June 14, 2011 / 10:37 PM / 6 years ago

UPDATE 1-Crystallex to seek compensation from Venezuela

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June 14 (Reuters) - Canadian gold miner Crystallex International Corp said it will seek to restore permit to develop the Las Cristinas gold mine in Venezuela and compensation for the interim losses suffered.

Alternatively, Crystallex said it may seek full compensation of more than $3.8 billion for the contract cancellation.

A state-owned Venezuelan company had unilaterally decided to end their 2002 contract on Las Cristinas project in February.

The Mine Operating Contract (MOC) was signed in September 2002 and granted it exclusive rights to explore and develop the Las Cristinas properties, considered one of Latin America's largest gold deposits.

The MOC was terminated despite following all the requirements needed to get the mining permit, Crystallex said.

The company is now seeking the restitution of its investments, including the MOC, and the issuance of the permit and compensation for interim losses suffered.

Crystallex, which had included a going concern note in last year's annual report, said it will sell the rest of the Las Cristinas project equipment valued at $27.5 million.

The company is also negotiating to restructure $100 million of debt with various noteholders, while pursuing refinancing opportunities with other parties.

Separately, Crystallex posted a quarterly net loss of $15.1 million, or 4 cents a share, compared with loss of $8.2 million or 3 cents a share, a year ago, according to its website.

Shares of the company closed at 12 Canadian cents on Tuesday on the Toronto Stock Exchange. (Reporting by Maneesha Tiwari in Bangalore; Editing by Gopakumar Warrier)

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