I apologize in advance for the length of this note.

I have been recently trying to piece together existing relationships between Bob Fung and his various business and personal associations, in the hope of finding clues to our two funding options: They are: To construct with CRRC (with permit) or, failing that, arbitration with a suitable bond-holder resolution.

Much of my logic is based on the following observations:

1. That in challenging times one often retreats into friendlier territory, populated with supportive and like-minded colleagues.

2. That the sources for arbitration funding (say, ~$200 million) may well be very different sources from those that he might have engaged for larger funding needs (such as mine infrastructure and construction). Clearly CRRC was the latter funding source within the JV, but arbitration funding may be found elsewhere from smaller entities.

3. We know Bob Fung has many deep friendships, both in the Canadian and Chinese business communities. We all are aware of the very close historical family relationships exist between Bob and members of Li Ka-Shing’s family. (For example Bob’s godfather to Li’s son, and, as Toronto Waterfront Chair, Li’s son benefitted from a contract related to the Queen St. Quay there. Also, both Li and Bob are involved in Vancouver-based redevelopment plans (Li: Expo 86 lands) and (Bob: Gastown heritage buildings). These personal relationships with LI have been well-documented, but I don’t think they represent a funding source, per se. Rather, Li may well be a source of strategic influence with other Mainland Chinese or Canadian companies.

4. The source of funding advice (and possible actually funding) may well arise from a company for which Bob has been a Board director for some years. MineonMoney had previously noted this affiliation. The entity is the Sunwah International (SWH.TO), which is 70% owned and controlled by Dr. Jonathan Choi, whose biography is impressive and follows below this note.

Jonathan Choi is a very highly regarded business person in both Hong Kong and mainland China. If you search, you will find him as a chief figure in many international trade relationships involving either his Sunwah company, or on behalf of others in the Chinese business community.

5. “Sunwah International” was renamed as such in January 2011, from its former corporate name of “Kingsway International” (KIH) and Dr. Choi is its largest shareholder and co-chair. They have several arms, one of which is financial advice and strategic funding. Based on these observations,

I believe Dr. Choi may have been involved in two ways with Boby Fung since early 2009. His company’s (Kingsway International) annual 2010 report states that they were responsible for finding Crystallex a Chinese investor (likely CRRC). (See link below). This likely was through Dr. Choi and/or Li. (See Kingsway 2010 annual report link below).

http://www.kingswaygroup.ca/uploads/KIH%20Annual%20Report2010.pdf

Excerpt from the KIH 2010 annual Report: “Crystallex is a Canadian-based company with its common shares traded on both the Toronto Stock Exchange (symbol: KRY) and the NYSE Amex Exchange (symbol: KRY). The company’s principal asset is the Las Cristinas project in Bolivar State, Venezuela. Crystallex’s interest in Las Cristinas is derived from the Mine Operating Contract (MOC) with Corporacion Venezolana de Guayana (CVG) which grants Crystallex exclusive rights to develop and mine the Las Cristinas property. In August 2009, KIH (Macau) Ltd., a subsidiary of KIH, entered into an agreement to provide advisory services to introduce Chinese strategic partners to the project and to provide key strategic advice. In June 2010, Crystallex signed a binding agreement with China Railway Resources Group Co. Ltd. to create a strategic partnership to develop Las Cristinas. The process to complete that transaction is underway and will include the signing of a definitive agreement as well as regulatory and shareholder approvals.”

I also believe Sunwah International may still be involved in a major way. Here is why….. If you read both the Sunwah international annual report for 2010, and the corresponding Crystallex report you will see corroborating entries, both for an original 2009 advisory fee paid to Sunwha ($175K) by Cyrstallex (prior to June 2010), and a relatively new advisory agreement with Sunway International, after June 2010, which based on an incentive-based reward. See the two links to these annual reports below.

The new Sunwah agreement is interesting and is still in existence. It has a very interesting clause. That is, that payment of advisory fees is contingent upon certain unspecified outcomes. And, that these "outcomes" did not occur by 31 December 2010. In other words, it seems Bob has negotiatied an incentive agreement Crystallex and Sunwah International.

http://www.kingswaygroup.ca/uploads/Second%20Quarter%20Results.pdf

http://www.crystallex.com/Theme/Crystallex/files/Reports/KRY_MDA_FS_Q2_2010-FINAL.pdf

I cannot find evidence, but I now wonder if the original $2.5 million KRY “rescue” fund was also related to this original 2009 advisory agreement with KIH/Sunwah.

Of course, the February 2011 MOC cancellation by CVG may very well have taken SunWah “by surprise” also, along with KRY and CRRC. Specifically, I am wondering if the lack of a permit from CRRC was the event that did not happen for Sunwah to collect their advisory fee by December 2010, as reported. I can find no indication what that fee might have been valued at.

So, in summary, I am trying to put these complex relationships together, based on past reports. I believe the following statements may be worth pursuing:

1. Bob Fung is working for the Crystallex shareholders through his personal and business relationships, probably related to Chinese/Canadian Sunwah connections. (I do feel he is an honest fellow, and working hard for our benefit.)

2. Bob Fung has developed a contract that is incentive-based. This may be wise and in our best interest as shareholders, especially given our current cash state and concerns about further share dilution. What these fees may be is perhaps unknowable until after the fact.

3. Either through Li Ka-Shing (strategic) , Sun Wah (strategic, advisory and perhaps financial), or both conjointly, there are two simultaneous activities being supported;

a) Plan A: pressuring CRRC, and through CRRC, in turn, Venezuela by Jonathan Choi (and possibly Li Ka-Shing, and

b) Plan B: finding arbitration and bond-holder funding through Sunwah International and Jonathan Choi. Again, fee unknown, but likely incentive-based.

4. It will be interesting to watch shares and options conversions, and future share price/annual reports in Sunwah International and its major shareholders.

****************

Jonathan Koon Shum Choi

Dr Jonathan Koon Shum Choi, JP, aged 52, is the Chairman of the Group. He has been responsible for the overall strategic planning of the Group since 1995. He is also the President of the Sun Wah Group. Apart from being a Member of the National Committee of the Chinese People’s Political Consultative Conference of the People’s Republic of China(the “PRC”), Dr Choi also holds a number of public positions which include the Vice-Chairman of the Chinese General Chamber of Commerce in Hong Kong, an Economic Advisor to the President of the Chinese Academy of Sciences, PRC, a Member of the Commission on Strategic Development of Hong Kong SAR and a Member of The Greater Pearl River Delta Business Council, Hong Kong SAR, the Chairman of the China Trade Advisory Committee of the Hong Kong Trade Development Council, the Chairman of the China-India Software Association, and an Honorary Citizen of Guangzhou City and Shenyang City, PRC. Dr Choi is a Court/Council Member of a number of universities including United College of the Chinese University of Hong Kong, the Hong Kong University of Science and Technology, the Hong Kong Polytechnic University, the Fudan University and the Nanjing University. Dr Choi has over 30 years of experience in the food industry, real estate development and international trade, and over 10 years of experience in the technology and finance related business. Dr Choi is a director of Kingsway International Holdings Limited, a substantial shareholder of the Company pursuant to Part XV of the Securities and Futures Ordinance (“SFO”). Dr Jonathan Koon Shum Choi is the brother of Mr Michael Koon Ming Choi. *****************