Hugo Chavez Frias) has serious misgivings about the intentions of a number of actors in the Venezuelan gold mining industry and it quickly became apparent that while Basic Industries & Mining (Mibam) and Environment (MinAmb) Ministry officials had proceeded through all the formalities of giving approvals for the mining operations to begin, there was growing concern over the alleged motives of some of the transnational companies.

In the case of Gold Reserve, it was quite plain that previously approved permits had been reversed because the company, headed by Doug Bellanger, out of Spokane in USA's western Washington State, was more inclined to position his company for a buy-out by another interested party, whether by Crystallex International (its first choice) or by some other entity that was more prepared to make the necessary investments in infrastructure and mandatory social projects under President Hugo Chavez Frias' thrust towards a more egalitarian and socialist state structure for Venezuela's future.

Gold Reserve's response to willing purchaser Rusoro Mining is seen locally and internationally as a gift horse to Bellanger's mouth but as far as Las Cristinas and Crystallex are concerned the situation is perhaps yet obscure.

Sources at Venezuela's Military Intelligence Directorate (DIM) have told VHeadline that there is little likelihood that Crystallex will get carte blanche to proceed with Las Cristinas despite its 100% ownership by the Venezuelan Guayana Corporation (CVG) and a 40-year mine operating contract signed several years ago by recently re-elected Bolivar State Governor Francisco Rangel Gomez, who was then president of the State-owned heavy industry conglomerate, CVG.

The particular fly in Crystallex' ointment is alleged to be its involvement with former Venezuelan Ambassador to Washington, Paris, United Nations, Madrid etc., Dr. Enrique Tejera Paris and closely linked members of the Crystallex de Venezuela C.A. management team, including lawyer Luis Cottin.

DIM-sources claim that elderly Enrique Tejera Paris was slated to take the interim presidency of Venezuela following the April 2002 coup d'etat against president Chavez Frias which was backed logically and financially by the United States, despite constant denials since then.

Tejera Paris is seen by intelligence agencies as the "brains" behind the 2002 coup attempt and reports claim that "ETP" was actually waiting in the wings, in a limousine close to the Miraflores Presidential Palace as the coup went down, but that he was pipped to the post by Federation of Chambers of Industry & Commerce (Fedecamaras) president Pedro Carmona Estanga, who had the role thrust upon him when ETP was unable to reach the palace because of thousands of opposition demonstrators who had blocked all surrounding streets leading to and from the palace that particular evening.

Former Crystallex general manager at Las Cristinas, Guillermo Adrian told VHeadline today (Tuesday) that it was already made known to Crystallex several years ago that ETP's then chairmanship of the Venezuelan subsidiary made it impossible for the CVG/Crystallex deal to go through and that ETP's subsequent resignation from the board was not seen as sufficient to "cleanse" Crystallex' reputaion as a serious player in the Venezuelan mining sector.

"There isn't a cat in hell's chance that Crystallex will get the final approval to begin mining,"says Adrian who has since moved to join the Russian Agapov Group's Rusoro Miniing which appears to have made great stride to cooperate on all fronts with the Chavez government in support of his socialist project for all of Venezuelan heavy and light industries as well as the oil sector.

"Yes, Crystallex has complied with all the requisite demanded by the environment ministry, by Mibam and the CVG, but President Chavez is simply NOT going to sign off on Las Cristinas while there is Tejera Paris family involvement in Crystallex' subsidiary and that of Luis Cottin."

While some North American investors appear to believe that an international arbiter may disagree on Chavez' motive for his decision, the government appears willing to accept the challenge as a matter of national security come hell or high water.

"The best option for Crystallex is to think seriously about the structure of its Venezuelan subsidiary and to go cap in hand to the Venezuelan government and to cooperate towards arriving at some agreement where the 'ETP factor' is removed completely, although I believe that this will be impossible at this stage."

Other government officials say that a restructured Crystallex de Venezuela MIGHT be able to enter into a 50/50 socialist joint venture with Venezuela on Las Cristinas if the company were to be seen to have a long-term interest in the development of Las Cristinas and NOT just (as is claimed) working the North American stock exchanges with absolutely NO benefit for the Venezuelan people or their government."

If, indeed, Rusoro were to show willing to buy-out Crystallex International's Venezuelan involvement, Adrian believes that Rusoro would act immediately to terminate the current Venezuelan management ofLas Cristinas, in which case he believes the government would not be tardy about giving final clearances to begin mining operations.

"It's a 'tranca' -- a roadblock -- that nobody really wants,"Guillermo Adrian says. "The whole situation could be resolved in a matter of weeks if not days, if Rusoro were to make an offer to buy-out Crystallex as well as Gold Reserve ... but I do not know if that is what Mr. Agapov wants!"

Guillermo Adrian suggests that we just have to wait and see what happens first with the Gold Reserve offer and then ... if there will be any offer on Las Cristinas ... perhaps Bob Fung will act decisively to get rid of the ETP factor."

"But at this stage I don't know whether it really matters or not!" he adds.

Roy S. Carson
vheadline@gmail.com