Stockpiling of saprolite ore is necessary to maintain the desired blend of saprolite

and bedrock plant feed. The majority of the saprolite is mined in the first half of the

mine life because the saprolite overlies the bedrock and therefore must be mined

before the bedrock can be accessed. Saprolite oxide is restricted to a maximum of

50% of the plant feed in year 1, or 10,000 tonnes per day and 43% per year

thereafter. Bedrock ore cannot exceed 75% of the plant feed without a drop in

production rates. The bedrock limit was relaxed after year 20 to 80% and allowed to

reach 90% after year 25. This was done to reduce the size of the saprolite ore

stockpiles, which would otherwise become costly.

Additionally, saprolite sulfide material cannot exceed 7% of the total plant feed during

the first 10 years and cannot exceed 10% after that. This restriction is relaxed in the

last two years of life. The increase in the proportion of sulfide feed to the plant is a

compromise between plant operations and ore stockpile management. A separate

stockpile is maintained for the saprolite sulfide.

The maximum size of the saprolite ore stockpiles is just under 16.5 million tonnes.

Over the life of the mine a total of approximately 28 million tonnes of saprolite ore is

stockpiled. Re-handling the stockpiled ore will be a challenge given the material

characteristics and the amount of rainfall at the site.

The saprolite oxide stockpile is divided into two areas, a high-grade area and a lowgrade

area. This is done to increase the feed grade in the early years by sending the

high-grade material to the plant first, thus increasing the recovered gold ounces and

improving the overall project economics. After year 10 the distinction between high

and low grades was discontinued. The average gold grade in the high-grade

stockpile is 2.0 g Au/t and the gold grade in the low-grade stockpile is 0.76 g Au/t.

MDA divided only the oxide in this way but the sulfide material could be handled in a

similar manner, although the benefit of this is limited by the restriction on the amount

of sulfide material in the plant feed.

Different mining equipment is used in the saprolite and bedrock due to the

significantly different material characteristics. A contractor will mine the saprolite

using a fleet of all-wheel-drive trucks and excavators. Crystallex will mine the

bedrock using conventional 136 tonne haul trucks and 21m

Mine manpower requirements vary with production levels but start at a base level of

94 people. This figure includes 15 in mine engineering and geology, 27 in mine

maintenance and 52 in mine operations. The maximum manpower level is 217

during years 27 through 29. The mine operations manager, chief mine engineer and

maintenance superintendent are initially expatriates and are replaced by Venezuelan

nationals after the second operating year.

The life-of-mine mine operating cost is estimated to be $2.94 per tonne of total ore or

$1.26 per total mined tonne, including saprolite mining. Pre-production contract

mining ($9.6 million) is considered a capital cost and not included in operating costs.

Total bedrock mining costs without the contract saprolite mining amount to $0.95 per

mined tonne or $2.23 per ore tonne.

Costs for major consumables and labour are primarily based on prices reported by

Crystallex from its current Venezuelan operations and independent budget

quotations. Fuel prices are low in Venezuela, $0.04 per litre is used for this work.

Contract saprolite mining is $1.37 per dry tonne based on budgetary bids from

contract mining firms currently working in Venezuela.

Currently in Venezuela the prices for explosives are established by a non-competitive

market and consequently are higher than prices in most other South American

countries. The costs used in this study of $1830/tonne for emulsion and $1000/tonne

for ANFO are based on the actual prices paid by Crystallex at their existing

operations and averages of other quotes received by MDA and Crystallex. Crystallex

currently pays $1200/tonne for ANFO at a Venezuelan mine much smaller than Las

Cristinas.

SGS Lakefield Research (Lakefield) conducted an extensive program to test samples

of saprolite oxide (SAPO), saprolite sulphide (SAPS), carbonate leached bedrock

(CLB) and carbonate stable bedrock (CSB) in bench tests and a 50 kg/day pilot plant

operation, run for 21 days during the months of April through July 2003 . Subsamples

were sent to McGill University for gravity recovery testwork. Outokumpu

conducted pilot plant settling tests on several samples. The various test programs

were designed to confirm relevant data generated by PDI, determine the gold

recovery and reagent requirements for the proposed gravity-leach flowsheet, and

generate plant design data.

Grinding data from Lakefield are generally in accordance with data generated by

Placer Dome. Pilot scale gravity concentration tests at Lakefield show about 30%

gold recovery from both a SAPO-CSB blend and a SAPO-SAPS-CLB-CSB blend at

mass concentration ratios of about 4000:1. Intensive cyanidation of the concentrates

from these tests gave >99% leach recovery. Tests at McGill to determine the gravity

recoverable gold (GRG) content of SAPO and CSB samples showed 39% and 46%

GRG, respectively which would translate into practical recoveries of about 25%

Thirty-six hour bottle roll leach tests (an industry standard) on gravity tailings confirm

that SAPO leaches very well to give about 99% overall (gravity+leaching) extraction

and a 0.02 g/t tailing. With a 24 h leach time, tailings were 0.03 g/t corresponding to

98% extraction. CSB gives about 85% overall extraction (0.17 g/t tailing). Cyanide

additions for SAPO and CSB have been less than 1 kg/t ore. Pure SAPS samples

with cyanide soluble copper (CNSCu) levels of 370 ppm or less have been tested

and gave 85 to 88% extraction, albeit with cyanide additions of 1.7 to 1.9 kg/t.

Mixtures containing SAPO, SAPS and CSB gave 85 to 90% overall extraction

provided that sufficient NaCN was present. The NaCN addition varied with the

CNSCu level in the ore.

A 2 kg/h pilot plant was operated for three weeks in which batch-ground/gravity

concentrated ore was subjected to carbon-in-leach (CIL) processing. During the first

13 days, a blend of 20% SAPO and 80% CSB was leached with 0.7 kg/t of cyanide to

give a final overall gold extraction of 89.6% (tailings average of 0.15 g/t). A SAPOSAPS-

CLB-CSB blend was processed for the last week. The plant tailing was 0.15

g/t for an extraction of 89.3% with a cyanide addition of 0.8 kg/t. Overall gold

recovery used in the preliminary design was 89%.

Viscosity measurements by Lakefield were acceptable for the mixtures that will be

handled in the Las Cristinas plant.

Outokumpu conducted high-rate thickening tests on nine sample blends, ranging

from pure SAPO to pure bedrock, using its pilot-scale thickener. At 50% solids in the

underflow, all blends containing 50% SAPO or less could be processed at 0.46 t/m

Acid-base-accounting (ABA) tests and various geotechnical studies were performed

by Lakefield on several samples to determine the potential for acid generation. Data

are discussed in Section 12 of this study report.

Natural degradation tests and continuous INCO Air/SO

All equipment, with the exception of secure areas such as electrowinning and the

gold, electrical and control rooms, is located in open sided structures or outdoors.

The processing plant is fenced for gold security reasons. Installed spare pumps are

provided for all critical process streams.

The process plant consists of single line crushing, semi-autogenous primary grinding

(SAG) followed by secondary grinding using a ball mill. A pebble crusher is

incorporated in closed circuit with the SAG mill.

A gravity circuit is included in closed circuit with the cyclones in order to recover any

coarse, free gold prior to regrinding in the ball mill.

Gold extraction is achieved in a conventional carbon-in-leach (CIL) circuit. Gold is

removed from the loaded carbon by pressure stripping, electrowinning and smelting a

gold dore product.

CLB and CSB ore is delivered by mine truck to the primary crushing station which is

permanently located to the east of the process plant. The primary crusher product

discharges via an apron feeder on the stockpile feed conveyor.

CLB and CSB ore is reclaimed from the coarse ore stockpile using apron feeders

located in the reclaim tunnel situated below the stockpile. The ore is loaded onto the

SAG mill feed conveyor.

SAPO and SAPS ore is delivered by mine truck to the saprolite crushing station. The

mine trucks direct dump into a feed hopper which is positioned over top of an apron

feeder. The apron feeder passes the saprolite ore into a mineral sizer in order to

reduce over sized clumps before being fed on to the SAG mill feed conveyor.

The SAG mill feed conveyor delivers a combination of saprolite, CLB and CSB ore

directly to the SAG mill. The SAG mill is driven by a clutch and pinion gear

arrangement by a variable speed synchronous motor. The SAG mill discharge is

screened by a double deck vibrating screen to remove over sized 12 mm pebbles.

The 12 mm pebbles from the vibrating screen are crushed in a cone crusher prior to

being recycled back to the SAG mill feed chute. Provision has also been made so

the pebbles can be recycled directly back to the SAG mill without further size

reduction or can be stockpiled outside the process plant building.

The under sized product from the vibrating screen drops into the cyclone feed pump

box where it is combined with the discharge from the ball mill. The ball mill is driven

by a wrap around, variable speed motor through a cycloconverter drive unit.

The combined SAG and ball mill discharges are diluted in the pump box with process

water and pumped to a cyclone cluster which sorts the ore particles by size and

returns the over size to the ball mill for further size reduction.

Also included in the grinding circuit is a gravity recovery circuit. A portion of the ball

mill discharge is diverted over a vibrating screen with the under size fed to one of two

centrifugal concentrators. Gravity concentrate from each centrifugal concentrator is

stored in a secured holding cone until it is leached in a semi-batch, high intensity

cyanide leach reactor. Gravity and leach reactor tailings are pumped backed to the

grinding circuit. The gold loaded solution from the leach reactor is pumped to a

dedicated electrowinning circuit located in the secured gold room.

Slurry from the grinding circuit cylcone overflow, after trash removal, is gravity fed to

the thickener feed collection box where slurry flows into a 45 m diameter thickener.

The thickener overflow flows by gravity into the process water tank. The thickener

underflow is pumped at 50% solids by weight into dual parallel 6-stage CIL circuits.

Cyanide and lime are staged added to each tank train. On an intermittent basis,

loaded carbon is pumped counter current to the slurry flow in order to increase the

gold loading. Loaded carbon is removed from the head end of each tank train and is

transferred to the acid wash vessel via a vibrating screen.

Loaded carbon captured by the vibrating screen drops by gravity into the acid wash

vessel. A 3% acid solution is pumped into the acid wash vessel and overflows the

top and returns to the acid mix tank. Acid washing takes approximately 1 hour. After

acid washing is complete, the spent acid is neutralized with sodium hydroxide before

discarding it to the tails pump box.

The desorption elution cycle starts with the preparation of a 3% sodium cyanide and

2% sodium hydroxide solution in the barren eluate tank. The solution is initially

pumped through the strip solution heater and returns to the barren eluate tank until

its temperature reaches 80

carbon fines tank. Water collected in the carbon fines tank is pumped through a plate

and frame filter press to capture any carbon fines.

The activity of the stripped carbon is restored in a kiln. After passing through the kiln,

the carbon drops out into a quench tank and is transported to the reactivated / fresh

carbon sizing screen. Screened carbon drops by gravity to the reactivated carbon

transfer hopper where it is mixed with washed fresh carbon. Screen fines flow by

gravity to the carbon fines tank. Water collected in the carbon fines tank is pumped

through a plate and frame filter press to capture any carbon fines.

There is some carbon loss through attrition and is made up with fresh carbon. Mixed

regenerated/fresh carbon in the transfer hopper is moved to the last leach tank in the

train via a horizontal recessed impeller pump.

Pregnant eluate solution from the desorption operation reports to the pregnant eluate

tank. Pregnant eluate solution is pumped to four electrowinning cells (two rows of

two in parallel). Gold metal is electrowon loosely on the stainless steel wool

cathodes in the electrowinning cells. Depleted solution flows from the outlet of each

cell to the barren eluate return tank and is then transported either back to the barren

eluate tank or recirculated back through the electrowinning cells via the pregnant

eluate tank.

Pregnant eluate from the concentrate leach circuit is pumped to the leach reactor

pregnant eluate tank in the refinery area. Pregnant eluate solution is transported

from the tank to two electrowinning cells in series. Gold metal is electrowon loosely

on the stainless steel wool cathodes in the electrowinning cells. Depleted solution

flows from the outlet of the last cell to the leach reactor barren eluate return tank and

is then transported either to the CIL circuit or recirculated back through the

electrowinning cells via the leach reactor pregnant eluate tank.

At the end of the run, the cathodes are removed from the cells; the gold bearing

sludge is washed off and then pumped to a plate and frame filter press. The filter

cake is mixed with fluxes, usually borax, soda ash and occasionally sodium nitrate

and fed to an electric induction furnace. The doré metal and slag separate in the

furnace, and the slag is poured off to slag pots then the doré metal is poured into

bars for shipment.

The cyanide destruction process is air/SO

The Las Cristinas site is situated in south eastern Venezuela and is some 6 km west

of the village of Las Claritas on Troncal 10 the main highway running from the

Brazilian border to the Venezuelan port of Puerto Ordaz on the Orinoco River. The

site is some 360 km by road from Puerto Ordaz and the road presents no significant

obstacles to the transportation of goods and materials to the site.

Access to the site will be from Troncal 10 along an existing unpaved road that will be

upgraded to take construction and operational traffic. This route is 19 km long and

being north of Las Claritas circumnavigates all the local villages and will thus avoid

any disruptions to the local population.

An existing 400 kV power line parallels Troncal 10 and a new substation was

constructed in 2001 just south of Las Claritas at Km 86 to service the area. The

substation has two 150 MVA power transformers and provision has been built in to

supply Las Cristinas with a 230 kV power line.

The site power demand is estimated at 30 MW which can be adequately supplied by

the substation.

Power to the site will be carried via a new overhead power line, a distance of

approximately 6 km, and will terminate at a new substation to be built on site from

where power will be distributed at 6.6 kV.

Potable water will be drawn from on-site wells and will be chlorinated prior to

distribution for consumption. Make-up water for process requirements will be drawn

from the Potaso Pit, an old mining pit that is permanently flooded. During operations

the Potaso pit will be charged with water from the diversion ditch.

Domestic sewage will be collected by a system of gravity sewers and treated

biologically with the resulting effluent being pumped to the tailings pond.

In 1998 a 3,058 person construction camp was constructed at the Las Cristinas

property. The camp included dormitories for workers and supervisors, kitchen and

canteen facilities, administration building, water and firewater plant and a sewage

treatment plant. The camp was subsequently abandoned and has been subject to

neglect and minor vandalism.

For the current project the construction camp will not be utilized except that the

administration building will be refurbished and will serve as the main administration

centre, the kitchen and canteen will be converted to a construction and operations

warehouse and the existing water plant will be brought on line. Sewage from the

camp site will be redirected to the new sewage treatment plant.

Aside from the main administration facilities located in the existing construction camp

additional buildings will include a Guard House at the entrance to the process plant

area, a Mill Administration and Dry, a Truck Maintenance and Mine Dry and a Truck

Wash.

Tailings area water management forms a large component of overall site water

management. Therefore the tailings area water balance was developed in

combination with the overall site water balance to support the development of the site

water management scheme. The water balance provides an indication of average

process water flow rates, range of tailings pond operating volumes, average

treatment rates for water treatment plants, average pumping rates from water

management ponds and average discharge rates of excess water to the

environment.

The site water management scheme has been developed so that pumping and

treatment costs are minimized by isolating clean runoff from potentially contaminated

runoff and process water streams. Environmental impact is reduced by providing

appropriate containment and treatment to all potentially contaminated site water

before discharge, and by maximizing the use of water recycling.

Six site water management ponds are proposed in addition to the tailings pond. All

runoff from waste rock dumps and saprolite waste dumps will be collected in ponds

to provide settling of suspended solids. All runoff from waste rock dumps will be

monitored for acid drainage.

Process reclaim water from the Tailings Management Facility (TMF) water reclaim

system will pass through a cyanide destruction facility before use in the process

plant. Freshwater makeup will be supplied by pumping from the Potaso Pit. This

water will require treatment in a sedimentation/filtration plant before entering the

process stream. Any seepage from the TMF dike will be collected by a perimeter

ditch and pumped back. Excess TMF pond water will be considered suitable for

discharge to the environment following cyanide removal if suspended solids are

within an acceptable range.

Clean surface water from upstream drainage areas will be collected into a diversion

channel and conveyed around the perimeter of the site. Clean surface runoff from

undisturbed drainage areas within the mine site will be collected and diverted to the

Potaso Pit which overflows into the river diversion system. Site drainage was

designed for a 1:25 year flood event and the river diversions for 1:100 year events.

A field program for the Tailings Pond area was undertaken by Bruce Geotechnical

Consultants Inc. (BGC), in 1994 and 1995 and reported in the Las Cristinas

Feasibility Study (BGC, 1996). BGC drilled 9 boreholes, dug 27 test pits and carried

out geologic mapping of outcrops. The geologic horizons were described as follows.

The upper horizon consists of a thin laterite soil horizon from 0.5 to 1.0 m thick. The

next two units are saprolite which will form the foundation immediately beneath the

tailings dikes. The upper layer of saprolite oxide (SAPO) is from 0 to 40 m in

thickness, while the thickness of the underlying layer of sulphide stable saprolite

(SAPS) varies from 0 m to 65 m. Below the saprolite is a layer of saprock, generally

less than 1 to 2 m thick. Beneath the saprock, bedrock is subdivided into CLB

(carbonate leached bedrock) and CSB (carbonate stable bedrock).

The results of BGC’s geotechnical investigation were used by SNC-LAVALIN for the

feasibility level design of the Tailings Management Facility (TMF). In addition, SNCLavalin

carried out analysis of samples collected from the sand and gravel deposit in

the tailings area. Results show that the sand and gravel is suitable material for filter,

drainage and other granular usages.

Design criteria for the TMF were selected to optimize groundwater protection,

physical stability and mine closure conditions, and to make maximum use of mine

waste materials on a cost effective basis. Due to the presence of cyanide in the

tailings slurry, the TMF was designed to withstand a maximum credible earthquake

and to contain the runoff from a 24 hour probable maximum flood event, based on

internationally and nationally accepted practice and risk ratings.

A cyanide destruction plant will be built to treat the Weak Acid Dissociable cyanide

concentration in the water discharged with the tailings slurry. It is not expected that

treatment of an acidic runoff will be required during mine operations.

Previous studies by BGC (BGC, 1996) identified a tailings facility comprised of two

cells. A two celled facility is no longer required due to changes in mining plan and

therefore, a single celled facility is proposed. In addition, the proposed dike

alignment differs from that proposed by BGC. The tailings dike does not extend as

far south as the previous layout since there is an area of sand and gravel deposit

along the old south dike perimeter. This material is not suitable as a foundation

material and therefore, the alignment was adjusted.

The alignment of the Tailings Dike was selected to provide a natural low permeability

foundation, to provide sufficient storage for tailings and water management, and to

utilize available natural topographic conditions.

The Starter Dike will form the first stage before operations begin and subsequent

stages will be constructed during operations. The Starter Dike will be sized to

provide tailings storage and water management for the first three years of operation.

It will be of low permeability design with foundation preparation and seepage control

measures for adequate structural and hydraulic stability. The TMF basin floor is

saprolite 20 m to 40 m thick with permeabilities ranging from 8x10

provides sufficient water depth to meet barge and reclaim pumping requirements, as

well as settlement of solids. The maximum normal operating volume is based on the

seasonal fluctuation in precipitation and the water treatment plant capacity. In

average conditions, the maximum water level will occur in the tailings pond during the

month of September, at the end of the wet season.

To ensure dike safety and satisfactory performance as tailings depository,

instrumentation is required to be installed in the dike structure. This includes pore

water pressure monitoring, settlement monitoring and groundwater monitoring during

operation and post-closure.

Buckland Harapiak (B-H) was engaged by Crystallex to carry out a study and make

recommendations for the appropriate organization structure for the Las Cristinas

operation, with a particular focus on the Finance & Administrative functions. The

organization proposed would support the 20,000 t/d open pit mine and CIL

processing facility with a total work force of approximately 400 employees. Research

for this report included interviews with senior management from Crystallex, including

in-country management; feasibility work previously completed by SNC-Lavalin and

MDA; the 1996 Socio-Economical Study conducted on behalf of PDI; the Las

Cristinas Development Plan (presented earlier this year by Dr. Sadek El-Alfy and

Julio Rojo) and various other sources of information on Venezuela and comparable

mining operations around the world.

A number of conclusions and recommendations can be drawn from environmental

analyses and the preliminary assessment of the potential environmental impacts

conducted during the feasibility stage of the Las Cristinas Project, as well as

development of the preliminary concept for site closure and rehabilitation.

A detailed Environmental Impact Assessment of the Las Cristinas project is required

by both Venezuelan and World Bank requirements. A significant amount of

environmental baseline data and impact analysis necessary for EIA preparation was

undertaken by PDI throughout the early to mid 1990’s. PDI submitted an EIA

document to the Venezuelan Government for review and approval in 1996, and a

Land Occupation permit was issued for the project. Building on the work conducted

by PDI, and in consultation with the Venezuelan Ministry of Environment and Natural

Resources, Crystallex initiated an update of the PDI work during the feasibility stage

of their project development to reflect changes in project design and environmental

characteristics. The main environmental activities of SNC-Lavalin and Crystallex

during this feasibility stage were:

•

•

•

•

•

•

•

•

•

•

•

The following are key conclusions of the preliminary environmental impact

assessment and preliminary site closure and rehabilitation concept for the Las

Cristinas project:

The Las Cristinas project can be developed in a manner which minimizes impacts to

the physical and biological environment.

The Las Cristinas project is being designed in accordance with applicable

Venezuelan legislation and regulations, and World Bank standards.

Crystallex has committed to the removal and controlled management/disposal of

mercury contaminated soils in a contained landfill facility, potentially resulting in

improvements to local water quality and reduced mercury load in local fish.

Initial acid base accounting (ABA) tests conducted on representative samples of

waste rock and ore composites indicate that almost 60% of waste rock (oxidized

saprolite and carbonate bedrock) will be non-acid generating and approximately 20%

of waste rock (sulphidic saprolite) will be acid generating; the waste rock dumps will

be designed to ensure that acid generating waste is placed over the low permeability

saprolite soils (to retard downward migration into subsurface soils and ground water)

and covered/buffered by non-acid generating or net acid consuming waste.

As precipitation exceeds evaporation over the course of a full annual cycle, there will

be a net discharge of water from the Las Cristinas site, however the site is being

designed and can be operated to effectively manage site drainage in a manner which

prevents erosion and ensures that all site effluent discharges to surface receivers will

meet Venezuelan and World Bank standards.

An SO

The Las Cristinas site area is in seismic activity zone 0 which presents the lowest

possible risk of seismic activity.

The TMF dam is designed to a stability factor of 1.3 (initial) and 1.5 (final

configuration and closure condition), which exceeds Venezuelan, European Union,

and Canadian dam association standard of 1.1.

The TMF is designed to contain a 24 hour Probable Maximum Precipitation flood

(PMF).

The tailings dam structure is designed to include a low permeability “clay” core

(saprolite soils) with a lower permeability hard rock shell on the downstream face. A

chimney drain and finger drains will be provided to minimize head build-up and

dangerously high phreatic head levels in the tailings; dam seepage will be collected

in a perimeter drain and released or re-circulated by a series of perimeter sumps

back to the tailings pond for long-term storage. Estimated seepage rate will be

approximately 11 m

The Las Cristinas project can be developed in a manner which meets Venezuelan

environmental standards.

The government of Venezuela and the President of the Republic have indicated their

repeated support for the Las Cristinas project, and other mining projects in Bolivar

state.

The Ministry of Environment and Natural Resources (MARNR) has indicated verbally

that EIA requirements for the Las Cristinas project can be met with submission of a

summary of updates and revisions to the PDI environmental impact assessment,

submitted and approved by MARNR in the late 1990s; no significant regulatory

hurdles are expected.

Crystallex maintains routine on-going discussions with CVG, MARNR and local

political leaders; issues are identified early and addressed as quickly as possible;

there are no known concerns on the part of any government agency or political party

that would present a significant risk of opposition to the project.

Leaders of the 6 main unions whose membership incorporates most of the small

miners operating within the Las Cristinas concessions indicated verbal support for

the project during recent interviews.

60% of surveyed residents in the local villages of Nuevas Claritas, Santo Domingo

and Las Claritas, support the Las Cristinas project if they can either continue with

mining activities or are provided another source of employment income.

Crystallex has committed to providing technical assistance to small miners and will

be examining alternate employment opportunities for small miners in the next stage

of project design. Crystallex has also committed to meeting Venezuelan and World

Bank standards.

CVG is required by law to provide assistance in preventing the re-settlement of small

miners within the concession once the site has been cleared for Crystallex

operations.

A detailed site closure and rehabilitation plan will be prepared in the next stage of

project design.

The preliminary concept for site closure and rehabilitation at closure is developed on

the basis that final land use for the site area will be natural, consistent with objectives

for the Imataca Forest Reserve.

Crystallex will maintain an active presence at the site for an undefined interim period

following termination of mine production, and prior to “walking away” from the site.

During this period they will operate an ARD treatment plant (if considered

necessary), and all site drainage necessary to ensure that ARD effluents are not

released to the environment untreated. All essential services such as access roads,

some buildings and some power supply will be maintained during the interim period.

All buildings, equipment, roads, and above ground services (e.g., transmission lines;

water supply lines, pumps, etc.) will be removed at closure (at latest following the

active interim closure period), and all slopes will be graded for public safety and

establishment of vegetation. Non-essential dams and berms will be breached and

graded to blend in with surrounding topography. The interim period will end once

Crystallex can demonstrate that all slopes are physically stable and that all site

drainage can be released to the environment without treatment in compliance with

Venezuelan and World Bank water quality standards.

In summary, it is concluded at this stage that the risk of significant environmental

impacts and/or schedule delays arising from environmental or socio-economic

concerns, either during operation, or following closure, is considered to be low.

Additional studies and analyses at a higher level of detail will be conducted in

subsequent stages of development to confirm these conclusions.

A number of recommendations for specific work tasks to be conducted in subsequent

design stages are considered routine (such as preparation of a detailed

environmental impact assessment), and are not provided in the following summary.

A work plan which contains these activities will be developed by Crystallex prior to

initiating the next stage of design. The recommendations provided below are those

which are considered most significant in the consideration of project feasibility.

It is recommended that Crystallex conduct additional acid base accounting and longterm

static tests to confirm results of the initial acid generation potential testing

conducted during the feasibility stage; details of the test program will be developed at

the outset of the next stage of project design.

It is recommended that Crystallex conduct additional interviews and surveys of the

local political leaders, residents, and business operators (including the small miners)

to obtain input on the potential social and economic impacts of the project (positive

and negative), as well as development of an action plan which will address

mitigation/compensation required to offset impacts caused as a result of lost

employment once the small miners are permanently removed from the Las Cristinas

concessions. These activities should be conducted in the context of a broader

action plan program in accordance with established World Bank procedures.

Although not specifically required by Venezuelan regulation, it is recommended

during the next stage of project design that Crystallex arrange for, hold and attend a

series of community meetings in strategic locations throughout the zone of influence

to describe the Las Cristinas project and receive public feedback on potential impacts

of the project and measures which could be implemented to minimize the

significance of potential impacts.

The Las Cristinas project capital costs are summarized in the Table 1-7.

Mine 27,258

Process Plant 80,196

Tailings Management Facility 25,490

Infrastructure 27,728

Owner’s Costs 10,000

Indirect Costs 72,095

In addition, sustaining capital totalling $160 million over the 34 years of the mine will

be required.

These estimates do not include VAT of $38.8 million which is recoverable once gold

sales commence.

The estimated Operating Costs for the project, based on life of project averages are

in Table 1-8 as follows (before royalties):

Mining $2.944 $80.01

Processing $3.378 $91.80

G & A $0.381 $10.37

TOTAL $6.704 $182.18

Note: *Does not include royalties

The findings in Table 1-9 were generated by the financial analysis using a gold price

of $325/oz.

Cumulative Project Cash Flow $ 742 million

IRR Project (without debt financing, before VAT and taxes) 14.5%

NPV Project cash flows @ 5% $ 238.5 million (before taxes)

Payback Period-Years (from start of project) 5 years (before tax)