---

Exhibit 1.2

Crystallex
International Corporation



CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010

---

Crystallex International Corporation

Table of Contents

|Responsibility for Financial Reporting                                        | 1
|----------------------------------------------------------------------------- | -
|Managements Report on Internal Control over Financial
      Reporting        | 1
|Managements Plans to Enhance Internal
      Control over Financial Reporting | 2
|Independent Auditors Report                                                  | 3
|Consolidated Balance Sheets                                                   | 5
|Consolidated Statements of Operations, Comprehensive Loss
      and Deficit   | 6
|Consolidated Statements of Shareholders
      Deficiency                     | 7
|Consolidated Statements of Cash Flows                                         | 8
|Notes to the Consolidated Financial
      Statements                          | 9

---

Crystallex International Corporation

Responsibility for financial reporting

The Board of Directors which, among other things, is
responsible for the consolidated financial statements of the Company, delegates
to management the responsibility for the preparation of the financial statements
and internal controls. The Board of Directors delegates to the Audit Committee
the responsibility for ensuring that management fulfils its responsibilities in
respect of financial reporting and internal control. Each year the shareholders
appoint independent auditors to audit and report directly to them on the
financial statements.

The consolidated financial statements have been prepared using
appropriate generally accepted accounting principles and estimates considered
necessary by management to present fairly and consistently the consolidated
financial position and the results of operations.

The Companys Audit Committee, which is appointed annually by
the Board of Directors, has three independent directors. The Committee meets
regularly with management and with the independent auditors to satisfy itself
that each party is properly discharging its responsibilities and to review the
financial statements and the independent auditors report.
PricewaterhouseCoopers LLP, the independent auditor appointed by the
shareholders to audit the consolidated financial statements, have full and
unrestricted access to the Audit Committee. The Audit Committee reports its
findings to the Board of Directors for consideration in approving the financial
statements for issuance to the shareholders.

Managements report on internal control over financial
reporting

The management of Crystallex International Corporation (the
Company) is responsible for establishing and maintaining adequate internal
control over financial reporting under Rule 13a-15(f) and 15d-15(f). The
Securities Exchange Act of 1934 defines this as a process designed by, or under
the supervision of, the Companys principal executive and principal financial
officers and effected by the Companys Board of Directors, management and other
personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles, and
includes those policies and procedures that:

- Pertain to the maintenance of records that, in reasonable detail,
  accurately and fairly reflect the transaction and dispositions of the assets
  of the Company;
- Provide reasonable assurance that transactions are recorded as necessary
  to permit preparation of financial statements in accordance with generally
  accepted accounting principles, and that receipts and expenditures of the
  Company are being made only in accordance with authorizations of management
  and directors of the Company; and
- Provide reasonable assurance regarding prevention or timely detection of
  unauthorized acquisition, use or disposition of the Companys assets that may
  have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that
the degree of compliance with policies or procedures may deteriorate.

Management has evaluated the effectiveness of the Companys
internal control over financial reporting as at December 31, 2010 based on the
criteria set forth in Internal ControlIntegrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO).

A material weakness is a deficiency, or combination of
deficiencies, in internal control over financial reporting, such that there is
a reasonable possibility that a material misstatement of the company's financial
statements will not be prevented or detected on a timely basis.

1

---

As at December 31, 2010, the Company identified material
weaknesses as follows:

| | (a) | Information and communication: The Company does not have
      a defined process to ensure all relevant events and obligations arising in
      Venezuela, including the details of contracts and other arrangements, are
      provided in a complete, accurate and timely manner to those responsible
      for the financial reporting function.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                    
| | (b) | Delegation of authority: The Company does not have a
      comprehensive defined authority structure or framework to specify the
      thresholds for those acting on behalf of the Company.                                                                                                                                                       

Either of these material weaknesses could result in a material
misstatement to the Companys annual consolidated financial statements that
would not be prevented or detected. Material weakness (b) noted above could also
result in the unauthorized acquisition, use, or disposition of the Companys
assets that could have a material effect on the consolidated financial
statements.

As a result of the material weaknesses described above,
Management has concluded that, as at December 31, 2010, the Companys internal
control over financial reporting was not effective.

The effectiveness of the Companys internal control over
financial reporting as at December 31, 2010 has been audited by
PricewaterhouseCoopers LLP, our independent auditor, as stated in their report
which appears herein.

Managements plans to remediate material weakness

To remediate the material weaknesses in the Companys internal control over
financial reporting, Management is designing additional controls to specifically
augment those controls relating to information and communication. Management is
redesigning the existing authority structure or framework, which specifies the
thresholds for those acting on behalf of the Company in approving transactions
relating to engineering, procurement and construction management transactions to
include all transactions.

2

---

Crystallex International Corporation

Independent Auditors Report

To the Shareholders of Crystallex International Corporation

We have completed integrated audits of Crystallex International
Corporations 2010 and 2009 consolidated financial statements and of its
internal control over financial reporting as at December 31, 2010. Our opinions,
based on our audits, are presented below.

Report on the consolidated financial statements

We have audited the accompanying consolidated financial
statements of Crystallex International Corporation, which comprise the
consolidated balance sheets as at December 31, 2010 and 2009 and the
consolidated statements of operations, comprehensive loss and deficit,
shareholders deficiency and cash flows for the years then ended, and the
related notes including a summary of significant accounting policies.

Managements responsibility for the consolidated financial
statements

Management is responsible for the preparation and fair
presentation of these consolidated financial statements in accordance with
Canadian generally accepted accounting principles and for such internal control
as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to
fraud or error.

Auditors responsibility

Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. We conducted our audits
in accordance with Canadian generally accepted auditing standards and the
standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform an audit to obtain reasonable
assurance whether the consolidated financial statements are free from material
misstatement. Canadian generally accepted auditing standards also require that
we comply with ethical requirements.

An audit involves performing procedures to obtain audit
evidence, on a test basis, about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditors judgment,
including the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the
companys preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting principles and policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements.

We believe that the audit evidence we have obtained in our
audits is sufficient and appropriate to provide a basis for our audit opinion on
the consolidated financial statements.

Opinion

In our opinion, the consolidated financial statements present
fairly, in all material respects, the financial position of Crystallex
International Corporation as at December 31, 2010 and 2009 and the results of
its operations and cash flows for each of the years then ended in accordance
with Canadian generally accepted accounting principles.

Emphasis of matter

Without qualifying our opinion, we draw attention to note 1 to
the consolidated financial statements which describes matters and conditions
that indicate the existence of a material uncertainty that may cast substantial
doubt about the companys ability to continue as a going concern.

Report on internal control over financial reporting

We have also audited Crystallex International Corporations
internal control over financial reporting as at December 31, 2010, based on
criteria established in Internal Control - Integrated Framework, issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Managements responsibility for internal control over
financial reporting

Management is responsible for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting, included in the accompanying
Managements Report on Internal Control over Financial Reporting.

3

---

Crystallex International Corporation

Auditors responsibility

Our responsibility is to express an opinion on the companys
internal control over financial reporting based on our audit. We conducted our
audit of internal control over financial reporting in accordance with the
standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was
maintained in all material respects.

An audit of internal control over financial reporting includes
obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, testing and evaluating the
design and operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we consider necessary in the
circumstances.

We believe that our audit provides a reasonable basis for our
opinion on the companys internal control over financial reporting.

Definition of internal control over financial reporting

A companys internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A
companys internal control over financial reporting includes those policies and
procedures that (i) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the companys assets that could have a
material effect on the financial statements.

Inherent limitations

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.

Basis for adverse opinion

A material weakness is a deficiency, or a combination of
deficiencies, in internal control over financial reporting, such that there is a
reasonable possibility that a material misstatement of the annual financial
statements will not be prevented or detected on a timely basis. As at December
31, 2010, material weaknesses have been identified relating to information and
communication and delegation of authority and are described in Managements
Report on Internal Control over Financial Reporting.

We considered these material weaknesses in determining the
nature, timing, and extent of audit tests applied in our audit of the December
31, 2010 consolidated financial statements, and our opinion regarding the
effectiveness of the Companys internal control over financial reporting does
not affect our opinion on those consolidated financial statements.

Adverse opinion

In our opinion, Crystallex International Corporation did not
maintain, in all material respects, effective internal control over financial
reporting as at December 31, 2010 based on criteria established in Internal
Control - Integrated Framework issued by COSO.

/s/ PricewaterhouseCoopers LLP

Chartered Accountants, Licensed Public Accountants

Toronto, Canada
March 31, 2011

4

---

|Crystallex International Corporation
|------------------------------------
|Consolidated Balance Sheets         
|(US$ thousands)                     

|                                                                                                   |   | December 31 |   |   | December 31 |  
|-------------------------------------------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                                                                   |   | 2010        |   |   | 2009        |  
|                                                                                                   |   |             |   |   |             |  
|Assets                                                                                             |   |             |   |   |             |  
|Current                                                                                            |   |             |   |   |             |  
|Cash and cash
      equivalents (Note 13)                                                          | $ | 16,128      |   | $ | 6,897       |  
|Accounts receivable                                                                                |   | 108         |   |   | 780         |  
|Prepaid expenses,
      deposits and other assets                                                  |   | 1,435       |   |   | 515         |  
|Restricted cash (Note 7)                                                                           |   | -           |   |   | 4,688       |  
|Equipment held for sale
      (Note 7)                                                             |   | -           |   |   | 3,180       |  
|Discontinued operations (Note 5)                                                                   |   | 941         |   |   | 1,129       |  
|                                                                                                   |   |             |   |   |             |  
|                                                                                                   |   | 18,612      |   |   | 17,189      |  
|                                                                                                   |   |             |   |   |             |  
|Property, plant and equipment (Note 6)                                                             |   | 33,200      |   |   | 39,203      |  
|Value-added taxes
      recoverable      (net of provision of
      $2,171 (2009 - $nil)) (Note 6) |   | -           |   |   | 1,736       |  
|                                                                                                   |   |             |   |   |             |  
|                                                                                                   | $ | 51,812      |   | $ | 58,128      |  
|                                                                                                   |   |             |   |   |             |  
|Liabilities                                                                                        |   |             |   |   |             |  
|Current                                                                                            |   |             |   |   |             |  
|Accounts payable and
      accrued liabilities                                                     | $ | 9,528       |   | $ | 8,043       |  
|Bank loan (Note 8)                                                                                 |   | 930         |   |   | -           |  
|Demand loan (Note 9)                                                                               |   | 2,500       |   |   | -           |  
|Promissory note (Note 7)                                                                           |   | -           |   |   | 894         |  
|Notes payable (Note 10)                                                                            |   | 95,035      |   |   | -           |  
|Discontinued operations (Note 5)                                                                   |   | 2,364       |   |   | 1,043       |  
|                                                                                                   |   |             |   |   |             |  
|                                                                                                   |   | 110,357     |   |   | 9,980       |  
|                                                                                                   |   |             |   |   |             |  
|Discontinued operations (Note 5)                                                                   |   | 2,081       |   |   | 2,217       |  
|Notes payable (Note 10)                                                                            |   | -           |   |   | 90,639      |  
|                                                                                                   |   |             |   |   |             |  
|                                                                                                   |   | 112,438     |   |   | 102,836     |  
|                                                                                                   |   |             |   |   |             |  
|                                                                                                   |   |             |   |   |             |  
|Shareholders Deficiency                                                                           |   |             |   |   |             |  
|Share capital (Note 11)                                                                            |   | 588,745     |   |   | 561,751     |  
|Contributed surplus                                                                                |   | 40,643      |   |   | 35,366      |  
|Accumulated other comprehensive income                                                             |   | 11,959      |   |   | 11,959      |  
|Deficit                                                                                            |   | (701,973    | ) |   | (653,784    | )
|                                                                                                   |   |             |   |   |             |  
|                                                                                                   |   | (60,626     | ) |   | (44,708     | )
|                                                                                                   |   |             |   |   |             |  
|                                                                                                   | $ | 51,812      |   | $ | 58,128      |  

Nature of operations and going concern (Note 1)
Contingencies (Note 14)

(See accompanying notes to the consolidated financial
statements)

Approved on behalf of the Board of Directors

|/s/ Robert Fung, Director | /s/ Johan vant Hof, Director
|------------------------- | -----------------------------

5

---

|Crystallex International Corporation                                       
|---------------------------------------------------------------------------
|Consolidated Statements of Operations, Comprehensive
      Loss and Deficit
|(US$ thousands, except for share and per share amounts)                    

|                                                                                 |   | Years ended December 31 |  
|-------------------------------------------------------------------------------- | - | ----------------------- | -
|                                                                                 |   | 2010                    |  
|(Expenses) income                                                                |   |                         |  
|General and administrative                                                       | $ | (12,187                 | )
|Litigation                                                                       |   | 319                     |  
|Interest on notes payable                                                        |   | (13,771                 | )
|Interest on promissory
      note and demand loan                                |   | (340                    | )
|Foreign currency exchange gain                                                   |   | 949                     |  
|Write-down of property,
      plant and equipment (Note 6)                       |   | (18,929                 | )
|Loss on sale of equipment                                                        |   | -                       |  
|Write-down of equipment
      held for sale                                      |   | -                       |  
|Provision for value-added taxes
      recoverable                                |   | (2,171                  | )
|                                                                                 |   |                         |  
|Interest and other income                                                        |   | 79                      |  
|Loss from continuing operations
      before      income taxes                   |   | (46,051                 | )
|                                                                                 |   |                         |  
|Future income tax recovery                                                       |   | -                       |  
|                                                                                 |   |                         |  
|Loss from continuing operations                                                  |   | (46,051                 | )
|                                                                                 |   |                         |  
|Loss from discontinued
      operations,      net of income taxes
      (Note 5) |   | (2,138                  | )
|                                                                                 |   |                         |  
|Net loss and comprehensive loss                                                  |   | (48,189                 | )
|                                                                                 |   |                         |  
|Deficit, beginning of year                                                       |   | (653,784                | )
|                                                                                 |   |                         |  
|Deficit, end of year                                                             | $ | (701,973                | )
|                                                                                 |   |                         |  
|                                                                                 |   |                         |  
|Loss per common share from continuing operations                                 |   |                         |  
| Basic and diluted                                                              | $ | (0.14                   | )
|Loss per common share from discontinued operations                               |   |                         |  
| Basic and diluted                                                              |   | (0.01                   | )
|                                                                                 |   |                         |  
|Loss per common share                                                            |   |                         |  
| Basic and diluted                                                              | $ | (0.15                   | )
|                                                                                 |   |                         |  
|                                                                                 |   |                         |  
|Weighted average number
      of      common shares outstanding                  |   | 330,297,171             |  

(See accompanying notes to the consolidated financial
statements)

6

---

|Crystallex International Corporation               
|---------------------------------------------------
|Consolidated Statements of Shareholders Deficiency
|(US$ thousands, except as noted)                   

AccumulatedNumber of
    
    
    
    
    
    Number of
    
    
    
    
    
    othercommon shares
    
    
    
    
    
    warrants
    
    
    Contributed
    
    
    comprehensive(thousands)
    
    
    Amount
    
    
    (thousands)
    
    
    surplus
    
    
    income
    
    
    Deficit
    
    
    TotalBalance at December 31, 2008
    
    294,818
    
    $
    561,751
    
    
    28,695
    
    $
    33,971
    
    $
    11,959
    
    $
    (339,885
    )
    $
    267,796Stock-based compensation
    
    -
    
    
    -
    
    
    -
    
    
    1,150
    
    
    -
    
    
    -
    
    
    1,150Warrants for advisory services
    
    -
    
    
    -
    
    
    3,000
    
    
    245
    
    
    -
    
    
    -
    
    
    245Loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (313,899
    )
    
    (313,899
    )Balance at December 31, 2009
    
    294,818
    
    
    561,751
    
    
    31,695
    
    
    35,366
    
    
    11,959
    
    
    (653,784
    )
    
    (44,708
    )Public offering
    
    70,000
    
    
    26,994
    
    
    35,000
    
    
    3,611
    
    
    -
    
    
    -
    
    
    30,605Equity component of    demand loan
    
    -
    
    
    -
    
    
    -
    
    
    200
    
    
    -
    
    
    -
    
    
    200Stock-based compensation
    
    -
    
    
    -
    
    
    -
    
    
    1,466
    
    
    -
    
    
    -
    
    
    1,466Loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (48,189
    )
    
    (48,189
    )Balance at
      December 31, 2010
    
    364,818
    
    $
    588,745
    
    
    66,695
    
    $
    40,643
    
    $
    11,959
    
    $
    (701,973
    )(a)
    $
    (60,626
    )


a) Includes total comprehensive deficit as at December 31, 2010
of $(690,014) (2009 - $(641,825)

(See accompanying notes to the consolidated financial
statements)

7

---

|Crystallex International Corporation 
|-------------------------------------
|Consolidated Statements of Cash Flows
|(US$ thousands)                      

|                                                                                                        |   | Years ended December 31 |  
|------------------------------------------------------------------------------------------------------- | - | ----------------------- | -
|                                                                                                        |   | 2010                    |  
|                                                                                                        |   |                         |  
|Cash flows used in operating activities                                                                 |   |                         |  
|Loss from continuing operations                                                                         | $ | (46,051                 | )
|Items not affecting
      cash:                                                                         |   |                         |  
|Write-down of
      property, plant and equipment                                                       |   | 18,929                  |  
|Provision for value-added taxes recoverable                                                             |   | 2,171                   |  
|Write-down of
      equipment held for sale                                                             |   | -                       |  
|Loss on sale of equipment                                                                               |   | -                       |  
|Future income tax
      recovery                                                                        |   | -                       |  
|Interest accretion                                                                                      |   | 4,596                   |  
|Stock-based
      compensation                                                                          |   | 1,392                   |  
|Warrants issued for advisory services                                                                   |   | -                       |  
|Unrealized gain on
      translation of future income taxes                                             |   | -                       |  
|Unrealized foreign currency exchange (gain) loss                                                        |   | (512                    | )
|Changes in non-cash working capital:                                                                    |   |                         |  
|Decrease (increase) in accounts receivable                                                              |   | 602                     |  
|(Increase)
      decrease in prepaid expenses,
      deposits              
      and other assets      |   | (804                    | )
|(Decrease)
      increase in accounts
      payable              
      and accrued liabilities         |   | (76                     | )
|                                                                                                        |   |                         |  
|                                                                                                        |   | (19,753                 | )
|                                                                                                        |   |                         |  
|Cash flows used in investing activities                                                                 |   |                         |  
|Investment in property, plant and
      equipment                                                       |   | (11,402                 | )
|Proceeds from sale of equipment                                                                         |   | 2,794                   |  
|                                                                                                        |   |                         |  
|                                                                                                        |   | (8,608                  | )
|                                                                                                        |   |                         |  
|Cash flows from financing activities                                                                    |   |                         |  
|Issuance of common shares and warrants                                                                  |   | 30,605                  |  
|Proceeds from demand
      loan                                                                         |   | 2,500                   |  
|Decrease (increase) in restricted cash                                                                  |   | 4,688                   |  
|Proceeds from bank loan                                                                                 |   | 930                     |  
|(Repayment of) proceeds from promissory note                                                            |   | (894                    | )
|                                                                                                        |   |                         |  
|                                                                                                        |   | 37,829                  |  
|Increase (decrease) in
      cash     **and cash
      equivalents from continuing operations**         |   | 9,468                   |  
|Decrease in cash from discontinued operations                                                           |   | (766                    | )
|Effects of foreign currency exchange
      rate     **fluctuations on
      cash and cash equivalents** |   | 529                     |  
|Cash and cash
      equivalents, beginning of year                                                      |   | 6,897                   |  
|                                                                                                        |   |                         |  
|Cash and cash
      equivalents, end of year                                                            | $ | 16,128                  |  

Supplemental disclosures with respect to cash flows (Note 13)

(See accompanying notes to the consolidated financial
statements)

8

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|1. | Nature of operations and going concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Crystallex International Corporation (Crystallex or the
      Company) is a Canadian-based company, which was granted a non-assignable
      Mine Operating Contract (the Mine Operating Contract) to develop and
      operate the Las Cristinas gold properties (Las Cristinas Project or Las
      Cristinas) located in Bolivar State, Venezuela.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | On September 17, 2002, the Company entered in to the MOC
      with the Corporación Venezolana de Guayana (CVG), acting under the
      authority of the Ministry of Energy and Mines of Venezuela, pursuant to
      Venezuelan mining law, under which the Company was granted the exclusive
      right to explore, develop and exploit the Las Cristinas 4, 5, 6 and 7
      properties, including the processing of gold for its subsequent
      commercialization and sale.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | In June, 2007, CVG confirmed that the approval of the
      Environmental Impact Study, the posting of the construction guarantee bond
      and the payment of the environmental disturbance taxes represented the
      final and conclusive step in the procedure for the issuance of the
      Authorization to Affect Natural Resources (the Permit) required to
      construct the Las Cristinas Project. Notwithstanding Crystallexs
      fulfillment of the conditions to receive the Permit, MinAmb denied the
      request for the Permit in April 2008. Despite the Companys compliance
      with the MOC requirements and CVGs confirmation in August 2010 that the
      MOC was in full force and effect, the Permit to allow project construction
      to commence has not been issued.                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | On February 3, 2011, the Company received a letter from
      CVG which stated that the MOC had been unilaterally terminated by CVG
      citing, as the basis for the termination of the MOC, Crystallexs lack of
      activity to progress the Las Cristinas Project for more than one year and
      for reasons of opportunity and convenience. Crystallex believes it has
      fully complied with all of its obligations under the MOC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | On February 16, 2011, the Company filed a Request for
      Arbitration against Venezuela before the Additional Facility of the World
      Banks International Centre for Settlement of Investment Disputes
      (ICSID) pursuant to the Agreement between the Government of Canada and
      the Government of Venezuela for the Promotion and Protection of
      Investments (the Treaty). On March 9, 2011, the Request for Arbitration
      was registered by ICSID. Arbitration has commenced following the failure
      of the Venezuelan Government to propose any resolution to grant the
      Permit, despite Crystallexs fulfillment of all conditions established by
      Venezuela, and the arbitrary unilateral termination of the MOC. The claim
      is for breach of the Treatys protections against expropriation, unfair
      and inequitable treatment and discrimination. The Company is seeking the
      restitution by Venezuela of Crystallexs investments, including the MOC,
      and the issuance of the Permit and compensation for interim losses
      suffered, or, alternatively full compensation for the value of its
      investment in an amount in excess of US$3.8 billion.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Subsequent to the unilateral termination of the MOC, the
      Company commenced the process for an orderly handover of Las Cristinas
      including but not limited to the security of the site, personnel and
      social projects. This handover will include severance and termination
      costs which are being determined by the Company, but cannot be reasonably
      estimated at this time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | During 2010, the Company commenced discussions with China
      Railway Resources Group Co. Ltd. (CRRC) to create a strategic
      partnership for the development of Las Cristinas. These discussions have
      terminated as a result of the unilateral termination of the MOC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | These consolidated financial statements have been
      prepared in accordance with Canadian generally accepted accounting
      principles using the going concern basis of accounting which contemplates
      the realization of assets and the satisfaction of liabilities in the
      normal course of business. Management has considered all available
      information in assessing the Companys ability to continue as a going
      concern, which is at least, but is not limited to, twelve months from the
      balance sheet date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

9

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Nature of operations and going concern (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | As at December 31, 2010, the Company had negative working
      capital of $91,745, including cash and cash equivalents of $16,128.
      Management estimates that the existing cash and cash equivalents, without
      receipt of proceeds from equipment sales or other sources of financing,
      will not be sufficient to meet the Companys obligations and budgeted
      expenditures during 2011 including the July 15, 2011 semi-annual interest
      and the principal amount of the $100,000 notes payable (the Notes) due
      on December 23, 2011. The unilateral cancellation of the MOC by CVG and
      the subsequent arbitration claim may impact on the Companys ability to
      raise financing. These uncertainties raise substantial doubt as to the
      ability of the Company to meet its obligations as they come due and,
      accordingly, as to the appropriateness of the use of accounting principles
      applicable to a going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company has a number of financing options which could
      generate sufficient cash to fund ongoing operations and/or service its
      debt requirements as they come due including, but not limited to, the
      following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| | a) | sale of remaining mining equipment, to which management
      has commenced a plan subsequent to year end;                                           
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                      
| | b) | negotiating a settlement with the holders (Noteholders)
      of the Notes to extend the maturity of the Notes or reduce its
      obligations; and
| |    |                                                                                                                                                      
| | c) | sale of equity and/or debt securities.                                                                                                               

|   | Subsequent to year end, the Company commenced a process
      to sell its remaining mining and milling equipment currently held in
      storage related to the Las Cristinas Project. If this equipment is sold
      for proceeds approximating carrying value, management projects that such
      funds would be sufficient to fund ongoing operations, including the July
      interest payment, up to December 2011 when the Notes are due. There are
      however no assurances that the sale process will be successful and if it
      were successful there are no assurances as to the amount or timing of any
      potential proceeds.                                                                                                                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company is in discussions with the Noteholders to
      restructure the Notes, including extending the maturity date beyond
      December 2011. There are no assurances that such discussions will be
      successful, and if the Company is not successful in this initiative, then
      the Company will need to raise substantial additional funds to repay the
      Notes. Despite the financings that have been completed by the Company, it
      has limited access to financial resources as a direct result of the
      unilateral cancellation of the MOC and there is, however, no assurance
      that sufficient additional financing will be available to the Company on
      acceptable terms, or at all, as a consequence of the Government of
      Venezuelas conduct. Failure to obtain such additional financing could
      result in the Company defaulting on its debt repayments.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | These consolidated financial statements do not reflect
      the adjustments to the carrying values of assets and liabilities, the
      reported expenses and the balance sheet classifications used, that would
      be necessary should the Company be unable to continue as a going concern.
      These adjustments could be material.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|2. | Significant accounting policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The principal accounting policies followed by the
      Company, which have been consistently applied in the preparation of these
      consolidated financial statements are summarized as follows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Basis of presentation of consolidated financial
      statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The consolidated financial statements of the Company have
      been prepared in accordance with accounting principles generally accepted
      in Canada (Canadian GAAP). These policies are consistent with accounting
      principles generally accepted in the United States (U.S. GAAP) in all
      material respects except as outlined in Note 18.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

10

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|2. | Significant accounting policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Principles of consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | These consolidated financial statements include the
      accounts of the Company and its wholly-owned subsidiaries, all of which
      are controlled through the ownership of a majority voting interest. All
      inter- company balances and transactions have been eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Translation of foreign currencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The U.S. dollar is the Companys functional and reporting
      currency. The currency of measurement for all of the Companys operations
      including its integrated Venezuelan operations is the U.S. dollar. In each
      of these operations, the temporal method is used to re-measure local
      currency transactions and balances into U.S. dollars. Under the temporal
      method, monetary assets and liabilities are translated into U.S. dollars
      at year- end exchange rates and non-monetary assets and liabilities are
      translated at historical exchange rates. Revenues, expenses and cash flows
      are translated at average exchange rates, except for items related to
      non-monetary assets and liabilities, which are at historical rates.
      Exchange gains and losses on translation of monetary assets and
      liabilities are included in income.                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Cash and cash equivalents include highly liquid
      investments with original maturities of three months or less.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Plant and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Plant and equipment are recorded at cost less accumulated
      amortization and impairment charges. Amortization is being provided for
      using the straight-line method over estimated useful lives ranging from
      five to twenty years, but limited to the mines estimated life.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Mineral properties and deferred exploration and
      development expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Mineral exploration costs such as topographical,
      geochemical and geophysical studies are capitalized and carried at cost
      until the properties to which they relate are placed into production, sold
      or where management has determined there to be impairment in value.
      Development costs incurred to access ore bodies identified in the current
      mining plan are expensed as incurred after production has commenced.
      Development costs necessary to extend a mine beyond those areas identified
      in the current mining plan and which are incurred to access additional
      reserves are deferred until the incremental reserves are mined. Once a
      mine has achieved commercial production, mineral properties and
      development costs, including the mineral acquisition and direct mineral
      exploration costs relating to the current mining plan, are depleted and
      amortized using the unit-of-production method over the estimated life of
      the ore body based on proven and probable reserves.                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Impairment of long-lived assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company periodically evaluates the recoverability of
      the net carrying value of its long-lived assets when events or changes in
      circumstances indicate that their carrying values may not be recoverable.
      This evaluation requires the comparison of the undiscounted future net
      cash flows derived from these assets with the carrying value of the
      assets. Estimated future net cash flows, on an undiscounted basis, are
      calculated using estimated recoverable ounces of gold (considering current
      proven and probable mineral reserves and the value beyond proven and
      probable which includes those mineral resources expected to be converted
      into mineral reserves), estimated future commodity price realization
      (considering historical and current prices, price trends and related
      factors) and operating costs, future capital expenditures, project
      financing costs and reclamation costs. When the carrying value of an asset
      exceeds its undiscounted cash flows, the asset is written down to its fair
      value, which is measured using its discounted future cash flows.

11

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|2. | Significant accounting policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Estimates and uncertainties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The preparation of financial statements in conformity
      with Canadian GAAP requires management to make estimates and assumptions
      that affect the reported amount of assets and liabilities and disclosure
      of contingent assets and liabilities at the date of the consolidated
      financial statements, and the reported amounts of revenues and
      expenditures during the reporting period. In addition to the
      appropriateness of the assumption of using the going concern basis of
      accounting, significant estimates used include those relating to the net
      realizable value of mining equipment, value-added taxes recoverable and
      payable in Venezuela, tax provisions, carrying value of asset retirement
      obligations, and the fair values of stock options and warrants.             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | While management believes these estimates and assumptions
      are reasonable, actual results could vary significantly.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Asset retirement obligation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company records a liability for its expected mine
      reclamation obligation, equal to the fair value of the obligation and
      records a corresponding increase to the carrying amount of the related
      asset which is amortized and charged to amortization expense over the life
      of the associated asset. The asset retirement obligation is accreted to
      fair value over the period of expected cash flows with a corresponding
      charge to operating expenses using the Companys credit-adjusted risk free
      rate. The carrying value of the asset retirement obligation is re-assessed
      annually for changes in estimates of the amount or timing of the
      underlying future cash flows.                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company uses the asset and liability method of
      accounting for income taxes whereby future income taxes are recognized for
      the tax consequences of differences between the financial statement
      carrying amounts and the tax basis of certain assets and liabilities by
      applying substantively enacted statutory income tax rates applicable to
      future years. Future income tax assets are evaluated and a valuation
      allowance is provided if realization is not considered more likely than
      not.                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Debt transaction costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company records debt net of transaction costs. Debt
      is subsequently stated at amortized cost and any difference between the
      proceeds (net of transaction costs) and the redemption value is recognised
      in the income statement over the period of the debt using the effective
      interest method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Loss per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Loss per share is calculated by dividing net loss by the
      weighted average number of common shares outstanding during the year plus
      outstanding warrants that are unconditionally convertible into common
      shares. Diluted per share amounts are calculated using the treasury stock
      method. Under the treasury stock method, the calculation of the weighted
      average number of common shares outstanding assumes that the proceeds to
      be received on the exercise of dilutive stock options and warrants are
      used to repurchase common shares at the average market price during the
      period. Since the Company has losses in 2010 and 2009, the potential
      effect of the outstanding stock options and warrants has not been included
      in this calculation as it would be anti-dilutive.

12

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|2. | Significant accounting policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Stock-based compensation and warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company recognizes compensation expense for stock
      options and warrants based on the estimated fair value at the grant date.
      Compensation expense for options granted to employees is determined based
      on estimated fair values of the options at the time of grant using the
      Black-Scholes option pricing model. The cost is recognized over the
      vesting period of the respective option. The Company does not incorporate
      an estimated forfeiture rate for stock options that will not vest; rather
      the Company accounts for actual forfeitures as they occur. Warrants
      granted are recorded at estimated fair values using the Black-Scholes
      option pricing model.                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Financial instruments  recognition and
      measurement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Financial assets, financial liabilities and derivatives
      are initially recognized at fair value and their subsequent measurement
      depends on their classification as described below. All financial assets
      or liabilities, with the exception of those securities designated as
      held-to-maturity (HTM), financial assets designated as
      available-for-sale (AFS), financial assets that are loans and
      receivables and other financial liabilities, are measured at fair value on
      each balance sheet date, with changes in fair value recorded in the
      consolidated statement of operations and comprehensive loss. Financial
      instruments classified as HTM, loans and receivables or other financial
      liabilities are recorded at amortized cost. Financial instruments
      classified as AFS are measured at fair value, with changes in fair value
      recorded in other comprehensive income (OCI), with the exception of
      AFS equity securities that do not have quoted market prices in an active
      market which are measured at cost.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Derivative instruments are carried at fair value,
      including those derivative instruments that are embedded in financial or
      non-financial contracts which are not closely related to the host
      contracts. Changes in the fair values of derivative instruments are
      recognized in income of the current period, with the exception of
      derivative instruments designated in effective cash flow hedges or hedges
      of foreign currency exposure in a self-sustaining foreign operation, which
      are recorded in OCI.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Comparative figures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The comparative figures have been reclassified, where
      necessary, to conform to the financial statement presentation adopted for
      2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3. | Capital management                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Companys capital consists of cash and cash
      equivalents, bank loan, demand loan and Notes. The Companys objective
      when managing capital is to maintain adequate funds to safeguard its
      ability to continue as a going concern. In order to achieve this
      objective, the Company invests its capital in highly liquid, highly rated
      financial instruments. The Company manages its capital structure and makes
      adjustments to it, based on the level of funds available to the Company to
      manage its operations. In order to meet the Companys objectives for
      managing capital the Company may issue new common shares, issue new debt
      or dispose of assets. There are no assurances that such sources of funding
      will be available on terms acceptable to the Company. There were no
      changes in the Company's approach to capital management during the year
      ended December 31, 2010. The Company is not subject to externally imposed
      capital requirements.                                                                            

13

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|4. | Venezuelan operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | In the third quarter of 2007, Crystallex changed the rate
      it used to translate its Venezuelan subsidiaries transactions and
      balances from the official exchange rate of 2.15 Venezuelan bolivar fuerte
      (BsF) to 1 U.S. dollar, to the parallel exchange rate. This was done due
      to the increasing spread between the official exchange rate and the
      parallel exchange rate.                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The Venezuelan subsidiaries have a U.S. dollar functional
      currency. As a result of the U.S. dollar functional currency, monetary
      assets and liabilities denominated in BsF generate gains or losses for
      changes in value associated with foreign currency exchange rate
      fluctuations against the U.S. dollar.                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On January 11, 2010, the Venezuelan government devalued
      the BsF and changed to a two-tier exchange structure. The official
      exchange rate moved from 2.15 BsF per U.S. dollar to 2.60 for essential
      goods and 4.30 for non-essential goods and services. The 2.60 exchange
      rate for essential goods has since been eliminated.                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On May 17, 2010, the Venezuelan government enacted
      reforms to its foreign currency exchange control regulations to close down
      the parallel exchange market. Therefore, continued use of the parallel
      rate to translate BsF denominated transactions is no longer acceptable.                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On June 9, 2010, the Venezuelan government enacted
      additional reforms to its exchange control regulations and introduced a
      newly regulated foreign currency exchange system; Sistema de Transacciones
      con Titulos en Moneda Extranjera (SITME), which is controlled by the
      Central Bank of Venezuela (BCV). Foreign currency exchange transactions
      not conducted through SITME do not comply with the exchange control
      regulations, and would therefore be considered illegal. The SITME imposes
      volume restrictions on the conversion of BsF to U.S. dollar, currently
      limiting such activity to a maximum equivalent of US$350 thousand per
      month.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | As a result of the enactment of the reforms to the
      exchange control regulations, the Venezuelan subsidiaries did not meet the
      requirements to use the SITME to convert U.S. dollars to BsF as at June
      30, 2010. Accordingly, the Company changed the rate used to re-measure
      BsF-denominated transactions from the parallel exchange rate to the
      official rate specified by the BCV, which was fixed at 4.30 BsF per U.S.
      dollar effective June 30, 2010. The net loss resulting from the
      re-measurement of BsF denominated transactions to the official rate
      specified by the BCV increased loss by approximately $850.                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Venezuelan subsidiaries had approximately $2,379 of net
      monetary liabilities denominated in BsF as at December 31, 2010. For every
      $1,000 of net monetary liabilities denominated in BsF, a 15%
      increase/(decrease) in the foreign currency exchange rate would
      increase/(decrease) the Companys loss by approximately $150.                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|5. | Discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On October 1, 2008, the Revemin mill and related assets
      located in El Callao, Venezuela reverted by contract to the State of
      Venezuela as a result of the expiry of the operating agreement relating to
      the mill. At the same time, the Company ceased all mining operations at
      the Tomi and La Victoria mines, which supplied ore to this mill. In 2009,
      the Company transferred to the State of Venezuela all of the Tomi and La
      Victoria mining concessions that did not form part of the mill contract.                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The results of operations at El Callao have been treated
      as discontinued operations as the Company has no intention of mining the
      concessions in this location. Assets and liabilities on the consolidated
      balance sheets include the following estimated amounts for discontinued
      operations.                                                                                                                                                                                                                                                                                                                                                                                        

14

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|5. | Discontinued operations (continued)
|-- | -----------------------------------

| |                                                 |   | December 31 |  |   | December 31 | 
| | ----------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                                 |   | 2010        |  |   | 2009        | 
| | Current assets                                  |   |             |  |   |             | 
| | Accounts receivable and other assets            | $ | 941         |  | $ | 1,129       | 
| |                                                 |   |             |  |   |             | 
| | Current liabilities                             |   |             |  |   |             | 
| | Accounts payable
      and accrued liabilities  | $ | 1,566       |  | $ | 1,043       | 
| | Current portion of asset retirement obligations |   | 798         |  |   | -           | 
| |                                                 | $ | 2,364       |  | $ | 1,043       | 
| | Asset retirement
      obligations              | $ | 2,081       |  | $ | 2,217       | 

The results of operations at El Callao
shown as discontinued operations in the consolidated statements of operations
and comprehensive loss were as follows:

| |                       |   | Years ended December
      31 |  
| | --------------------- | - | ----------------------------- | -
| |                       |   | 2010                          |  
| |                       |   |                               |  
| | Expenses (income)     |   |                               |  
| | Operations            | $ | 2,480                         |  
| | Foreign exchange gain |   | (342                          | )
| |                       |   |                               |  
| | Net loss              | $ | 2,138                         |  

The cash flows used in discontinued
operations were as follows:

| |                      |   | Years ended December
      31 |  
| | -------------------- | - | ----------------------------- | -
| |                      |   | 2010                          |  
| |                      |   |                               |  
| | Operating activities | $ | (766                          | )

Asset retirement obligations of
discontinued operations are as follows:

| |                                                       |   | December 31 |   |   | December 31 |  
| | ----------------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                                       |   | 2010        |   |   | 2009        |  
| |                                                       |   |             |   |   |             |  
| | Asset retirement obligations, beginning of
      year | $ | 2,217       |   | $ | 2,343       |  
| | Reclamation expenditures                              |   | (236        | ) |   | -           |  
| | Accretion expense                                     |   | 332         |   |   | -           |  
| | Revision in
      estimated cash flows                |   | 566         |   |   | (126        | )
| |                                                       |   |             |   |   |             |  
| | Asset retirement obligations, end of year             |   | 2,879       |   |   | 2,217       |  
| | Less current portion                                  |   | 798         |   |   | -           |  
| |                                                       | $ | 2,081       |   | $ | 2,217       |  

The key assumptions on which the fair
value of the asset retirement obligations are based include the estimated future
cash flows, the timing of those cash flows, and the credit-adjusted risk-free
rate at which the estimated cash flows have been discounted. The Company used a
discount rate of 15%. As at December 31, 2010, undiscounted cash outflows
approximating $3,548 are estimated to be incurred over a two year period. The
revision in estimated cash flows resulted principally from an increase in the
area of soil contamination around the Revemin mill.

15

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|**5.** | Discontinued operations (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | In view of the uncertainties concerning future asset
      retirement and progressive reclamation costs, the ultimate costs to the
      Company could differ materially from the amounts estimated. The estimate
      for the future liability is subject to change based on possible amendments
      to applicable laws and legislation, and technological innovations. Future
      changes, if any, due to their nature and unpredictability, could have a
      significant impact and would be reflected prospectively, as a gain or
      loss.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|6.     | Property, plant and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

| |                    |   | December 31, 2010 | 
| | ------------------ | - | ----------------- | 
| |                    |   |                   | 
| |                    |   | Cost              | 
| | Mining equipment   | $ | 40,197            | 
| | Mineral properties |   | 309,609           | 
| |                    |   |                   | 
| |                    | $ | 349,806           | 

| |                    |   | December 31, 2009 | 
| | ------------------ | - | ----------------- | 
| |                    |   |                   | 
| |                    |   | Cost              | 
| | Mining equipment   | $ | 39,203            | 
| | Mineral properties |   | 297,069           | 
| |                    |   |                   | 
| |                    | $ | 336,272           | 

On December 31, 2009, the Company
assessed the Las Cristinas Project for impairment based on the guidance in EIC
174 "Mining Exploration Costs", AcG11 "Enterprises in the Development Stage",
and CICA Handbook Section 3063, Impairment of Long-Lived Assets and concluded
that, despite its continued efforts to secure the Permit and pursue accretive
transactions in respect of the Las Cristinas Project, a non-cash write-down of
the carrying value should be recorded as at December 31, 2009 based on certain
impairment triggers noted including, but not limited to, the permitting delays
described in Note 1. The Company determined that, among other things, the
uncertainty regarding the Permit had a significant impact on the estimated
future net cash flows associated with the Las Cristinas Project and on
recoverability of the carrying value of the asset. Accordingly, the Company
recorded a non-cash write-down of $297,069 as at December 31, 2009 relating to
all mineral property costs, except the carrying value of the remaining mining
equipment.

The Company conducted similar
impairment assessments as at the end of each quarter in 2010 and for similar
reasons to those indicated above; the Company recorded additional non-cash
write-downs totalling $12,540. In addition, the Company recorded a provision of
$2,171 against Venezuelan value-added taxes recoverable (VAT) from cumulative
expenditures incurred on Las Cristinas. This provision was recorded as the VAT
is only recoverable from future operations at Las Cristinas and cannot be
transferred or assigned.

As a result of the termination of the
MOC, the Company also tested the mine equipment for recoverability at December
31, 2010. As a result, the Company recorded an impairment charge of $6,389
related to its mining equipment, which is included in the line, Write-down of
property, plant and equipment in the consolidated statement of operations. Fair
value was determined based on a range of estimated future net cash flows
expected to arise from the future sale of the mine equipment, on the basis that
this represents management's likely course of action.

16

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|7.  | Sale of equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | During 2009, the Company sold mining equipment for net
      proceeds of $12,361 from which $4,688 was restricted to pay the scheduled
      January 15, 2010 interest obligation on the Notes described in Note 10.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | As at December 31, 2009, the Company was in the process
      of selling additional mining equipment with a net book value of $4,416 and
      recorded a write-down of $1,236 based on estimated net realizable value of
      $3,180. In December 2009, the Company received an advance of $894 from the
      auctioneer who subsequently sold the majority of this equipment in April
      2010 for $2,794. The Company issued to the auctioneer a demand promissory
      note for $894 bearing interest at the Bank of America, Australia, Bank
      Bill Buying semi-annual rate plus 4%, which was secured by the underlying
      equipment. The Company repaid the promissory note and related interest
      charges from the auction proceeds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | In June 2010, the Company decided not to proceed further
      with the sale of equipment with a net book value of $386 (cost of $994
      less write-down of $608) which was reallocated to mining equipment prior
      to the write- down recorded at December 31, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|8.  | Bank loan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | At December 31, 2010, the Companys Venezuelan Branch has
      a bank loan of approximately $930 to fund operations, which the Company
      considers as the best temporary measure to deal with conversion of U.S.
      funds into BsF in Venezuela on a timely basis. This demand loan bears
      interest at 19% per annum and is collateralized by cash.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|9.  | Demand loan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | In early 2010, the Company commenced negotiations with
      China Railway Resources Group Co. Ltd. (CRRC) to create a strategic
      partnership for the development of Las Cristinas. The proposed transaction
      was never completed. During these negotiations, CRRC loaned Crystallex
      $2,500, which is repayable on demand and ranks subordinate to the Notes
      described in Note 10. At the time of the loan advance, it was contemplated
      that, upon closing of a transaction with CRRC, the loan would be
      convertible at the option of CRRC into common shares of Crystallex at a
      price of Cdn$0.40 per common share of Crystallex. The conversion feature
      of the loan was ascribed a fair value of $200 using the Black-Scholes
      pricing model and recorded as contributed surplus. The residual liability
      component of the loan of $2,300 was accreted up to its face value using
      the effective interest method, and, accordingly, interest accretion of
      $200 was recorded during the year ended December 31, 2010 as a component
      of interest expense. The conversion feature of this loan has been
      eliminated since no transaction was concluded with CRRC.                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10. | Notes payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | In conjunction with a unit offering on December 23, 2004,
      the Company issued $100,000 of senior unsecured Notes with a coupon rate
      of 9.375%, due on December 23, 2011, for net proceeds of $75,015 after
      expenses and equity allocation. Interest is payable semi-annually on
      January 15 and July 15 of each year, beginning on July 15, 2005. The
      Company may redeem the Notes, in whole or in part, at any time after
      December 31, 2008 at a redemption price of between 100% and 102% of the
      principal amounts of the Notes, depending on the redemption date, plus
      accrued and unpaid interest and additional interest, if any, to the date
      of the redemption. In addition, the Company may be required to redeem the
      Notes for cash if there is a change in control in the Company where the
      acquirers debt rating is below the debt rating of the Company before or
      after the change in control, or where the Company ceases to beneficially
      own, directly or indirectly, at least a majority interest in the Las
      Cristinas Project. The Company may also redeem the Notes, in whole but not
      in part, for cash at its option if there is a change in the applicable
      Canadian

17

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|10. | Notes payable (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | withholding tax legislation. As described in Note 14, the
      Company successfully defended against an action previously brought by
      Noteholders relating to a project change in control.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The initial carrying value of the Notes was derived from
      a unit structure that contained both a Note and a share component. As a
      result, the share component was determined based on the fair value of the
      common shares issued with the unit offering, calculated at $21,450 with
      $78,550 being the discounted fair value of the Notes. The discounted fair
      value of the Notes, net of expenses, is accreted up to the face value of
      the Notes using the effective interest method over its seven-year term,
      with the resulting charge recorded to interest expense. Interest accretion
      of $4,396 (2009 - $3,893) on the Notes was recorded during the twelve
      months ended December 31, 2010 as a component of interest expense.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|11. | Share capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| |                                                         |   | December 31 |  |   | December 31 | 
| | ------------------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                                         |   | 2010        |  |   | 2009        | 
| |                                                         |   |             |  |   |             | 
| | Authorized                                              |   |             |  |   |             | 
| | Unlimited common shares,
      no par value             |   |             |  |   |             | 
| | Unlimited
      Class A preference shares, no par value |   |             |  |   |             | 
| | Unlimited Class B
      preference shares, no par value |   |             |  |   |             | 
| | Issued                                                  |   |             |  |   |             | 
| | 364,817,719 common shares (2009 - 294,817,719)          | $ | 588,745     |  | $ | 561,751     | 

Financing transaction

On June 30, 2010, the Company completed
a public offering of 70 million units at Cdn $0.50 per unit for gross proceeds
of Cdn $35.0 million (U.S. $33,001).

Each unit consisted of one common share
of the Company and one half of one common share purchase warrant. Each whole
warrant entitles the holder to purchase a further common share of the Company at
an exercise price of Cdn $0.70 expiring June 30, 2011.

The net proceeds received by the
Company, after payment of issuance costs of $2,396, was $30,605, of which
$26,994 was recorded as share capital and $3,611 was recorded as contributed
surplus.

Warrants

As at December 31, 2010, common share
purchase warrants were outstanding enabling the holders to acquire common shares
as follows:

| |                  |  | Number of   |    
| | ---------------- |  | ----------- | ---
| | Exercise price   |  | warrants    |    
| |                  |  | (thousands) |    
| | $0.70 (Cdn$0.70) |  | 35,000      | (a)
| | $0.30 (Cdn$0.30) |  | 3,000       | (b)
| | $3.02 (Cdn$3.00) |  | 16,445      | (c)
| | $4.25            |  | 12,250      | (d)
| |                  |  |             |    
| |                  |  | 66,695      |    

| | a) | These warrants expire on June 30, 2011.                                                                                                                                        
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | These warrants expire on April 23, 2012.                                                                                                                                       
| | c) | These warrants expire six months following the date that
      is 45 days following the receipt of the Permit for the Las Cristinas
      Project.                             
| | d) | These warrants become exercisable for an 18-month period
      commencing on the date which is 45 days following the receipt of the
      Permit for the Las Cristinas Project.

18

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|11. | Share capital (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Stock options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Effective June 24, 2009, shareholders of the Company
      approved a Fixed Share Option Plan (the New Plan), which provides for
      the granting of a maximum 8,000,000 stock options to acquire common shares
      of the Company to executive officers, directors, employees and service
      providers of the Company. Under the New Plan, the exercise price of each
      stock option cannot be less than the closing price of the Companys common
      shares on the Toronto Stock Exchange, on the trading day immediately
      preceding the date of grant. Stock options have a life of up to ten years
      and may vest immediately, or over periods ranging from one year to three
      years. In addition, the directors of the Company may permit an optionee to
      elect to receive without payment by the optionee of any additional
      consideration, common shares equal to the value of stock options
      surrendered.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Effective June 23, 2010, shareholders of the Company
      approved an increase in the number of stock options in the New Plan,
      authorizing an additional 5,000,000 stock options to acquire common shares
      of the Company to executive officers, directors, employees and service
      providers of the Company. As at December 31, 2010, 11,077,900 stock
      options had been granted under the New Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Prior to June 25, 2008, the Company had a rolling stock
      option plan (the Old Plan), which provided for the granting of stock
      options to acquire common shares of the Company equal to 10% of the issued
      and outstanding common shares from time to time, and had characteristics
      similar to the New Plan. Effective June 24, 2008, the Company ceased to
      grant stock options under the Old Plan and no additional stock options are
      available for grant under the Old Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The Company determines the fair value of the employee
      stock options using the Black-Scholes option pricing model. The estimated
      fair value of the stock options is expensed over their respective vesting
      periods. The fair value of stock options granted was determined using the
      following assumptions for stock options granted during the year ended
      December 31, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| |                                                            |   | Years ended December
      31 | 
| | ---------------------------------------------------------- | - | ----------------------------- | 
| |                                                            |   | 2010                          | 
| | Risk-free interest rate                                    |   | 1.7%                          | 
| | Expected life (years)                                      |   | 3                             | 
| | Expected volatility over expected life                     |   | 127%                          | 
| | Expected dividend rate                                     |   | 0%                            | 
| | Weighted average fair value of stock
      options granted | $ | 0.33                          | 

The fair value compensation recorded
for stock options that have vested for the year ended December 31, 2010 was
$1,466 (2009 - $1,150) of which $1,392 (2009 - $969) was expensed and $74 (2009
- $181) was capitalized to mineral properties prior to the write-down described
in Note 6.

As at December 31, 2010, stock options
were outstanding enabling the holders to acquire common shares as follows:

19

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|11. | Share capital (continued)
|--- | -------------------------

Outstanding stock options
    
    
    Exercisable stock optionsWeighted average
    
    
    Weighted
    
    
    
    
    
    Weightedremaining
    
    
    average
    
    
    
    
    
    averageRange of
    
    Number
    
    
    contractual
    
    
    exercise
    
    
    Number
    
    
    exerciseexercise prices
    
    of stock options
    
    
    life
    
    
    price
    
    
    exercisable
    
    
    price(Cdn$)
    
    (thousands)
    
    
    (years)
    
    
    (Cdn$)
    
    
    (thousands)
    
    
    (Cdn$)$0.24
    
    6,175
    
    
    6.44
    
    
    0.24
    
    
    6,175
    
    
    0.24$0.45
    
    4,903
    
    
    7.69
    
    
    0.45
    
    
    3,145
    
    
    0.45$1.90 to $2.60
    
    2,349
    
    
    1.38
    
    
    2.22
    
    
    2,349
    
    
    2.22$3.00 to $3.57
    
    2,678
    
    
    3.45
    
    
    3.14
    
    
    2,678
    
    
    3.14$4.05 to $4.87
    
    2,292
    
    
    3.40
    
    
    4.43
    
    
    2,217
    
    
    4.4418,397
    
    
    5.31
    
    
    1.49
    
    
    16,564
    
    
    1.60


A summary of the outstanding stock
options as at December 31 and changes during each year then ended are as
follows:

| |                            |  |             |   |  | Years ended December 31 | 
| | -------------------------- |  | ----------- | - |  | ----------------------- | 
| |                            |  |             |   |  | 2010                    | 
| |                            |  |             |   |  | Weighted                | 
| |                            |  |             |   |  | average                 | 
| |                            |  | Number      |   |  | exercise                | 
| |                            |  | of options  |   |  | price                   | 
| |                            |  | (thousands) |   |  | (Cdn$)                  | 
| | Balance, beginning of year |  | 15,254      |   |  | 1.94                    | 
| | Expired or forfeited       |  | (1,760      | ) |  | 2.43                    | 
| | Issued                     |  | 4,903       |   |  | 0.45                    | 
| | Balance, end of year       |  | 18,397      |   |  | 1.49                    | 

Shareholder rightsplan

On June 24, 2009, the shareholders of
the Company approved the continuation of the Companys shareholder rights plan
(the Rights Plan), which was previously approved on October 30, 2006. The
rights issued under the Rights Plan are subject to reconfirmation at every third
annual meeting of shareholders and will expire at the close of the Companys
annual meeting in 2016. The Rights Plan is designed to ensure the fair treatment
of shareholders in connection with any takeover bid for the Company and to
provide the board of directors and shareholders with sufficient time to fully
consider any unsolicited takeover bid. The Rights Plan also provides the board
of directors with time to pursue, if appropriate, other alternatives to maximize
shareholder value in the event of a takeover bid.

Pursuant to the Rights Plan, one right
(a Right) is attached to each outstanding common share of the Company held by
shareholders of record at the close of business on the record date. The Rights
will separate from the common shares at the time that is the close of business
on the eighth trading day (or such later day as determined by the board of
directors of the Company) after the public announcement of the acquisition of,
or intention to acquire, beneficial ownership of 20% of the common shares of the
Company by any person other than in accordance with the terms of the Rights
Plan.

In order to constitute a permitted bid,
an offer must be made in compliance with the Rights Plan and must be made to all
shareholders (other than the offeror), must be open for at least 60 days and be
accepted by shareholders holding more than 50% of the outstanding voting shares
and, if so accepted, must be extended for a further period of ten business days.

20

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|12. | Income taxes                                                                                                                                                                                                                                                                                                                                               
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                            
|    | The Company operates in Canada and Venezuela and,
      accordingly the results from operations are subject to different rates of
      taxation. The income taxes reported differs from the amounts computed by
      applying the cumulative Canadian federal and provincial income tax rates
      to the loss before tax recovery due to the following:

| |                                                                     |   | Years ended December
      31 |  
| | ------------------------------------------------------------------- | - | ----------------------------- | -
| |                                                                     |   | 2010                          |  
| | Statutory tax rate                                                  |   | 28.93%                        |  
| | Loss from continuing operations    before
      income tax recovery | $ | (46,051                       | )
| |                                                                     |   |                               |  
| | Income tax benefit                                                  | $ | (13,323                       | )
| | Change in valuation allowance                                       |   | 5,381                         |  
| | Change in substantively enacted tax rates                           |   | -                             |  
| | Change in foreign exchange rates                                    |   | (6,171                        | )
| | Non-deductible (non-taxable) items                                  |   | 3,437                         |  
| | Reduction in losses carry forward                                   |   | 10,676                        |  
| | Future income tax
      recovery                                    | $ | -                             |  

The tax effects of temporary
differences resulting in future income tax assets and are as follows:

| |                                 |   | Years ended December
      31 |  
| | ------------------------------- | - | ----------------------------- | -
| |                                 |   | 2010                          |  
| | Future income tax assets:       |   |                               |  
| | Losses carry forward            | $ | 49,769                        |  
| | Financing fees                  |   | 1,091                         |  
| | Asset retirement obligations    |   | 979                           |  
| | Property, plant and equipment   |   | 88,211                        |  
| | Less:
      valuation allowance |   | (140,050                      | )
| | Net future income taxes         | $ | -                             |  

As at December 31, 2009, the Company
recorded a write-down of $297,069 of the carrying value of Las Cristinas Project
which resulted in the reversal of future income tax liabilities of $17,459
relating to temporary differences between book and tax values previously
recorded.

At December 31, 2010 the Company had
the following unused tax losses available for tax purposes:

| |                |   | Country | 
| | -------------- | - | ------- | 
| | Year of Expiry |   | Canada  | 
| | 2011           | $ | -       | 
| | 2012           | $ | -       | 
| | 2013           | $ | -       | 
| | 2014           | $ | 17,555  | 
| | 2015           | $ | 36,910  | 
| | 2016           | $ | 28,150  | 
| | 2027           | $ | 24,935  | 
| | 2028           | $ | 24,142  | 
| | 2029           | $ | 24,255  | 
| | 2030           | $ | 20,063  | 

21

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|13. | Supplemental disclosures with respect to cash flows
|--- | ---------------------------------------------------

| |                                                                   |   | December 31 |  |   | December 31 | 
| | ----------------------------------------------------------------- | - | ----------- |  | - | ----------- | 
| |                                                                   |   | 2010        |  |   | 2009        | 
| | Cash and cash equivalents consist of:                             |   |             |  |   |             | 
| | Cash                                                              | $ | 2,059       |  | $ | 6,897       | 
| | Interest-bearing savings accounts (0.2%-1.2%
      interest rate) |   | 14,069      |  |   | -           | 
| |                                                                   |   |             |  |   |             | 
| |                                                                   | $ | 16,128      |  | $ | 6,897       | 

Cash paid during the years ended
December 31:

Cash paid during the years ended
December 31:

| |                  |   | 2010  |  |   | 2009  | 
| | ---------------- | - | ----- |  | - | ----- | 
| | For interest     | $ | 9,375 |  | $ | 9,375 | 
| | For income taxes | $ | -     |  | $ | -     | 

Investment in property, plant and
equipment for the years ended December 31:

| |                                                                                                                                                                                                        |   | 2010    |   |   | 2009     |  
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | ------- | - | - | -------- | -
| | Net book value of property, plant and
      equipment    January 1                                                                                                                                     | $ | 39,203  |   | $ | 343,652  |  
| | Net book value of property, plant and equipment
         December 31                                                                                                                                   |   | 33,200  |   |   | 39,203   |  
| |                                                                                                                                                                                                        |   |         |   |   |          |  
| | Net decrease in property, plant and equipment                                                                                                                                                          |   | 6,003   |   |   | 304,449  |  
| | Re-allocation of equipment held for sale                                                                                                                                                               |   | 386     |   |   | -        |  
| | Write-down of property, plant and equipment                                                                                                                                                            |   | (18,929 | ) |   | (297,069 | )
| | Capitalization of stock-based compensation                                                                                                                                                             |   | 74      |   |   | 181      |  
| | Future income taxes                                                                                                                                                                                    |   | -       |   |   | 2,047    |  
| | Net book value of equipment sold                                                                                                                                                                       |   | -       |   |   | (19,420  | )
| | Net book value of
      equipment held for sale                                                                                                                                                        |   | -       |   |   | (4,416   | )
| |                                                                                                                                                                                                        |   |         |   |   |          |  
| | Net increase in investments before working capital items                                                                                                                                               |   | (12,466 | ) |   | (14,228  | )
| | Changes in working capital related to   
      property, plant and equipment acquisitions after giving effect to
         the provision for value-added taxes recoverable of $2,171
      (2009: $Nil) |   | 1,064   |   |   | (851     | )
| |                                                                                                                                                                                                        |   |         |   |   |          |  
| | Cash investment in property, plant and equipment                                                                                                                                                       | $ | (11,402 | ) | $ | (15,079  | )

|14. | Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Noteholders appeal dismissed with costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | In December 2008, the Company was served with a notice of
      application (the Application) by the trustee for the Noteholders as
      described in Note 10. The trustee, on behalf of certain Noteholders
      sought, among other things, a declaration from the court that there had
      been a project change of control (a Project Change of Control) event, as
      defined in the First Supplemental Indenture made as of December 23, 2004,
      thereby requiring Crystallex to accelerate payment and purchase all of the
      Notes of each Noteholder who has so requested at a price equal to 102% of
      the principal amount of the Notes, together with accrued and unpaid
      interest to the date of purchase.

22

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|14. | Contingencies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | A Project Change of Control is defined as the occurrence
      of any transaction as a result of which Crystallex ceases to beneficially
      own, directly or indirectly, at least a majority interest in the Las
      Cristinas Project.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | On December 16, 2009, the Ontario Superior Court
      dismissed all of the Noteholders claims against Crystallex and ordered
      the Noteholders to pay Crystallex its costs incurred with respect to the
      Application. In detailed reasons, the court held that Crystallex and its
      Board acted reasonably and in accordance with its obligations to all
      stakeholders including the Noteholders. The Noteholders appealed this
      decision, which was heard in late April 2010. In May 2010, the Court of
      Appeal for Ontario dismissed the Noteholders appeal. The Noteholders paid
      Crystallex $765 on account of Crystallexs costs in defending the
      litigation. The Noteholders also signed a release against the Company and
      its directors at the same time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Proposed class action dismissed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | The Company and certain officers and directors were named
      as defendants (the Defendants) in a putative securities fraud class
      action that commenced on December 8, 2008, in the United States District
      Court for the Southern District of New York. The plaintiffs in the lawsuit
      were described as investors who acquired the Companys common shares
      during the period from March 27, 2006 to April 30, 2008, inclusive (the
      Proposed Class Period). The complaint alleged that the Defendants made
      several statements during the Proposed Class Period about the Companys
      Las Cristinas Project, and that the issuance of the required Venezuelan
      government Permit in connection with that project was imminent and
      guaranteed to be issued to the Company. The complaint asserted that the
      Defendants did not have, during the Proposed Class Period, a reasonable
      expectation that the Company would receive the required Permit, and that
      on April 30, 2008, the Permit was, in fact, denied. The proposed class
      action sought compensatory damages plus costs and fees, alleging
      violations of Section 10(b) of the Securities Exchange Act of 1934 (the
      Exchange Act) and Rule 10b-5 promulgated thereunder by each of the
      Defendants, and a violation of Section 20A of the Exchange Act by one of
      the individual Defendants.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | On March 28, 2011, the court dismissed this lawsuit in
      its entirety and without prejudice. The court allowed the plaintiffs to
      file a second amended complaint if they have reason to do so in good faith
      within 21 days of the court order.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Claims by former employees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | The Companys subsidiaries in Venezuela have been served
      with statements of claims from several former employees for additional
      severance and health related issues for an aggregate claim of
      approximately $1,145. The Company believes these claims are without merit
      and is vigorously defending against them. However, as the outcome of these
      claims cannot be determined at this time, the Company has made no
      provision for these claims as at December 31, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

23

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|15. | Related party transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | During the year ended December 31, 2010, the Company paid
      head office rent of $122 (2009 - $126) to a subsidiary of a company that
      retains the Chairman and Chief Executive Officer (CEO) of the Company as
      a director. In addition, in August 2009, another subsidiary of this
      company entered into an agreement with the Company to provide advisory
      services. The advisory fee includes a work fee, and a success fee that is
      only payable on the fulfilment of certain conditions. For the year ended
      December 31, 2010 the Company paid advisory fees of $125 (2009 - $75),
      under the terms of this advisory agreement.       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | During the year ended December 31, 2010, the Company paid
      underwriting fees of $1,386 (2009 - $nil) to a company that retains the
      Chairman and CEO of the Company as an employee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | As at December 31, 2010, $12 (2009: $nil) was receivable
      from the Chairman and CEO of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | These transactions were in the normal course of
      operations and were measured at the exchange values, which represented the
      amount of consideration established and agreed to by the related parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|16. | Risk management                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | Financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The Companys activities expose it to a variety of risks
      arising from financial instruments. These risks and managements
      objectives, policies and procedures for managing these risks are as
      follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | Credit risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | Credit risk is the risk of loss due to a counterpartys
      inability to meet its obligations under a financial instrument that will
      result in a financial loss to the Company. The Companys credit risk is
      primarily attributable to cash that is held with major Canadian chartered
      banks.                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The Company is exposed to the credit risk of Venezuelan
      banks, which hold cash for the Companys Venezuelan operations. The
      Company limits its exposure to this risk by maintaining minimal cash
      balances to fund the immediate needs of its Venezuelan subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The Company has additional credit risk relating to
      value-added taxes recoverable from the Government of Venezuela.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | Interest rate risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | Interest rate risk is the risk that the fair value or
      future cash flows of a financial instrument will fluctuate because of
      changes in market interest rates. The Companys cash equivalents and bank
      loan have interest at market rates. Fluctuations in market rates of
      interest do not have a significant impact on the fair value or future cash
      flows of these financial instruments due to the short term to maturity of
      these instruments. The Companys demand loan has a fixed rate of interest.
      The fair value of this instrument is not significantly impacted by
      fluctuations in market rates as it is payable on demand.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | Currency risks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The Company has operations in Venezuela, where currently
      there is an exchange control regime, and is exposed to currency risks from
      the exchange rate of the Venezuelan BsF relative to the U.S. dollar. In
      addition, some of the Companys head office operations are transacted in
      Canadian dollars.                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The Companys risk management objective is to reduce cash
      flow risk related to foreign denominated cash flows. Currency risk is
      derived from monetary assets and liabilities denominated in Venezuelan BsF
      and Canadian dollars.                                                                                                                                                                                                                                                                                                                                                                                                                                   

24

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|16. | Risk management (continued)                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                      
|    | The following table provides a sensitivity analysis of
      the positive/(negative) impact on operations as a result of a hypothetical
      weakening or strengthening of the Venezuelan BsF and Canadian dollar
      relative to the U.S. dollar:

| |                                 |   | December 31 |   |   | December 31 |  
| | ------------------------------- | - | ----------- | - | - | ----------- | -
| |                                 |   | 2010        |   |   | 2009        |  
| | Venezuelan BsF net assets       |   |             |   |   |             |  
| | 15% increase in value           | $ | 312         |   | $ | 295         |  
| | 15% decrease in value           | $ | (312        | ) | $ | (295        | )
| |                                 |   |             |   |   |             |  
| | Canadian dollar net liabilities |   |             |   |   |             |  
| | 15% increase in value           | $ | (1,304      | ) | $ | (64         | )
| | 15% decrease in value           | $ | 1,304       |   | $ | 64          |  

Liquidity risk

The Company faces liquidity risk to the
extent that it will be unable to settle liabilities as they come due. In order
to manage this risk, management monitors rolling forecasts of the Companys
liquidity reserve on the basis of expected cash flow. The maturities of the
Companys financial liabilities are as follows:

| |                                             |   | 1 month |  |   | 1 to 3 |  |   | 3 months to |  |   | 1 year to | 
| | ------------------------------------------- | - | ------- |  | - | ------ |  | - | ----------- |  | - | --------- | 
| |                                             |   |         |  |   | months |  |   | 1 year      |  |   | 5 years   | 
| |                                             |   |         |  |   |        |  |   |             |  |   |           | 
| | Current liabilities                         | $ | 5,889   |  | $ | 2,296  |  | $ | 2,909       |  | $ | -         | 
| | Asset retirement obligations (undiscounted) |   | -       |  |   | -      |  |   | 798         |  |   | 2,750     | 
| | Debt                                        |   | -       |  |   | 930    |  |   | 102,500     |  |   | -         | 
| | Total                                       | $ | 5,889   |  | $ | 3,226  |  | $ | 106,207     |  | $ | 2,750     | 

|    | Fair value                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | As at December 31, 2010, the Companys financial
      instruments consisted of cash and cash equivalents, accounts receivable,
      accounts payable and certain accrued liabilities, bank loan, demand loan
      payable and Notes. The financial instruments that are measured at fair
      value and classified as Level 2 are cash and cash equivalents. Accounts
      receivable, accounts payable and certain accrued liabilities, bank loan
      and demand loan payable are measured at amortized cost and their fair
      values approximate carrying values due to their short-term nature. The
      Notes are classified as other financial liabilities and are measured at
      amortized cost.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|17. | Segmented information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Company has one operating segment, which, until the
      unilateral cancellation of the MOC, was principally the development of the
      Las Cristinas Project.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Property, plant and equipment all relate to the Las
      Cristinas Project and include long-lead time equipment previously acquired
      for its development, of which significant amounts are located temporarily
      in the United States and various other countries.                                                                                                                                                                                                                                                                                                                                                                                                                                        

25

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|18. | Differences between Canadian and United States
      generally accepted accounting principles                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                     
|    | The Company prepares its consolidated financial
      statements in accordance with Canadian GAAP which varies in certain
      significant respects from U.S. GAAP. The following adjustments would be
      required in order to present the consolidated financial statements in
      accordance with U.S. GAAP.
|    |                                                                                                                                                                                                                                                                                                                     
|    | Balance Sheets                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                     
|    | The differences between Canadian GAAP and U.S. GAAP on
      the consolidated balance sheets are as follows:                                                                                                                                                                                                        

| |                                                        |   | December 31, 2010 |  
| | ------------------------------------------------------ | - | ----------------- | -
| |                                                        |   | Canadian          |  
| |                                                        |   | GAAP              |  
| | Current assets                                         | $ | 17,671            |  
| | Current assets of discontinued operations              |   | 941               |  
| | Property, plant and equipment                          |   | 33,200            |  
| | Other assets                                           |   | -                 |  
| |                                                        | $ | 51,812            |  
| |                                                        |   |                   |  
| | Current liabilities                                    | $ | 12,958            |  
| | Current liabilities of discontinued operations         |   | 2,364             |  
| | Long-term liabilities of discontinued
      operations |   | 2,081             |  
| | Notes payable                                          |   | 95,035            |  
| | Shareholders deficit                                  |   | (60,626           | )
| |                                                        | $ | 51,812            |  

| |                                                      |   | December 31, 2009 |  
| | ---------------------------------------------------- | - | ----------------- | -
| |                                                      |   | Canadian          |  
| |                                                      |   | GAAP              |  
| | Current assets                                       | $ | 16,060            |  
| | Current assets of discontinued operations            |   | 1,129             |  
| | Property, plant and equipment                        |   | 39,203            |  
| | Other assets                                         |   | 1,736             |  
| |                                                      | $ | 58,128            |  
| | Current liabilities                                  | $ | 8,937             |  
| | Current liabilities of discontinued
      operations |   | 1,043             |  
| | Long-term liabilities of discontinued operations     |   | 2,217             |  
| | Notes payable                                        |   | 90,639            |  
| | Shareholders
      deficit                          |   | (44,708           | )
| |                                                      | $ | 58,128            |  

For the purposes of reporting in
accordance with U.S. GAAP, amounts referred to as contributed surplus under
Canadian GAAP are referred to as additional paid in capital.

26

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|18. | Differences between Canadian and United States
      generally accepted accounting principles (continued)                
|--- | -------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                          
|    | Statements of Operations                                                                                                 
|    |                                                                                                                          
|    | The impact of the differences between Canadian GAAP and
      U.S. GAAP on the net loss for the year would be as follows:

| |                                                                       |  |     |  |       | Years ended December
      31 |      
| | --------------------------------------------------------------------- |  | --- |  | ----- | ----------------------------- | -----
| |                                                                       |  |     |  |       | 2010                          |      
| |                                                                       |  |     |  |       |                               |      
| | Net loss under Canadian GAAP                                          |  |     |  | **$** | **(48,189**                   | **)**
| | Mineral property costs                                                |  | (a) |  |       | (12,540                       | )    
| | Adjustment to loss on disposal of property,
      plant and equipment |  | (a) |  |       | -                             |      
| | Net reversal of write-down of property, plant and equipment           |  | (a) |  |       | 12,540                        |      
| | Future income taxes                                                   |  | (a) |  |       | -                             |      
| | Future income tax recovery                                            |  | (a) |  |       | -                             |      
| |                                                                       |  |     |  |       |                               |      
| | Unrealized gain on
      translation of future income taxes           |  | (a) |  |       | -                             |      
| | Net loss and comprehensive loss under U.S. GAAP                       |  |     |  | **$** | **(48,189**                   | **)**
| |                                                                       |  |     |  |       |                               |      
| | Net loss per share  basic and diluted                                |  |     |  | **$** | **(0.15**                     | **)**
| |                                                                       |  |     |  |       |                               |      
| | Weighted average number of shares outstanding                         |  |     |  |       | 330,297,171                   |      

Loss from discontinued operations, net
of tax, is the same for Canadian GAAP and U.S. GAAP.

Statement of Cash Flows

The impact of the above differences
between Canadian GAAP and U.S. GAAP on the combined statements of cash flows
would be as follows:

| |                                                                                                          |  |     |  |       | Years ended December
      31 |      
| | -------------------------------------------------------------------------------------------------------- |  | --- |  | ----- | ----------------------------- | -----
| |                                                                                                          |  |     |  |       | 2010                          |      
| |                                                                                                          |  |     |  |       |                               |      
| | Cash flows used in operating activites
         reported under Canadian GAAP                             |  |     |  | **$** | **(19,753**                   | **)**
| | Mineral property
      costs                                                                             |  | (a) |  |       | (11,402                       | )    
| | Cash flows used in operating
      activities    reported under U.S. GAAP                                |  |     |  |       | (31,155                       | )    
| | Cash flows used in investing   
      activities reported under Canadian GAAP                            |  |     |  |       | (8,608                        | )    
| | Mineral property costs                                                                                   |  | (a) |  |       | 11,402                        |      
| | Cash flows from (used in) investing   
      activities reported under U.S. GAAP                         |  |     |  |       | 2,794                         |      
| | Cash flows (used in) from financing
      activities    reported under both Canadian and U.S.
      GAAP |  |     |  |       | 37,829                        |      
| | Net (decrease) increase in cash and
      cash    equivalents during the year                            |  |     |  |       | 9,468                         |      
| | Decrease in cash and cash
      equivalents    from discontinued operations                              |  |     |  |       | (766                          | )    
| | Effects of exchange rate fluctuations on
      cash    and cash equivalents                              |  |     |  |       | 529                           |      
| | Cash and cash equivalents, beginning of year                                                             |  |     |  |       | 6,897                         |      
| |                                                                                                          |  |     |  |       |                               |      
| | Cash and cash equivalents, end of year                                                                   |  |     |  | $     | **16,128**                    |      

27

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(US$ thousands,
      except as noted)        

|18. | Differences between Canadian and United States generally
      accepted accounting principles (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | Under Canadian GAAP, mineral properties, including
      exploration, development and acquisition costs, are carried at cost until
      the properties to which they relate are placed into production, sold or
      where management has determined an impairment in value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | Under U.S. GAAP and practices established by the United
      States Securities and Exchange Commission (SEC) all mine project related
      costs incurred before a commercially mineable deposit is established are
      expensed as incurred. A commercially mineable deposit is defined as one
      with proven and probable reserves which can be economically and legally
      extracted or produced based on a bankable feasibility study. Once a
      commercially mineable deposit is established all additional costs incurred
      to bring the mine into production are capitalized as development costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | At December 31, 2008, the Company concluded that given
      the protracted delay in the receipt of the Permit to develop Las
      Cristinas, the strict legal criterion of having necessary permits to
      exploit the reserves under SEC Industry Guide 7 would not be met.
      Accordingly in 2008, under U.S. GAAP, the Company wrote down the Las
      Cristinas mineral property costs by $198,412 to the carrying value of its
      acquisition costs and cost of equipment. In 2010 and 2009, for U.S. GAAP
      purposes, the Companys U.S. GAAP policy is to expense all mineral
      property costs and accordingly, $12,540 (2009: $16,456) which were
      initially capitalized under Canadian GAAP during 2010 and 2009 have been
      expensed for U.S. GAAP. In 2009, the Company recorded, under Canadian
      GAAP, a write-down of $297,069 relating to the Las Cristinas mineral
      property costs and property acquisition costs, , whereas for U.S GAAP
      purposes the required write-down was $36,170 relating to property
      acquisition costs. Therefore s at December 31, 2010 and 2009, the Canadian
      GAAP and U.S. GAAP carrying values for property, plant and equipment are
      identical.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | In 2009, for Canadian GAAP, the Company capitalized
      future income taxes of $2,047 into mineral property costs, recorded an
      unrealized gain on future income taxes of $1,249 and recorded future
      income tax recovery of $17,459. These amounts have been adjusted for U.S.
      GAAP purposes as a result of the U.S. GAAP policy of expensing mineral
      property costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | In 2009 the Company sold certain mining equipment and for
      Canadian GAAP, the Company recorded a loss of $8,295 after deducting the
      carrying value of the disposed equipment and transaction costs. For U.S.
      GAAP, the loss was reduced by $1,445, reflecting the lower carrying value
      of this equipment for U.S. GAAP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | Under Canadian GAAP, debt transaction costs related to
      the Notes have been netted against the Notes. Under U.S. GAAP, these costs
      are reported on the balance sheet as deferred assets and amortized over
      the term of the debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | Future accounting policy changes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The Company will be converting its basis of accounting
      from Canadian GAAP to International Financial Reporting Standards (IFRS)
      for periods beginning January 1, 2011, preparing its first interim
      financial statements in accordance with IFRS for the three-month period
      ending March 31, 2011. As a result of this transition to reporting under
      IFRS, new US GAAP pronouncements effective from 2011 onwards will not have
      an impact on the Companys consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

28

---