A recent post by Ant & Sons details four signs that Venezualan gold company Crystallex might receive environmental permitting approval soon. They include the following: support from the Venezualan Permanent Environmental Commission, recent bought deal financing, appointment of William Faust as COO and Senior VP, and fellow gold miner Gold Reserve Inc. receiving the same approval.

Certainly, the stock of Gold Reserve has appreciated significantly over the past few weeks as the Brisas Project economics began to outshine Venezualan risk: proven and probably reserves of ~10.4 million ounces of gold and 1.3 billion lbs of copper with average estimated annual production at 456,000 oz Au, 60 million lbs Cu and an internal rate of return (IRR) >30% at today's prices.

The President of Gold Reserve recently came onto Canada's Business News Network (BNN) and gave a brief synopsis on both the activities of the company, the general mining environment in Venezuala, and, of great interest, remarks on neighbour Crystallex:

Doug Belanger, president, Gold Reserve Inc.

Building Venezuelan Mine
We mobilized our contractor SNC-Lavelin..we are engaging local population, train them, use them for of the prime requirements of the government to involve local people so they benefit from large development

Raising ~$600 Million for Capital Costs
Four mandated banks: Corporacion Andina de Fomento (CAF), Export Development Canada (EDC), UniCredit Group (as HVB) and WestLB of Germany for $450 million debt package, and then we will look for equity and quasi-equity to make up the balance

Hugo Chavez
Politicians say a lot but need to look at actions; we have gotten more done in his administration than the three previous ones combined..beyond that, they follow the rule of law, we have had no trouble with Venezuelan government

They have a 34% income tax rate, pretty standard..4% royalty on gold, same for copper, not too low, not too high..Hugo Chavez recently signed a decree decreasing value-added tax, trying to encourage investment..they are making $150-200 million in oil per day, we will not do that in a year..what they are more interested in developing mining industry

Crystallex Permit?
I do not know their chances of getting approval..we had an investment roundtable with Ministry of Mines, Environment, Crystallex ambassador and ourselves, agreed on sharing of properties, waste management, airstrip..we both save money..after we got government to agree to permit separately..since then we have moved on our own path..the government wants these projects to go forward..

Crystallex's stock rose in sympathy with Gold Fields when approval of the latter's environmental permitting hit the newswires. However, as Doug Belanger stated, it was agreed upon with the Venezualan government that both companies will be evaluated separately, even though they will share some the same infrastructure.

Ultimately, I think that the Las Cristinas will be developed, but details of the arrangement between Crystallex and the Venezualan government are still up in the air. A recent Reuters report dated April 18 states that the government still has not made up its mind on whether or not to put the project under state control, and correspondingly, if Crystallex will be made into a minority partner; all of this in the context of a lingering, still unapproved environmental permit.