<a href=www.vheadline.com>Venezuela's Electronic News Posted: Friday, June 20, 2003 By: David Coleman

In the latest issue of his Gold Stealth Bull Market financial newsletter, analyst John Ing says that one of the biggest myths on the North American stock markets is that Toronto headquartered Crystallex International Corporation (KRY) does not own the rights to the gigantic Las Cristinas gold mine in southeastern Venezuela.

Ing writes: "Las Cristinas was awarded to Crystallex on September 17, 2002 ... this exclusive operating agreement was signed with Venezuelan Guayana Corporation (CVG) a multi-billion state-owned company that was given authority to contract with third parties over the Las Cristinas property from the Ministry of Energy and Mines, as the executing authority under the Mining Law."

"Following the cancellation of the Placer Dome contract due to a notice of default (no gold was produced) the property was repossessed on behalf of the Republic of Venezuela under Venezuelan mining law. The contract was cancelled in early November 2001 and the assets were repossessed November 16, 22001. The contract was gazetted and the copper concessions were cancelled on March 6, 2002 ... Crystallex owns the rights: fact."

Ing continues: Crystallex has reported a reserve update at the 100% owned Las Cristinas gold project in Southeastern Venezuela where an independent study by Reno-based Mine Development Associates shows the deposit holds proven and probable reserves of 9.5 million ounces, grading 1.33 grams per tonnes.

Crystallex has hired SNC Lavalin, to complete a feasibility study of Venezuela's largest undeveloped deposit is expected this fall ... current plans call for an initial 20,000 tonnes per day operation, capable of producing oxide and sulfide ores with a capital expenditure between $225-$230 million. The first phase should produce 275,000-280,000 ounces of gold.

Deutsche Bank has been selected as project finance advisor and, despite earlier ownership questions, we believe that Las Cristinas does not have any of the political problems or lack of economics of other major projects.

Crystallex will not have to move villages, cemeteries or change their processing facilities to mine Las Cristinas ... the government is Crystallex' partner and with power, water and abundant labor, this is an excellent project.

The Gold Stealth Bull Market financial newsletter concludes: "We continue to recommend purchase since Crystallex has one of the lowest market cap per ounce of production with respect to other major underdeveloped projects. As such the longer the shares drift down here, the more likely the company will become a takeover candidate. Maison has assisted the company in recent financings."

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Friday, May 30, 2003 By: Oscar Heck

VHeadline.com commentarist Oscar Heck writes: The Venezuelan opposition seems to be full of contradictions (again). In March 2003, opposition members who were participating in the selection process of the new CNE (National Electoral College) board stated that they were happy with the way the process was being manned. The opposition implied that the people involved in the process were acting in good faith.

Now it appears that the opposition is having problems with the process regarding the choosing of the last board member. As I understand it, this last board member is important because, apart from this, the rest of the board is 50/50 pro-opposition/pro-government (although the board is supposed to be neutral, I think).

The government suggests that the issue be brought up to the TSJ (Supreme Justice Tribunal), but it appears that the opposition has a problem with that as well, because they seem to believe that the TSJ has too many pro-government judges. Very strange.

If the TSJ was politically driven in favor of Chavez, the people involved in “the stoppage” (December 2002-January 2003) and in the April 11, 2002 coup would already be in jail for having committed acts of treason and sedition … Carlos Fernandez, Carlos Ortega, Juan Fernandez, Pedro Carmona, and a bunch of other people. (Many of these people are no longer in Venezuela. Some are in Colombia, Costa Rica and the USA).

Now, the selection of the CNE board is also important for the opposition because without this new CNE board, they will not be able to legally begin the process for a referendum against Chavez.

So, why are they stalling?

If the selection process was good for the selection of the other board members, why is it not good now?

Why is the TSJ suddenly not good either?

It doesn’t make sense ... as far as I know, the TSJ is one of Chavez’ pet peeves … Chavez is continuously complaining that the TSJ is not doing its job and implies most of the judges are supporting the opposition and are corrupt.

So, why would the opposition be stalling again (without any apparent logic)?

I believe that the opposition is starting another tactic to discredit the present Venezuelan government … again. The tactic … create all sorts of scenarios to delay the referendum then blame it on Chavez and propagate this as “news” worldwide to add to their lies that Chavez is a dictator and anti-democratic.

However, I do not think that their tactics will work because Venezuelans will not be fooled again, as some 2-3 million were conned into believing that “the stoppage” and the sabotage of PDVSA (Venezuela’s national petroleum company, one of the largest in the world) would result in Chavez leaving office.

During the months of January and February 2003, Globovision (Venezuela’s 24-hour news/commentary TV station ú and pro-opposition) had countless interviews with “petroleum” experts, politicians, etc., all of which guaranteed that PDVSA would take years to recover, blaming it all on Chavez and his incompetent government. These “expert opinions” were propagated worldwide as “news” ... however, they have all been proven wrong. PDVSA production is almost back to normal after a few short months.

In the same way, as with the issue of the CNE board selection, the opposition may be attempting to begin fabricating scenarios that they will later attempt to use as ammunition against the Chavez government.

Now, about corruption … I have been having some very interesting email discussions with a Venezuelan who has very good ideas. Corruption in Venezuela has been “a way of life” for many people … I would say mostly for the upper crust such as the leaders of the CTV (Central Union Movement), members of Fedecamaras (Chamber of Commerce equivalent), politicians, lawyers, judges, and also within the police forces. During his election campaign, Chavez had apparently promised to curb corruption and jail people who are corrupt, also promising that his government would not be corrupt. Tall order!

Most opposition people appear to think that Venezuela is more corrupt than ever and that the Chavez government is more corrupt than previous ones. I argue that corruption is probably that same still but that people are talking about it more than ever, thus appearing to be greater.

One example is that the case of corruption (for misuse of government funds) against Chavez has been thrown out of court, “Supreme Tribunal throws out corruption charges against the President.”  I also believe that if the Chavez government is so corrupt (as the opposition charges), real evidence would have come out by now, after 4 years of Chavez being in power. (There are enough people who hold economic power in Venezuela that would love to see Chavez ousted from his elected post).

The person that I have been corresponding with is disappointed with the “fact” that corruption is still rampant in Venezuela and that Chavez appears to be doing nothing about it (contrary to what he promised to do). I believe that Chavez is doing what he can, especially under the circumstances (attempted coup, “the stoppage”, sabotage, etc).

First of all, if Chavez, or the Chavez government, jails people for being corrupt without going through the legal system, then Chavez and company would be acting as dictators ... not something that Chavez needs. Secondly, as far as I can see, the Chavez government is taking the legal approach to the problem of corruption. Some examples: working on the passing of anti-monopoly laws, implementing land reform, applying anti-speculation/hoarding laws (such as the seizing of hoarded chicken) and digitalizing information (such as at two of the main customs installations).

It is also important to realize that most fraud/corruption cases take years to resolve, even in countries such as Canada or the USA.

To add to the difficulty, in Venezuela, the TSJ is in disarray and the overhaul of the seemingly corrupt and inefficient TSJ has been apparently continuously hampered by anti-government interests. Without a solid and politically-neutral TSJ, anti-corruption laws will be very difficult to implement.

Overall, I believe that eradicating corruption from the mainstream of Venezuelan society will take years, probably 1-2 generations. (In Venezuela, even if a person believes that corruption is not a good thing, the person will often participate in corruption because if she/he doesn’t, then she/he will be the loser).

I believe that Venezuelans must be patient.

Chavez (or anyone else) can not quickly and magically change “traditional” habits that have been around for so many years.

Oscar Heck Oscar@VHeadline.com

Story last updated at 9:39 a.m. Friday, May 30, 2003 The Post and Courier-Los Angeles Times

CARACAS, VENEZUELA--President Hugo Chavez and opposition representatives signed a controversial peace deal Thursday that paves the way for early presidential elections but was criticized as falling far short of solving the nation's political crisis.

Government and opposition members said the agreement represents the best hope to reconcile this deeply divided country, even as some in the fractured opposition expressed serious reservations about the deal.

"The government is not going to say we've won with this agreement, and I hope the opposition won't either," said Chavez, who did not attend the signing ceremony at a hotel here Thursday. "Let's say the country won."

The agreement is the culmination of six months of arduous negotiations by the Organization of American States, backed by the Atlanta-based Carter Center, the United Nations and the six-nation Group of Friends of Venezuela, which includes the United States.

The negotiations were intended to ease deep divisions in Venezuela, which in the last 18 months has suffered through an attempted coup, a devastating general strike and a plunging economy.

Foes of Chavez, a former paratrooper first elected to the presidency in 1998, accuse him of being a communist sympathizer leading the country to ruin with a half-baked social revolution. Chavez and his supporters see the opposition as right-wing coup-mongers who have done nothing to relieve the country's poverty.

The primary point of the agreement is that both sides will follow the system in the Venezuelan Constitution for a presidential recall.

But the agreement sets no timetable for an election. It also leaves unanswered a host of difficult questions about how, exactly, to conduct such a vote.

The body designated in the constitution to oversee elections, the National Electoral Council, does not exist yet and is currently the subject of an intense dispute in the assembly regarding the appointment of its members.

Also, Chavez made no promises to forgo court challenges to a recall election, though the opposition believes such delaying tactics would cost him in international political circles.

In fact, however, Chavez has already challenged the validity of the 2.8 million signatures the opposition has collected for the recall, which it hopes to hold as soon as August.

Still, OAS Secretary-General Cesar Gaviria, who oversaw the talks, said an election might be possible as soon as November.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Thursday, May 29, 2003 By: Jorge Marin

Date: Thu, 29 May 2003 17:14:49 -0400 From: Jorge Marin Jorge.Marin@pollak.com To: Editor@VHeadline.com Subject: Objective Comment

Dear Editor: I enjoy most of the letters and editorials on your website, but when I read <a href=www.vheadline.com>Luis Zuleta's rumblings, well my stomach turned. If he is trying to present himself as an objective commentator he failed badly ... using the same excuses the opposition keeps using to justify the events of April 11, 2002 only highlights his bias.

Let's get one thing clear, two wrongs don't make a right.

The fact that Chavez was involved in a coup, back in 1992 is irrelevant to what happened last year. If the argument is that because he was involved in the fail coup he, somehow, is open to the same medicine or he is an illegitimate President ... well the majority of people elected him, so he has been legitimized. He also paid for his involvement in the 1992 attempted coup with prison time.

• The 1992 coup attempt was wrong, and the people involved were punished for it, the same should occur with the people that were involved in the 2002 coup.

There are no missing funds in the Chavez administration. If there were, the opposition would have dragged that out to the negotiating table, or to the Supreme Court ... just like they do whenever Chavez sneezes. The funds Luis Zuleta refers to were located ... were they used for other means than the intended use? Yes ... but, as I recall, these funds were used to cover a shortage in payroll funds ... they were not used for any personal gain, as Luis Zuleta insinuates.

Luis Zuleta also ascertains that just because Chavez allowed himself to be put in jail, it means that he didn't really meant to fight to the death. I guess he should have gotten himself killed, along with a lot of other people, just so that other people could say, "well I guess he meant it."

Luis Zuleta fails to mention that it was Chavez who called for the coupsters to surrender in order to avoid bloodshed in 1992. Chavez agreed to be escorted out of Miraflores in 2002, but he had a better than 50% chance of getting himself killed ... yet he realized that resisting would have cause not just his blood but his guards' and a lot of other people in the streets. He did the right thing, and the fact that he is back in power, proves he did the right thing.

Luis Zuleta also mentions that Chavez violated the law by wearing his uniform ... give me a break! What about the, so call, officers that were calling for rebellion in Altamira for months, I guess those officers are heroes to Luis Zuleta.

If Mr. Zuleta is so concerned with obeying the law, he should be very careful when he promotes that the best thing that could happen to Chavez is to be "taken out." Fomenting the overthrow of a foreign government or the assassination of a foreign leader is a violation of USA law.

Jorge Marin Jorge.Marin@pollak.com

Venezuelan, living abroad on 4/11/02 and respecting the laws of my home country.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, May 28, 2003 By: David Sheegog

Date: Wed, 28 May 2003 10:17:28 -0500 From: David Sheegog davidsheegog@hotmail.com To: Editor@VHeadline.com Subject: Oliver Campbell deserves credit

Dear Editor: Oliver Campbell deserves credit for giving credit to PDVSA for restoring production from Venezuela's oil fields ... his caution against listening too much to "experts" should also be taken to heart.

There is an iron law of petroleum production, however, that is missing from his article, and that is: peak of production follows peak of discovery.

That has happened already in the United States, where peak discovery was in 1939 and peak production in 1970.

Once a net exporter of petroleum, the US now imports 56% of its consumption.  Peak production has happened as well to three out of four of those which Campbell mentions ... the North Sea, Libya, and Prudoe Bay ... it will happen in Nigeria and Venezuela. Peak of world discovery was 1973. (Statistics are from the US Energy Information Agency)

The importance of this fact is that, if a major oil producing country, such as Venezuela, intends to have a vibrant economy after peak of oil production, planning for the eventual depletion of it's oil reserves is extremely important work for everyone: the government, the private business sector, and all other institutions and individuals that can contribute to a country's long range planning.

That work was not done ... still isn't being done in the US, with the result that this country is now, by far, the largest end-user (and waster) of petroleum in the world on an absolute and per-capita basis. We have an economy that is addicted to oil ... cheap oil ... and the "planning," if you can call it that, is to use our incredible military strength to insure that we keep getting it.

An immoral approach by most anyone's standards, and one not possible for the rest of the world.

The task before all of us in the developed and developing world is to envision the world without cheap oil. That world will have to look and function differently than the one we live in today.

Mr. Campbell, is right that improved recovery methods have made it possible cost-effectively to extend the life of many reservoirs. I witnessed that in my native Oklahoma; however, there are now more capped wells than producing wells here. When it takes more oil-produced energy to pump oil from a well than is recovered, then all the improved recovery in the universe can't make it cost-effective to remove that oil.

Energy economists refer to this as EROEI (energy-return-on-energy-invested).

The energy cost of deep sea production and other difficult extraction zones has already prohibited some of them from being developed. Another iron law of petroleum production is that the easiest and cheapest to produce fields will be developed first ... they have been already.

Venezuela, like the United States, has been fortunate to have abundant oil and gas resources. But those resources are finite. Whether the world has another 40 or 100 years of usable petroleum is less moot now than it was when the first predictions were "40 more years" as Mr. Campbell remembers. Improved science in geology, exploration, reservoir engineering, secondary recovery technology etc. have given us a much clearer picture of the world's petroleum reserves and how long they will last.

Peak world oil production will come within the next twenty years ... the depletion curves on any and all fields look much steeper in descent than production curves going up simply because we've become so much better at extraction, as Mr. Campbell points out.

With proper planning, the remaining oil could be made to last a very long time ... but that planning is mostly not being done, except in a handful of places, Denmark, Netherlands, Iceland, Cuba, that I am aware of.

• President Chavez Frias deserves credit for his initiatives to diversify the Venezuelan economy as well as for his efforts in restructuring PDVSA to enable it to get back most of it's lost production so quickly.

In the long, long haul the restructuring of Venezuela's economy to be more self-sufficient and energy efficient is the more important ... as it is for the whole world.

David Sheegog davidsheegog@hotmail.com Oklahoma, USA