CVG: Crystallex International hires Deutsche Bank to lead financing at Las Cristinas

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Monday, May 19, 2003 By: David Coleman

A press release from CVG HQ in Puerto Ordaz states that German Deutsche Bank will lead banks in charge of financing part of an estimated US$500 million investment at the Las Cristinas gold project in southeastern Venezuela.

Exclusively contracted project operator Crystallex International will finance a fraction of the total amount through the direct investment according to Crystallex International president & CEO Marc J. Oppenheimer, executive president Robert Fung and the president of the Venezuelan Guayana Corporation (CVG), Major General (ret.) Francisco Rangel Gomez.

Oppenheimer explains that the German bank counts on worldwide financing experience through European, North and Latin American institutions except for multilateral entities. “Every mining project relies on different sources of fund-raising: financing and direct investment ... the first one is a long-term debt that honors said project and the second one is the own contribution of the company ; the proportion of both components will be known as soon as the feasibility study is over.”

"Las Cristinas is more appealing for financial entities since it accounts on proven reserves equivalent to 1.33 g/t (higher than the 1.12 g/t estimated by Minca) at US$325 per ounce ($50 less than the price set by Minca) making it less subject to price fluctuation according to data provided by Mine Development Associates (MDA) last week. Simultaneously, new drillings are being performed and the preliminary data guarantee higher reserves and tenor allowing, in this way, more independency from the price."

Deutsche Bank executive Jeffrey Stufsky describes the exclusive operation contract between the CVG and Crystallex as excellent, pointing out the importance of setting a short-term profit-making timeframe.

Rangel Gomez says the main interest on the part of the CVG is "the consolidation of sustainable economical activity in the southern zone of Bolivar State, with the creation of employment and the social benefits welfare for the communities ... this will accrue profit to Venezuela and also signal the start-up of mining projects in Bolivar State.”