An Update On Venezuelan Mining Company Crystallex

“Ian, should we continue holding the Crystallex (KRY) position you recommended in June?”

Having just received that question, we wanted to answer it publicly in case you had a similar question.

The shortest, quickest answer is yes. The longer answer:

There’s still no word on Crystallex’s future in Venezuela. But the company is reporting that a team led by the Vice Minister completed a site visit of the Las Cristinas project.

“While it’s early to predict the results of the process, we are encouraged by the progress made and the completion of the site visit, and remain optimistic about a prompt and successful completion of the process,” says Crystallex’s Chairman and CEO.

And, we remain as bullish as the CEO.

And if you’re new to the KRY stock, or missed what we reported in June 2008, here’s more.

“Mid-May 2008, all looked grim for shares of Crystallex, as Venezuela pulled the plug on the company’s Las Cristinas property. Production was expected to begin there by 2009.

At the time, Venezuela refused to grant a permit to KRY for the Las Cristinas mine after deciding not to grant licenses for open-pit mining for gold, diamonds and coal. Instead, they opted to step up oversight on the mining industry. Citing ecological damage for the move, Venezuela dashed KRY’s hopes to mine in the nine million acre reserve.

But that was in May.

Today, shares of Crystallex are a buy after the Venezuelan government said it was willing to reconsider the cancellation of the permit for the Las Cristinas project. In this release, the company said it was invited to a meeting by representatives of the Ministry of the Environment, and was told that possible modifications of the Las Cristinas project could result in an issued permit.

Modifications included further optimizing the social project in the area, mitigating the impact of open vein deposit in the affected areas of the Imataca, improving the remediation plans at the end of the mine life as well as remediation of the existing environmental damage caused by illegal miners.

Even better, from the minutes from a National Assembly committee meeting, Crystallex learned that representatives from the Ministry of Mines “confirmed support” for the company.

But nothing is set in stone just yet. So far, the news is good for the company and shareholders of the beaten down stock. Buy it. Hold it. And sit tight. We’ll keep you up to date.

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