Yesterday Crystallex International Corporation (AMEX Trading Symbol: KRY) (Price: $3.6875) bought ads in newspapers in Canada and the U.S. The ads reiterated Crystallex’s false Las Cristinas ownership claims and its implausible denials of Mr. Rafael Rodriquez Acosta’s charges. The ads contain false statements including a quote attributed to the Chairman of the Energy and Mining Committee claiming that Mr. Acosta does not represent the Venezuelan government. Mr. Acosta did and does represent the Venezuelan government and its official position concerning Crystallex. This statement appears to have been made by Congressman Bernardo Alvarez. Crystallex knows or should know that Mr. Alvarez is not the Chairman of the Energy and Mining Committee. Congressman Omar Barboza is the Chairman of the Energy and Mining Committee. Mr. Alvarez has stated he has no knowledge of the Crystallex fraud investigation and has no business commenting on Crystallex. Mr. Acosta has been President of Venezuela’s Congressional Mining Sub-Committee for 12 years and was a leading member of the Special Committee that investigated Crystallex. Last week, Mr. Acosta accused Crystallex of defrauding investors by claiming it owned the Carabobo mining concessions and by claiming it has a legal action pending against the Las Crisitinas 4 and 6 gold mining concessions.
The ads stated that “Crystallex enjoys a good working relationship with Venezuela and its government”. The Attorney General of Venezuela, the Ministry of Energy and Mines, the state-owned Corporacion Venezolana de Guayana, State and City local officials, and union officials and members all strongly and publicly oppose Crystallex’s Las Cristinas claim. The ad also states that Mr. Alvarez claims that the dispute is between “two firms”. This is not true. We have spoken to Mr. Alvarez in Venezuela. Mr. Alvarez confirmed that he is perfectly aware that the dispute is between Crystallex and his own government and not between Crystallex and Placer Dome. Mr. Alvarez’s party formerly called the Radical Cause recently merged with Country for All. Both parties have little support and less political power. Combined they hold only 3 of 37 Congressional seats and control no committees. Mr. Alvarez’s party may have received support from Crystallex during their attempt to obtain the Carabobo concessions.
Asensio & Company, Inc. maintains a Strong Sell and Short Sell recommendation on shares of Crystallex’s stock.
Short selling involves a risk not associated with the purchase of stock including, but not only limited to, unlimited loss and stock borrowing risks. Additional information is available upon request.