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Reserves at Crystallex's (KRY) Las Cristinas Project in Venezuela have increased by 24% or approximately 3.3 million ounces, according to Wellington West analyst Catherine Gignac.

She said in a note to clients that the increase was a combination of a higher gold price assumption of US$550 per ounce versus US$450 in 2005 and a drill program delineating the Las Cristinas property.

She added, however, that the current reserves of roughly 17 million ounces were negatively affected by rising operating costs at the project.

"Operating costs are now estimated to average US$9.81 per tonne over the life of mine with total cash cost to average $339 per ounce compared to the previous estimate of $221 per ounce," Ms. Gignac wrote. "This increase in operating cost accounted for the reduction in reserves of approximately 5.9 million ounces."

As for the ongoing delay in receiving the final permit for the project from the Venezuelan government, Ms. Gignac told frustrated investors that the government appears to support the development and simply has a different timeline than North American capital markets.

She said it could take "six weeks or six months for the go-ahead permit," adding that once a permit is released, many uncertainties will be resolved.

She maintained her "strong buy" and left her C$10 target price unchanged.

KRY 1-yr chart:

Source: Patience, Crystallex Investors: The Venezuelan Government Will Eventually Come Through