news at BVGBolivar Goldfields Ltd -
Crystallex to acquire Venezuelan assets of Bolivar Goldfields
Bolivar Goldfields Ltd BVG
Shares issued 14,285,105 2000-04-19 close $1.72
Friday Apr 21 2000
See Crystallex International Corporation (KRY) News Release
Mr. Marc Oppenheimer reports
Crystallex International has signed a letter of intent to acquire all of the Venezuelan assets of Bolivar Goldfields. The acquisition, subject to final due diligence, regulatory approvals and approval of both companies' board of directors, will include the Tomi mine and associated processing facility, as well as 44,438 hectares of exploration lands. The Tomi mine is currently producing approximately 70,000 ounces of gold on an annual basis at costs under $200 per ounce. The exploration lands include the Dividival I and II and the Belen II concessions in the El Callao greenstone belt, known as Venezuela's most prolific gold producer over the past 150 years.
Located in Venezuela's Bolivar state, the Tomi concession at March 1, 2000, reportedly contained open-pit minable reserves of 263,000 ounces of gold. The current reserves, located in four pits: McKenzie, Charlie Richards, Milagrito and Fosforito, would be sufficient to support a mine life of four years. In addition to the concession's open-pit reserves, drilling conducted by Bolivar below the Charlie Richards pit has intersected several high-grade intervals including gold values of 6.06 grams per tonne over 65 metres, 17.39 grams per tonne over 21 metres and 11.25 grams per tonne over 28 metres, indicating a strong potential for underground mining. Previous gold occurrences also indicate excellent potential on other parts of the Tomi concession as well as on the Dividival and Belen concessions.
Subject to due diligence, and regulatory and board approvals, Crystallex will purchase the Venezuelan assets for $10.5-million (U.S.) cash and the assumption of up to $13-million (U.S.) in existing long-term debt associated with the assets. Additionally, Crystallex and Bolivar will exchange two-year warrants to purchase 1.0 million common shares in each other's capital, at a 40-per-cent premium over the average closing price of each company's stock for 10 trading days prior to acceptance of the offer.
According to Crystallex president and chief executive officer, Marc J. Oppenheimer, Crystallex intends to finance the acquisition through lines of credit as well as non-recourse project financing. "We have already obtained an expression of interest from our bank for restructuring the debt associated with Bolivar's Venezuelan assets," Mr. Oppenheimer said.
"This acquisition will do more than increase our gold production, reserves and exploration potential," Mr. Oppenheimer continued. "It will be a significant addition to Crystallex's already sizable commitment to Venezuela and is consistent with our plans to work with the Venezuelan government to develop the country's natural resources efficiently and profitably. Our long-term working relationship with the people and government of Venezuela has provided us with a unique knowledge about the region that will be a great benefit in developing these mineral properties. In addition, the strategic location of the concessions and particularly the mill may also provide opportunities to develop efficiencies between this and other projects in Venezuela."
WARNING: The company relies on litigation protection for "forward-looking" statements.
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