The Microcap Speculator

Love it or hate it, few would dispute that the decision on Crystallex’s (KRY) mining permit application was a make or break event. Unfortunately for Crystallex investors, Venezuela denied the permit. The decision effectively ends KRY’s plans to exploit Las Cristinas, one of the world’s premier gold formations.

CRYSTALLEX INTERNATIONAL CORPORATION (Toronto:KRY.TO - News)(AMEX:KRY - News) has become aware that the Director General of the Administrative Office of Permits at the Ministry of the Environment and Natural Resources of Venezuela (”MinAmb”) has issued a communication to the Corporacion Venezolana de Guayana (”CVG”), the owner of the Las Cristinas concessions, denying a request for the authorization to affect natural resources to carry out exploration activities in the mining area of Las Cristinas in Sifontes, Bolivar State.

In issuing the communication, the Director General cites sensitivities surrounding indigenous peoples, the small miners and the environment in the area generally known as the Imataca Forest Reserve, which contains a number of mining projects, which like those of Crystallex, are seeking the required permits to continue their development and exploitation.

On the news, Crystallex shares dropped as low as $.50 and closed at $.91. The company says it is considering options “including an application for reconsideration.” Its time for Crystallex to be honest with investors. If Chavez wanted Crystallex to get the permit, it would have received the permit. As I stated last August, the fact that the permit decision was taking so long suggested that Chavez was not lending his support.

I think its game over for Crystallex and Las Cristinas. I’m not sure what the company is worth without its flagship venture, but it sure isn’t worth its current market cap of over $280M.

DISCLOSURE: No position.