NET NITS: Venezuela revisited

Our knowledgeable readers have been weighing in with opinions about Crystallex and the Las Cristinas project in Ven...

Our knowledgeable readers have been weighing in with opinions about Crystallex and the Las Cristinas project in Venezuela. The best summary of the situation came from Grant Watson, who is retired and living in Winnipeg. He wrote:


"I read your story about Crystallex and Venezuela with great interest. I've been an investor in the junior gold market for many years. Some companies have worked out to be profitable for me others haven't. I've followed the story of Las Cristinas for many years. I used to be shareholder in Placer Dome back when it had the rights to mine.


"I've noticed over the years many stories that have some basis in fact but usually miss very important information that leads the reader to question if the writer has actually done their home work. I don't know if Crystallex will get to mine Las Cristinas or not, but I do know that many of the reports currently being published are opinion pieces and not factual.


"If you go back and research the ownership path of Las Cristinas from Placer Dome to Vanessa Ventures to Crystallex and finally Corporacion Venezolana de Guayana you will see that the Las Cristinas concession is owned by a Venezuela company that is under Mibam [Venezuelan ministry for basic industries and mining] control. Crystallex gave up their claims to the concession Las Cristinas in 2002 in favour of a mine operating agreement. How does Venezuela national something it already owns?


"Many mining companies in Venezuela may well be nationalized or forced into a joint venture with the Venezuela government when this new model for the mining industry … comes to pass. That doesn't mean the existing companies will be kicked out or left with nothing.


"Recently Hecla Mining sold there its Venezuela assets to Rusoro Mining and Rusoro formed a 50/50 joint venture with the Venezuela government. This joint venture is operated under Venezuela state administration.


"Many of the current articles are saying that Las Cristinas will be handed over to Rusoro mining because it is a Russian owned company. Rusoro is a Canadian company with the large majority of shareholders that aren't Russian. I've contacted Rusoro and they have denied any knowledge of getting Lac Cristinas. [Mibam minister Rodolfo] Sanz himself has come out and said this story is false. I have to wonder if the fact the Russian delegation was in Venezuela at the same time the stories came out had anything to do with it.


"If you want to research Crystallex, I would suggest you look at the June 24, 2008, release of the meeting that took place to discuss the refusal of the Minister of Environment to grant Crystallex their permit. You will find that not only has Crystallex done everything asked of them they have the support of both the Miban and CVG. [The release is posted at]


"As an investor and observer I am always surprised that reporters never asked Sanz if [the government] will be honouring its mine operating agreement with Crystallex. I realize that most reporters don't know that Crystallex isn't the owner of Las Cristinas but I would have thought someone might stumble across the truth. The whole question surround Las Cristinas should be not who owns it but who will mine it. I still believe Crystallex will be that miner."


Roy S. Carson of Houston, Texas, weighed into the discussion pointing out that my remarks perpetuated some of the mis-truths swirling around the Las Cristinas project. For information in English, he suggests readers go to


And to the grumpy reader who wrote, "You will eat crow on this one, baby. I promise you!", let me say it's yummy; crow tastes a lot like chicken.


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