Crystallex International Corp lost a major gold project in Venezuela and as a result 39% of market capitalisation in the same day. The Toronto based company is a junior miner listed on the Toronto Stock Exchange. The shares fell 9 cents to 14 cents after 8.5 million shares were traded.
The company received a letter from the Corporacion Venezolana de Guayana, or CVG, on Sunday which said that its contract for operating the Las Cristinas mine was unilaterally terminated. The CVG gave reasons such as lack of activity by the company on the project for over a year and other reasons of opportunity and convenience for the cancellation of the Crystallex International operating contract.
The company said that it was ready to begin construction on the site but was waiting for a permit from the government. The environment ministry had denied their request for a permit in April 2008 despite the fulfilment of the conditions to get the permit.
The mine which is located in the southern Bolivar state of Venezuela is estimated to have 17 million ounces of gold. It was the principal asset of Crystallex International. Crystallex said it was considering all steps necessary to protect its investment on behalf of all its stakeholders including the filing of the international arbitration claim.