Crystallex International Corporation
TSX : KRY
NYSE Amex : KRY

Crystallex International Corporation

April 01, 2010 08:01 ET

Crystallex Reports 2009 Financial Results

TORONTO, ONTARIO--(Marketwire - March 31, 2010) - Crystallex International Corporation (TSX:KRY)(NYSE Amex:KRY) today reported its financial results for the year ended December 31, 2009. The Company prepares its consolidated financial statements in U.S. dollars and in accordance with Canadian Generally Accepted Accounting Principles. The consolidated financial statements along with management's discussion and analysis will be available for viewing on the Crystallex International Corporation website at www.crystallex.com. The Documents have been filed with SEDAR (www.sedar.com).

Overview

Crystallex is a Canadian based company engaged in the development of the Las Cristinas gold property located in Venezuela. Its common shares are traded on both the Toronto Stock Exchange (symbol: KRY) and the NYSE Amex Exchange (symbol: KRY).

Las Cristinas

  • The Company's principal asset is its interest in the Las Cristinas gold project located in Bolivar State, Venezuela. The Company's interest in the Las Cristinas concessions is derived from a Mine Operating Contract (the "MOC") with the Corporacion Venezolana de Guayana (the "CVG") which grants Crystallex exclusive rights to develop and mine the gold deposits on the Las Cristinas property.
  • The Company has not received a response from the Minister of Environment and Natural Resources ("MinAmb") to its June 16, 2008 appeal of the Director General of the Administrative Office of Permits at MinAmb denying its request for the Authorization to Affect Natural resources (the "Permit") for the Las Cristinas project.
  • The Company remains compliant with the MOC in order to protect the option of proceeding to international arbitration and retains control of the Las Cristinas property site. All community infrastructure projects as required under the MOC have been completed.
  • Despite continued efforts to secure the Permit and pursue accretive transactions in respect of the Las Cristinas Project, the Company recorded a non-cash write down to the carrying value of the Company's interest in Las Cristinas of $297,069 as required under Canadian GAAP based on certain potential impairment tests including, but not limited to, the permitting delays. Such non-cash impairment charge has been taken to comply with accounting requirements and does not reflect the Company's continuing strong belief in the project, its commercial prospects and the likelihood of the receipt of the Permit.
  • The Company will consider its options under International Financial Reporting Standards, when adopted in 2011, to reverse the impairment charge and restore the carrying value of the Company's interest in Las Cristinas to its original amount, if receipt of the Permit or other circumstances warrants a reversal of this impairment charge. Meanwhile the Company continues to pursue the Permit and the development of Las Cristinas with all appropriate measures, including continued compliance with its obligations under the MOC.

Liquidity and Capital Resources

  • Cash and cash equivalents at December 31, 2009 were $6.9 million.
  • The Company forecasts that it will have sufficient cash to fund its operations through the second quarter of 2010, but will not be sufficient to cover the Company's obligations over the next twelve months (see "Liquidity and Capital Resources" section).

Financial Results

  • Losses from continuing operations were $311.9 million ($(1.06) per share) and $21.8 million ($(0.07) per share) for 2009 and 2008, respectively.
  • Losses from discontinued operations at El Callao were $2.0 million and $3.9 million for 2009 and 2008, respectively.
  • Losses from operations were $313.9 million ($(1.07) per share) and $25.7 million ($(0.09) per share) for 2009 and 2008, respectively.

Legal Matters

  • On December 16, 2009 the Ontario Superior Court dismissed all of the claims by certain holders (the "Noteholders") of the Company's 9.375% aggregate principal amount of $100 million notes (the "Notes") against Crystallex and ordered the Noteholders to pay Crystallex costs. In detailed reasons the court held that Crystallex acted reasonably and in accordance with its obligations to the Noteholders. The Noteholders have filed an appeal which is scheduled to be heard on April 26, 2010.
  • The Company and certain officers and/or directors have been named as defendants in a proposed class action lawsuit commenced in the United States District Court of the Southern District of New York. Crystallex believes that the complaint is without merit and will vigorously defend itself against this action. Crystallex has filed a motion to dismiss the class action complaint.

About Crystallex
Crystallex International Corporation is a Canadian based company, whose principal asset is its interest in the Las Cristinas gold development project located in Bolivar State, Venezuela. Crystallex shares trade on the TSX (symbol: KRY) and NYSE Amex (symbol: KRY) Exchanges.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws, including: statements relating to the estimated reserves and resources at Las Cristinas; anticipated results of drilling programs, feasibility studies or other analyses; the potential to increase reserves and expand production, at Las Cristinas; Crystallex's projected construction and production schedule, and cost and production estimates, for Las Cristinas; and management's statements regarding its expectations regarding mining in Venezuela. Forward-looking statements are based on estimates and assumptions made by Crystallex in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that Crystallex believes are appropriate in the circumstances. Many factors could cause Crystallex's actual results, performance or achievements to differ materially from those expressed or implied by the forward looking statements, including: gold price volatility; impact of any hedging activities, including margin limits and margin calls; discrepancies between actual and estimated production, between actual and estimated reserves, and between actual and estimated metallurgical recoveries; mining operational risk; regulatory restrictions, including environmental regulatory restrictions and liability; risks of sovereign investment; speculative nature of gold exploration; dilution; competition; loss of key employees; additional funding requirements; and defective title to mineral claims or property. These factors and others that could affect Crystallex's forward-looking statements are discussed in greater detail in the section entitled "Risk Factors" in Crystallex's Annual Information Form (which is included in the Annual Report on Form 40-F that Crystallex files with the United States Securities and Exchange Commission (the "SEC") and elsewhere in documents filed from time to time with the Canadian provincial securities regulators, the SEC and other regulatory authorities. These factors should be considered carefully, and persons reviewing this press release should not place undue reliance on forward-looking statements. Crystallex has no intention and undertakes no obligation to update or revise any forward-looking statements in this press release, except as required by law.

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