Crystallex meltdown ugly, but not surprising

The latest news out of Venezuela, where the regime has a well-established disdain for North American resource companies, has knocked Crystallex back 67 cents to 94 cents on the TSX, well off the gold miner's 52-week high of $5.70. The stock is also now miles under the price on $2.10-a-unit financing done on Feb. 5, which saw the company raise $60-million by selling units consisting of one share and half a warrant. That last prospectus - the financing was led by Macquarie Capital Markets Canada - contained a nine pages of “Risk Factors,” a detailed description of the perils of dealing in Venezuela. (Crystallex chairman Robert Fung was a partner in Macquarie's predecesors, Orion Financial and Yorkton Securities.) Starting on page 17, readers encountered specific warnings on the fact that environmental permits were still pending, and more general references to the capricious nature of the Hugo Chavez regime.