---

|Crystallex International Corporation | Exhibit1.2
|------------------------------------ | ----------













CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008













---

|Crystallex International Corporation
|------------------------------------
|Table of Contents                   

Management's Responsibility for Financial Reporting
    1Management's Report on Internal Control over Financial
      Reporting
    2Changes to Internal Control over Financial Reporting
    2Independent Auditors' Report
    3Consolidated Balance Sheets
    5Consolidated Statements of Operations, Comprehensive Loss
      and Deficit
    6Consolidated Statements of Shareholders' (Deficit) Equity
    7Consolidated Statements of Cash Flows
    8Notes to the Consolidated Financial Statements
    9


---

Crystallex International Corporation

Management's Responsibility for
Financial Reporting

The consolidated financial statements of Crystallex
International Corporation (the Company) and all of the information included in
this annual report are the responsibility of the management of the Company and
have been approved by the Company's Board of Directors. The consolidated
financial statements have been prepared in accordance with accounting principles
generally accepted in Canada and reflect management's best estimate and
judgement based on currently available information. Financial statements, by
nature, are not precise since they include certain amounts based upon estimates
and judgments. When alternative methods exist, management has chosen those it
deems to be the most appropriate in the circumstances.

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 Company's Audit Committee is appointed by the Board of
Directors annually and is currently comprised of three independent directors.
The Committee meets regularly with management and with the independent auditors
to satisfy itself that each group is properly discharging its responsibilities
and to review the financial statements and the independent auditors' report.
PricewaterhouseCoopers LLP, the independent auditors 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.

The consolidated financial statements have been audited by
PricewaterhouseCoopers LLP on behalf of the shareholders and their report
follows.

|/s/ Robert Fung         | /s/ Hemdat Sawh        
|----------------------- | -----------------------
|Robert Fung             | Hemdat Sawh            
|Chief Executive Officer | Chief Financial Officer
|                        |                        
|March 31, 2010          |                        

1

---

Crystallex International Corporation

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 assessed the effectiveness of the Company's internal
control over financial reporting as at December 31, 2009. Based on this
evaluation, management concluded that such internal control over financial
reporting was effective as at December 31, 2009. This assessment was based on
the criteria set forth in Internal ControlIntegrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO).

The effectiveness of internal control over financial reporting
as at December 31, 2009 has been audited by PricewaterhouseCoopers LLP,
independent auditors, and their report follows.

Changes to Internal Control over Financial Reporting

There has been no change to the Company's system of internal
controls during 2009 that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting.

|/s/ Robert Fung         | /s/ Hemdat Sawh        
|----------------------- | -----------------------
|Robert Fung             | Hemdat Sawh            
|Chief Executive Officer | Chief Financial Officer
|                        |                        
|March 31, 2010          |                        

2

---

Crystallex International Corporation

Independent Auditors' Report

To the Shareholders of Crystallex International Corporation

We have completed integrated audits of Crystallex International
Corporation's 2009 and 2008 consolidated financial statements and of its
internal control over financial reporting as at December 31, 2009. Our opinions,
based on our audits, are presented below.

Consolidated financial statements

We have audited the accompanying consolidated balance sheets of
Crystallex International Corporation (the Company) as at December 31, 2009 and
2008, and the related consolidated statements of operations, comprehensive loss
and deficit, shareholders' (deficit) equity and cash flows for each of the years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits of the Company's financial statements
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 about whether the financial statements are free of material
misstatement. An audit of financial statements includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. A financial statement audit also includes assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of the
Company as at December 31, 2009 and 2008 and the results of its operations and
its cash flows for each of the years then ended in accordance with Canadian
generally accepted accounting principles.

Internal control over financial reporting

We have also audited Crystallex International Corporation's
internal control over financial reporting as at December 31, 2009, based on
criteria established in Internal Control - Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). The
Company's 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. 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.

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.

3

---

Crystallex International Corporation

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.

In our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as at December 31,
2009 based on criteria established in Internal Control  Integrated Framework
issued by the COSO.

|/s/ PricewaterhouseCoopers LLP                     | 
|-------------------------------------------------- | 
|                                                   | 
|Chartered Accountants, Licensed Public Accountants | 
|Toronto, ON, Canada                                | 
|March 31, 2010                                     | 

Comments by Auditors for US Readers on Canada-US Reporting
Difference

In the United States, reporting standards for auditors require
the addition of an explanatory paragraph (following the opinion paragraph) when
the consolidated financial statements are affected by conditions and events that
cast substantial doubt on the Company's ability to continue as a going concern,
such as those described in Note 1 to the consolidated financial statements. Our
report to the shareholders dated March 31, 2010 is expressed in accordance with
Canadian reporting standards which do not permit a reference to such events and
conditions in the auditors' report when these are adequately disclosed in the
consolidated financial statements.

|/s/ PricewaterhouseCoopers LLP                     | 
|-------------------------------------------------- | 
|                                                   | 
|Chartered Accountants, Licensed Public Accountants | 
|Toronto, ON, Canada                                | 
|March 31, 2010                                     | 

4

---

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

|                                                  |   | December 31 |   |   | December 31 |  
|------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                  |   | 2009        |   |   | 2008        |  
|                                                  |   |             |   |   |             |  
|Assets                                            |   |             |   |   |             |  
|Current                                           |   |             |   |   |             |  
|Cash and cash
      equivalents (Note 10)         | $ | 6,897       |   | $ | 34,520      |  
|Restricted cash (Note 6)                          |   | 4,688       |   |   | -           |  
|Accounts receivable                               |   | 780         |   |   | 172         |  
|Prepaid expenses, deposits and other
      assets |   | 515         |   |   | 1,145       |  
|Equipment held for sale
      (Note 6)            |   | 3,180       |   |   | -           |  
|Discontinued operations (Note 4)                  |   | 1,129       |   |   | 1,689       |  
|                                                  |   |             |   |   |             |  
|                                                  |   | 17,189      |   |   | 37,526      |  
|                                                  |   |             |   |   |             |  
|Property, plant and equipment (Note 5)            |   | 39,203      |   |   | 343,652     |  
|Value-added taxes receivable                      |   | 1,736       |   |   | 1,286       |  
|                                                  |   |             |   |   |             |  
|                                                  | $ | 58,128      |   | $ | 382,464     |  
|                                                  |   |             |   |   |             |  
|Liabilities                                       |   |             |   |   |             |  
|Current                                           |   |             |   |   |             |  
|Accounts payable and
      accrued liabilities    | $ | 8,043       |   | $ | 7,767       |  
|Promissory note (Note 6)                          |   | 894         |   |   | -           |  
|Discontinued operations (Note 4)                  |   | 1,043       |   |   | 3,494       |  
|                                                  |   |             |   |   |             |  
|                                                  |   | 9,980       |   |   | 11,261      |  
|                                                  |   |             |   |   |             |  
|Discontinued operations (Note 4)                  |   | 2,217       |   |   | -           |  
|Notes payable (Note 7)                            |   | 90,639      |   |   | 86,746      |  
|Future income taxes (Note 9)                      |   | -           |   |   | 16,661      |  
|                                                  |   |             |   |   |             |  
|                                                  |   | 102,836     |   |   | 114,668     |  
|                                                  |   |             |   |   |             |  
|                                                  |   |             |   |   |             |  
|Shareholders' (Deficit) Equity                    |   |             |   |   |             |  
|Share capital (Note 8)                            |   | 561,751     |   |   | 561,751     |  
|Contributed surplus                               |   | 35,366      |   |   | 33,971      |  
|Accumulated other comprehensive income            |   | 11,959      |   |   | 11,959      |  
|Deficit                                           |   | (653,784    | ) |   | (339,885    | )
|                                                  |   |             |   |   |             |  
|                                                  |   | (44,708     | ) |   | 267,796     |  
|                                                  |   |             |   |   |             |  
|                                                  | $ | 58,128      |   | $ | 382,464     |  

|Nature of operations and going concern (Note 1)                         |                              
|----------------------------------------------------------------------- | -----------------------------
|Commitments and contingencies (Note 12)                                 |                              
|Subsequent event (Note 17)                                              |                              
|                                                                        |                              
|(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 |  
|--------------------------------------------------------------------- | - | ----------------------- | -
|                                                                      |   | 2009                    |  
|(Expenses) income                                                     |   |                         |  
|General and
      administrative                                      | $ | (9,303                  | )
|Litigation                                                            |   | (2,322                  | )
|Interest on notes
      payable                                       |   | (13,268                 | )
|Foreign currency exchange gain                                        |   | 851                     |  
|(Loss) gain on sale of
      equipment                                |   | (7,059                  | )
|Write down of equipment held for sale                                 |   | (1,236                  | )
|Write down of property,
      plant and equipment (Note 5)            |   | (297,069                | )
|Interest and other income                                             |   | 23                      |  
|Amortization of property, plant and
      equipment                   |   | -                       |  
|                                                                      |   |                         |  
|Loss from continuing operations before
      income tax               |   | (329,383                | )
|Future income tax
      recovery                                      |   | (17,459                 | )
|Loss from continuing operations                                       |   | (311,924                | )
|Loss from
      discontinued operations, net of tax (Note 4)          |   | (1,975                  | )
|Net loss and comprehensive loss                                       |   | (313,899                | )
|Deficit, beginning
      of year                                      |   | (339,885                | )
|                                                                      |   |                         |  
|Deficit, end of
      year                                            | $ | (653,784                | )
|Loss per share from continuing operations 
      basic and diluted   | $ | (1.06                   | )
|Loss per share
      from discontinued operations  basic and diluted |   | (0.01                   | )
|                                                                      |   |                         |  
|Loss per share 
      basic and diluted                              | $ | (1.07                   | )
|                                                                      |   |                         |  
|Weighted average
      number of shares outstanding                   |   | 294,817,719             |  

(See accompanying notes to the consolidated financial
statements)

6

---

|Crystallex International Corporation                           
|---------------------------------------------------------------
|Consolidated Statements of Shareholders' (Deficit)
      Equity
|(US$ thousands, except as noted)                               

|                                |  |             |  |   |         |  |  |             |   |   |             |   |   |               |  |   |          |       |   |          |  
|------------------------------- |  | ----------- |  | - | ------- |  |  | ----------- | - | - | ----------- | - | - | ------------- |  | - | -------- | ----- | - | -------- | -
|                                |  | Number of   |  |   |         |  |  |             |   |   |             |   |   | Accumulated   |  |   |          |       |   |          |  
|                                |  | common      |  |   |         |  |  | Number of   |   |   |             |   |   | other         |  |   |          |       |   |          |  
|                                |  | shares      |  |   |         |  |  | warrants    |   |   | Contributed |   |   | comprehensive |  |   |          |       |   |          |  
|                                |  | (thousands) |  |   | Amount  |  |  | (thousands) |   |   | surplus     |   |   | income        |  |   | Deficit  |       |   | Total    |  
|                                |  |             |  |   |         |  |  |             |   |   |             |   |   |               |  |   |          |       |   |          |  
|Balance as at December 31, 2007 |  | 261,659     |  | $ | 503,489 |  |  | 18,186      |   | $ | 27,124      |   | $ | 11,959        |  | $ | (314,165 | )     | $ | 228,407  |  
|                                |  |             |  |   |         |  |  |             |   |   |             |   |   |               |  |   |          |       |   |          |  
|Shares issued                   |  |             |  |   |         |  |  |             |   |   |             |   |   |               |  |   |          |       |   |          |  
|Public offering                 |  | 32,890      |  |   | 57,730  |  |  | 16,445      |   |   | 6,414       |   |   | -             |  |   | -        |       |   | 64,144   |  
|Exercise of stock
      options |  | 96          |  |   | 278     |  |  | -           |   |   | (96         | ) |   | -             |  |   | -        |       |   | 182      |  
|Directors' fees                 |  | 173         |  |   | 254     |  |  | -           |   |   | -           |   |   | -             |  |   | -        |       |   | 254      |  
|Warrants expired                |  | -           |  |   | -       |  |  | (5,936      | ) |   | -           |   |   | -             |  |   | -        |       |   | -        |  
|Stock-based compensation        |  | -           |  |   | -       |  |  | -           |   |   | 529         |   |   | -             |  |   | -        |       |   | 529      |  
|Loss for the year               |  | -           |  |   | -       |  |  | -           |   |   | -           |   |   | -             |  |   | (25,720  | )     |   | (25,720  | )
|                                |  |             |  |   |         |  |  |             |   |   |             |   |   |               |  |   |          |       |   |          |  
|Balance at December 31, 2008    |  | 294,818     |  |   | 561,751 |  |  | 28,695      |   |   | 33,971      |   |   | 11,959        |  |   | (339,885 | )     |   | 267,796  |  
|                                |  |             |  |   |         |  |  |             |   |   |             |   |   |               |  |   |          |       |   |          |  
|Stock-based compensation        |  | -           |  |   | -       |  |  | -           |   |   | 1,150       |   |   | -             |  |   | -        |       |   | 1,150    |  
|Warrants for advisory services  |  | -           |  |   | -       |  |  | 3,000       |   |   | 245         |   |   | -             |  |   | -        |       |   | 245      |  
|Loss for the year               |  | -           |  |   | -       |  |  | -           |   |   | -           |   |   | -             |  |   | (313,899 | )     |   | (313,899 | )
|                                |  |             |  |   |         |  |  |             |   |   |             |   |   |               |  |   |          |       |   |          |  
|Balance as at December 31, 2009 |  | 294,818     |  | $ | 561,751 |  |  | 31,695      |   | $ | 35,366      |   | $ | 11,959        |  | $ | (653,784 | ) (a) | $ | (44,708  | )

|a) Includes total comprehensive deficit for the year ended
      December 31, 2009 of $(641,825) (2008 - $(327,926))
|--------------------------------------------------------------------------------------------------------------------
|(See
      accompanying notes to the consolidated financial statements)                                             

7

---

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

|                                                                                  |   | Years ended December 31 |  
|--------------------------------------------------------------------------------- | - | ----------------------- | -
|                                                                                  |   | 2009                    |  
|                                                                                  |   |                         |  
|Cash flows used in operating activities                                           |   |                         |  
|Loss from continuing
      operations for the year                                | $ | (311,924                | )
|Items not affecting cash:                                                         |   |                         |  
|Loss (gain) on sale of equipment                                                  |   | 7,059                   |  
|Write down of
      equipment held for sale                                       |   | 1,236                   |  
|Write down of property plant and equipment                                        |   | 297,069                 |  
|Future income tax
      recovery                                                  |   | (17,459                 | )
|Interest accretion on notes payable                                               |   | 3,893                   |  
|Warrants issued
      for advisory services                                       |   | 245                     |  
|Stock-based compensation                                                          |   | 969                     |  
|Unrealized gain on
      translation of future income taxes                       |   | (1,249                  | )
|Unrealized foreign currency exchange loss (gain)                                  |   | 27                      |  
|Directors' fees
      settled with shares                                         |   | -                       |  
|Amortization of property plant and equipment                                      |   | -                       |  
|Net change in non-cash working capital:                                           |   |                         |  
|(Increase) decrease in accounts receivable                                        |   | (678                    | )
|Decrease (increase) in prepaid expenses, deposits and other assets                |   | 630                     |  
|Increase (decrease) in accounts payable and accrued liabilities                   |   | 608                     |  
|                                                                                  |   |                         |  
|                                                                                  |   | (19,574                 | )
|                                                                                  |   |                         |  
|Cash flows used in investing
      activities                                     |   |                         |  
|Investment in property, plant and
      equipment                                 |   | (15,079                 | )
|Proceeds from sale of equipment                                                   |   | 12,361                  |  
|                                                                                  |   |                         |  
|                                                                                  |   | (2,718                  | )
|                                                                                  |   |                         |  
|Cash flows from (used in) financing
      activities                              |   |                         |  
|Increase in restricted cash                                                       |   | (4,688                  | )
|Proceeds from issuance
      of promissory note                                   |   | 894                     |  
|Proceeds from issuance of common shares                                           |   | -                       |  
|                                                                                  |   |                         |  
|                                                                                  |   | (3,794                  | )
|                                                                                  |   |                         |  
|(Decrease) increase in cash and cash equivalents from
      continuing operations |   | (26,086                 | )
|                                                                                  |   |                         |  
|Decrease in cash and cash equivalents from discontinued
      operations (Note 4) |   | (1,648                  | )
|                                                                                  |   |                         |  
|Effects of exchange rate fluctuations on cash                                     |   | 111                     |  
|                                                                                  |   |                         |  
|Cash and cash
      equivalents, beginning of year                                |   | 34,520                  |  
|                                                                                  |   |                         |  
|Cash and cash
      equivalents, end of year                                      | $ | 6,897                   |  



Supplemental disclosures with respect to cash flows (Note 10)

(See accompanying notes to the consolidated financial
statements)

8

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|1. | Nature of operations and going concern
|-- | --------------------------------------

Crystallex International Corporation (Crystallex or the
Company) is a Canadian based company which owns the Mine Operating Contract
(the Mine Operating Contract) to develop and operate the Las Cristinas gold
properties (Las Cristinas Project or Las Cristinas) located in Venezuela.

a) Background

On September 17, 2002, the Company entered into a
non-assignable Mine Operating Contract (with the Corporación Venezolana de
Guayana (the 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.

The Company is currently awaiting the decision of the
Venezuelan Ministry of the Environment and Natural Resources (MinAmb) in
respect of the issuance of the Authorization to Affect Natural Resources (the
Permit) to commence construction at Las Cristinas.

The construction and ultimate commencement of commercial
production at Las Cristinas are dependent on the receipt of the Permit, which
will allow management to proceed to put in place financing to fund construction.
In addition, the Las Cristinas Project is subject to sovereign risk, including
political and economic instability, changes in existing government regulations,
government regulations relating to mining that may withhold the receipt of
required permits, as well as currency fluctuations and local inflation. In April
2008 the Director General of Permits at MinAmb denied the issuance of the Permit
and subsequently denied the Company's appeal. The Company filed an appeal to the
Minister of MinAmb in June 2008 and no decision has been received to date which
demonstrates the significant risks that the Las Cristinas Project faces. The
Company, nonetheless, has made specific decisions to continue to meet its
obligations under the Mine Operating Contract and has received confirmation from
the CVG in March 2009 that the Mine Operating Contract remains in full force and
effect, which provides the Company with continued control over the Las Cristinas
Project.

b) Basis of presentation and going concern

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.

As at December 31, 2009, the Company had positive working
capital of $7,209, including cash and cash equivalents of $6,897. Management
estimates that these funds, in addition to the proceeds from the equipment held
for sale (Note 6) and loan (Note 17), will be sufficient to meet the Company's
obligations and budgeted expenditures through the second quarter of 2010, but
will not be sufficient to cover the Company's obligations over the next twelve
months. This uncertainty raises 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.

9

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|1. | Nature of operations and going concern (continued)
|-- | --------------------------------------------------

The Company believes it has a number of financing options which
could generate sufficient cash to fund ongoing operations and service its debt
requirements as they come due including, but not limited to, the following:

| | a) | introduction of joint venture partners;                                                                                                            
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | sale of equity and/or debt securities;                                                                                                             
| | c) | further expenditure reductions;                                                                                                                    
| | d) | additional sales of equipment; and                                                                                                                 
| | e) | negotiating a settlement with its Noteholders to reduce,
      eliminate or otherwise decrease its obligations, particularly, interest
      costs.

There is, however, no assurance that these sources of funding
or any other initiatives will be available to the Company, or that they will be
available on terms that are acceptable to the Company. Accordingly, 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, except for certain new pronouncements which have been
adopted effective January 1, 2009 as described in Note 3, 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 16.

Principles of consolidation

These consolidated financial statements include the accounts of
the Company and its majority-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.

10

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|2. | Significant accounting policies (continued)
|-- | -------------------------------------------

Plant and equipment

Plant and equipment are recorded at cost less accumulated
amortization. Amortization of plant and equipment used directly in the mining
and production of gold is included in operating costs. 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. Management has
performed an impairment analysis and concluded that there has been an impairment
of the Las Cristinas Project as at December 31, 2009 as the Permit has not been
received as yet (Note 5).

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.
Significant estimates used include those relating to the recoverability of
property, plant and equipment, value-added tax receivable in Venezuela, tax
provisions and the recoverability of future income tax balances, 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.

11

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|2. | Significant accounting policies (continued)
|-- | -------------------------------------------

Asset retirement obligations

The Company records a liability for its expected mine
reclamation obligations, 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.

Revenue recognition

Revenue from mining operations is recognized upon shipment of
gold, when title has passed to the customer, when persuasive evidence of an
arrangement exists, and collection of the sale is reasonably assured.

Deferred financing fees and debt

Until December 31, 2006, transaction costs related to the
Company's debt financings were deferred and amortized over the term of the
related financing. Effective January 1, 2007, the Company reports 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 2009 and 2008, the potential effect of the outstanding stock options
and warrants has not been included in this calculation as it would be
anti-dilutive.

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.

12

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|2. | Significant accounting policies (continued)
|-- | -------------------------------------------

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 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.

Comparative figures

The comparative figures have been reclassified, where
necessary, to conform to the financial statement presentation adopted for 2009.

|3. | Changes
    in accounting policies and future accounting pronouncements
|-- | -----------------------------------------------------------------------

Changes in accounting policies

In February 2008, the CICA issued new Handbook Section 3064,
Goodwill and Intangible Assets, which establishes revised standards for
recognition, measurement, presentation and disclosure of goodwill and intangible
assets. This standard is effective for the fiscal year beginning January 1,
2009. The adoption of this standard had no impact on the Company's consolidated
financial statements.

In January 2009 the CICA issued EIC-173, Credit Risk and the
Fair Value of Financial Assets and Financial Liabilities. This standard
provides guidance on how to account for credit risk of an entity and
counterparty when determining the fair value of financial assets and financial
liabilities, including derivative instruments. This standard is effective for
the fiscal year beginning January 1, 2009. The adoption of this standard did not
have a significant impact on the Company's consolidated financial statements.

In March 2009, the CICA issued EIC-174, Mining Exploration
Costs, which provides guidance for mining exploration enterprises on the
accounting and impairment review of exploration costs. This standard is
effective for the fiscal year beginning January 1, 2009. The adoption of this
standard did not have a significant impact on the Company's consolidated
financial statements.

In June 2009, CICA Handbook Section 3862, Financial
Instruments  Disclosures, was amended to require disclosures about the inputs
to fair value measurements, including their classification within a hierarchy
that prioritizes the inputs to fair value measurement. The three levels of the
fair value hierarchy are:

Level 1  Unadjusted quoted prices in active markets for
identical assets or liabilities; 
Level 2  Inputs other than quoted prices that are observable
for the asset or liability either directly or indirectly; and 
Level 3  Inputs that are not based on observable market data.

13

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|3. | Changes in accounting policies and future accounting
      pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Future accounting pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | In January 2009, the CICA issued CICA Handbook Section
      1582, Business Combinations, which replaces the former guidance on
      business combinations. Section 1582 establishes standards for the
      measurement of a business combination and the recognition and measurement
      of assets acquired and liabilities assumed. In addition, the CICA issued
      Section 1601, Consolidated Financial Statements, and Section 1602, Non-
      controlling Interests, which replaces the existing guidance. Section 1601
      establishes standards for the preparation of consolidated financial
      statements and Section 1602 provides guidance on accounting for non-
      controlling interest in a subsidiary in consolidated financial statements
      subsequent to a business combination. These standards apply prospectively
      to business combinations for which the acquisition date is on or after the
      beginning of the first annual reporting period beginning on or after
      January 1, 2011, with earlier application permitted. The Company has not
      yet determined the impact of the adoption of these standards on its
      consolidated financial statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4. | 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 which 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 amounts for discontinued operations.

December 31
    
    
    December 312009
    
    
    2008Current assetsAccounts receivable and other
      assets
    $
    1,129
    
    $
    1,689Current liabilitiesAccounts payable and accrued
      liabilities
    $
    1,043
    
    $
    1,151Current portion
      of asset retirement obligations
    
    -
    
    
    2,343Asset retirement
      obligations
    
    2,217
    
    
    -$
    3,260
    
    $
    3,494


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

Years ended December 312009
    
    
    2008Mining revenue
    $
    -
    
    $
    14,421Expenses (income)Operations
    
    2,075
    
    
    19,746Accretion of asset
      retirement obligations
    
    -
    
    
    365Foreign exchange gain
    
    (100
    )
    
    (2,040
    )Total expenses
    
    1,975
    
    
    18,071Loss before income taxes
    
    (1,975
    )
    
    (3,650
    )Income tax
    
    -
    
    
    (263
    )Net loss
    $
    (1,975
    )
    $
    (3,913
    )


14

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|4. | Discontinued operations (continued)
|-- | -----------------------------------

The cash flows used in discontinued operations are as follows:

Years ended December 312009
    
    
    2008Operating activities
    $
    (1,648
    )
    $
    (1,049
    )


Asset retirement obligations of discontinued operations are as
follows:

December 31
    
    
    December 312009
    
    
    2008Asset retirement obligations, beginning of
      year
    $
    2,343
    
    $
    2,431Accretion expense
    
    -
    
    
    365Reclamation
      expenditures
    
    
    
    
    -Revision in estimated cash flows
    
    (126
    )
    
    (453
    )Asset retirement obligations, end of year
    
    2,217
    
    
    2,343Less: current portion
    
    -
    
    
    2,343$
    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 or rates at
which the estimated cash flows have been discounted. The Company used a discount
rate of 15%. As at December 31, 2009, undiscounted cash outflows approximating
$2,930 are estimated to be incurred over a two year period.

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 change in an accounting estimate.

|**5.** | **Property, plant and equipment**
|------ | ---------------------------------

December 31, 2009Net bookCost
    
    
    Write down
    
    
    valuePlant and equipment
    $
    89,625
    
    $
    50,422
    
    $
    39,203Mineral properties
    
    246,647
    
    
    246,647
    
    
    -$
    336,272
    
    $
    297,069
    
    $
    39,203December 31, 2008Accumulated
    
    
    Net bookCost
    
    
    amortization
    
    
    valuePlant and equipment
    $
    111,800
    
    $
    430
    
    $
    111,370Mineral properties
    
    232,282
    
    
    -
    
    
    232,282$
    344,082
    
    $
    430
    
    $
    343,652


15

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|5. | Property, plant and equipment (continued)
|-- | -----------------------------------------

The Company assessed the Las Cristinas Project for impairment
based on the guidance in EIC 174 "Mining Exploration Costs" and AcG-11
"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 write down should be recorded in the current year 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 current uncertainty regarding the permit had a significant impact on
management's ability to estimate the future net cash flows associated with the
Las Cristinas Project. Accordingly, the Company recorded a non-cash write down
of $297,069 relating to all mineral property costs, including the deferred
exploration and development expenditures, except the carrying value of the
remaining mining equipment of $39,203.

The Company will be reporting under International Financial
Reporting Standards (IFRS) effective January 1, 2011. Under IFRS an entity is
required to assess at each reporting date any indication that a previously
recognized impairment loss no longer exists or has decreased. If there is an
indication, the entity is required to estimate the recoverable amount and
determine whether an impairment reversal is appropriate. The Company will
carefully asses the alternative accounting policies available under IFRS and
will consider a reversal of the write down based on the facts and circumstances
at the time of adoption of IFRS.

The aggregate expenditures incurred, before write down, on the
Las Cristinas Project by the Company to December 31, 2009 are summarized as
follows:

Cash
    
    
    Non-cash
    
    
    TotalPlant and equipment
    $
    89,625
    
    $
    -
    
    $
    89,625Exploration, development and related expenses
    
    165,728
    
    
    5,732
    
    
    171,460Property payment and finders' fees
    
    24,978
    
    
    11,192
    
    
    36,170Future income taxes
    
    -
    
    
    37,277
    
    
    37,277Stock-based compensation
    
    -
    
    
    1,740
    
    
    1,740$
    280,331
    
    $
    55,941
    
    $
    336,272


|6. | Sale of
    equipment
|-- | ---------------------

During 2009, the Company sold generic mining equipment with a
carrying value of $19,420 (2008: $4,288) for net proceeds of $12,361 (2008 -
$6,039), which resulted in a loss on disposal of $7,059 (2008 - gain of $1,751).
Of these net proceeds, $4,688 was set aside and restricted to pay the scheduled
January 15, 2010 interest obligation on the notes payable described in Note
7.

The Company is in the process of selling the remaining generic
mining equipment with a carrying value of $4,416 for estimated net realizable
value of $3,180 and, accordingly, recorded a write down of $1,236. The Company
received an advance of $894 from the auctioneer who has been commissioned to
sell most of this equipment. The Company issued to the auctioneer a demand
promissory note for $894 bearing interest at Bank of America, Australia, Bank
Bill Buying semi-annual rate per annum plus 4% which is secured by the
underlying equipment.

16

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|7. | Notes
    payable
|-- | -----------------

In conjunction with a unit offering on December 23, 2004, the
Company issued $100,000 of senior unsecured notes (the 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 it 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
withholding tax legislation. As described in Note 12, the Company successfully
defended against an action 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 rate method over its seven-year term, with the resulting charge
recorded to interest expense. Interest accretion of $3,893 (2008 - $3,455) on
the Notes was expensed during the year ended December 31, 2009 as a component of
interest expense.

Fair value of Notes

The fair value of the Notes is approximately $25,000 (2008 -
$30,000), calculated using a discounted cash flow methodology. The methodology
uses the risk-free interest rate and the Company's credit spread as inputs. As
the Company's credit spread is an unobservable input due to limited trading of
the Notes in the market, the Company has estimated its credit spread by
reference to current yields to maturity for debt with similar terms and risks
and also by reference to the yield to maturity implicit in the prices obtained
from the limited trading of the Notes.

|8. | Share
    capital
|-- | -----------------

December 31
    
    
    December 312009
    
    
    2008AuthorizedUnlimited common shares,
      without par valueUnlimited Class A
      preference shares, no par valueUnlimited Class B
      preference shares, no par valueIssued294,817,719 common
      shares
    $
    561,751
    
    $
    561,751


17

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|8. | Share
    capital (continued)
|-- | -----------------------------

Warrants

As at December 31, 2009, common share purchase warrants were
outstanding enabling the holders to acquire common shares as follows:

Number ofExercise Price
    
    warrants(thousands)$0.29 (Cdn$0.30)
    
    3,000
    (a)$2.87 (Cdn$3.00)
    
    16,445
    (b)$4.25
    
    12,250
    (c)31,695


| | a) | These warrants expire on April 23, 2012. The fair value
      of these warrants which were granted during the year ended December 31,
      2009 for advisory services was determined to be $245 using the
      Black-Scholes option pricing model with the following assumptions: 1.61 %
      risk-free interest rate, 3 years expected life, 130% volatility and 0%
      dividend rate.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | These warrants expire six months following the date which
      is 45 days following the receipt of the Permit for the Company's Las Cristinas Project.                                                                                                                                                                                                                                     
| | c) | These warrants become exercisable for an eighteen month
      period commencing on the date which is 45 days following the receipt of
      the Permit for the Company's Las Cristinas
  Project.                                                                                                                                                                                           

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 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 the 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. As
at December 31, 2009, 6,175,000 stock options were granted under the New Plan.

Prior to June 25, 2008, the Company had a rolling share option
plan (the Old Plan), which provided for the granting of 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.

18

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|8. | Share
    capital (continued)
|-- | -----------------------------

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 on a straight-line basis 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, 2009. No stock options were granted during the year ended December
31, 2008.

Years ended December 312009
    
    
    2008Risk-free interest rate
    
    1.8%
    
    
    -Expected life (years)
    
    3
    
    
    -Expected volatility over expected life
    
    118%
    
    
    -Expected dividend rate
    
    0%
    
    
    -Weighted average fair value of stock options granted
      during the year
    $
    905
    
    $
    -


The fair value compensation recorded for stock options that
have vested for the year ended December 31, 2009 was $1,150 (2008 - $529), of
which $969 (2008 - $496) was expensed and $181 (2008 - $33) was capitalized to
mineral properties.

As at December 31, 2009, options were outstanding enabling the
holders to acquire common shares as follows:

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
    
    
    7.44
    
    
    0.24
    
    
    6,175
    
    
    0.24$1.75 to $2.60
    
    
    3,829
    
    
    1.68
    
    
    2.23
    
    
    3,829
    
    
    2.23$2.65 to $3.57
    
    
    2,810
    
    
    4.30
    
    
    3.12
    
    
    2,810
    
    
    3.12$3.91 to $4.87
    
    
    2,440
    
    
    4.18
    
    
    4.42
    
    
    2,210
    
    
    4.4015,254
    
    
    4.89
    
    
    1.94
    
    
    15,024
    
    
    1.90


19

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|8. | Share
    capital (continued)
|-- | -----------------------------

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

Years ended December 312009
    
    
    
    
    
    2008Weighted
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    averageNumber
    
    
    exercise
    
    
    Number
    
    
    exerciseof options
    
    
    price
    
    
    of options
    
    
    price(thousands)
    
    
    (Cdn$)
    
    
    (thousands)
    
    
    (Cdn$)Balance, beginning of year
    
    10,517
    
    
    3.14
    
    
    12,527
    
    
    3.04Granted
    
    6,175
    
    
    0.24
    
    
    -
    
    
    -Exercised
    
    -
    
    
    -
    
    
    (96
    )
    
    1.90Expired or forfeited
    
    (1,438
    )
    
    3.34
    
    
    (1,914
    )
    
    2.60Balance, end of year
    
    15,254
    
    
    1.94
    
    
    10,517
    
    
    3.14


Financing Transactions

Fiscal 2008 Activity

On February 11, 2008, the Company completed a public offering
of 32.89 million units at Cdn$2.10 per unit for gross proceeds of Cdn$69.1
million.

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$3.00 for a period expiring on the later of: (i) August 11, 2009; and (ii)
six months following the Permit date, where the Permit date is the
45th day following the receipt by the Company of the Permit. Each
common share and one-half warrant were ascribed values of Cdn$1.89 and Cdn$0.21,
respectively.

The net proceeds received by the Company, after payment of
issuance costs of $4,622, was $64,144, of which $57,730 was recorded as share
capital and $6,414 was recorded as contributed surplus.

Shareholder Rights Plan

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
Expiration Time). 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 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 (the Separation Time) which 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.

20

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|8. | Share
    capital (continued)
|-- | -----------------------------

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.

|9. | 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 312009
    
    
    2008Statutory tax rate
    
    30.36%
    
    
    31.06%Loss from
      continuing operations before income tax recovery
    $
    (329,383
    )
    $
    (21,807
    )Income tax benefit
    $
    (100,000
    )
    $
    (6,773
    )Change in valuation allowance
    
    80,617
    
    
    (7,873
    )Change in substantively enacted tax rates
    
    3,195
    
    
    2,291Change in foreign exchange rates
    
    (6,164
    )
    
    10,592Non-deductible (non-taxable) items
    
    (6,442
    )
    
    1,155Reduction in loss carry forwards
    
    11,335
    
    
    608Future income tax
      recovery
    $
    (17,459
    )
    $
    -


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

December 31
    
    
    December 312009
    
    
    2008Future income tax assets:Losses carried forward
    $
    51,099
    
    $
    51,754Financing fees
    
    1,021
    
    
    1,306Asset retirement obligations
    
    754
    
    
    797Property, plant and equipment
    
    80,160
    
    
    -Less: valuation allowance
    
    (133,034
    )
    
    (50,940
    )Net future income tax asset
    
    -
    
    
    2,917Future income tax liabilitiesProperty, plant and equipment
    
    -
    
    
    (19,578
    )Net future income taxes
    $
    -
    
    $
    (16,661
    )


The components of the Company's future income tax balance
include a future income tax estimate of 34% of the carrying value of the Las Cristinas asset recorded in the parent entity for accounting purposes which may
not have deductibility for income tax purposes in the Venezuela Branch in the
foreseeable future. The Company recognized unrealized non-cash foreign currency
translation gains of $1,249 during the year ended December 31, 2009 (2008 -
$808). These translation gains result from the translation into U.S. dollars at
the end of the year of the Venezuelan-denominated future income tax liabilities
that are recognized in connection with these expenditures on the Las Cristinas
asset. Such currency translation gains and losses have been recorded in the
determination of net loss.

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.

21

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|9. | Income
    taxes (continued)
|-- | ----------------------------

At December 31, 2009 the Company had the following unused tax
losses available for tax purposes:

CountryYear of Expiry
    
    Canada
    
    
    Venezuela2010
    $
    36,786
    
    $
    2,9552011
    $
    -
    
    $
    4,1472012
    $
    -
    
    $
    2,4862014
    $
    16,684
    
    $
    -2015
    $
    35,078
    
    $
    -2026
    $
    26,753
    
    $
    -2027
    $
    23,697
    
    $
    -2028
    $
    22,944
    
    $
    -2029
    $
    21,849
    
    $
    -


|10. | Supplemental disclosures with respect to cash flows
|--- | ---------------------------------------------------

December 31
    
    
    December 312009
    
    
    2008Cash and cash equivalents consist of:Cash
    $
    6,897
    
    $
    1,600Canadian treasury bills
    
    -
    
    
    32,920$
    6,897
    
    $
    34,520Cash paid during the years ended December 31:2009
    
    
    2008For interest
    $
    9,375
    
    $
    9,375For income taxes
    $
    -
    
    $
    340Investment in property, plant
      and equipment for the years ended December 31:2009
    
    
    2008Net book value of property, plant and
      equipmentJanuary 1
    $
    343,652
    
    $
    317,179Net book value of property, plant and
      equipmentDecember 31
    
    39,203
    
    
    343,652Net decrease (increase) in property, plant and equipment
    
    304,449
    
    
    (26,473
    )Write down of property, plant and equipment
    
    (297,069
    )
    
    -Capitalization of stock compensation
    
    181
    
    
    33Future income taxes
    
    2,047
    
    
    3,226Amortization
    
    -
    
    
    (77
    )Net book value of equipment sold
    
    (19,420
    )
    
    (4,288
    )Net book value of
      equipment held for sale
    
    (4,416
    )
    
    -Net decrease before working capital items
    
    (14,228
    )
    
    (27,579
    )Changes in working capital related toproperty, plant and equipment acquisitions
    
    (851
    )
    
    (645
    )Cash investment in
      property, plant and equipment
    $
    (15,079
    )
    $
    (28,224
    )


22

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|10. | Supplemental disclosures with respect to cash flows (continued)
|--- | ---------------------------------------------------------------

Issuance of common shares for cash for the year ended
      December 31:2009
    
    
    2008Cash received from:Public offering
    $
    -
    
    $
    64,144Exercise of stock options
    
    -
    
    
    182$
    -
    
    $
    64,326


|11. | Segmented information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | The Company has one operating segment, which is the
      development of mining properties with the Las Cristinas Project as its
      principal operation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Property, plant and equipment all relate to the Las
      Cristinas Project and include long-lead time equipment required for its
      development, of which significant amounts are located temporarily in the
      United States and various other countries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|12. | Commitments and contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Las Cristinas commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Under the terms of the Mine Operating Contract with the
      CVG, the Company has undertaken to make all investments necessary to
      develop and exploit the deposits at Las Cristinas. Based on a study
      completed in November 2007, the Company estimates that approximately
      $300,000 of additional capital costs would have to be spent on Las
      Cristinas to meet this obligation after the receipt of the Permit. These
      projected cost estimates will be updated if and when the Company receives
      the Permit to commence development of the project.                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Action by Noteholders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | In December 2008, the Company was served with a notice of
      application (the Application) by the trustee for the Noteholders as
      described in Note 7. The trustee, on behalf of certain Noteholders sought,
      among other things, a declaration from the court that there has 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.                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | 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 acted
      reasonably and in accordance with its obligations to the Noteholders. The
      Noteholders have appealed this decision and a court hearing of the appeal
      is scheduled for late April 2010. Although Crystallex is of the opinion
      that the court's decision will be upheld, there can be no assurance that
      the appeal will be resolved in favour of the Company and an unfavourable
      outcome of this appeal may have a material adverse impact on the Company's
      financial condition.

23

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|12. | Commitments
    and contingencies (continued)
|--- | ---------------------------------------------

Proposed class action

The Company and certain officers and directors have been named
as 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 are described as investors who
acquired the Company's common stock during the period from March 27, 2006 to
April 30, 2008, inclusive (the Proposed Class Period). The complaint alleges
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 asserts 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 seeks
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.

In a court order dated April 7, 2009, the lead plaintiffs were
appointed and, on June 12, 2009, they filed an amended complaint. The defendants
filed a motion to dismiss on August 14, 2009. The lead plaintiffs filed an
opposition to the motion to dismiss on September 11, 2009 and the defendants
filed a reply thereto on September 29, 2009. The defendants also informed the
court of the December 16, 2009 decision of the Ontario Superior Court, which
dismissed all of the Noteholders' claims against Crystallex.

Crystallex believes that the complaint is without merit and
intends to vigorously defend itself against the action. However, because the
action is in its preliminary stages, the Company cannot provide assurances as to
the outcome of the action, nor can the range of losses, if any, be estimated.
Accordingly, no losses have been accrued.

Claim by an individual

On May 23, 2006, the Company and certain directors and officers
were served with a statement of claim by an individual alleging
misrepresentation, conspiracy and breach of contract, and claiming damages of
approximately Cdn$1.75 million. The Company has filed its statement of defence
and believes that there is little likelihood of any ultimate liability. However,
as the outcome of this matter cannot be determined at this time, the Company has
made no provision for this contingency as at December 31, 2009.

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 $980. The Company
believes these claims are without merit and plans to vigorously defend against
them. However, as the outcome of these claims cannot be determined at this time,
the Company has made no provision for these contingencies as at December 31,
2009.

24

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|13. | Related
    party transactions
|--- | ------------------------------

During the year ended December 31, 2009, the Company paid head
office rent of $126 (2008 - $11) to a subsidiary of a company that retains the
Chairman 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 until December 31, 2009 with a renewable clause for an
extension of three months. The advisory fee includes a work fee to a maximum of
$100, and a success fee which is only payable upon the fulfilment of certain
conditions. For the year ended December 31, 2009, the Company paid advisory work
fees of $75 under the terms of this advisory agreement.

During the year ended December 31, 2008, the Company paid
underwriting fees to a company which retains the Chairman of the Company as an
employee.

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.

|14. | 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 and cash equivalents that are held in investment accounts
with major Canadian chartered banks. The Company's investment policy limits its
investments to Canadian Government Treasury Bills.

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's has additional credit risk relating to value
added taxes receivable from the government of Venezuela.

Interest Rate Risk

Interest rate risk is the risk that the future cash flows of a
financial instrument will fluctuate because of changes in market interest rates.
The Company's cash and cash equivalents include highly liquid investments that
earn interest at market rates. Fluctuations in market rates of interest do not
have a significant impact on the Company's results from operations due to the
short term to maturity of the investments held. The interest on the Australian
dollar denominated promissory note payable is variable with the Australian prime
rate and based on the amount owing, fluctuations in the Australian prime rate
would not have a significant impact on the Company's results from operations.

25

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|14. | Risk
    management (continued)
|--- | -------------------------------

Currency Risk

The Company has operations in Venezuela, where currently there
is an exchange control regime, and is exposed to foreign exchange risk 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. Foreign exchange risk is derived
from monetary assets and liabilities denominated in Venezuelan BsF and Canadian
dollars.

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 312009
    
    
    2008Venezuelan BsF net assets15% increase in value
    $
    295
    
    $
    11115% decrease in value
    $
    (295
    )
    $
    (111
    )Canadian dollar net liabilities15% increase in value
    $
    (64
    )
    $
    (66
    )15% decrease in value
    $
    64
    
    $
    66


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 toMonths
    
    
    1
      Year
    
    
    5
      YearsCurrent liabilities
    $
    5,220
    
    $
    3,320
    
    $
    1,440
    
    $
    -Asset retirement obligations
    
    -
    
    
    -
    
    
    -
    
    
    2,217Debt
    
    -
    
    
    -
    
    
    -
    
    
    100,000Total
    $
    5,220
    
    $
    3,320
    
    $
    1,440
    
    $
    102,217


Fair value

At December 31, 2009 and 2008, the Company's financial
instruments consisted of cash and cash equivalents, restricted cash, accounts
receivable, accounts payable and accrued liabilities, promissory note payable
and long term notes payable. The financial instruments that are measured at fair
value and classified as Level 2 are cash and cash equivalents, and restricted
cash; the fair values of these instruments approximate their carrying values.
Accounts receivable, accounts payable and accrued liabilities, and promissory
note payable are measured at amortized cost and their fair values approximate
carrying values due to their short-term nature. The long term notes are
classified as held-to-maturity and are measured at amortized cost with the
fair value of $25,000 (2008: $30,000) provided as supplemental disclosure at
Note 7.

26

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|15. | Capital
    management
|--- | ----------------------

The Company's capital consists of cash, Notes payable and
shareholders' deficit. The Company's objective when managing capital is to
maintain adequate funds to safeguard its ability to continue as a going concern
and pursue the development of or obtain a successful outcome from the Las Cristinas project. 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, 2009. The Company is not subject
to externally imposed capital requirements.

|16. | 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, 2009Canadian
    
    
    
    
    
    
    
    
    U.S.GAAP
    
    
    Adjustments
    
    
    
    
    
    GAAPCurrent assets
    $
    16,060
    
    $
    -
    
    $
    
    
    
    16,060Current assets of discontinued operations
    
    1,129
    
    
    -
    
    
    
    
    
    1,129Property, plant and equipment
    
    39,203
    
    
    -
    
    
    (a)
    
    
    39,203Other
      assets
    
    1,736
    
    
    1,002
    
    
    (b)
    
    
    2,738$
    58,128
    
    $
    1,002
    
    $
    
    
    
    59,130Current liabilities
    $
    8,937
    
    $
    -
    
    $
    
    
    
    8,937Current liabilities of discontinued operations
    
    1,043
    
    
    -
    
    
    
    
    
    1,043Long-term liabilities of
      discontinued operations
    
    2,217
    
    
    -
    
    
    
    
    
    2,217Notes payable
    
    90,639
    
    
    1,002
    
    
    (b)
    
    
    91,641Shareholders' deficit
    
    (44,708
    )
    
    -
    
    
    
    
    
    (44,708
    )$
    58,128
    
    $
    1,002
    
    $
    
    
    
    59,130


27

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|16. | Differences between Canadian and United States
generally accepted accounting principles (continued)
|--- | ---------------------------------------------------------------------------------------------------

December 31, 2008Canadian
    
    
    
    
    
    
    
    
    U.S.GAAP
    
    
    Adjustments
    
    
    
    
    
    GAAPCurrent assets
    $
    35,837
    
    $
    -
    
    $
    
    
    
    35,837Current assets of discontinued operations
    
    1,689
    
    
    -
    
    
    
    
    
    1,689Property, plant and equipment
    
    343,652
    
    
    (245,888
    )
    
    (a)
    
    
    97,764Other assets
    
    1,286
    
    
    1,507
    
    
    (b)
    
    
    2,793$
    382,464
    
    $
    (244,381
    )
    $
    
    
    
    138,083Current liabilities
    $
    7,767
    
    $
    -
    
    $
    
    
    
    7,767Current liabilities of discontinued operations
    
    3,494
    
    
    -
    
    
    
    
    
    3,494Notes payable
    
    86,746
    
    
    1,507
    
    
    (b)
    
    
    88,253Future income taxes
    
    16,661
    
    
    (16,661
    )
    
    (a)
    
    
    -Shareholders' equity
    
    267,796
    
    
    (229,227
    )
    
    
    
    
    38,569$
    382,464
    
    $
    (244,381
    )
    $
    
    
    
    138,083


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.

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 312009
    
    
    2008Net loss under Canadian GAAP
    $
    
    
    
    (313,899
    )
    $
    (25,720
    )Mineral property costs
    
    (a)
    
    
    (16,456
    )
    
    -Adjustment to loss on disposal of property,
      plant and equipment
    
    (a)
    
    
    1,445
    
    
    -Net reversal of write down of property, plant and equipment
    
    (a)
    
    
    260,899
    
    
    -Future income taxes
    
    (a)
    
    
    2,047
    
    
    -Future income tax recovery
    
    (a)
    
    
    (17,459
    )
    
    -Unrealized gain on translation of future
      income taxes
    
    (a)
    
    
    (1,249
    )
    
    -Capitalization of interest to mineral properties
    
    (a)
    
    
    -
    
    
    12,830Write down of mineral properties
    
    (a)
    
    
    -
    
    
    (198,412
    )Write off of
      future income tax liability
    
    (a)
    
    
    -
    
    
    13,096Net loss and comprehensive loss under U.S. GAAP
    $
    
    
    
    (84,672
    )
    $
    (198,206
    )Net loss per share  basic and diluted
    $
    
    
    
    (0.29
    )
    $
    (0.68
    )Weighted average number of shares outstanding
    
    
    
    
    294,817,719
    
    
    290,958,931Loss from discontinued
      operations, net of tax, is the same for Canadian GAAP and U.S. GAAP.


28

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|16. | Differences between Canadian and United States generally
    accepted accounting principles (continued)
|--- | -------------------------------------------------------------------------------------------------------

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 312009
    
    
    2008Cash flows used in operating activitesreported under Canadian
      GAAP
    
    
    
    **$**
    (19,574
    )
    $
    (22,648
    )Mineral property costs
    
    (a)
    
    
    (15,079
    )
    
    -Adjustment to interest
    
    (a)
    
    
    -
    
    
    12,830Cash flows used in operating activities reported under U.S.
      GAAP
    
    
    
    
    (34,653
    )
    
    (9,818
    )Cash flows used in investing activities
      reported under Canadian GAAP
    
    
    
    
    (2,718
    )
    
    (22,185
    )Mineral property costs
    
    (a)
    
    
    15,079
    
    
    -Adjustment to interest
    
    (a)
    
    
    -
    
    
    (12,830
    )Cash flows from (used in) investing activities reported
      under U.S. GAAP
    
    
    
    
    12,361
    
    
    (35,015
    )Cash flows (used in) from financing
      activities reported under both Canadian and U.S. GAAP
    
    
    
    
    (3,794
    )
    
    64,326Net (decrease) increase in cash and cash equivalents during
      the year
    
    
    
    
    (26,086
    )
    
    19,493Decrease in cash and cash equivalents from
      discontinued operations
    
    
    
    
    (1,648
    )
    
    (1,049
    )Effects of exchange rate fluctuations on cash and cash
      equivalents
    
    
    
    
    111
    
    
    11Cash and cash equivalents, beginning of year
    
    
    
    
    34,520
    
    
    16,065Cash and cash equivalents, end of year
    
    
    
    **$**
    6,897
    
    $
    34,520


(a) Mineral properties and exploration and development costs

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.

29

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|16. | Differences between Candian and United States generally
accepted accounting principles (continued)
|--- | --------------------------------------------------------------------------------------------------

(a) Mineral properties and exploration and development costs
(continued)

As at December 31, 2008 the Company reviewed its policy of
continued capitalization of mineral property expenditures as a result of the
protracted delay in the receipt of the Permit to develop Las Cristinas. In
fiscal 2004 the Company commenced the capitalization of mineral property costs
upon the completion of a positive feasibility study in May 2004. At that time
the Company felt that the receipt of the Permit to legally commence development
of the mine was perfunctory. 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 2009, for U.S. GAAP purposes, the Company's policy is to expense all mineral
property costs and accordingly, $16,456 which were capitalized for Canadian GAAP
during the year have been expensed for U.S. GAAP. In 2009, the Company recorded,
under Canadian GAAP, a write down of $297,069 of the Las Cristinas mineral
property costs to the carrying value of the remaining mining equipment, whereas
for U.S GAAP purposes the required write down was $36,170 relating to
acquisition costs. As at December 31, 2009, the Canadian GAAP and U.S. GAAP
carrying values for property, plant and equipment are identical.

In 2009 the Company sold certain mining equipment and is in the
process of selling additional mining equipment. 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.

Under Canadian GAAP, the Company has elected to expense
interest costs incurred on qualifying mineral properties in the development
stage and reported interest as an operating activity. In 2008, under U.S. GAAP,
interest costs of $12,830 associated with the Las Cristinas mineral properties
under development had been capitalized, prior to the write-down, and reported as
investing activity. In 2009, for U.S. GAAP, all cash flows relating to mineral
properties are reported as operating activities.

At December 31, 2008, under U.S. GAAP, the Company wrote off
future income tax liability of $13,096 as a result of the write-down of mineral
property costs. 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.

(b) Deferred financing costs

Under Canadian GAAP, financing 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.

Accounting changes implemented in 2009

| | (i) | Codification of U.S. GAAP  On July 1, 2009, the Financial
Accounting Standards Board (FASB) codification of U.S. GAAP was launched as
the sole source of authoritative non-governmental U.S. GAAP. The Accounting Standards Codification (ASC) is not
intended to change U.S. GAAP, but rather reorganize existing guidance by
accounting topic to allow easier identification of applicable standards. This
codification has been used in the references to U.S. GAAP.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

30

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|16. | Differences between Canadian and United States generally accepted accounting
    principles (continued)
|--- | -------------------------------------------------------------------------------------------------------

Accounting changes implemented in 2009 (continued)

| | (ii)  | Disclosure about Derivative Instruments and Hedging Activities 
In March 2008, the FASB issued new disclosure requirements for derivative
instruments and hedging activities. Under this guidance entities are required to
provide enhanced disclosures about how and why an entity uses derivative
instruments, how derivative instruments and the related hedged items are
accounted for, and how derivative instruments and the related hedged items
affect an entity's financial position, financial performance and cash flows.
This standard was adopted by the Company effective January 1, 2009. The adoption
of this standard had no impact on the Company's consolidated financial
statements as the Company does not currently have any derivative instruments or
engage in hedging activities.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (iii) | Business Combinations  In December 2007, FASB issued this new
standard which requires an acquiring entity in a business combination to
recognize all (and only) the assets acquired and liabilities assumed in the
transaction; establishes the acquisition-date fair value as the measurement
objective for all assets acquired and liabilities assumed; and requires the
acquirer to disclose to investors and other users all of the information they
need to evaluate and understand the nature and financial effect of the business
combination. The adoption of this standard effective January 1, 2009 did not
have any impact on the Company's consolidated financial statements for U.S. GAAP.                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (iv)  | Non-controlling Interest in Consolidated Financial Statements 
In December 2007, the FASB issued this new standard which requires all entities
to report non-controlling (minority) interest in subsidiaries in the same way as
equity in the consolidated financial statements. The adoption of this standard
effective January 1, 2009 did not have any impact on the Company's consolidated
financial statements for U.S. GAAP.                                                                                                                                                                                                                                                                                                                                                                        
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (v)   | Measuring Fair Value of Liabilities  In August 2009, the FASB
issued this new standard which is effective prospectively for interim periods
beginning after August 1, 2009, with early adoption permitted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

Existing guidance required that the fair value of liabilities
be measured under the assumption that the liability is transferred to a market
participant. ASU 2009-05 provides further clarification that fair value
measurement of a liability should assume transfer to a market participant as of
the measurement date without settlement with the counterparty. Therefore, the
fair value of the liability reflects non-performance risk, including but not
limited to the reporting entity's own credit risk. The adoption of this standard
effective October 1, 2009 did not have a material impact on the Company's
consolidated financial statements for U.S. GAAP.

Accounting standards issued but not yet adopted

(i)

Amendments to accounting for VIEs  In the second quarter
of 2009, the FASB issued an amendment to its guidance on Variable Interest
Entities (VIE) which is effective for the Company's 2010 fiscal year. This new
guidance makes significant changes to the model for determining who should
consolidate a VIE by specifically eliminating the quantitative approach to
determining the primary beneficiary. The amendment requires the use of a
qualitative approach to determine the primary beneficiary based on the power to
direct activities of the VIE that most significantly impact its economic
performance and an obligation to absorb losses or to receive benefits of the
VIE. If the power is shared, then no party is the primary beneficiary. This
amendment is not expected to have an impact on the Company.

31

---

|Crystallex International Corporation          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2009 and 2008                    
|(US$ thousands,
      except as noted)        

|17. | Subsequent event
|--- | ----------------

Subsequent to the year ended December 31, 2009, the Company
received a $2,500 convertible loan from a potential strategic investor. This
convertible loan bears interest at 6% and is repayable on June 30, 2010 with an
extension up to November 30, 2010 as determined by the lender. Subject to
regulatory approval, the lender has the right exercisable for a period from May
31, 2010 to November 30, 2010 to cause the conversion of any amount of the
unpaid balance of this loan into common shares of Crystallex at a price per
common share equal to the greater of Cdn$0.20 and 95% of the 5 day
volume-weighted-average trading price on the Toronto Stock Exchange of the
common shares ending on the date of conversion.

32

---