and has agreed to make an equity investment in Crystallex following closing of the transactions, at a share price based on the then prevailing market price of the common shares of Crystallex.

KRY needs funding to continue operating. I'm assuming a much scaled-back operation in Venezuela with technical staff, security operations and Venezuelan admin. costs moving to the new CRRC operation post KRY shareholder August vote and assuming all regulatory and government approvals July 30. The equity injection would enable KRY to continue funding salaries/office/costs to remain a publically traded co. etc. through till commencement of production wherein a formula would be devised to enable KRY to contribute a portion of cashflow from revenue (for 1/3 of capital costs for optimized production). Keep in mind KRY has a large carry-back loss provision so tax will not be an issue for a long time.

In addition, CRRC will assist Crystallex to retire the outstanding noteholders' obligations;

My understanding is that a material change in beneficiary majority ownership of Las Cristinas can result in noteholders forcing KRY to redeem outstanding notes and accrued/unpaid interest at 100 and 102 % of principal amount.

I'm thinking CRRC advances to KRY the funds required for the July 15 semi-annual interest payment. This amount then becomes an amount that CRRC can elect through its' option to convert to shares at CAD 40 cents.

Once a deal goes through July 30 and shareholders provide their go-ahead at an August vote, assuming the permit is granted prior then the noteholders may be prepared to defer loan repayment or allow a renegotiation.

Therefore the 19.9 % may only apply to the noteholder July 15 interest, the 6.25 million shares issued at CAD 40 cents for the USD 2.5 million loan and an equity infusion.

will provide a construction guarantee;

this would appear to be a construction guarantee to the CVG/MIBAM that CRRC would provide.

CRRC shall also have a onetime option to convert a portion of funds advanced to Crystallex to satisfy its obligation to the noteholders into common shares of CrystallexCdn$0.40 per share for a period of five years from the date of funding, provided that CRRC and its affiliates shall beneficially own not more than 19.9% of the outstanding common shares of Crystallex after giving effect to such conversion. CRRC shall have the right to maintain its pro rata equity interest in Crystallex to a maximum of 19.9% of the outstanding shares.

My understanding, and i'm awaiting confirmation from IR, is that CCRC can only convert the portion it loans to KRY that goes directly to noteholder obligations into stock at CAD 40 cents.

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So in summary, CCRC will have 6.250 miilion at CAD 40 cents (the USD 2.5 million), a percentage for equity injection at prevailing market share price and then a percentage for whatever goes to noteholder obligations.

No more than 19.9 %.

shares outstanding = 294.817719 shares @ 19.9 % = 58.668 million shares

58.668 - 6.250 million = 52.418 million shares

Should the permit arrive before closing and the stock price is higher we may actually get less dilution. Something to keep in mind!

Anyway, this is what i'm able to think through at present.

Please feel free to pick through this and add your comments.

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