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UNITED
        STATESSECURITIES AND EXCHANGE
  COMMISSIONWashington, D.C. 20549

FORM
20-F/A  No. 3

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| | REGISTRATION STATEMENT PURSUANT
        TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
| | ------------------------------------------------------------------------------------------------------
| |                                                                                                       
| | OR                                                                                                    
| |                                                                                                       
| | ANNUAL REPORT PURSUANT TO SECTION
        13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934          
| | For the fiscal year ended December
        31, 2003                                                   
| |                                                                                                       
| | OR                                                                                                    
| |                                                                                                       
| | TRANSITION REPORT PURSUANT TO
        SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934      
| | For the transition
        period from _______________ to                                             

Commission
      file number: 1-14620

CRYSTALLEX
        INTERNATIONAL CORPORATION(Exact name of Registrant as specified in its
  charter)

Crystallex
      International Corporation(Translation
  of Registrant's name into English)

Canada(Jurisdiction of incorporation or organization)

18
        King Street East, Suite 1210, Toronto, Ontario, Canada M5C 1C4(Address of principal executive offices)

Securities registered or to be registered pursuant
    to Section 12(b) of the Act:

|Title
            of each class         | Name of each
            exchange on which registered
|--------------------------------------- | -----------------------------------------------------
|Common Shares without
        par value | American Stock Exchange                              
|                                        | Toronto Stock Exchange                               

Securities
    registered or to be registered pursuant to Section 12(g) of the Act:None(Title of Class)

Securities
    for which there is a reporting obligation pursuant to Section 15 (d) of the
    Act:None

As of December
    31, 2003, the registrant had outstanding:135,403,523Common
  Shares; No Class A Preference Shares; No Class B Preference Shares

As of
    May 3, 2004, the registrant had outstanding:179,498,492 Common Shares; No Class A Preference Shares; No Class B Preference
  Shares

---

Indicate by check mark
      whether the registrant (1) has filed all reports required to be filed by
      Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
      12 months (or for such shorter period that the registrant was required
      to file such report(s), and (2) has been subject to such filing requirements
      for the past 90 days:


|Yes |  | No
|--- |  | --

Indicate by check mark
      which financial statement item the registrant has elected to follow:


|Item
          17 |  | Item
        18
|----------------- |  | ---------------

(APPLICABLE
      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE
      YEARS)

Indicate by check mark
      whether the registrant has filed all documents and reports required to
      be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of
      1934 subsequent to the distribution of securities under a plan confirmed
      by a court.


Not applicable.


|
|
|
|





|TABLE
            OF CONTENTS                                                            
|-----------------------------------------------------------------------------------------
|                                                                                         
|Item                                                                                     
|                                                                                         
|                                                                                         
|1  Identity of Directors, Senior
        Management, and Advisers                       
|                                                                                         
|2  Offer Statistics and Expected
        Timetable                                      
|                                                                                         
|3  Key Information                                                                      
|                                                                                         
|4  Information on Crystallex                                                            
|                                                                                         
|5  Operating and Financial Review
        and Prospects                                 
|                                                                                         
|6  Directors, Senior Management
        and Employees                                   
|                                                                                         
|7  Major Shareholders and Related
        Party Transactions                            
|                                                                                         
|8  Financial Information                                                                
|                                                                                         
|9  The Offer and Listing                                                                
|                                                                                         
|10  Additional Information                                                              
|                                                                                         
|11  Quantitative and Qualitative
        Disclosures About Market Risks                 
|                                                                                         
|12  Description of Securities
        Other Than Equity Securities                      
|                                                                                         
|13  Defaults, Dividend Arrearages
        and Delinquencies                             
|                                                                                         
|14  Material Modifications to
        the Rights of Security Holders and Use of Proceeds
|                                                                                         
|15  Controls and Procedures                                                             
|                                                                                         
|16A  Audit Committee Financial
        Expert                                           
|                                                                                         
|16B  Code
    of Ethics                                                                 
|                                                                                         
|16C  Principal
        Accountant Fees and Services                                     
|                                                                                         
|16D  Exemptions
        from the Listing Standards for Audit Committees                 
|                                                                                         
|16E  Purchases
        of Equity Securities by the Issuer and Affiliated Purchasers     
|                                                                                         
|17  Financial Statements                                                                
|                                                                                         
|18  Financial Statements                                                                
|                                                                                         
|19  Exhibits                                                                            
|                                                                                         
|Financial Statements                                                                     
|                                                                                         
|Signature                                                                                
|                                                                                         
|Certifications                                                                           

ii

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Geological Standards:
      When used in this annual report, Mineral Deposits were used to calculate
      the Ore Reserves by application of minimum mining widths, dilution, mining
      recovery factors, operating costs and metal prices. With respect to open
      pit mining, optimized pits were generated, followed by detailed pit design
      and engineering in establishment of Ore Reserves. Unless the context otherwise
      requires, the term Ore Reserves used in this annual report corresponds
      to Probable and/or Proven and Probable Reserves.


Note:Unless otherwise
      indicated, all amounts in this annual report and exhibits thereto are stated
      in Canadian dollars. At May 3, 2004, the noon buying rate in New York City
      for cable transfers in Canadian dollars as certified for customs purposes
      by the Federal Reserve Bank of New York was one Canadian dollar equalled
      $0.728 United States Dollars. (See Item 3.A, Key Information  Selected
      Financial Data, for further information.)


FORWARD LOOKING STATEMENTS

This annual report contains certain
      forward-looking statements and information regarding Crystallex International
      Corporations financial position, business strategy and plans and
      objectives of its management for future operations that derive from managements
      beliefs and assumptions based on information currently available. The statements
      and information are forward-looking statements within the meaning of Section
      27A of the Securities Act of 1933, as amended, and Section 21E of
      the Securities Exchange Act of 1934, as amended. When used in this
      annual report, the words "anticipate," "believe," "intend," "estimate," "expect," "will," "could," "may" and
      similar expressions intend to identify forward-looking statements, but
      the fact that any of these words does not appear does not mean that the
      statement is not forward-looking. Forward-looking statements, which appear
      in a number of places in this annual report, describe, among other things,
      risks and uncertainties, and reflect managements current views with
      respect to future events. Actual results could differ materially from those
      contemplated by the forward-looking statements and are subject to certain
      risks, uncertainties and assumptions, including those described under "Risk
      Factors" and elsewhere in this annual report. Should one or more of these
      risks or uncertainties materialize, or should underlying assumptions prove
      incorrect, actual results may vary materially from those described in this
      annual report. This paragraph expressly qualifies all subsequent written
      and oral forward-looking statements attributable to Crystallex or persons
      acting on its behalf.


iii

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PART I

ITEM 1  IDENTITY OF DIRECTORS,
      SENIOR MANAGEMENT, AND ADVISERS

Not Applicable


ITEM 2  OFFER STATISTICS
      AND EXPECTED TIMETABLE

Not applicable


ITEM 3  KEY INFORMATION

|A. | Selected Financial Data
|-- | -----------------------

Exchange Rates


Unless otherwise indicated, all
      dollar amounts herein are stated in Canadian dollars. The following tables
      illustrate the rate of exchange for Canadian dollars per US$1.00 in effect
      at the end of the following periods and the average rate of exchange based
      on the noon buying rate in New York City for cable transfers in Canadian
      dollars as certified for customs purposes by the Federal Reserve Bank of
      New York:


|Month
          and Year | High per |       | Low per |  | Average per | 
|------------------------ | -------- | ----- | ------- |  | ----------- | 
|Month                    | Month    | Month
|                         |          |       |        
|November 2003            | 1.3362   |       | 1.2930  |  | 1.3130      | 
|December 2003            | 1.3405   |       | 1.2923  |  | 1.3128      | 
|January 2004             | 1.3340   |       | 1.2690  |  | 1.2958      | 
|February 2004            | 1.3442   |       | 1.3108  |  | 1.3299      | 
|March 2004               | 1.3437   |       | 1.3080  |  | 1.3286      | 
|April 2004               | 1.3711   |       | 1.3101  |  | 1.3721      | 
|                         |          |       |         |  |             | 

|Years                           | Average of
          Exchange | 
|------------------------------- | ----------------------------- | 
|Rates on
          Last Days of
|Month for
          Each Year  
|                                |                              
|2003                            | 1.4012                        | 
|2002                            | 1.5702                        | 
|2001                            | 1.5484                        | 
|2000                            | 1.4873                        | 
|1999                            | 1.4827                        | 

As of May 3, 2004, the exchange
      rate was CDN $1.3740 for US$1.00.


Source-
    Federal Reserve Bank of New York


1

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Selected Financial Data


The selected financial data shown
      and expressed in Canadian dollars in the following tables below have been
      derived from and should be read in conjunction with the financial statements
      and notes included as Item 18 in this document. Crystallex's financial
      statements have been prepared in accordance with generally accepted accounting
      standards in Canada and have been reconciled to accounting principles generally
      accepted in the United States. The selected financial data as at December
      31, 2003 and 2002 and for the three years ending December 31, 2003 is derived
      from the audited financial statements appearing in this document.


Selected Consolidated
      Financial Data in Canadian Dollars
  (Canadian GAAP)

|                                                              | For
          Year |               | For Year      |              | For Year    |   | For
          Year Ended |   | For Year    |  
|------------------------------------------------------------- | ------------------ | ------------- | ------------- | ------------ | ----------- | - | ------------------------ | - | ----------- | -
|Ended                                                         | Ended              | Ended        
|Ended                                                         | December 31,       | December      | December 31,  | December 31,
|December                                                      | 2002(1)            | 31, 2001(1)   | 2000(1)       | 1999(2)     
|31, 2003                                                      | (as restated)      | (as restated) | (as restated) | (as amended)
|                                                              |                    |               |               |             
|Income Statement Data                                         |                    |               |               |              |             |   |                          |   |             |  
|Mining Revenue(3)                                             | 15,566,511         |               | 13,317,819    |              | 16,005,855  |   | 8,507,733                |   |            |  
|                                                              |                    |               |               |              |             |   |                          |   |             |  
|Income (loss) before Income Taxes
        from                |                    |               |               |              |             |   |                          |   |             |  
|   Continuing
        Operations                             | (78,026,642        | )             | (52,721,972   | )            | (34,416,262 | ) | 5,150,460                |   |            |  
|   Discontinued
        Operations                           | (4,027,210         | )             | (3,737,840    |              | (8,136,179  | ) | (601,600                 | ) | (618,936    | )
|                                                              |                    |               |               |              |             |   |                          |   |             |  
|Income Taxes                                                  |                   |               |              |              |            |   |                         |   |            |  
|                                                              |                    |               |               |              |             |   |                          |   |             |  
|Net Income (loss)                                             | (82,053,852        | )             | (56,459,812   | )            | (42,552,441 | ) | 4,548,860                |   | (618,936    | )
|                                                              |                    |               |               |              |             |   |                          |   |             |  
|Net Income (loss) per Common
        Share    Basic          |                    |               |               |              |             |   |                          |   |             |  
|   Continuing
        Operations                             | (0.67              | )             | (0.63         | )            | (0.50       | ) | 0.09                     |   | (0.00       | )
|   Discontinued
        Operations                           | (0.03              | )             | (0.04         | )            | (0.12       | ) | 0.00                     |   | (0.00       | )
|                                                              |                    |               |               |              |             |   |                          |   |             |  
|   Net
        Income (loss) per Common Share                | (0.70              | )             | (0.67         | )            | (0.62       | ) | 0.09                     |   | (0.00       | )
|                                                              |                    |               |               |              |             |   |                          |   |             |  
|Weighted Average Number of Shares
        Outstanding  Basic | 118,309,198        |               | 84,441,287    |              | 69,117,738  |   | 52,965,842               |   | 39,308,858  |  
|                                                              |                    |               |               |              |             |   |                          |   |             |  
|Balance Sheet Data                                            |                    |               |               |              |             |   |                          |   |             |  
|Cash and Short-Term Investments                               | 33,863,448         |               | 5,695,130     |              | 14,409,831  |   | 4,418,442                |   | 6,652,863   |  
|Working Capital (Deficiency)                                  | 4,699,786          |               | (19,596,429   | )            | 9,261,655   |   | 5,528,714                |   | 6,701,812   |  
|Total Assets                                                  | 173,524,848        |               | 182,367,984   |              | 166,980,682 |   | 165,561,727              |   | 110,841,419 |  
|Long-Term Debt                                                | 8,373,406          |               | 26,206,277    |              | 25,216,992  |   | 32,656,570               |   | 16,848,835  |  
|Shareholders Equity                                          | 102,058,845        |               | 83,084,535    |              | 103,281,456 |   | 107,198,254              |   | 75,355,365  |  

|   
|---
|(1)
|(2)
|(3)

2

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Crystallex has not paid any dividends
      since its incorporation.


Had the consolidated financial
      statements of Crystallex been prepared in accordance with accounting principles
      generally accepted in the United States, certain selected financial data
      would have been reported as shown on the following table:




|                                                      | Selected
              Consolidated Financial Data in Canadian Dollars (U.S.
              GAAP) |  
|----------------------------------------------------- | ------------------------------------------------------------------------------------------------ | -
|                                                      |                                                                                                  |  
|                                                      | For
            Year
        Ended
        December 31,
        2003                             |  
|                                                      |                                                                                                  |  
|Income
            Statement Data                     |                                                                                                  |  
|Mining Revenue(3)                                     | 15,566,511                                                                                       |  
|                                                      |                                                                                                  |  
|Loss before Income Taxes Under
        U.S. GAAP from |                                                                                                  |  
| Continuing Operations                               | (90,650,590                                                                                      | )
| Discontinued Operations                             | (4,027,210                                                                                       | )
|                                                      |                                                                                                  |  
|Income Taxes                                          |                                                                                                 |  
|                                                      |                                                                                                  |  
|Net Loss                                              | (94,677,800                                                                                      | )
|                                                      |                                                                                                  |  
|Net Loss per Common Share  Basic                     |                                                                                                  |  
| Continuing Operations                               | (0.78                                                                                            | )
| Discontinued Operations                             | (0.03                                                                                            | )
|                                                      |                                                                                                  |  
|Net loss per Common Share                             | (0.81                                                                                            | )
|                                                      |                                                                                                  |  
|Weighted Average                                      |                                                                                                  |  
|Number of Shares                                      |                                                                                                  |  
|Outstanding  Basic                                   | 118,309,198                                                                                      |  
|                                                      |                                                                                                  |  
|Balance SheetData                                     |                                                                                                  |  
|Cash and Short-Term Investments                       | 33,863,448                                                                                       |  
|Working Capital (Deficiency)                          | 4,699,786                                                                                        |  
|Total Assets                                          | 69,282,525                                                                                       |  
|Long-Term Debt                                        | 8,373,406                                                                                        |  
|Shareholders Equity                                  | (2,183,478                                                                                       | )

|   
|---
|(1)
|(2)
|(3)

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Under U.S. generally accepted
      accounting principles, Crystallex has written down its investment in mineral
      properties for those properties with no mineral reserves. As a result,
      during the years ended December 31, 2003, 2002, 2001, 2000, and 1999, Crystallex
      incurred mineral property write-downs of $3,761,273, $42,868,819, $13,306,689,
      $12,643,590, and $5,497,813, respectively.


|B. | Capitalization and Indebtedness
|-- | -------------------------------

Not Applicable


|C. | Reasons for the Offer and Use of Proceeds
|-- | -----------------------------------------

Not Applicable


|D. | Risk Factors
|-- | ------------

Las Cristinas Properties


A third party has filed court
        actions in Venezuela alleging that it has the right to mine the Las Cristinas
        properties. If the actions are successful, Crystallex could lose its
        rights to those properties.


The rights of Crystallex to develop
      the Las Cristinas 4, 5, 6 and 7 deposits (the Las Cristinas Deposits)
      are derived from: (a) a presidential decree which authorized the MEM to
      contract for the exploitation of the Las Cristinas Deposits and an agreement
      between the MEM and the CVG authorizing the CVG to enter into a mine operation
      agreement with a third party and (b) a mine operation agreement between
      the CVG and Crystallex dated September 17, 2002 (the MOA).
      Under the terms of the MOA, the administration of the Las Cristinas Deposits
      relating to gold,including
      its exploration, development, exploitation, commercialization and sale,
      has been granted exclusively to Crystallex as provided by the mining law
      of Venezuela. The CVG had previously entered into a mining contract with
      Minera Las Cristinas, C.A. (MINCA) to develop the Las Cristinas
      Deposits (the MINCA Contract). MINCA produced no gold and suspended
      its development activities on the Las Cristinas Deposits. As a result,
      the CVG noted MINCA in default of its agreement and subsequently terminated
      the MINCA Contract. Thereafter, the CVG entered into the MOA with Crystallex.
      (See Item 4D, Information on Crystallex  Property, Plants
      and Equipment  Las Cristinas 4, 5, 6 and 7, beginning on page
      22.) MINCA has claimed that the cancellation of the MINCA Contract was
      illegal and has commenced legal actions in Venezuela disputing the CVGs
      legal authority for cancelling the MINCA Contract and entering into the
      MOA. Crystallex cannot predict the outcome of the various MINCA legal actions
      or any impact that these actions could have on mining rights under the
      MOA, including whether these actions could lead to the termination of Crystallexs
      rights under the MOA. 4


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Should these rights under the
      MOA be terminated, Crystallex would be required to write off its carrying
      value in Las Cristinas, which was approximately $94 million as of December
      31, 2003.


Crystallexs mining rights are contractual
        and may be terminated in the event of breach of the MOA.


Under the MOA, and in accordance
      with applicable Venezuelan mining laws, ownership of the Las Cristinas
      Deposits belongs to the Republic of Venezuela. The MOA does not transfer
      any property ownership rights to Crystallex, and the right of Crystallex
      to develop the Las Cristinas Deposits is contingent upon Crystallex continuing
      to meet its ongoing obligations under the MOA. (See Item 4D, Information
      on Crystallex  Property, Plants and Equipment  Las Cristinas
      4, 5, 6 and 7, beginning on page 22.) Among other things, the MOA
      requires that Crystallex make all necessary investments and complete all
      works necessary to reactivate the Las Cristinas Deposits; design, construct
      and operate a processing plant, to process gold for its subsequent commercialization
      and sale; put into production the Las Cristinas mining project by May 16,
      2004; and return the mine, its installations, and equipment to the CVG
      upon termination of the MOA. On March 8, 2004, the CVG, acting under its
      mandate from the MEM and as the authorized agency of the Republic of Venezuela,
      approved the full feasibility study for the Las Cristinas project including
      the development plan and timeline presented thereunder. Upon receiving
      such approval, Crystallex immediately commenced exploition of the Las Cristinas
      Deposits, as contemplated by Article 58 of the Venezuelan Mining Law and
      consistent with the provisions of the MOA, with the initiation of the first
      phase of the development. This included the granting of its EPCM contract,
      the commencement of geotechnical drilling, the filing of permit applications
      and the refurbishment of the mining camp. The right of Crystallex to develop
      the gold contained in the Las Cristinas Deposits is contingent upon Crystallex
      continuing to meet its ongoing obligations under the MOA. In the event
      of a breach of the MOA which was not cured by Crystallex, such breach could
      result in the CVG having the right to terminate the MOA.


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Crystallex requires additional funding
          to develop its mining properties, and lack of funding may delay or
          reduce mining activities and may result in default in performance under
          and termination of the MOA.


Under
    the terms of the MOA, Crystallex is required, among other things, to make
    all necessary investments and complete all works necessary to reactivate
    the Las Cristinas Deposits, to design, construct and operate a processing
    plant, to process gold for its subsequent commercialization and sale and
    to return the mine, its installations and equipment to the CVG upon termination
    of the MOA. In order to develop the Las Cristinas project and its other mining
    projects, Crystallex will need to raise additional financing which may include
    one or more of non-recourse project debt, mezzanine debt and additional equity
    financing. ( SeeItem
    5, Operating and Financial Review and Prospects  Financial Overview  Liquidity
    and Capital Resources, page 53.) Given the fact that the MOA maintains
    ownership rights in the CVG, that Crystallexs rights under the MOA
    are not assignable without consent, that a third party has filed court actions
    in Venezuela alleging that it has the right to mine the Las Cristinas Deposits,
    and the Las Cristinas Deposits are located in an area where mining rights
    may be restricted, sufficient additional financing may not be available to
    Crystallex. Crystallex currently has limited financial resources, and its
    failure to obtain such additional financing could result in the delay or
    indefinite postponement of the exploration and development of Crystallexs
    mining projects and could lead to Crystallex defaulting under the MOA.


The Las Cristinas Deposits are located
          in an area where mining activities may be restricted, thereby impairing
          the ability of Crystallex to exploit the Las Cristinas Deposits.


The Las Cristinas properties
      are located within the Imataca Forest Reserve. The Presidential decree
      regulating the Imataca region recognizes mining activities as a permitted
      use in the Forest Reserve and establishes the framework for the mining
      activities which may take place within the region. That Presidential decree
      has been the subject of legal challenges before the Venezuelan courts since
      1997. Pending resolution of these challenges, the Venezuelan courts issued
      an interim order that no new mining concessions or rights, as opposed to
      existing or previously obtained mining rights, could be granted in the
      region. If a final ruling of the Venezuelan courts on this matter imposes
      restrictions on mining activities within the Imataca Forest Reserve, it
      is possible that such restrictions could be retroactive in nature and could
      prevent Crystallex from exploiting these existing mining properties.


Crystallex could lose its mining properties
          if it defaults on its loan facility.


Crystallexs loan facility
      requires that Crystallex maintain specific financial ratios and satisfy
      financial condition tests. Events beyond Crystallexs control, including
      changes in general economic and business conditions, may affect Crystallexs
      ability to satisfy these covenants, which could result in a default under
      this loan facility. If an event of default under this facility occurs,
      the lender could elect to declare all principal amounts outstanding thereunder,
      together with accrued interest, to be immediately due and payable. The
      lender could also elect to enforce its security interest over substantially
      all property relating to Crystallexs Tomi property, the Revemin mill
      and Crystallexs share interest in El Callao Mining Corp.


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Uncertainty of ore reserve estimates
          could lead Crystallex to allocate its capital to deposits which ultimately
          prove uneconomic and forego development of potentially significant
          deposits.


Crystallexs business relies
      upon the accuracy of its determinations as to whether a given deposit has
      significant mineable minerals. Crystallexs reported mineral reserves
      are only estimates. There is no certainty that the estimated mineral reserves
      will be recovered or that they will be recovered at the rates estimated.
      Mineral reserve estimates are based on limited sampling, and, consequently,
      are uncertain because the samples may not be representative. Mineral reserve
      estimates may require revision (either up or down) based on actual production
      experience. Market fluctuations in the price of metals, as well as increased
      production costs or reduced recovery rates, may render certain mineral
      reserves uneconomic and may ultimately result in a restatement of reserves.
      Moreover, short-term operating factors relating to the mineral reserves,
      such as the need for sequential development of ore bodies and the processing
      of new or different ore grades, may adversely affect Crystallexs
      profitability in any particular accounting period. If Crystallexs
      estimates are incorrect, it will not correctly allocate its resources,
      causing it either to spend too much at what could be a less than an economical
      deposit or to fail to mine what could be a significant deposit.


Uncertainty with respect to title to
          remaining mineral properties may result in loss of mining rights without
          compensation for development expenditures.


Acquisition of title to mineral
      properties is a very detailed and time-consuming process. Title to, and
      the area of, mineral claims may be disputed. Crystallex does not know whether
      someone will challenge or impugn title to its properties. As a result,
      Crystallex can never be certain that it will have valid title to its mining
      properties. Mining properties sometimes contain claims or transfer histories
      that examiners cannot verify, and transfers under foreign law often are
      complex. Crystallex does not carry title insurance on its properties. Therefore,
      a successful claim that Crystallex does not have title to a property could
      cause Crystallex to lose its rights to mine that property, perhaps without
      receiving any compensation for its prior expenditures relating to the property.


Gold price volatility may negatively
          impact Crystallexs cash flow and profitability, cause an adjustment
          of its reserves and result in a reduction or suspension of its mining
          activities.


Gold prices historically have
      fluctuated widely and are affected by numerous external factors beyond
      Crystallexs control. Between 1998 and 2003, the gold price fluctuated
      from a low of U.S.$253 to a high of U.S.$416. (SeeItem
      4B, Information on Crystallex  Business Overview  The
      Gold Market, page 18.) On May 3, 2004, the p.m. fixing price of gold
      sold in the London Bullion Market was U.S.$391.25per
      ounce.


The gold price can fluctuate
      widely and is affected by numerous factors beyond Crystallexs control,
      including industrial and jewelry demand, inflation and expectations with
      respect to the rate of inflation, the strength of the U.S. dollar and of
      other currencies, interest rates, gold sales by central banks, forward
      sales by producers, global or regional political or financial events, and production
      and cost levels in major gold-producing regions. In addition, the gold
      price is sometimes subject to rapid short-term changes because of speculative
      activities.


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The profitability of Crystallexs
      operations, its revenues and its cash flow as well as the market price
      of its common shares are significantly affected by changes in gold prices.
      If gold prices decline for a significant period below the cost of production
      of any or all of Crystallexs operations, it may not be economically
      feasible to continue production at such properties. This would materially
      affect production, profitability and Crystallexs financial position.
      A decline in the market price of gold may also require Crystallex to write-down
      the carrying value of its mineral reserves, which might have a material
      and adverse effect on its earnings and profitability. Should any significant
      writedowns in reserves be required, material writedowns of Crystallexs
      investment in the affected mining properties and increased amortization,
      reclamation and closure charges may be required. Accordingly, even if Crystallex
      discovers and produces commercial amounts of gold, gold prices may not
      be high enough for Crystallex to sell gold profitably.


Gold hedging activities may create risk
          of losses depending upon the price of gold, the ability of Crystallex
          to produce and deliver gold, and the performance of third party buyers.


Crystallex has entered into forward
      contracts and written call options to sell a portion of the gold that it
      anticipates it will produce at its mines. These contracts obligate Crystallex
      to sell the gold at a price set when it enters into the contract, regardless
      of the price when Crystallex actually produces the gold. Accordingly, there
      is a risk that the price of gold is higher at the time Crystallex produces
      the gold than when it enters into the contracts, so that Crystallex must
      sell the gold at a lower price than it could have received if it did not
      enter into the contracts. In addition, if Crystallex is not able to produce
      and deliver the amount of gold specified in the contracts, it may be required
      to buy gold at market prices to satisfy its contract obligations. These
      market prices may be higher than the agreed upon delivery prices or higher
      than Crystallexs production costs.SeeItem
      5, Operating and Financial Review and Prospects  Financial
      Overview  Forward Sales and Written Call Options  Mark-to-Market
      (Fair Value), page 52. Further, in respect of the forward contracts,
      the entity contracting to buy the gold from Crystallex could default, which
      means that if the contract price is higher than the market price at the
      time of delivery, Crystallex will not likely be able to resell the gold
      at the higher price.


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| | Crystallex faces significant risks in
            the exploration, development and operation of its mining properties,
            and the success of its business will be dependent upon its management
            of such risks.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The business of exploring for
      and mining of minerals involves a high degree of risk. Few properties that
      are explored are ultimately developed into producing mines. Unusual or
      unexpected formations, formation pressures, fires, power outages, labor
      disruptions, flooding, explosions, tailings impoundment failures, cave-ins,
      landslides and the inability to obtain adequate machinery, equipment or
      labor are some of the risks involved in the operation of mines and the
      conduct of exploration programs. Substantial expenditures are required
      to establish ore reserves through drilling, to develop metallurgical processes
      to extract the metal from the ore and, in the case of new properties, to
      develop the mining and processing facilities and infrastructure at any
      site chosen for mining. Crystallex does not know whether it will discover
      minerals in sufficient quantities and manage the production risks in order
      to justify commercial exploitation, whether it will discover minerals in
      sufficient quantities to justify commercial operations, or whether it will
      obtain on a timely basis the funds required for development. The economics
      of developing gold and other mineral properties are affected by many factors,
      including the cost of operations, variations in the grade of ore mined
      and metals recovered, fluctuations in metal markets, costs of processing
      equipment, continuing access to smelter facilities on acceptable terms
      and other factors, such as government regulations, including regulations
      relating to royalties, allowable production, importing and exporting of
      minerals and environmental protection.


Crystallexs operations may
      also be affected by the presence of illegal miners (something which is
      not uncommon in the gold mining areas of the Guyana shield area of Venezuela).
      Although Crystallex, in conjunction with the local authorities, employs
      strategies to control the presence of illegal miners, such presence could
      nevertheless hurt Crystallexs mining operations.


| | Crystallex faces potential risks and
            uncertainties resulting from the location of its properties and operations
            in countries where political, governmental or other activities may
            disrupt its business, including property rights, exploration and
            mining activities and the movement of funds.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Political and related legal and
      economic uncertainty may exist in countries where Crystallex may operate.
      Crystallexs mineral exploration and mining activities may be hurt
      by political instability and changes to government regulation relating
      to the mining industry. Risks of foreign operations may include political
      unrest, labor disputes, invalidation of governmental orders and permits,
      corruption, war, civil disturbances and terrorist actions, arbitrary changes
      in law or policies of particular countries, changes to government regulation
      relating to the mining industry, foreign taxation, price and currency controls,
      delays in obtaining or the inability to obtain necessary governmental permits,
      opposition to mining from environmental or other nongovernmental organizations,
      limitations on foreign ownership, limitations on the repatriation of earnings,
      limitations on gold exports and increased financing costs. These risks
      may limit or disrupt Crystallexs mineral exploration and mining activities,
      restrict the movement of funds or result in the deprivation of contract
      rights or the taking of property by nationalization or expropriation without
      fair compensation.


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Crystallex does not know what,
      if any, negative impact recent and ongoing political unrest in Venezuela,
      including civil disturbances, fuel shortages, currency and exchange controls,
      and labor strikes, will have on it in the future, particularly if these
      conditions were to continue for an extended period of time, and there can
      be no assurance that Crystallexs operations would not be adversely
      affected.


| | Crystallex may not insure or be able
            to insure certain risks, which may result in increased costs and
            reduced profitability.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------

Exploration, development and
      production operations on mineral properties involve numerous risks, including:


| |  | unexpected or unusual geological
        operating conditions
| | - | -------------------------------------------------------------
| |  | rock bursts                                                  
| |  | cave-ins                                                     
| |  | fires                                                        
| |  | floods                                                       
| |  | earthquakes and other environmental
        occurrences      
| |  | political and social instability.                            

It is not always possible to
      obtain insurance against all such risks, and Crystallex may decide not
      to insure against certain risks as a result of high premiums or other reasons.
      Should such liabilities arise, they could reduce or eliminate profitability
      and result in increasing costs. Crystallex does not maintain insurance
      against environmental risks.


| | Crystallex faces industry competition
          in the acquisition of mining properties and the recruitment and retention
          of qualified personnel.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------

There is competition within the
      mining industry for the discovery and acquisition of properties considered
      to have commercial potential. Crystallex competes with other mining companies,
      many of which have greater financial resources than Crystallex, for the
      acquisition of mineral claims, leases and other mineral interests as well
      as for the recruitment and retention of qualified employees and other personnel.


| | Crystallexs business depends
            upon a limited number of mining properties and processing facilities,
            the loss of any of which might negatively impact its operations.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Crystallexs operations at
      the Tomi mine and the Revemin Mill account for all of Crystallexs
      current mineral production and revenue. (SeeItem 4B, Information
      on Crystallex  Business Overview  Activity on the Mining Properties, pages
      17-18.) Any adverse development affecting these operations would significantly
      hurt Crystallexs financial performance and results of operations.


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| | Crystallex faces significant risks
            inherent in the production of gold, and the success and profitability
            of its operations is dependent upon its ability to manage and control
            these risks.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Crystallexs actual production
      may vary from its estimates for a number of reasons, including:


| |  | the actual amount of ore mined varying from estimates
        of grade, tonnage, dilution and metallurgical and other characteristics                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the accuracy of estimated rates
        and costs of mining and processing                                                                                                 
| |  | short-term operating factors
        such as the need for sequential development of ore bodies and the processing
        of new or different ore grades from those planned
| |  | mine failures, slope failures
        or equipment failures                                                                                                                
| |  | industrial accidents                                                                                                                                                       
| |  | natural phenomena such as inclement
        weather conditions, floods, droughts, rock slides and earthquakes                                                              
| |  | encountering unusual or unexpected
        geological conditions                                                                                                           
| |  | changes in power costs and
        potential power shortages                                                                                                               
| |  | shortages of principal supplies
        needed for operation, including explosives, fuels, chemical reagents,
        water, equipment parts and lubricants                
| |  | labor shortages or strikes                                                                                                                                                 
| |  | civil disobedience and protests                                                                                                                                            
| |  | restrictions or regulations
        imposed by government agencies or other changes in the regulatory environments.                                                        

Such occurrences could result
      in damage to mineral properties, interruptions in production, injury or
      death to persons, damage to property of Crystallex or others, monetary
      losses and legal liabilities. These factors may cause a mineral deposit
      that has been mined profitably in the past to become unprofitable, forcing
      Crystallex to cease production. Each of these factors also applies to Crystallexs
      sites not yet in production. It is not unusual in new mining operations
      to experience unexpected problems during the production start-up phase.


| | Crystallexs operations require
            environmental permits and are subject to environmental compliance
            regulations. Compliance may involve significant costs and delays,
            and failure to comply may result in fines or suspension of its mining
            activities.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Crystallexs activities are
    subject to laws and regulations controlling not only the mining of and exploration
    for mineral properties, but also the possible effects of such activities
    upon the environment. (SeeItem 4.B, Information on Crystallex  Business
    Overview  Government Regulation, page 19, and Item 5B, Operating
    and Financial Review and Prospects  Regulatory and Environment Risks, beginning
    on page 59.) Environmental laws may change and make the mining and processing
    of ore uneconomic or result in significant environmental or reclamation costs.
    Environmental laws provide for restrictions and prohibitions on spills, releases,
    or emissions of various substances produced in association with certain mining
    industry operations, such as seepage from tailings disposal areas which could
    result in environmental pollution. A breach of such laws may result in the
    imposition of fines and penalties or the suspension or closure of mining
    operations. In addition, certain types of operations require the submission
    of environmental impact statements and approval thereof by government authorities.
    Environmental laws are evolving in a manner which may mean stricter standards
    and enforcement, increased fines and penalties for non-compliance, more stringent
    environmental assessments of proposed projects, and a heightened degree of
    responsibility for companies and their officers, directors and employees.
    Permits from a variety of regulatory authorities are required for many aspects
    of mine development, operation and reclamation. Future laws and regulations
    could cause additional expense, capital expenditures, restrictions, liabilities
    and delays in the development of Crystallexs properties, the extent
    of which cannot be predicted. In the context of environmental permits, including
    the approval of reclamation plans, Crystallex must comply with standards,
    laws and regulations which may entail costs and delays depending on the nature
    of the activity to be permitted and how stringently the regulations are implemented
    by the permitting authority. Crystallex does not maintain environmental liability
    insurance.

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| | Crystallex operations
      require additional permits and are subject to regulations. Compliance may involve significant costs or delays, and failure to comply
      may result in fines or suspension of its mining activities.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Government regulations
    significantly affect Crystallexs mining operations. (SeeItem
    4.B, Information on Crystallex  Business Overview  Government
    Regulation, pages 18-19.) Crystallexs mining operations and exploration
    and development activities are subject to extensive laws and regulations governing
    health and worker safety, employment standards, waste disposal, protection
    of the environment, protection of historic and archaeological sites, mine
    development and protection of endangered and protected species and other matters.
    Each jurisdiction in which Crystallex has properties regulates mining activities.
    Crystallex generally requires permits from authorities in these jurisdictions
    to authorize Crystallexs operations. These permits relate to virtually
    every aspect of Crystallexs exploration, development and production
    activities. It is possible that future changes in applicable laws, regulations
    or changes in their enforcement or regulatory interpretation could result
    in changes in legal requirements or in the terms of existing permits applicable
    to Crystallex or its properties, which could significantly impact Crystallexs
    current operations or planned exploration and development projects. Obtaining
    necessary permits can be a complex, time consuming process and Crystallex
    cannot assure whether necessary permits will be obtainable on acceptable terms,
    in a timely manner or at all. The costs and delays associated with obtaining
    necessary permits and complying with these permits and applicable laws and
    regulations could stop or materially delay or restrict Crystallex from proceeding
    with the development of a project or the operation or further development
    of a mine. Any failure to comply with applicable laws and regulations or permits,
    even if inadvertent, could result in interruption or closure of exploration,
    development or mining operations or material fines, penalties or other liabilities.


| | Currency fluctuations
      may increase operating costs.
| | ---------------------------------------------------------

Currency fluctuations
    may affect the costs that Crystallex incurs in its operations. Gold is sold
    throughout the world based principally on a U.S. dollar price, but a portion
    of Crystallexs operating expenses are incurred in non-U.S. dollar currencies.
    The appreciation of non-U.S. dollar currencies in those countries where Crystallex
    has mining operations against the U.S. dollar would increase the costs of
    gold production at such mining operations and could hurt Crystallexs
    profitability and financial condition.


Crystallexs Venezuelan
    operations are currently subject to currency and exchange controls. These
    government imposed controls may hurt Crystallex by restricting its ability
    to repatriate funds.


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| | Crystallex has
      incurred recent losses.
| | --------------------------------------------

Crystallex incurred
    a net loss in 2003 and, after restatement of its consolidated financial statements
    for 2002 incurred net losses in each of 2002 and 2001. Crystallexs profitability
    12 depends, among other things, on the price of gold, the level of gold production,
    cash operating costs, the prices and production levels of by-product minerals
    and other factors discussed in Risk Factors. Substantially all
    of these factors are beyond Crystallexs control. As part of the preparation
    of its audited financial statements for the year ended December 31, 2003 Crystallex
    undertook a detailed review of the carrying value of each of its mineral properties
    as well as related deferred exploration costs and its plant and equipment.
    The review resulted in a $23.9 million write-down of mineral properties, of
    which $18.8 million was related to the La Victoria property and the balance
    to various exploration properties


| | Crystallex has
      two registration statements under review with the United States Securities
      and Exchange Commission (SEC) which could result in revised disclosure.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Crystallex currently
    has outstanding two registration statements filed with the SEC in connection
    with the registration of securities of Crystallex issued in 2002 and 2003
    in private placements. The registration statements are the subject of an ongoing
    full review by the SEC. As at the date of this Annual Report,
    these registration statements have not been declared effective by the SEC.
    As a result of this review, Crystallex could be required to revise the disclosure
    or restate the financial statements included in the registration statements
    or other reports (including this Annual Report) filed with the SEC.


| | Crystallexs
      business depends upon a small number of key personnel, the loss of any of
      which might significantly impair its business.
| | -------------------------------------------------------------------------------------------------------------------------------------------------

Crystallexs business
    is dependent on retaining the services of a small number of key management
    personnel, namely Messrs. Bruce, Fung, Thomas, Rosiak, Ross and El-Alfy (SeeItem 6, Directors, Senior Management and Employees, beginning
    on page 61.) The success of Crystallex is, and will continue to be to a significant
    extent, dependent on the expertise and experience of the directors and senior
    management. The loss of one or more of these people could significantly impair
    Crystallexs ability in developing, exploring, acquiring, and funding
    mining properties. Crystallex does not maintain key employee insurance on
    any of its employees.


| | Crystallex has
      authorized for issuance a large number of shares, which, if issued in significant
      amounts, could result in dilution of share ownership and a reduction in
      share price.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As at May 3, 2004, Crystallex
    has authorized the issuance of more than 28,568,905 common shares that have
    not yet been issued for payment of certain property purchases and related
    indebtedness, the exercise of stock options, finder's fees, the exercise of
    warrants issued in private placements, placement agent's fees for a private
    placement, and exercise of warrants issued for convertible notes and broker's
    fees. Furthermore, Crystallex may issue additional common shares from time
    to time in the future. If Crystallex issues a substantial number of those
    new shares, it could substantially dilute the ownership interest of Crystallexs
    current shareholders, based upon the 179,498,492 Crystallex shares outstanding
    as of May 3, 2004. In addition, given Crystallexs average daily trading
    volume of approximately 767,900 shares on the American Stock Exchange (AMEX)
    (Consolidated Market) and approximately 724,275 shares on the Toronto Stock
    Exchange (TSX) for the period January 1, 2003 through April 30,
    2004, the sale of these shares could provide enough selling pressure to depress
    the share price of Crystallexs common shares.


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| | Limited attendance
      at a shareholders meeting and minimal quorum requirements may result
      in a small number of shareholders taking votes binding upon all shareholders.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Crystallexs by-laws
    provide that a quorum for transacting business at a general meeting of shareholders
    shall be two shareholders present in person or by proxy holding not less than
    one-twentieth of the issued shares entitled to be voted at the meeting. Under
    the Canada Business Corporations Act, only two Crystallex shareholders
    could attend shareholders meetings in person or by proxy, in which event
    these two shareholders could (provided they hold the requisite percentage
    of shares) take votes binding on behalf of all shareholders.


ITEM
4  INFORMATION ON CRYSTALLEX

|A. | History and Development
      of Crystallex
|-- | -------------------------------------------
|   |                                            
|   | Background                                 

Crystallex is a corporation
    that operates under the Canada Business Corporation Act (CBCA)
    and trades as a public company on the TSX and the AMEX under the symbol KRY.
    Crystallex was incorporated under the Company Act (British Columbia), Canada
    on May 22, 1984 under the name of Petroflame International Resources
    Ltd. In January 1991, Petroflame changed its name to Crystallex and
    consolidated its share capital by way of a five to one share rollback (reverse
    stock split). On January 23, 1998, Crystallexs corporate existence was
    continued under the CBCA , thereby bringing Crystallex under the jurisdiction
    of the CBCA as if it was originally incorporated under the CBCA.


Crystallex is engaged
    in the production of gold and related activities including exploration, development,
    mining, and processing. It conducts these activities primarily through mineral
    concessions that it owns or controls in Venezuela. Crystallex is currently
    producing gold from the Tomi concession in Venezuela (which it acquired in
    July 2000 as part of its acquisition of Bolivar Goldfields A.V.V.s assets
    in Venezuela). Ore from the Tomi concession is processed at Crystallexs
    Revemin Mill in Venezuela (which it acquired in July 2000 as part of its acquisition
    of Bolivar Goldfields A.V.V.s assets in Venezuela).


On September 17, 2002,
    Crystallex entered into the MOA with the CVG, acting under the authority of
    the MEM , under which Crystallex has been granted the rights to develop the
    Las Cristinas Deposits in the Municipality of Sifontes, Bolivar State, Venezuela.
    The MOA represents the culmination of a long-standing effort by Crystallex
    to obtain the mining rights for, and gain possession of, the Las Cristinas
    Deposits and provides to Crystallex the exclusive right to develop the Las
    Cristinas Deposits, including the commercialization and sale of gold.


A positive Feasibility
    Study for Las Cristinas was completed by SNC-Lavalin Engineers and Constructors
    Inc. (SNCL) in September 2003 and the Study was approved by the CVG on March
    8, 2004. The process for obtaining the required mining permits was formally
    initiated on April 15, 2004 with the submission of the Environmental Impact
    Study (EIS). It is presently anticipated that the required permits for project
    construction will be issued later in 2004, allowing construction to commence.
    An Engineering, Procurement and Construction Management (EPCM) contract to
    provide services for the development of Las Cristinas was awarded to SNCL
    in March 2004. The engineering and construction schedule is estimated at approximately
    24 months from the start of detailed engineering, which started on March 23,
    2004.


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At the end of the third quarter of 2003, Crystallex suspended
operations at the La Victoria mine (which it acquired in February, 2001 through its acquisition of a
controlling interest in El Callao Mining Corp.). It was determined that a large proportion of the unoxidized
ore is refractory and, as a result of low gold recoveries, is uneconomic to process in a conventional
cyanide-in-leach processing circuit. Preliminary metallurgical testwork demonstrated that the ore is amenable
to pre-treatment with a Bio-Oxidation process and Crystallex has shipped a twenty tonne ore sample to South Africa
to further assess the Bio-Oxidation process in a pilot plant test.


At year end 2003, Crystallex wrote-down the carrying value of La Victoria by
$18.8 million, reducing the carrying value to zero as it was determined that
the asset value, based upon reserves at December 31, 2003, was materially less
than the net book value. A drilling program is currently underway at La Victoria.
When the new reserve estimate and Bio-Oxidation pilot plant results are available
in the third quarter, Crystallex will undertake an evaluation to determine if
installation of a Bio-Oxidation plant is economically viable.


The address of Crystallexs principal and registered office is 18 King Street
East, Suite 1210, Toronto, Ontario, M5C 1C4, telephone number (416) 203-2448.
Its agent for service of process in the United States is Lawrence W. Koltun,
whose business address is 1146 19th Street, NW, Suite 250, Washington,
DC 20036.


Important Acquisitions and Divestitures
Since January 1, 2000


In February 2001, Crystallex completed the acquisition of a controlling interest
in Lo Increible, a 9,704 hectare pre-feasibility gold
property located in Venezuelas El Callao gold district. The acquisition
was in the form of a share exchange take-over bid for the shares of El Callao
Mining Corp. and the purchase of certain assets from its principal shareholder.
Crystallex issued 2.4 million shares to acquire approximately 80% of the outstanding
shares of El Callao Mining Corp. In addition, Crystallex paid US$7.6 million
to purchase certain assets as well as El Callao Mining Corp. debt held by Bema
Gold Corporation. (See Item 4.D, Information on Crystallex  Property,
Plants and Equipment  El Callao Properties  The Lo Increible Deposits.)


In July, 2000, Crystallex acquired all of Bolivar
Goldfields A.V.V.s assets in Venezuela, through the purchase of the stock
of Bolivars wholly-owned subsidiary, for a purchase price of US$7 million
and the assumption of bank debt of US$13 million, which Crystallex paid to US$8.5
million at closing. Crystallex paid US$5 million of the purchase price in cash
and issued to Bolivar a promissory note in the principal amount of US$2 million
(which Crystallex has since paid) for the balance. The final maturity of the
bank debt is in 2006.


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Crystallex financed the foregoing acquisitions from its working capital, lines of credit, and/or issuance of its securities.


Effective October 1, 2003, Crystallex sold to Uruguay Mineral Exploration Inc.
(UME), an unrelated third party whose shares are listed on the TSX Venture Exchange,
all of the shares of all companies holding Crystallex's ownership interests in
the San Gregorio mining operations in Uruguay. Although the San Gregorio mining
operations had been by far Crystallexs biggest producer of gold (producing
between 66,000 and 72,000 ounces of gold in each of the past three years), Crystallex
believed that the San Gregorio mine was nearing the end of its useful life and
that it would be more appropriate to focus its energy and resources on its Venezuelan
properties, and in particular the development of Las Cristinas.


Under the terms of the agreement, UME will pay Crystallex US$2 million in two
equal installments, with the first installment due six months after closing (which
Crystallex has received) and the second installment due twelve months after closing.
Formal closing was completed on October 27, 2003. Crystallex also received a
transfer of certain exploration drilling equipment, with an estimated value of
US$600,000. In addition, UME paid approximately US$2.8 million to fund the closing
out of all remaining San Gregorio gold forward sales commitments, (approximately
37,600 ounces), and through the Uruguayan companies purchased, assumed certain
environmental, remediation, severance and closure costs which would have been
incurred by Crystallex had it proceeded with the planned closure of its Uruguayan
mining operations. The sale was completed through the transfer of the shares
of Crystallexs Uruguayan subsidiary companies which owned the mining assets.
Crystallex recorded a non-cash $1.3 million loss as a result of this transaction.


B.   Business Overview

Activity
on the Mining Properties


Crystallex is a Canadian-headquartered gold producer with operations and exploration properties in Venezuela. Cyrstallexs principal asset is the Las Cristinas Deposits, located in southeastern Venezuela. Crystallexs medium term goal is to become a low cost, intermediate size gold producer with production exceeding 350,000 ounces of gold per year. Crystallex aims to achieve this goal over the next few years through the development of the Las Cristinas Deposits.
Crystallex has signed the MOA which authorizes the development and exploitation of Las Cristinas. Crystallex has completed a positive Feasibility Study for Las Cristinas, which was approved by the CVG on March 8, 2004 and has awarded the EPCM contract for the construction of an open pit mine and 20,000 tonne per day gold processing facility. Gold production from Las Cristinas is expected in early 2006. During the initial years of the project life, the mine is forecast to produce over 300,000 ounces of gold per year at a cash cost of US$144 per ounce. Crystallex has also completed various social development infrastructure projects as required under the contract and is providing ongoing employment and jobs training. (See Property, Plants and Equipment  Las Cristinas 4, 5, 6 and 7.)


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Crystallexs other principal mineral assets in Venezuela include the Tomi concession, the La Victoria concession and the Albino concession. In 2004, Crystallex plans to mine and process
ore from open pit and underground mines on the Tomi concession, (see Property, Plants and Equipment  The Tomi Concession.).
Crystallex is forecasting gold production of 50,000 ounces in 2004. Pending receipt
of environmental permits, Crystallex also plans to commence the development of
a small underground mine on the Albino concession during 2004, with production
of 15,000-20,000 ounces of gold per year starting in 2005 (see Property, Plants and Equipment  The Albino Concession.).
At the La Victoria open pit mine, operations have been suspended since the end
of the third quarter of 2003 while Crystallex evaluates the Bio-Oxidation process
in a pilot plant test for treating refractory ore and undertakes a drilling program
aimed at increasing reserves (see Property, Plants and Equipment  El Callao Properties  The Lo Increible Deposits.)
..


The Gold Market


Gold bullion trades around the world on a 24-hour basis and the market price
for gold is readily ascertainable from the London Metal Exchange, the New York
Commodities Futures Exchange (Comex) and other commodity markets. Every day,
hundreds of thousands of ounces are bought and sold at electronic speeds. Production
comes mainly from large mines in South Africa, North and South America, Australia,
and the former Soviet Union. Main consuming markets are the Middle East, South
East Asia, Europe, and North America.


Although not required to do so, Crystallex sells its production from its Revemin
mill to the Central Bank of Venezuela. Crystallex receives the full international
price for the gold that it sells to the Central Bank of Venezuela.


The following table sets forth annual high, low, average and end of period afternoon
fixing gold prices in U.S. dollars per troy ounce on the London Bullion Market
(rounded to the nearest whole dollar):


|LONDON P.M. GOLD FIX           
|-------------------------------
|PRICE IN U.S. DOLLARS PER OUNCE
|                               
|Year                           
|                               
|2004 (January to April)        
|2003                           
|2002                           
|2001                           
|2000                           
|1999                           

The London P.M. price fix for gold on May 4, 2004, was US$391 per ounce.


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Government Regulation


Mining operations and exploration activities are subject to various national, state, provincial and local laws and regulations in Venezuela and other jurisdictions, which govern exploration, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters. Crystallex has obtained or has pending applications for those licenses, permits or other authorizations currently required to conduct its operations. Crystallex believes that it is in compliance in all material respects with applicable mining, health, safety and environmental statutes and the regulations passed thereunder in the jurisdictions in which it operates. Crystallex is not aware of any current orders or directions affecting Crystallex or its properties or operations with respect to the foregoing laws and regulations.


Crystallexs mining operations and exploration activities are subject to various federal, state and local laws and regulations governing protection of the environment. These laws are continually changing and, as a general matter, are becoming more restrictive. Crystallexs policy is to conduct business in a way that safeguards public health and the environment. Crystallex believes that its operations are conducted in material compliance with applicable laws and regulations.


Changes to current local, state or federal laws and regulations in the jurisdictions where Crystallex operates could require additional capital expenditures and increased operating and/or reclamation costs. Although Crystallex is unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could render certain mining operations uneconomic.


During 2003, Crystallex was not aware of and had no notice of any material environmental incidents or material non-compliance with any applicable environmental regulations.


Review of Title to
    Properties


At the time that it acquires
      a  mining property, Crystallex completes or causes to be completed due
      diligence
    on the property which, in the ordinary course, would include a review by
      local  counsel of concession (title) rights, surface rights and mining
      contracts.
    Crystallex further obtains and relies upon detailed representations of vendors
       and, in some cases, legal opinions obtained from counsel for such vendors

    as a condition of closing. Crystallex has also customarily reviewed at the
       time of acquisition financing files and reports to lenders whose loans
      remain
    in place, in whole or in part, after acquisition. While such reports have
       been issued specifically to the lenders, they have provided support to
      Crystallex
    due diligence. Finally, since it has made some of its acquisitions through
       the purchase of shares (see,
        for example,the discussion
        in
    Crystallexs History and Development  Important Acquisitions
    Since  January 1, 2000), Crystallex has, prior to closing, had an opportunity
     to review in detail the records of the entity being acquired and interview

    key employees in respect of matters concerning title and mining contracts.
     However, despite these efforts, Crystallex can never be certain that it
    will
    have valid title to its mining properties (SeeItem 3, Key Information
     - Risk Factors  Uncertainty with respect
    to title to remaining mineral properties may result in loss of mining rights
     without compensation for development expenditures.)


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|C. | Organizational Structure
|-- | ------------------------

Crystallex operates its business
  either directly or through its subsidiaries. Its significant subsidiaries are
  as follows:


|Name
      of Subsidiary                 |                     | Country of incorporation
      or residence |  | Crystallexs ownership
and voting interest |    
|---------------------------------------- | ------------------- | ------------------------------------------- |  | ------------------------------------------ | ---
|                                         |                     |                                            
|Minera Albino C.A.                       |                     | Venezuela                                   |  | 100%                                       | (1)
|El
      Callao Mining Corp.             |                     | British
      Columbia (Canada)             |  | 80%                                        |    
|Mineras Bonanza,
        C.A. (Tomimine) |                     | Venezuela                                   |  | 100%                                       | (1)
|Revemin II C.A.
      (Revemin mill)     |                     | Venezuela                                   |  | 93%                                        | (1)
|                                         |                     |                                             |  |                                            |    
|(1)                                      | Indirect subsidiary |                                             |  |                                            |    

The above table does not include
  Crystallexs ownership interest in Las Cristinas 4 and 6 (seeProperty, Plants and Equipment
   Las Cristinas 4, 5, 6 and 7) since Crystallex will develop the
  Las Cristinas gold deposits under the terms of its MOA with the CVG.


[Text
  continues on next page]

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|D. | Property, Plants and Equipment
|-- | ------------------------------
|   |                               
|   |                               

|                                                                  |  | Summary
      of Property Data (1)As
      of December 31, 2003 | 
|----------------------------------------------------------------- |  | --------------------------------------------------------------- | 
|                                                                  |  |                                                                 | 
|Property                                                          |  | Acreage(Hectares)                                               | 
|                                                                  |  |                                                                 | 
|Las Cristinas 4,5,6,7
      (CVG Contract)                        |  | 4,000                                                           | 
|                                                                  |  |                                                                 | 
|Albino Underground (Concession)                                   |  | 500                                                             | 
|                                                                  |  |                                                                 | 
|Bolivar Goldfields:                                               |  | 500(6)                                                          | 
|                                                                  |  |                                                                 | 
|Tomi Underground (Concession)                                     |  |                                                                 | 
|                                                                  |  |                                                                 | 
|Tomi Open Pit (Concession)                                        |  |                                                                 | 
|                                                                  |  |                                                                 | 
|El Callao (Lo Increible):                                         |  | 9,704                                                           | 
|                                                                  |  |                                                                 | 
|La Victoria
      (Concession)                                    |  |                                                                 | 
|                                                                  |  |                                                                 | 
|Lo Increible 2,
      4(a), 4(b), 4(c), 4(d)
      (CVG Contract) |  |                                                                 | 
|                                                                  |  |                                                                 | 

|   
|---
|(1)
|(2)
|(3)
|(4)
|(5)
|(6)

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Las Cristinas 4, 5, 6 and 7


On September 17, 2002, Crystallex
    entered into a MOA with the CVG, under which Crystallex has been granted the
    right to develop the Las Cristinas Deposits. The CVG is the state organization
    responsible for the development of all natural resources in Bolivar State,
    with the exception of oil, and has entered into the MOA with Crystallex acting
    under the CVGs mandate from the MEM and as the authorized agency of
    the Republic of Venezuela.


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Background


The MOA represents the culmination
    of a long-standing effort by Crystallex to obtain the mining rights for, and
    gain possession of, the Las Cristinas Deposits. Crystallex has for several
    years been involved in the enforcement of its title rights to the Las Cristinas
    4 and 6 concessions. One of the obstacles to the enforcement of those rights
    was the MINCA Contract granted in 1992 by the CVG to MINCA, a joint venture
    company owned by the CVG and Placer Dome Inc. (Placer Dome)
    for the development of the Las Cristinas Deposits. In November 2001, the CVG
    cancelled the MINCA Contract. In March 2002, the MEM declared that the MINCA
    Contract was terminated and reassumed control of those mining rights. Although
    those actions did not have any effect on Crystallexs title claim to
    the Las Cristinas 4 and 6 concessions, the result of those actions was that
    all assets impacted by the MINCA Contract reverted to the Republic of Venezuela.
    Under an agreement between the MEM and the CVG dated May 16, 2002, the CVG
    was authorized by the MEM to contract for the development and exploitation
    of the Las Cristinas Deposits and for the use of the related assets including
    reports, data and existing infrastructure. Crystallex was selected by the
    CVG as the party to develop the Las Cristinas Deposits and entered into the
    MOA with the CVG on September 17, 2002. Crystallex has been advised by its
    Venezuelan counsel that the MOA has been entered into in accordance with all
    applicable Venezuelan laws and under the authority granted to the CVG by the
    MEM. As the MOA provides Crystallex with all legal authority necessary to
    take possession of and develop the Las Cristinas Deposits, including the commercialization
    and sale of gold, it is no longer necessary for Crystallex to proceed with
    its various legal actions seeking to enforce its title rights to the Las Cristinas
    4 and 6 concessions.


Mining Operation Agreement


The MOA provides Crystallex with
    the exclusive right to explore, design and construct facilities, exploit,
    process and sell gold from Las Cristinas. An official translated version of
    the MOA is available on Crystallexs website, www.crystallex.com.


The MOA has been entered into
    in accordance with applicable Venezuelan laws and under authority granted
    to the CVG by the MEM. A report in late February, 2003 from the Commission
    of Energy and Mines of the National Assembly of Venezuela and a report released
    in June 2003 by the Permanent Comptrollership Commission of the National Assembly
    confirm the legal and administrative process by which the contract rights
    of Minca, a previous partner with the CVG, were terminated, the process by
    which the related assets were repossessed by the Republic of Venezuela, and
    the process by which the Venezuelan Government, through the CVG, entered into
    the MOA with Crystallex.


The principal provisions of the
    MOA include:


| |  | All reserves and
      production are for the account of Crystallex. However, the MOA does not
      transfer any property ownership rights to Crystallex.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                           
| |  | Initial term of
      20 years, with two renewal terms, each for ten years.                                                                               
| |   |                                                                                                                                                           
| |  | Compensation to
      the CVG consists of the following:                                                                                                  
| |   |                                                                                                                                                           
| |   |                                                                                                                                                           
| |   |                                                                                                                                                           
| |   |                                                                                                                                                           
| |   |                                                                                                                                                           
| |   |                                                                                                                                                           
| |   |                                                                                                                                                           
| |   |                                                                                                                                                           
| |   |                                                                                                                                                           
| |   |                                                                                                                                                           
| |   |                                                                                                                                                           

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| |  | The CVG is responsible
      for obtaining all environmental and mining permits, with Crystallex providing
      any necessary technical information to support the permit applications.
      (Application and supporting studies have been filed by the CVG to obtain
      environmental and mining permits. Approvals are pending.)                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Throughout the term
      of the MOA, Crystallex will provide certain special programs which are intended
      to create employment for the region and provide training programs, provide
      technical assistance to local small miners associations, improve community
      health care facilities and make various infrastructure improvements to water
      sewage and roads. Crystallex agreed to hire 75 employees by the end of 2002
      and an additional 50 employees by the end of 2003. (Crystallex has fulfilled
      all social benefit obligations required to date under the MOA including
      housing, sewerage systems, water systems, road improvements, improvement
      of medical facilities and provision of medical supplies.)
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Crystallex presented
      a full Feasibility Study to the CVG for its approval on September 10, 2003,
      in accordance with the MOA. The CVG approved the Feasibility Study on March
      8, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Crystallex must
      make all the investments and complete all works necessary to reactivate
      the Las Cristinas Deposits, to design, construct and operate a processing
      plant, process gold for its subsequent commercialization and sale, and to
      return the mine, its installations and equipment to the CVG upon termination
      of the MOA. (Crystallex has commenced first phase development with granting
      of its EPCM contract to SNCL, the commencement of the permitting process,
      the commencement of geotechnical drilling and the refurbishment of the construction
      camp.)                                                                                                                                       
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Crystallex will
      supply performance bonds related to construction and labor obligations and
      to support compliance with environmental requirements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Crystallex must
      provide and maintain until the start of commercial production a bond for
      the performance of its obligations under the MOA in an amount equal to approximately
      US$4.6 million. (The bond is in place.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Crystallex will
      prepare and present to the CVG for approval annual production plans as well
      as plans of exploitation for the life of the Las Cristinas Deposits. The
      plans are to include volume of production and other pertinent aspects of
      development including environmental protection and security.                                                                                                                                                                                                                                                                                                                                                                                                                              

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| | Should Crystallex
      fail to fulfill the annual production or grade average contemplated by the
      annual production plan for reasons other than as contemplated by the MOA
      or force majeure, Crystallex is required to compensate the CVG for lost
      profits (royalties) otherwise payable.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                             
| | The CVG may terminate
      the MOA unilaterally in the event of the inactivity of the project for a
      period of one year without just cause.                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                             
| | Each party may terminate
      the MOA upon a breach of the MOA by the other party, subject to providing
      the other party with written notice of such breach and providing a 90 day
      curative period.                                                                                             
|  |                                                                                                                                                                                                                                                                                                             
| | Crystallexs
      annual production commitment will be based upon the annual production plan
      to be approved by the CVG.                                                                                                                                                                              
|  |                                                                                                                                                                                                                                                                                                             
| | Crystallex will
      be the sole employer of personnel at the project site, will be responsible
      for compliance with labor laws, and has agreed that at least 90% of the
      employees for the project will be Venezuelan.                                                                          
|  |                                                                                                                                                                                                                                                                                                             
| | Crystallex may not
      assign, directly or indirectly, any of its rights under the MOA or delegate
      any of its obligations under the MOA. The MOA does not grant CVG any termination
      or other rights on a change of control of Crystallex.                                                     

In accordance with the
  MOA, Crystallex formally took possession of the Las Cristinas properties on
  September 30, 2002, and also acquired from the CVG the use of certain assets
  related to the Las Cristinas Deposits, including drilling data, core samples,
  technical studies and certain other information. [text
  continues on next page]


24

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| | Las Cristinas Highlights
| | ------------------------
|

| | Location       |  | Located in Bolivar
      State in southeast Venezuela, approximately 360 kms by paved highway from
      Puerto Ordaz, a major industrial city and port.                                                                                                                                               
| | -------------- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                |  | Property is accessed
      by a 19 km road from the main highway.                                                                                                                                                                                                                                      
|
| | Process        |  | Open pit mining and
      conventional carbon-in-leach gold recovery.                                                                                                                                                                                                                                  
| |                |  | Initial processing
      rate of 20,000 tonnes per day.                                                                                                                                                                                                                                                
| |                |  | Excellent infrastructure
      with a 400 kV power line paralleling the main highway and a new substation
      constructed 6 kms from the project site.                                                                                                                                               
|
| | Reserves       |  | Proven and Probable
      reserves of 10.2 million ounces calculated at a US$325 per ounce gold price.                                                                                                                                                                                                 
|
| | Work Progress  |  | Positive feasibility
      completed September 2003. CVG approval of the Feasibility Study received
      March 8, 2004.                                                                                                                                                                               
| |                |  | Awarded an Engineering,
      Procurement and Construction Management contract to SNC-Lavalin in March
      2004.                                                                                                                                                                                     
| |                |  | EIS completed and
      formally submitted to the CVG and the Ministry of Environment and Natural
      Resources (MARN) on April 15, 2004.                                                                                                                                                            
| |                |  | Ongoing infill drill
      program.                                                                                                                                                                                                                                                                    
| |                |  | Ongoing social development
      program, including jobs training and local infrastructure projects. Completed
      housing, sewerage, water treatment and road upgrade commitments under the
      MOA.                                                                                              
|
| | Path Forward   |  | Detailed engineering
      has commenced.                                                                                                                                                                                                                                                              
| |                |  | Planning for preliminary
      construction activities, including site clearing and road upgrading in the
      third quarter of 2004.                                                                                                                                                                 
| |                |  | Full construction
      to commence following receipt of permits, expected later in 2004.                                                                                                                                                                                                              
|
| | Production     |  | Production targeted
      to start in the first quarter of 2006.                                                                                                                                                                                                                                       
| | Timeline       |   |                                                                                                                                                                                                                                                                                                        
|
| | Production     |  | At 20,000 tonnes per
      day, for first five years gold production Forecast averages 311,000 ounces
      per year at an average total cash cost of US$144 per ounce. For the life
      of mine, production averages266,000
      ounces per year at an average total cash cost of US$196 per ounce.
| | Forecast       |   |                                                                                                                                                                                                                                                                                                        
|
| | Capital Cost   |  | US$282 million (includes
      US$39 million of refundable VAT)                                                                                                                                                                                                                                        
| | Estimate       |   |                                                                                                                                                                                                                                                                                                        
|
| | Financing Plan |  | Financing structure
      expected to be a combination of project debt and equity.                                                                                                                                                                                                                     
| |                |  | Closed a C$115 million
      equity financing. Plan to raise the balance of the equity requirement later
      in 2004 or early 2005.                                                                                                                                                                  
| |                |  | BNP Paribas engaged
      as project finance debt advisor. Expect to close a project debt facility
      with a syndicate of commercial banks and possibly export credit agencies
      during 2005.                                                                                                   
|

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| | Overview
| | --------

At a US$325 per ounce gold
  price, reserves of 10.2 million ounces of gold rank Las Cristinas as one of
  the largest undeveloped gold deposits in the world.


A positive Feasibility
  Study was completed by SNC Lavalin Engineers and Constructors Inc. (SNCL) in
  September 2003 and the study was approved by the CVG on March 8, 2004. The process
  for obtaining the required mining permits was formally initiated on April 15
  with the submission of the Environmental Impact Study (EIS). It is presently
  anticipated that the required permits for project construction will be issued
  later in 2004, allowing construction to commence. An EPCM contract to provide
  services for the development of Las Cristinas was awarded to SNCL in March 2004.
  The engineering and construction schedule is estimated at approximately 24 months
  from the start of detailed engineering, which started on March 23, 2004.


| | Location and Infrastructure
| | ---------------------------

The Las Cristinas property
  is located in the southeast corner of Venezuela in Bolivar State at Kilometre
  88. Access to the property is via the main paved highway from the Venezuelan
  port of Puerto Ordaz to the Brazilian border. Puerto Ordaz is a major industrial
  city located on the Orinoco River, some 360 kilometres from Las Cristinas. Current
  access to the site from the paved highway is along a six kilometre dirt road
  from the village of Las Claritas. To bypass local villages, an upgraded nineteen
  kilometre road will be used in the near future.


A long history of mining
  and industrial projects in Bolivar State makes the region very suitable for
  the development of a large gold mining project. Power for Las Cristinas will
  be from the national hydroelectric power grid. An existing 400 kV power line
  parallels the main highway from Puerto Ordaz and, in 2001, a new substation
  was constructed six kilometres from Las Cristinas to service the Las Cristinas
  project and the surrounding area. Two 150 MVA power transformers have been installed
  at the substation and provision has been made to supply Las Cristinas via a
  new six kilometre 230 kV overhead power line. The power line, which has a 300
  MW capacity can adequately supply a 20,000 tonne per day operation or an expansion
  to 40,000 tonnes per day, which require 30 MWs and 60 MWs respectively.


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Feasibility Study

A positive Feasibility
  Study completed by SNCL in September 2003 demonstrated the technical and economic
  viability of developing Las Cristinas as a large open pit mine, employing conventional
  carbon-in-leach (CIL) gold processing technology. Mill throughput is planned
  at 20,000 tonnes per day; however,
  the process plant has been designed to accommodate an expansion to 40,000 tonnes
  per day, which will be implemented as soon as practicable. The Feasibility Study
  was approved by the CVG on March 8, 2004.


Calculated at a US$325 per ounce
  gold price, Las Cristinas proven and probable reserves currently stand
  at 246 million tonnes, grading 1.29 grams of gold per tonne for a total of 10.2
  million ounces of gold. Crystallex started an infill drill program during the
  first quarter of 2004 with the aim of upgrading some mineralized material to
  reserves.


At a processing rate of 20,000 tonne
  per day, gold production is forecast to average 266,000 ounces per year over
  the 34 year mine life at a cash cost, including royalties, of US$196 per ounce.
  However, over the first five years of operation, gold production is expected
  to average 311,000 ounces per year at an average cash cost, including royalties,
  of US$144 per ounce. The internal rate of return for the project, on an unleveraged
  basis and assuming a US$325 per ounce gold price, is 13.8% before-tax and 10.5%
  after-tax. Using the same pit design and reserve estimate, at a gold price of
  US$375 per ounce, the pre-tax internal rate of return climbs to 19.4% and the
  after-tax return is 14.6%. Crystallex is presently reviewing tax and financing
  structures that may reduce the overall project tax burden.


Estimated costs for construction
  are US$282 million, comprised of $242 million of capital costs (including a
  $30 million contingency) and US$39 million of Value Added Tax, (VAT). Based
  on a gold price of US$325 per ounce, the VAT is recoverable within two and one
  half years, once gold sales commence. At higher gold prices, VAT would be recovered
  sooner.


Reserves

Mineral Deposit/Reserve Methodology
    and Verification


Mine Development Associates (MDA)
  completed a mineralized deposit model that was based on an electronic database
  of drill, topographic, geologic and engineering data that Crystallex acquired
  from the CVG in September 2002. Data from 1,174 drill holes and 108 trenches
  were included in the Las Cristinas database. Over 160,000 meters of drilling
  have been completed on the property (including trenches). In addition, MDA and
  Crystallex undertook a drill and sample assay program to verify the presence
  and tenor of the mineralization reported in the acquired database. The verification
  program included drilling 2,188 meters in twelve diamond drill holes and analyzing
  275 quality assurance/quality control samples. MDA found that the verification
  drill results and check samples corroborate the tenor of gold mineralization
  previously reported. For additional confirmation, Crystallex and MDA re-assayed
  262 pre-existing pulps, 200 pre-existing coarse rejects and 342 pre-existing
  quarter core samples. Mean grades are similar for both datasets.


Reserve Estimates


Mineral reserve estimates were developed
  by MDA from its mineral deposit model using Medsystem-MineSight computer software.
  Two separate pits were designed: the larger Conductora, which contains the bulk
  of the reserves, and the Mesones. Pit designs were based on a US$325 per ounce
  gold price and cut-off grades ranging from 0.46 g/t to 0.69 g/t, depending upon
  the material type. 27


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|Pit        |  | Reserve
            Category |  | Tonnes(000) |  | AverageGrade (g/t) |  | ContainedOunces (x
        000) | 
|---------- |  | ---------------------------- |  | ----------- |  | ------------------ |  | ------------------------------- | 
|           |  |                              |  |             |  |                    |  |                                 | 
|Conductora |  | Proven                       |  | 36,620      |  | 1.38               |  | 1,625                           | 
|           |  | Probable                     |  | 187,117     |  | 1.27               |  | 7,669                           | 
|           |  |                              |  |             |  |                    |  |                                 | 
|Mesones    |  | Probable                     |  | 21,922      |  | 1.24               |  | 871                             | 
|           |  |                              |  |             |  |                    |  |                                 | 
|Total      |  | Proven                       |  | 36,620      |  | 1.38               |  | 1,625                           | 
|           |  | Probable                     |  | 209,039     |  | 1.27               |  | 8,540                           | 
|           |  |                              |  |             |  |                    |  |                                 | 
|Total      |  | Proven & Probable            |  | 245,659     |  | 1.29               |  | 10,165                          | 
|           |  |                              |  |             |  |                    |  |                                 | 

Gold Only Recovery versus Gold/Copper
  Recovery

Superior project economics and a
  simplified processing flowsheet are the principal reasons supporting Crystallexs
  decision to develop Las Cristinas with a CIL circuit to recover gold rather
  than incorporate both CIL and flotation circuits to recover copper and gold.


The decision was based upon a number
  of considerations including:


| | i.   | The copper grade at Las Cristinas
      is very low. The average copper grade is 0.13%, which is lower than the
      copper grade of the tailings produced by most Chilean and Peruvian copper
      mines.                                                                                                                                                                                                                                                                                                                                                                                     
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ii.  | Crystallexs proposed gold-only
      CIL plant is simpler to construct and operate than a gold/copper plant,
      which also requires two separate tailings facilities to accommodate its
      effluent discharges as compared to the one required for the CIL plant.                                                                                                                                                                                                                                                                                                                         
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | iii. | The gold/copper option requires
      transportation of a concentrate along the main highway from Las Cristinas
      to Puerto Ordaz and the construction of concentrate handling and shipping
      facilities at Puerto Ordaz.                                                                                                                                                                                                                                                                                                                                                                
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | iv.  | Metallurgical testwork demonstrated
      that the gold-only CIL plant would generate an overall gold recovery of
      89%. In comparison, the gold/copper plant would generate an overall gold
      recovery of 81%, which is effectively reduced to 78% as the smelters typically
      only pay for 95% of the gold content in the concentrate. As a consequence,
      the gold-only option recovers an extra 786,000 ounces of gold over the life
      of the mine, while the gold/copper option recovers approximately 193,000
      tonnes of payable copper over the life of the mine.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | v.   | There are no adverse environmental
      impacts by having the copper report to the tailings. Firstly, as noted,
      the copper at Las Cristinas is very low grade. Secondly, the tailings dam
      at Las Cristinas has been designed from first principles to ensure that
      there are no negative environmental effects from the very low content of
      copper in the tailings.                                                                                                                                                                                                      
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | vi.  | The non-recovery of copper will
      not have any meaningful adverse metallurgical consequences. The copper mineral
      in the primary ore is chalcopyrite, the only copper mineral that is not
      soluble in cyanide, and which therefore does not interfere with the gold
      recovery process. The only cyanide soluble copper minerals at Las Cristinas
      are found in the sulphidic saprolite ore type, which only comprises about
      10% of the total ore. Ore blending will be used to restrict the proportion
      of sulphidic saprolite ore in the process circuit.    

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An economic analysis clearly demonstrated
  superior returns on investment for the gold-only option. The enhanced economics
  of the gold only alternative are a result of recovering an additional 786,000
  ounces of gold, lower capital costs in the gold only option over the life of
  the project and lower refining fees for gold produced in dore rather than gold
  produced in concentrate under the gold/copper option. Together, these more than
  offset net copper revenue after deducting concentrate transportation, smelting
  and refining costs. Moreover, the gold only option generates higher royalties
  to the Government of Venezuela and the CVG than does the gold/copper option.


Crystallex does not require the
  copper rights for Las Cristinas in order to exploit the gold and does not currently
  intend to negotiate with the CVG for the right to exploit the copper.


Engineering, Procurement and
  Construction Management (EPCM)

Crystallex awarded SNCL an EPCM
  contract to provide services for the design, construction and commissioning
  of a 20,000 tonne per day gold processing facility at Las Cristinas. Detailed
  engineering commenced upon the awarding of the EPCM mandate and preliminary
  site clearing is scheduled for the third quarter. Pending receipt of all permits,
  construction is planned to start during the fourth quarter of 2004. The schedule
  of engineering design through commissioning of the plant is estimated at approximately
  twenty four months.


Crystallex is building an outstanding
  and experienced project development team under Ken Thomas, the Companys
  Chief Operating Officer. Ron Colquhoun and Barney Burke have recently joined
  Crystallex as Vice President of Technical Services and Corporate Manager, Projects
  respectively. Both joined from Barrick Gold Corp. and have extensive experience
  in managing project development and EPCM arrangements. In addition, John Binns
  has joined Crystallex as Vice President, Environment. John also previously worked
  for Barrick in Chile and his fluency in Spanish will greatly assist in implementing
  our environmental and social development programs. All of the above individuals
  worked with Ken Thomas for many years at Barrick Gold Corp.


Crystallex has forecast capital
  expenditures of approximately US$80 million on Las Cristinas during 2004.


Social Development Program

Crystallex is committed to employing
    the highest standards of corporate citizenship at Las Cristinas and recognizes
    the importance of developing a long term partnership with the local communities.
    Crystallexs social development program for Las Cristinas is dedicated
    to supporting the communities near Las Cristinas with long term employment
    training, economic development, local infrastructure and health care. Crystallex
    has hired a Community Relations Director, based in Las Claritas, to oversee
    the implementation of the social development program. To date, Crystallex
    has spent approximately US$2.0 million on the Las Cristinas social development
    program. 29


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A number of local infrastructure construction projects have been completed, including:


| | Thirty new homes were constructed
    for local residents.                                                  
|- | ------------------------------------------------------------------------------------------------------------
| | Built and installed three new
    water treatment plants, inclusive of reticulation.                        
| | Built and installed two new
    sewage treatment plants and related sewerage network.                       
| | Upgraded and paved local community
    roads.                                                               
| | Continuing with the upgrading
    of the local medical centre and supplying of medicines on a monthly basis.

In addition, Crystallex employs over 125 local residents and is providing ongoing
programs for technical assistance training and Crystallex is also funding and
administering a scholastic scholarship program.


On January 26, 2004, the mayor of the Municipality of Sifontes and the Governor
of Bolivar State presented Crystallex and the Las
Cristinas Project with the Orden (Order of) General Dimingos Sifontes  Primera
Clase. This annual award is the highest award bestowed by the Municipality
and recognizes Crystallexs
contribution to the Municipality and its residents.


Environmental Impact Study (EIS)

Crystallex and the CVG, together with SNCL, have completed an updated EIS. The
EIS updates the Las Cristinas EIS submitted in 1996. The 1996 EIS was approved
by the Ministry of Environment and Natural Resources (MARN) in 1997 and the two
permits required for conducting mining activities in Venezuela, namely, the Land
Occupation Permit and the Permit to Impact Renewable Natural Resources were issued.
The 1996 EIS was updated by Crystallex to reflect changes in the project design
and environmental characteristics. Some of the project changes include: (i) reducing
the initial processing capacity from 40,000 to 20,000 tonnes per day followed
by an expansion to 40,000 tpd in year 9 of the project, (ii) changing the processing
flowsheet to produce gold only, (iii) changing the design of the tailings management
facility from two cells to one and (iv) the socio-economic baseline has changed
with the presence of small scale miners on the property.


The EIS includes additional baseline studies carried out by Crystallex and various
consultants. The baseline database has been updated in several areas: additional
acid rock drainage testwork and initial cyanide destruction tests by SGS Lakefield,
additional socio-economic surveys and a census of unauthorized small scale miners
conducted by Proconsult of Venezuela.


Crystallex and the CVG submitted the EIS to the MARN on April 15, 2004. This initiated the final process for environmental permitting for Las Cristinas. Crystallex is aiming to receive conditional approval in the summer of 2004 to start preliminary site work. The CVG have approved a program of additional environmental baseline data collection, including drilling in the tailings management facility, pit and dump areas to confirm soils and groundwatercharacteristics,
additional acid rock drainage tests, a second phase of socio-economic studies
and a characterization of the small scale miners. The results of this additional
work will be submitted during the second and third quarters of 2004 as addenda
to the EIS. Receipt of permits is expected later in 2004. The EIS includes a
Site Closure and Rehabilitation Plan and anEnvironmental
Management Plan that meets Venezuelan and World Bank standards.


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40,000 Tonne Per Day Feasibility Study

During the first quarter of 2004, SNCL completed a full feasibility study for
Las Cristinas based on a 40,000 tonne per day, (tpd) processing rate. The initial
(base case) feasibility study completed by SNCL in September 2003 contemplated
a 20,000 tpd processing rate. The 40,000 tpd study demonstrates that the economics
of the 20,000 tpd base case can be materially improved by constructing a larger
scale operation. The 40,000 tpd study provides Crystallex with the flexibility
to establish, either initially, or early in the project life a 40,000 tpd operation
if there is sufficient financing appetite in the equity and/or bank markets.
Crystallex is designing the 20,000 tpd operation to allow for an expansion to
40,000 tpd while minimizing expenses for alterations to the 20,000 tpd operation
during the expansion.


Under the 40,000 tpd case, proven and probable reserves, at a $325 per ounce
gold price, are estimated at 11.1 million ounces. Gold production averages almost
500,000 ounces per year over a twenty year mine life, and is about 550,000 ounces
per year for the first five years. Average annual cash costs are $153 per ounce
for the first five years and $193 per ounce over the project life. Using a $325
per ounce gold price, the unleveraged, pre-tax IRR is 16.8%. At $375 per ounce,
the IRR climbs to 24.3%.


Key project highlights comparing the 20,000 tpd and 40,000 tpd operations are
tabled below:


[table begins on next page]

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|                                                                  | 20,000 TPD        |  | 40,000 TPD        | 
|----------------------------------------------------------------- | ----------------- |  | ----------------- | 
|                                                                  |                  
|Reserves1(at $325 per ounce)                                      | 246 million       |  | 297 million       | 
|                                                                  | tonnes @ 1.29 g/t |  | tonnes @ 1.17 g/t | 
|                                                                  |                   |  |                   | 
|                                                                  | 10.2 million      |  | 11.1 million      | 
|                                                                  | ounces            |  | ounces            | 
|                                                                  |                   |  |                   | 
|Mine Life                                                         | 34 Years          |  | 21 Years          | 
|Strip Ratio                                                       | 1.34              |  | 1.04              | 
|Metallurgical Recovery                                            | 89%               |  | 89%               | 
|                                                                  |                   |  |                   | 
|Average Annual Production  Life of Mine                          | 266,000           |  | 490,000           | 
|Average Annual Production  First Five Years                      | 311,000           |  | 549,000           | 
|                                                                  |                   |  |                   | 
|Average Cash Cost
       with Royalties  Life of
       Mine     | $197/oz           |  | $193/oz           | 
|                                                                  |                   |  |                   | 
|Average Cash Cost
       with Royalties  First Five
       Years | $144/oz           |  | $153/oz           | 
|                                                                  |                   |  |                   | 
|Average Operating Cost  Life of Mine                             | $6.70/t ore       |  | $5.97/t ore       | 
|                                                                  |                   |  |                   | 
|Development Capital Cost                                          | $243 million      |  | $365 million      | 
|VAT Estimate                                                      | $39 million       |  | $59 million       | 
|                                                                  |                   |  |                   | 
|Cumulative Free Cashflow @ $325 Gold                              | $742 million      |  | $745 million      | 
|Cumulative Free Cashflow @ $375 Gold                              | $1.2 billion      |  | $1.2 billion      | 
|                                                                  |                   |  |                   | 
|IRR @ $325 Gold Pre-Tax                                           | 13.8%             |  | 16.8%             | 
|IRR @ $325 Gold After-Tax                                         | 10.5%             |  | 12.1%             | 
|                                                                  |                   |  |                   | 
|IRR @ $375 Gold Pre-Tax                                           | 19.4%             |  | 24.3%             | 
|IRR @ $375 Gold After-Tax                                         | 14.6%             |  | 17.5%             | 
|                                                                  |                   |  |                   | 
|                                                                  |                   |  |                   | 

|1 | Mineral reserve estimates in
        the Feasibility Studies have been estimated in accordance with the standards
        of the Canadian Institute of Mining, Metallurgy, and Petroleum as adopted
        by the Canadian Securities Regulators in National Instrument 43-101 and
    also meet SEC Industry Guide 7 reserve definitions.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Financing Plan

Crystallex intends to finance the
  development of Las Cristinas with a combination of equity and project finance
  debt. Crystallex
recently raised gross proceeds of C$115 million in a common share financing,
with the majority of the proceeds budgeted for Las Cristinas. These proceeds,
together with cash on hand, are sufficient to cover all required expenditures
to advance project development into early 2005. To complete the financing for
the development of Las Cristinas, Crystallex currently expects to issue equity
or arrange other forms of financing later this year, or in early 2005, and expects
to close a project finance debt agreement with a syndicate of commercial banks
and possibly export credit agencies during 2005. Crystallex has engaged BNP Paribas
(BNPP) as a project finance advisor to assist in the arranging and
structuring of project finance debt for the development of Las Cristinas.


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The Albino Concession

Company Interest and Authorizations


Crystallex controls 100% of the
  Albino concession. Crystallex is currently seeking the two permits required
  to conduct underground mining at Albino, namely the Land Use Permit and the
  Permit to Impact Renewable Natural Resources. A Land Use Permit was previously
  issued approving open pit mining at Albino; however, the permit needs to be
  revised to include underground exploitation as Crystallexs current plan
  is to develop a small, high grade underground mine beneath the surface of the
  existing open pit.


Property History


In late 1992, Crystallex become
  involved in the exploration and subsequent development of the Albino concession.
  Following an initial program of mapping, soil sampling, ground magnetometer
  and IP surveys, drilling began in 1993 to test for continuity of gold mineralization
  along the Conductora-Aguao 2 trend. Between 1993 and 1998, 268 holes were drilled
  totaling 30,164 metres. Open pit mining at Albino was initiated in 1994 and
  lasted through 1998. Approximately 41,000 ounces of gold were produced during
  this period.


Location and Access


The Albino concession is a 500-hectare
  concession located in southeast Venezuela in Bolivar State. The property is
  contiguous to the south and east of Las Cristinas 4 and 5. Albino is accessible
  by a four kilometre gravel road from the village of Las Claritas, just off Troncal
  10, the main paved highway linking Puerto Ordaz to the Brazilian border. Rainfall
  is approximately 15 feet per year.


Royalty Payments


The Albino Concession is subject
  to a net smelter return royalty, payable to MEM, of 4% of the value of gold
  sold (based on the London Metal Exchange price) and 7% of the value of diamonds.
  MEM has, however, reduced the royalty for gold to 1% for the Albino Concession
  for an indefinite period, but there can be no assurance that such reduction
  will continue to apply.


MEM Option to Acquire 20%
    Interest of Albino Concession.


The Albino Concession requires Crystallex
  to sell to an entity that MEM designates, if MEM requests at any time during
  the life of the concession, a twenty percent (20%) interest in any company used
  to mine and develop the concessions. Crystallex believes that other Venezuelan
  concessions contain similar provisions but that MEM has not exercised its options
  to date. Crystallex may in the future acquire additional concessions in Venezuela
  that have similar provisions. Crystallex cannot determine at what price, if
  any, the designated entity would be required to pay for the shares representing
  this 20% interest or whether the MEM would even require such shares to be transferred
  to its designated entity.


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Local Geological Setting


The Albino Concession is in an area
  of low relief and moderately dense tropical rainforest jungle. Actual outcrops
  of rock are rare. The rainy season is from May to October. The area rivers flood
  during the rainy season but the property is not affected by flooding.


The Albino Concession is underlain
  by supracrustal rocks of a lower Proterozoic greenstone belt. Due to intense
  tropical weathering that characterizes the region, the original bedrock has
  been saprolitized to depths of 30 meters to 60 meters below surface. Consequently,
  there is no hard rock outcrop on surface. Interpretations of the original protholith
  based on examination of drill core indicate that the main lithologic units underlying
  the property are porphyritic and fragmental pyroclastic rocks of andesitic to
  basaltic composition; fine grained, aphanitic to amygdaloidal mafic volcanics;
  porphyritic diorite, and late diabase dykes.


Alteration assemblages at the Albino
  Concession occur within northeast trending zones of shearing and quartz veining
  and include carbonate, chlorite, sericite, silica, tourmaline and pyrite.


Mineralized Zones


Mineralization at the Albino Concession
  is predominantly found in north-east trending shear zones and quartz veins located
  in the western portion of the concession.


The main mineralized system, known
  as the La Conductora  Aguao 2 shear, is a 2 meter to 15 meter wide ductile-brittle
  zone of mineralization which has been traced by drilling over a strike length
  of 750 meters and to vertical depths of 250 meters. The mineralized system is
  open at depth and to the southwest. The shear zone, which dips moderately to
  the northwest, is developed near the contact between supracrustal rocks and
  dioritic intrusives. Gold mineralization within the northern portion of the
  shear zone occurs within a pervasively silicified, pyritized and carbonatized
  mylonite zone, locally cut by quartz veins and quartz-carbonate veinlets. The
  southern two-thirds of the shear zone are characterized by the presence of thick
  auriferous quartz veins within envelopes of mineralized schist. The highest
  gold values within the La Conductora-Aguao shear correlate with quartz-albite
  veinlets and pyrite content.


The second most important mineralized
  system at Albino is a northeast trending shear known as the Medina 3 Zone. This
  zone consists of strongly foliated, pyrite-bearing schists with intercalations
  of quartz vein stringers and schists. The zone has been traced by trenching
  and drilling over a strike length of 500 meters.


Other mineralized zones at Albino
  include the Medina 1 Zone, the Salazar Zone, the Southern Extension of the Aguao
  shear, and a number of geochemical anomalies characterized by erratic gold values
  in quartz veins.


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Ore Reserves


Ore reserves (proven and probable)
  estimated at December 31, 2003 using a $320 per ounce gold price are summarized
  below:


|         | Ore Tonnes(000s) |  | Grade(g/t) |  | ContainedGold (ozs) | 
|-------- | ----------------- |  | ---------- |  | ------------------- | 
|         |                   |  |            |  |                     | 
|Proven   | 121               |  | 12.0       |  | 46,700              | 
|Probable | 149               |  | 12.1       |  | 57,700              | 
|         |                   |  |            |  |                     | 
|Total    | 270               |  | 12.0       |  | 104,400             | 
|         |                   |  |            |  |                     | 

The Albino Proven and Probable underground
  mining reserves were calculated using a 5.9 gpt cutoff grade. The ore reserves
  were estimated in June 2003 by Mine Development Associates, an independent mine
  engineering company based in Reno, Nevada.


For purposes of determining reserves
  drill sections are spaced 25 meters apart, and the drill spacing within the
  sections is 25 meters.


Current Operations


A Feasibility Study, completed by
  MDA in 2001 demonstrated the viability of developing of a small, moderate to
  high grade underground gold mine at Albino. MDA also completed an updated reserve
  estimate for Albino in 2003, which estimated proven and probable reserves, calculated
  at a gold price of US$320 per ounce, of 270,000 tonnes of ore with an average
  grade of 12.04 grams/tonne, containing approximately 104,000 ounces of gold.


Crystallex plans to start development
  of an underground mine at Albino during 2004. Dewatering
  of the existing open pit has started and Crystallex anticipates receiving the
  required permits for ramp development during the second quarter of the year.
  Until the Las Cristinas mill is operating, ore from the Albino mine will be
  trucked about 250 kilometres to the Revemin mill for processing. The mine is
  forecast to produce between 15,000 and 20,000 ounces of gold per year for approximately
  five years based on current reserves, at an average cash cost of about US$175
  per ounce. Assuming receipt of required permits, initial gold production should
  commence in early 2005. Capital expenditures required to reach production are
  estimated at approximately US$3.2 million and total capital over the life of
  the mine is estimated at approximately US$7 million.


Bolivar Goldfields
  Properties   The Tomi Mining Concession and Revemin Mill

The 500 hectare Tomi concession
  and the Revemin mill are the principal assets of Minera Bonanza S.A. Minera
  Bonanza is a wholly owned indirect subsidiary of Crystallex, acquired on July
  27, 2000 from Bolivar Goldfields Ltd. Crystallexs acquisition of Minera
  Bonanza also included 44,438 hectares of exploration land.


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| | The Tomi Concession
| | -------------------
| |                    
| | Location and Access

Crystallex owns 100% of
  the Tomi concession, which is located in Bolivar State, 16 kilometres northeast
  of El Callao. The concession is accessed by a 6 km gravel road branching off
  the interstate highway linking Puerto Ordaz, the main commercial center of Bolivar
  State, to the Brazilian border.


| | Property History
| | ----------------

Modern exploration on
  the property only began in 1993 when Bolivar Goldfields Ltd completed the acquisition
  of the Tomi concession and adjoining Belen and Dividival I and II concessions


The initial exploration
  work by Bolivar Goldfields consisted of a 100 m x 100 m soil sampling program
  and an airborne geophysical survey (magnetics and radiometrics). The soil sampling
  program led to the definition of a strong anomaly, 1,600 m long and 700 m wide,
  which was subsequently investigated by 9,000 metres of mechanized trenching
  and 8451 metres of reverse circulation and diamond drilling in 78 holes. Most
  of the drilling was carried out in 1994 and 1995. The exploration work culminated
  in a feasibility study by Kilborn Inc. of Toronto, Canada in 1996.


There are four adjoining
    deposits on the concession, namely Charlie Richards, Mackenzie, Milagrito
    and Fosforito. Mining commenced in 1998 at the Mackenzie open pit, and subsequent
    to Crystallexs purchase of the concession in August 2000, mining has
    also been conducted in the Charlie Richards and Milagrito open pits. In 2001,
    Crystallex completed a 4,456 metre diamond drill program and Feasibility Study
    (completed by Mine Development Associates) which supported the development
    of an underground mine below the Charlie Richards pit. Over the course of
    2002 and the first half of 2003, a small, high grade underground mine was
    developed and gold production commenced in the second half of 2003. Crystallex
    is currently mining the Mackenzie and Milagrito open pits and the Charlie
    Richards underground mine. Ore from the Tomi concession is trucked approximately
    twenty one kilometres to Crystallexs Revemin mill for processing.


| | Geology and Mineralization
| | --------------------------

The Tomi concession is
  located in the Lower Proterozoic El Callao greenstone belt, a succession of
  mafic (ultramafic) volcanic piles overlain by intermediate to felsic volcanics,
  volcaniclastics and sediments. The main rock types at Tomi are deformed volcaniclastic
  rocks and gabbroic sills.


Gold mineralization on
  the property is essentially confined to zones of intense folding and shearing
  within the gabbroic sills. At MacKenzie, Charlie Richards and Milagrito gold
  mineralization consists of quartz-veined, silicified, carbonatized and pyritized
  zones occurring along the hinges and limbs of antiforms plunging 45o to the
  east. At Fosforito, gold mineralization occurs along an easterly dipping shear
  zone.


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| | Ore Reserves
| | ------------

Ore Reserves (Probable)
  estimated at December 31, 2003 using a gold price of $320 per ounce for the
  underground reserves and $325 per ounce for the open pit reserves are summarized
  below:


|                   | Ore
      Tonnes |                  | Grade |  | Contained | 
|------------------ | ---------------- | ---------------- | ----- |  | --------- | 
|(000's)            | (g/T)            | Gold
      (ozs)
|                   |                  |                  |       |  |           | 
|Tomi Open Pits     | 300              |                  | 4.6   |  | 43,900    | 
|Tomi Underground   | 140              |                  | 15.2  |  | 68,400    | 
|(Charlie Richards) |                  |                  |       |  |           | 

The ore reserves for the
  underground portion of the Charlie Richards deposit were calculated by Mine
  Development Associates using a a cutoff grade of 5.0 g/t Au. The ore reserves
  for the open pits were estimated using a cutoff of 1.8 g/t Au. For the open
  pit reserves, the data and model were verified by Dr. Luca Riccio, P. Geo.,
  Consulting Geologist to Crystallex and the pit optimization was undertaken by
  Scott Hardy, P. Eng., Mine Development Associates.


For purposes of determining
    reserves drill sections are spaced 25 meters apart, and the drill spacing
    within the sections is 25 meters.


| | Current Operations
| | ------------------

|                                           |         |  |        |  |         | 
|------------------------------------------ | ------- |  | ------ |  | ------- | 
|100% Basis                                 | 2003    |  | 2002   |  | 2001    | 
|                                           |         |  |        |  |         | 
|Tomi Open Pits
      (100% Crystallex)     |         |  |        |  |         | 
|Tonnes Ore Mined                           | 268,169 |  | 25,644 |  | 120,876 | 
|Tonnes Waste Mined                         | 919,137 |  | 2,908  |  | 479,614 | 
|Tonnes Ore Processed                       | 247,644 |  | 27,998 |  | 122,000 | 
|Average Grade of Ore
      Processed (g/t) | 3.48    |  | 3.01   |  | 3.10    | 
|Recovery Rate (%)                          | 88%     |  | 87%    |  | 92%     | 
|                                           |         |  |        |  |         | 
|Production (ounces)                        | 24,360  |  | 2,347  |  | 11,132  | 
|Tomi Underground
      (100% Crystallex)   |         |  |        |  |         | 
|Tonnes Ore Mined                           | 12,698  |  | 0      |  | 0       | 
|Tonnes Ore Processed                       | 11,070  |  | 0      |  | 0       | 
|Average Grade of Ore
      Processed (g/t) | 8.31    |  | 0      |  | 0       | 
|Recovery Rate (%)                          | 93%     |  | 0      |  | 0       | 
|                                           |         |  |        |  |         | 
|Production (ounces)                        | 2,753   |  | 0      |  | 0       | 
|                                           |         |  |        |  |         | 

Gold production from the
  Tomi concession was 27,113 ounces in 2003, representing 77% of Crystallexs
  Venezuelan gold production. At the end of the third quarter, mining of ore was
  temporarily suspended at the La Victoria mine and shifted entirely to the Tomi
  concession. As compared with La Victoria, the Tomi ore is higher grade and better
  gold recoveries are achieved as the Tomi ore does not have the refractory characteristics
  of the La Victoria ore. During 2003, gold
  recovery at Revemin from processing Tomi open pit ore averaged 88%, as compared
  with 68% recovery for La Victoria.


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The Tomi deposits are
  forecast to account for almost all of Crystallexs gold production in 2004.
  Mining will be conducted at the Milagrito and Mackenzie open pits and the Charlie
  Richards underground mine. Reserves at Milagrito are expected to be depleted
  during 2004 and at Mackenzie in early 2005. However, Crystallex has completed
  a drilling program at the Fosforito deposit and is presently analyzing results.
  It is Crystallexs belief that the addition of reserves at Fosforito could
  extend the life of the Tomi open pits into late 2005.


Production at the Charlie
  Richards underground mine is gradually increasing as recent capital funding
  provided for new equipment required for optimal development and production.
  It is expected that the mine will reach design levels of about 200 tonnes of
  ore per day by the third quarter of 2004. Annual gold production from the underground
  mine is forecast to range between 10,000 and 17,000 ounces per year for approximately
  four years based upon current reserves of approximately 68,000 ounces of gold.
  Cash production costs are forecast to average US$175 per ounce. The Charlie
  Richards orebody is open at depth and Crystallex expects that underground reserves
  will continue to be extended over the years as mine development provides on-going
  access for deeper reserve drilling.


Crystallex has forecast
  capital expenditures of approximately US$2.0 million for the Tomi concession
  during 2004.


| | Revemin Mill
| | ------------

The Revemin mill is
    a conventional CIL facility capable of treating 1,350 metric tons of ore per
    day. The Revemin mill processes ore from the La Victoria and Tomi mines as
    well as ore purchased from independent miners on nearby concessions.


| | Revemin Mill Production
| | -----------------------

|                                              |   |         |  |   |         |  |   |         | 
|--------------------------------------------- | - | ------- |  | - | ------- |  | - | ------- | 
|100% Basis                                    |   | 2003    |  |   | 2002    |  |   | 2001    | 
|                                              |   |         |  |   |         |  |   |         | 
|Revemin Mill                                  |   |         |  |   |         |  |   |         | 
|La Victoria Ore Processed
      (tonnes)      |   | 89,025  |  |   | 326,572 |  |   | 297,000 | 
|Tomi Open Pit Ore
      Processed (tonnes)    |   | 247,644 |  |   | 27,998  |  |   | 122,000 | 
|Tomi Underground Ore
      Processed (tonnes) |   | 11,070  |  |   | 0       |  |   | 0       | 
|Purchased Ore Processed
      (tonnes)        |   | 22,537  |  |   | 12,339  |  |   | 19,000  | 
|                                              |   |         |  |   |         |  |   |         | 
|Total Ore Processed
      (tonnes)            |   | 370,276 |  |   | 366,909 |  |   | 438,000 | 
|Head Grade of Ore
      Processed (g/t)       |   | 3.51    |  |   | 3.0     |  |   | 3.4     | 
|Total Recovery
      Rate (%)                 |   | 84%     |  |   | 79%     |  |   | 90%     | 
|Total Gold Recovered
      (ounces)           |   | 35,244  |  |   | 27,791  |  |   | 42,690  | 
|                                              |   |         |  |   |         |  |   |         | 
|Venezuela 
      Costs (US$/ounce)1          |   |         |  |   |         |  |   |         | 
|                                              |   |         |  |   |         |  |   |         | 
|Total Cash Cost
      Per Ounce Sold          | $ | 378     |  | $ | 346     |  | $ | 178     | 
|Cost Per Tonne
      of Ore Processed         | $ | 9.91    |  | $ | 10.50   |  | $ | 9.08    | 
|                                              |   |         |  |   |         |  |   |         | 

| 
|-
|1

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El Callao Properties  The Lo Increible Deposits


The Lo Increible gold property is located adjacent to Crystallex's Revemin mill
in El Callao. The project consists of two adjacent claims aggregating 9,704 hectares.
Six deposits have been identified on the property, the largest of which is the
La Victoria deposit. Crystallex acquired the project through a take-over bid
for all of the shares of El Callao Mining Corporation and the purchase from Bema
Gold Corp. of both US$16 million of debt that El Callao Mining owed to Bema Gold
and Bema Golds royalty on the project's cash flow. Crystallex indirectly
owns 51% of the Lo Increible project and the right to increase its ownership
to 70%, and the remaining 49% ownership is currently controlled by Venezuelan
partners unrelated to Crystallex. Crystallex and its Venezuelan partners have
agreed that the net income from the Lo Increible Project is applied to the reduction
of debt owing to Crystallex in amounts ranging from 50% to 75%
of such net income.


Location, Access, Infrastructure


The properties are located three kilometers north of El Callao and 15 km south
of Guasipati. Access to the claims is via the paved interstate highway and a
number of subsidiary gravel roads. The project area lies partly in savannah and
partly in low tropical rain forest at elevations in the 150 m to 225 m range.


Property History


The Lo Increible gold belt has been partially exposed by some 86 hardrock gold
workings spread along the belt. None of these workings are more than 25 metres
deep. Despite the El Callao district's production history and Lo Increible's
extensive surface workings, little modern exploration had taken place until the
El Callao Mining Corp. began working on the district in late 1993. El Callao's
work initially included regional-scale mapping, airborne magnetic and radiometric
surveys, soil and rock sampling, extensive mechanized trenching, and detailed
sampling in selected areas. Areas of interest were evaluated by 10,413 metres
of reverse circulation drilling in 1994. This RC program led to the definition
of priority targets that were subsequently tested by diamond drilling.


In 1997, El Callao Mining commissioned MRDI, an independent engineering firm
based in San Mateo, California, to conduct a mineral deposit estimate of the
Lo Increible deposits based on a data base of 49,377 meters of drilling in 302
holes. The mineral deposit estimate was completed in 1998 and subsequently revised
in 2000 based on the information provided by 19 additional holes totaling 1,925
meters.


In addition to the mineral deposit defined by this drilling, El Callao's work
led to the identification of several mineralized zones with potential for open
pittable mineralization.


In late 2001, Crystallex completed 2,893 meters of diamond drilling in 36 holes
at La Victoria. The drilling was primarily aimed at upgrading the reserves within
the central portion of the La Victoria deposit. The results confirmed the continuity
of mineralization throughout the entire mineralized panel. They also indicated
the presence of a thick, high grade ore shoot defined by broad mineralized intervals
in holes LV01-003 (20.50 meters of 14.10 g/t Au) and LV01-13 (17.20 meters of
4.41 g/t Au followed by 33.10 meters
of 8.07 g/t Au).


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Crystallex is currently undertaking a 7,500 meter drill program. A new reserve estimate and mine plan is expected to be completed upon completion of the drill program and the Bio-oxidation pilot plant program. (SeeItem
  4D, Property, Plants and Equipment, Las Cristinas 4, 5, 6 and 7  Current Operations La Victoria.)


Geology and mineralization


The Lo Increible project is located in the heart of the El Callao Greenstone
belt gold producing region of Venezuela. The greenstone sequence consists of
a volcano-sedimentary pile of Lower Proterozoic age comprised of a basal unit
of basaltic rocks, a middle unit of intermediate to felsic volcanics, and an
upper unit of clastic sediments. The main feature of the Lo Increible project
is a major NNE to NE trending shear system which extends over a distance of 15
km and contain numerous historical gold workings.


Gold mineralization within the Lo Increible belt is associated to shear-vein
systems characterized by intense hydraulic brecciation, silica flooding, carbonate-sericite
alteration and sulphidation (pyrite and subordinate arsenopyrite). Exploration
work by EMC has led to the definition of six separate deposits known as La Victoria,
La Cruz (LC), El Tapon (T), Sofia (S), La
Loca (LL) and El Extranjero (E).


La Victoria is the largest deposit identified to date on the property. It consists
of several stacked mineralized zones that
dip 35qto
the east and have been traced for 750 metres along strike. The main zone of mineralization
("Main Zone") has an average true thickness of 20 metres and is characterized
by a pinch-and-swell distribution of gold mineralization. La Cruz deposit consists
of subparallel shear-hosted mineralized bodies dipping 60qto
the southeast. The best developed zone within this deposit is 3 m to 25 m thick
and has been traced for 600 m along strike. El Tapon and La Sofia are rod-like
deposits with average thicknesses of 9 m to 12m. They have been traced 200 m
to 250 m down-plunge. The La Loca deposit is a shallow dipping (35o),
5 m to 10 m thick mineralized zone with a known strike length of 100 m. The El
Extranjero deposit comprises two steeply dipping mineralized zones ranging in
thickness from 2 m to 20 m. To date the deposit has been traced over 250 m along
strike and 120 m down dip.


Ore Reserves (La Victoria Deposit)


Ore reserves (probable) at La Victoria estimated at December 31, 2003 using a
gold price of $325 per ounce, are summarized below:


|            | Ore Tonnes |  | Grade |  | Contained  | 
|----------- | ---------- |  | ----- |  | ---------- | 
|            | (000's)    |  | (g/T) |  | Gold (ozs) | 
|            |            |  |       |  |            | 
|La Victoria | 1,215      |  | 5.2   |  | 202,600    | 

For the La Victoria open pit reserve estimate, the data and model were verified
by Dr. Luca Riccio, P. Geo., Consulting Geologist to Crystallex and the pit optimization
was undertaken by Scott Hardy, P. Eng., Mine Development Associates. The La Victoria
reserves were calculated using a
cut off grade of 2.1 g/t.


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Mineralized material at the five other Lo Increible deposits (LC, T, S, LL, E) do not qualify as reserves for United States reporting purposes, under SEC Industry Guide 7.


For purposes of determining reserves for La Victoria, drill sections are spaced
25 to 50 meters apart, and the drill spacing within the sections is in the range
of 25 to 50 meters.


Current Operations La Victoria

|100% Basis                           | 2003    |  | 2002    |   | 2001    | 
|------------------------------------ | ------- |  | ------- | - | ------- | 
|                                     |         |  |         |   |         | 
|La Victoria (51% Crystallex)1,2      |         |  |         |   |         | 
|Tonnes Ore Mined2                    | 86,078  |  | 333,857 |   | 260,098 | 
|Tonnes Waste Mined                   | 461,163 |  | 937,949 |   | 613,210 | 
|Tonnes Ore Processed                 | 89,025  |  | 326,572 |   | 297,000 | 
|Average Grade of Ore Processed (g/t) | 2.84    |  | 2.8     |   | 3.1     | 
|Recovery Rate (%)                    | 68%     |  | 76      | % | 90%     | 
|                                     |         |  |         |   |         | 
|Production (ounces)                  | 5,564   |  | 22,548  |   | 26,504  | 
|                                     |         |  |         |   |         | 
|                                     |         |  |         |   |         | 

|1 | Crystallex owns 80% of El Callao
        Mining Corp, which in turn has an indirect 51% equity interest in La
        Victoria through the Venezuelan holding company, Osmin Holdings Limited.
        However, Crystallex has an 87.5% share of the distributable cashflow
        from Osmin until the first US$4.0 million of debt owing from Osmin is
        repaid. Thereafter, Crystallex has a 75% share of the cashflow until
        the total debt from Osmin due indirectly to Crystallex (approximately
        $30.6 million at December 31, 2003) is fully repaid and a 51% share thereafter.
        Presently, there is no distributable cashflow, and Crystallex reports
    all production and reserves for its account.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | Crystallex commenced mining at
    La Victoria in April 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

La Victoria is the largest of six deposits on the Lo Increible property located in southeastern Venezuela in the historic El Callao gold district. The property is located three kilometres north of the town of El Callao in Bolivar State. Crystallex acquired its 51% interest in Lo Increible in 2001 and commenced open pit mining at La Victoria in April of that year.


During the second quarter of 2002, with the transition from mining saprolite
ore to sulphide ore, gold recoveries declined from over 90% to about 75%. Mining
and processing of ore continued for the first three quarters of 2003, however
recoveries averaged only 68% for the first nine months of 2003 and just 54% for
the third quarter.


Initial metallurgical testwork on the La Victoria sulphide ore deposit demonstrated
that the content of refractory ore was higher than originally estimated, and
as a consequence a significant portion of the sulphide ore cannot be economically
processed using the conventional cyanide gold extraction process at the Revemin
mill. The gold in the La Victoria ore is encapsulated in sulphide minerals which
prevent sufficient quantities of gold from being exposed to cyanide, and thus
results in low gold recovery. Bench scale testwork at SGS Lakefield Research
indicated that the ore at La Victoria is very amenable to Bio-Oxidation (BIOX),
a pre-treatment step that breaks down the sulphide minerals through accelerating
the oxidation process, thereby exposing the gold for subsequent removal by cyanide
leaching.


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Crystallex is currently evaluating
    the viability of constructing and operating a Bio-Oxidation plant at the
    Revemin mill.
    Fully evaluating the propertys economic viability requires a drilling
    program to be conducted to assess the size and grade of the La Victoria ore
    deposit and pilot plant testing of the Bio-Oxidation process. The drill program
    started in late March 2004. In addition, a bulk ore sample has been shipped
    to South Africa for BIOX pilot plant testing. Results should be available
    to undertake a comprehensive economic evaluation in the third quarter. Mining
    of ore was stopped in the last quarter of 2003, but waste stripping continues
    at a reduced rate. Full production will restart if a decision is made to
    proceed with the installation of a Bio-Oxidation plant. Crystallex has budgeted
    US$1.1 million for the drill program and pilot plant testing in 2004.


At year end 2003, Crystallex completed
    an economic valuation for La Victoria including capital and operating cost
    estimates for a Bio-Oxidation plant. It was determined that the current asset
    value was materially less than the net book value due to the limited reserves
    that exist at this point in time, (the drill program referred to above is
    now underway to determine the full extent of La Victorias reserve potential).
    Accordingly, Crystallex wrote-down the carrying value of La Victoria by C$18.8
    million, reducing the carrying value to zero. As noted, a further property
    assessment will be conducted when an updated reserve estimate and Bio-Oxidation
    pilot plant results are available. Based on the positive bench scale Bio-Oxidation
    testwork and current geological interpretation, Crystallex believes La Victoria
    will be restored as a viable operation through the Bio-Oxidation process
    and a successful outcome of the reserve drilling program.


Mineiro Concessions

Crystallex has not performed any
    mining activities on the Mineiro concession in Brazil.


The Santa Elena, Carabobo
      and San Miguel Concessions

Crystallex has not conducted any
    exploration work on these properties for the past ten years. At year-end
    2003, Crystallex wrotedown the entire carrying value of these properties.


Knob Hill Property and Other
Properties

Crystallex has not performed any
    mining activities on other properties, such as the Knob Hill concession in
    Canada. Crystallex has written down the carrying value of these properties
  to zero.


ITEM 5  OPERATING
      AND FINANCIAL REVIEW AND PROSPECTS

This discussion of Crystallexs
    financial condition and results of the operations should be read in conjunction
    with the 2003 audited consolidated financial statements and the related notes.
    Crystallex prepares and files its consolidated financial statements and Managements
    Discussion and Analysis (MD&A) in Canadian dollars (unless
    otherwise stated) and in accordance with Canadian generally accepted accounting
    principles (GAAP).


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|A. | FINANCIAL OVERVIEW
|-- | ------------------

These consolidated financial statements have been reconciled to US GAAP as discussed in Note 18 to the consolidated financial statements contained in this Form 20-F Annual Report.


2003 Highlights


| |  | Positive Feasibility Study
    for the Las Cristinas gold project completed by SNCL.                                                                                                                                                                                                                               
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                    
| |  | Strengthened senior management
        with the hiring of Todd Bruce as President and Chief Executive Officer
        and Ken Thomas as Chief Operating Officer. Closed the Vancouver office
        and consolidated Crystallexs management and administrative operations
        at
its new Toronto head office.
| |   |                                                                                                                                                                                                                                                                                                                    
| |  | Received bids by year end for
    EPCM services for the development of Las Cristinas.                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                    
| |  | Reserves
        at December 31, 2003, of 10.6 million ounces of gold, including 10.2
    million ounces at Las Cristinas.                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                    
| |  | Common share and special warrant
        financings in August and September 2003 raised gross proceeds of US$38.2
    million. Cash at December 31, 2003, of $33.9 million.                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                    
| |  | Policy to become hedge free.
    Reduced gold contracts in 2003 by 25%, or 122,000 ounces.In
    2004, plan to buy back additional contracts in an amount at least equivalent
    to gold production for the year.                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                    
| |  | Sold the San Gregorio mining
    interests and related assets in Uruguay.                                                                                                                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                    
| |  | Net loss for the year of $82.1
        million, or ($0.70) per share, inclusive of a non-hedge derivative loss
        of $21.7 million, or ($0.18) per share and a non-cash write-down of mineral
    properties of $23.0 million, or ($0.20) per share.                                                          

Subsequent
        to Year-End


| |  | In January and February, further
        strengthened management by recruiting three senior project development
        executives: Ron Colquhoun as Vice President Technical Services; Barney
        Burke as Corporate Manager, Projects; and John Binns as Vice President
    Environment.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                               
| |  | On March 8, received approval
    of the Las Cristinas Feasibility Study from the CVG.                                                                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                               
| |  | On March 25, awarded an EPCM
        contract to SNCL to provide services for the construction of Las Cristinas.
    The EPCM schedule is approximately twenty-four months.Detailed
    engineering has commenced.                                                                            
| |   |                                                                                                                                                                                                                                                                                               
| |  | Closed a common share financing
        of 28.75 million common shares at $4.00 per share for gross proceeds
        of $115 million. Net proceeds received of US$71.7 million will be used
    to fund the development of Las Cristinas.                                                     
| |   |                                                                                                                                                                                                                                                                                               
| |  | On April 15, submitted the
        Environmental Impact Study (EIS) for Las Cristinas to the CVG and the
        Ministry of the Environment and Natural Resources (MARN). Receipt of
        all required permits to start construction of Las Cristinas is expected
    later in 2004.      

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Overview


Crystallex recorded a number of significant achievements during 2003 and continues
to make considerable progress in early 2004. A positive Feasibility Study, which
was completed for the Las Cristinas project in September 2003, was approved by
the CVG on March 8, 2004. The study confirmed the economic and technical viability
of Las Cristinas using conventional open pit mining and carbon-in-leach (CIL)
gold processing. Also during 2003, Requests for Proposals (RFPs) were prepared
and issued to engineering firms to bid for EPCM services related to the construction
of Las Cristinas. After a thorough evaluation process, SNCL was appointed on
March 25, 2004 as the EPCM contractor for the Las Cristinas project. The project
schedule, from detailed engineering through commissioning of the plant, is estimated
to be approximately twenty-four months.


The EIS for Las Cristinas was recently revised in conjunction with the CVG. The
permitting process was initiated with the submission of the final EIS to the
CVG and the MARN on April 15, 2004. Crystallex is aiming to obtain interim approval
during the summer to begin site preparation work and hopes to receive the final
environmental and mining permits necessary to begin construction activities during
the fourth quarter of 2004.


Crystallex has met all the required social commitments in the Las Cristinas Mining
Operating Agreement (MOA) with the CVG. Local infrastructure projects, including
building thirty new houses, installing new sewerage and water treatment facilities
and road upgrading have been completed. Crystallex is also upgrading a medical
clinic and providing medicine on a monthly basis. As required under the MOA,
Crystallex has employed 125 local residents at the project and is providing ongoing
job training programs.


Crystallex started an infill drill program at Las Cristinas during the first
quarter of 2004 which is expected to add to reserves.


In the third quarter of 2003, Crystallex sold its San Gregorio mine in Uruguay
to Uruguay Mineral Explorations Inc. (UME). The transaction was very positive
for Crystallex, as UME assumed all obligations and liabilities, including closure
and environmental obligations, as well as funding the closing of the San Gregorio
gold forward sale position of 37,640 ounces. UME will also pay Crystallex sale
proceeds of US$2.0 million during 2004.


The sale of the San Gregorio assets advanced
Crystallexs objective of reducing its gold hedge book. During 2003, Crystallex
reduced its forward sales and call options sold by 122,000 ounces. This was accomplished
through the San Gregorio sale, a buyback of 25,000 ounces of
forward sales contracts and by delivering gold
production into forward contracts. Crystallex had approximately 350,000 ounces
of forward sales and call options sold at the end of 2003 at an average price
of US$304 per ounce. During 2004, Crystallex intends to close additional contracts
through financial settlements.


By
      the end of the third quarter 2003, Crystallex had considerably improved
      its cash position. Gross proceeds of US$38.2 million were raised in two
      special warrant financings in August and September. A portion of the proceeds
      were used for immediate capital investments at our existing Tomi mines
      and Revemin mill and quickly contributed to the improved operating performance
      during the fourth quarter of the year. Gold production of 15,200 ounces
      in the fourth quarter accounted for 43% of total gold production of approximately
      35,200 ounces from the Venezuelan operations in 2003. In 2004, Crystallex
      expects to produce about 50,000 ounces of gold.


Crystallexs cash position
      was further strengthened with the $115 million common share financing subsequent
      to year-end. These proceeds will allow Crystallex to advance with engineering,
      equipment purchasing and start development of Las Cristinas during 2004.
      The total financing requirement for Las Cristinas is estimated at approximately
      US$340 million, including US$39 million of refundable VAT, a cost overrun
      requirement to support our guarantee of a planned project debt financing,
      interest during the construction period and various financing fees. Currently,
      Crystallex expects to finance the construction of Las Cristinas with a
    combination of equity and project debt.


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Financial Results Overview


|                                                             |  | 2003 |             |   | 2002 |            |   | 2001 |           
|------------------------------------------------------------ |  | ---- | ----------- | - | ---- | ---------- | - | ---- | ----------
|                                                             |  |      |             |   |      |            |   |      |           
|Operating Statistics                                         |  |      |             |   |      |            |   |      |           
|Venezuela Gold Production                                    |  |      | 35,244      |   |      | 27,791     |   |      | 42,690    
|Uruguay Gold Production1                                     |  |      | 41,729      |   |      | 66,832     |   |      | 66,957    
|Total Gold Production (ounces)                               |  |      | 76,973      |   |      | 94,623     |   |      | 109,647   
|Total Cash Cost Per Ounce Sold2,3                            |  |      | US$378      |   |      | US$346     |   |      | US$178    
|Average Realized Price Per
        Ounce3                    |  |      | US$363      |   |      | US$310     |   |      | US$242    
|Average Spot Gold Price Per
        Ounce                    |  |      | US$363      |   |      | US$310     |   |      | US$271    
|                                                             |  |      |             |   |      |            |   |      |           
|Financial Statistics (C$
          thousands)                |  |      |             |   |      |            |   |      |           
|Revenues3,
          4                                       |  | $    | 15,567      |   | $    | 13,318     |   | $    | 16,006    
|Cash Flow from Operating Activities3,
          5            |  |      | ($34,308    | ) | $    | (4,549     | ) | $    | 4,318     
|Net Loss4                                                    |  |      | ($82,054    | ) | $    | (56,460    | ) | $    | (42,552   
|Net Loss per Basic Share4                                    |  |      | ($0.70      | ) | $    | (0.67      | ) | $    | (0.62     
|Weighted Average Number of
        Common Shares Outstanding |  |      | 118,309,198 |   |      | 84,441,287 |   |      | 69,117,738

| 
|-
|1
|2
|3
|4
|5

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During 2003, Crystallex incurred
  a net loss of $82.1 million, or $0.70 per share as compared with a restated
  net loss of $56.5 million, or $0.67 per share in 2002. The larger net loss in
  2003 was primarily attributable to a non-cash charge of $23.0 million for a
  write-down of mineral properties (of which $18.8 million relates to the La Victoria
  property), an increase in general and administrative expenses from $9.0 million
  to $22.4 million, and a foreign exchange loss of $4.5 million. The foreign exchange
  loss was due to the impact of the weakening of the U.S. dollar on Crystallexs
  Canadian dollar obligations. These items were partially offset by a reduction
  in the non-hedge derivative loss to $21.7 million in 2003 as compared with a
  restated $34.8 million loss in 2002.


Revenue on our Statement of Operations
  represents revenue from the Venezuelan operations only, as San Gregorio is accounted
  for as a Discontinued Operation. Revenue in 2003 was $15.6 million, as compared
  with $13.3 million in 2002. The increase in revenue is attributable to selling
  more ounces of gold in Venezuela at a higher average realized price. Gold sales
  in 2003 were 30,632 ounces at an average realized price of US$363 per ounce,
  as compared with 28,088 ounces in 2002 at an average realized price of US$310
  per ounce.


Operating cash flow from continuing
  operations, before capital expenditures, was a utilization of $34.3 million
  in 2003, as compared with a utilization of $4.5 million in 2002. Higher general
  and administrative expenses, cash used to reduce the gold hedge book and a greater
  use of cash related to working capital changes were the main reasons for a larger
  operating cash flow deficit in 2003.


Financing activities increased during
  2003. Crystallex raised approximately $75 million during the year, primarily
  with special warrant financings. The financings in 2003 and the April 2004 common
  share financing for gross proceeds of $115 million have considerably improved
  Crystallexs liquidity.


Income Statement

Production and Gold Sales
  Revenue

|                             | 2003   |        | 2002   |  
|---------------------------- | ------ | ------ | ------ | -
|                             |        |        |        |  
|Gold Production (ounces)     |        |        |        |  
|San
      Gregorio1          |        | 41,729 |        |  
|La Victoria                  | 5,564  |        | 22,548 |  
|Tomi
      Open Pit          | 24,360 |        | 2,347  |  
|Tomi
      Underground       | 2,753  |        |        | 0
|Purchased
      Material     | 2,567  |        | 2,896  |  
|Total                        | 76,973 |        | 94,623 |  
|                             |        |        |        |  
|                             |        |        |        |  
|Total Cash Costs (US$/ounce) |        |        |        |  
|San
      Gregorio           | $      | 276    |        | $
|Venezuela                    | $      | 378    |        | $
|Company Average              | $      | 323    |        | $
|                             |        |        |        |  

| 
|-
|1
|2

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In 2003, Crystallex produced almost
  77,000 ounces of gold, about 18,000 ounces less than the 95,000 ounces produced
  in 2002. The decrease was due to selling the San Gregorio mine at the end of
  the third quarter of 2003, although this was partially offset by higher gold
  production in Venezuela. Gold production in Venezuela was approximately 35,000
  ounces in 2003, a 25% increase over the 28,000 ounces produced in 2002. There
  was a considerable improvement in operating performance during the final quarter
  of 2003, with gold production reaching 15,200 ounces, as compared with 4,300
  ounces in the first quarter. This was attributable primarily to increasing mill
  throughput resulting from capital investments in equipment and spare parts,
  as well as from higher ore grades and gold recoveries. The Revemin mill operated
  at 98% of its 1,350 tonne per day capacity during the fourth quarter of 2003,
  up from only 55% in the first quarter of the year. Gold recovery, which averaged
  84% for the year, was 92% in the fourth quarter. The grade of ore processed
  at the Revemin mill during the fourth quarter averaged 4.2 grams per tonne,
  as compared with 3.5 grams per tonne for the full year and 3.0 grams per tonne
  in 2002.


Tomi

Tomi was Crystallexs main
  producing concession in 2003, accounting for about 77% of Venezuelan production.
  Tomi produced 27,113 ounces in 2003, of which 24,360 ounces were from the Milagrito
  and Mackenzie open pit mines and the balance of 2,753 ounces were from the new
  Charlie Richards underground mine.


Almost all of Crystallexs
  forecast gold production of 50,000 ounces in 2004 will come from the Tomi concession.
  Mining will be conducted at the Milagrito and Mackenzie open pits and the Charlie
  Richards underground mine. The open pit reserves at Tomi are forecast to be
  depleted during 2005.


Production at the Charlie Richards
  underground mine is expected to reach design levels of about 200 tonnes of ore
  per day by the third quarter of 2004. At full operation, annual gold production
  from the underground mine is forecast to range between 10,000 and 17,000 ounces
  per year for approximately four years at current estimated reserves of 68,000
  ounces of gold. Total cash costs are forecast to average US$175 per ounce.


Crystallex has forecast capital
  expenditures of approximately US$2.0 million for the Tomi concession during
  2004.


La Victoria

The La Victoria deposit contains
  a significant quantity of sulphide refractory ore, which results in low gold
  recoveries when processed at the Revemin mill, which is a conventional cyanide-in-leach
  plant. The recovery of gold from La Victoria ore averaged only 54% during the
  third quarter of 2003 and 68% for the first nine months of the year. As a consequence,
  the production of ore has been suspended at La Victoria while Crystallex assesses
  the viability of treating the refractory ore in a Bio-Oxidation circuit prior
  to cyanide leaching. Crystallex is currently conducting a Bio-Oxidation pilot
  plant test on a twenty tonne sample of ore from La Victoria.


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Due to a lack of capital in the past,
  data from previous drilling is insufficient to accurately confirm the full
  extent of La Victorias reserve potential. Consequently, an infill drill
  program is underway to better determine the size and grade of the deposit.
  Production will resume at La Victoria if the Bio-Oxidation process is technically
  viable and the project generates an acceptable economic return. A decision
  will likely be made in the third quarter of 2004.


Crystallex wrote-down its entire
    $18.8 million carrying value of La Victoria in accordance with Canadian Generally
    Accepted Accounting Principles (GAAP). Nevertheless, based on positive preliminary
    Bio-Oxidation testwork and geological interpretations, Crystallex is optimistic
    that La Victoria can be restored to economic viability.


Gold Sales


The Mining Revenue line on the Statement
    of Operations of Crystallex only includes gold sales from our Venezuelan
    mines, as the San Gregorio mine in Uruguay was sold at the end of the third
    quarter of 2003 and is accounted for as a Discontinued Operation. Gold sales
    were 30,362 ounces in 2003 from operations in Venezuela. This is less than
    production of 35,244 ounces as approximately 4,900 ounces of gold produced
    in December 2003 were not sold until after year-end. Including gold sales
    from San Gregorio of 39,562 ounces, total gold sales for the year were 70,194
    ounces.


Spot gold prices averaged US$363
    per ounce in 2003, up from US$310 in 2002. In Venezuela, all our gold is
    sold to the Central Bank and Crystallex receives the prevailing spot gold
    price. During 2003, we received an average price of US$363 per ounce for
    our Venezuelan gold sales. This generated revenue on our Statement of Operations
    of $15.6 million during 2003.


Most of the gold sales from Uruguay
    were delivered against forward sales positions and Crystallex realized an
    average price of US$297 per ounce on gold sales from Uruguay.


In 2004, Crystallex expects to continue
    to sell all gold production to the Venezuelan Central Bank and realize the
    spot price of gold on these sales. Gold sales proceeds are received in local
    currency and will be utilized to fund ongoing operations and capital projects
    in Venezuela.


Operating Expenses


Crystallexs total cash costs
    of production include mining, processing, mine administration, royalties
    and production taxes and excludes corporate general and administrative expenses,
    depreciation and depletion, financing costs, capital costs, exploration and
    reclamation accruals.


Crystallexs cost of sales
    for 2003 were $16.2 million as compared with $15.2 million in 2002, as more
    ounces of gold were produced and sold in 2003 than in 2002. Gold sales from
    continuing operations were 30,632 ounces in 2003, as compared with 28,088
    ounces in 2002. The total cash costs per ounce of gold sold from Venezuela
    was US$378 per ounce in 2003, however when gold production from discontinued
    operations (Uruguay) is included, Crystallexs total cash costs were
    US$323 per ounce. Operating costs in Venezuela were high during the first
    nine months of 2003, particularly in the first quarter when they averaged
    US$460 per ounce.


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The high costs were primarily a result of low gold recoveries at La Victoria. Gold production improved materially by year end as mining was entirely conducted at the Tomi concession, which is higher grade and yields higher gold recoveries than experienced at La Victoria.


General and Administrative Expenses


General and Administrative (G&A)
    expenses totalled $22.4 million during 2003, as compared with about $9.0
    million in 2002. Compensation, including salaries and bonuses, comprised
    the largest component of G&A during 2003, at about $7.4 million. Other
    significant G&A expense categories included legal and audit fees of $3.8
    million, advisory and consulting fees of about $3.0 million, Caracas office
    G&A
of $2.0 million and insurance of $1.3 million.


G&A expenses in 2003 were approximately
    $13.4 million higher than in 2002. During the year Crystallex incurred unusual
    and one-time expenses in respect of: special one-time bonus payments to officers
    and directors related to the consummation of the Las Cristinas mining agreement;
    bonus and success fees paid to various Venezuelan litigation and other legal
    counsels; professional fees related to responding and satisfying questions
    raised during an ongoing regulatory review; successful completion of several
    financings and office closures with related consolidation costs. At least
    $5 million of such costs represent one-time expenditures. In addition, Crystallex
    has significantly added to its senior staff in contemplation of the commencement
    of the financing and construction of the Las Cristinas project, further increasing
    G&A expenditures. Crystallex anticipates that the level of G&A expenses
    for 2004 will approximate 2003 amounts less the one time charges discussed
    above.


The largest component of the $13.4
    million increase was bonus payments, which were $2.9 million higher in 2003
    as compared with 2002. Included in the $2.9 million increase are $1.3 million
    of special bonuses paid in September 2003 to management and directors of
    Crystallex and $1.1 million
of success fees paid to Crystallexs Venezuelan legal counsel, all as one-time
payments specifically in recognition of their commitment of time and effort on
behalf of Crystallex, over several years, in successfully consummating the Las
Cristinas mining operation agreement. The payments were approved by an independent
compensation committee of the Board of Directors. There will be no further bonuses
paid to legal counsel, management, and directors relating to the consummation
of the Las Cristinas mining agreement. There, however, may be future bonuses
paid to these individuals based on different criteria.


Advisory fees accounted for $2.3
    million of
the increase of G&A expenditures in 2003 as compared with 2002. The two principal
advisory fees were related to the engagement of an investment bank to provide
corporate advisory services and for the engagement of a project finance debt
advisor for Las Cristinas. Other G&A areas that had material increases during
2003 included legal and audit fees, which increased by $2.1 million and insurance
which increased by $1.1 million.


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Forward Sales and Written Call Options


Crystallex has adopted a policy
    to become hedge free as we hold the view that the market ascribes a discount
    to derivatives. Crystallex plans to eliminate its existing economic derivative
    commitments, which consist of call options sold and forward sales contracts.
    This will be accomplished by repurchasing forward sales and call option contracts
    at opportune times. To facilitate this approach, Crystallex plans to negotiate
    with its counterparties to move certain commitments to future periods.


Crystallex made considerable progress
    during 2003 in reducing the number of hedged ounces of gold. Commitments
    under forward sales and call options were reduced from 471,872 ounces to
    350,025 ounces, a reduction of almost 122,000 ounces. This was mainly accomplished
    by delivering gold production into forward sales positions, buying back 25,000
    ounces of forward sales (at a net cost of approximately US$74 per ounce or
    US$1.84 million) and by retiring 37,640 ounces of forward sales as part of
    the sale of the San Gregorio mine. At year-end, Crystallexs contracted
    ounces represented just 3% of our reserves.


As tabled below, at December 31,
    2003, Crystallexs derivative position was comprised of 125,856 ounces
    of fixed forward contracts at an average price of US$305 per ounce, and 224,169
    ounces of call options sold at an average price of US$303 per ounce.


|                                   | 2004 |         | 2005 |   | 2006    |  | Total |       
|---------------------------------- | ---- | ------- | ---- | - | ------- |  | ----- | ------
|                                   |      |         |      |   |         |  |       |       
|Fixed Forward Gold Sales (ounces)  |      | 43,430  |      |   | 42,430  |  |       | 39,996
|Average Price (US$/ounce)          | $    | 300     |      | $ | 305     |  | $     | 310   
|Written Gold Call Options (ounces) |      | 127,237 |      |   | 94,932  |  |       | 2,000 
|Average Exercise Price (US$/ounce) | $    | 298     |      | $ | 309     |  | $     | 348   
|Total (ounces)                     |      | 170,667 |      |   | 137,362 |  |       | 41,996
|Average Price (US$/ounce)          | $    | 299     |      | $ | 308     |  | $     | 312   
|                                   |      |         |      |   |         |  |       |       

| |                                          
| | -----------------------------------------
| | Accounting for Derivative
    Instruments

Crystallexs existing forward
    sales and call options are designated as derivatives so they do not qualify
    for the normal sales exemption, (or hedge accounting) for accounting treatment.
    Crystallexs metal trading contracts are recorded on the Balance Sheet
    at fair market value. Crystallex has no off-balance sheet gold contracts.
    Changes in the fair value of derivatives recorded on the Balance Sheet are
    recorded in earnings as an unrealized non-hedge derivative (loss) gain in
    the Statement of Operations. The gains and losses occur because of changes
    in commodity prices and interests rates.


The variation in the fair market
    value of options and forwards from period to period can cause significant
    volatility in earnings; however, this fair market value adjustment is a non-cash
    item that will not impact Crystallexs cash flow. Should Crystallex
    be unable to satisfy its commitments from gold production, it would be required
    to financially settle the underlying positions which will impact future cashflows,
    thereby reducing its cash position. For the year, the total unrealized mark-to-market
    loss on the non-hedge derivative positions was $19.4 million.


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In addition, realized losses of $2.3 million arising from financial settlement of contracts were also recognized.


Mark-to-Market (Fair Value)

At December 31, 2003, the unrealized mark-to-market
value of Crystallexs gold forward sales and call options, calculated at
a year end spot price of US$415 per ounce was negative $52.6 million. This fair
value is recorded on the Balance Sheet as a liability (Deferred Credit) and represents
the replacement value of these contracts based upon the spot gold price at year-end
and does not represent an obligation for payment. Crystallexs obligations
under the forward sales contracts are to deliver an agreed upon quantity of gold
at a predetermined price by the maturity date of the contract, while delivery
obligations under the call options sold are contingent upon the price of gold
and will take effect if the gold price is above the strike price of the relevant
contract at its maturity date and the option is exercised by the option
holder.


In circumstances where Crystallex is unable to meet the obligations under the
fixed forward sales or call options, Crystallex may negotiate with the counterparty
to defer the expiry date of the forward sale or call option, or purchase gold
in the market, or settle the positions financially. If Crystallex were to purchase
gold in the market or settle the contracts financially, it would result in a
reduction of Crystallexs cash. The table below illustrates the cash requirement
if Crystallex had to financially settle contract positions in excess of planned
production. The analysis assumes, and Crystallex believes it is reasonably likely
that, Crystallex proceeds with a Bio Oxidation operation at La Victoria and that
the Albino mine is developed on schedule. The analysis excludes future Las Cristinas
production. It also assumes Crystallex is unable to roll existing contracts to
future periods. The December 31, 2003 spot gold price of US$415 per ounce is
used.


|US$ millions                         |   | 2004    |  |   | 2005    |  |   | 2006   |  |   | Total   |  | 
|------------------------------------ | - | ------- |  | - | ------- |  | - | ------ |  | - | ------- |  | 
|                                     |   |         |  |   |         |  |   |        |  |   |         |  | 
|Total ounces Committed               |   | 170,667 |  |   | 137,362 |  |   | 41,996 |  |   | 350,025 |  | 
|Planned Production                   |   | 50,000  |  |   | 75,000  |  |   | 65,000 |  |   | 190,000 |  | 
|Excess Committed Ounces              |   | 120,667 |  |   | 62,362  |  |   | nil    |  |   | 183,029 |  | 
|Average Committed Price (US$/oz)     | $ | 299     |  | $ | 308     |  | $ | 312    |  | $ | 3021    |  | 
|Average Assumed Spot Price (US$/oz)  | $ | 415     |  | $ | 415     |  | $ | 415    |  | $ | 415     |  | 
|Cash Required to Settle
      Excess | $ | 14.0    |  | $ | 6.7     |  | $ | $nil   |  | $ | 20.7    |  | 
|Positions                            |   |         |  |   |         |  |   |        |  |   |         |  | 
|Unrealized Mark to Market            | $ | 20.2    |  | $ | 15.7    |  | $ | 4.8    |  | $ | 40.7    |  | 
|Fair value                           |   |         |  |   |         |  |   |        |  |   |         |  | 
|                                     |   |         |  |   |         |  |   |        |  |   |         |  | 
|                                     |   |         |  |   |         |  |   |        |  |   |         | 

|1 | Represents the average price for
      the years 2004 and 2005 in which there are excess committed ounces.
|- | ----------------------------------------------------------------------------------------------------------

Crystallex cautions readers not to
  place undue reliance on the projected production figures illustrated above.
  As noted under Forward Looking Statements in the Annual Report,
  predictions and forecasts involve inherent risks and uncertainties. A number
  of factors could cause actual results to differ from plans.


In the event that there is no production from the La Victoria and Albino mines,
we estimate that the total ounces that we expect to produce in 2004 - 2006 would
be reduced by approximately 81,000 ounces, thereby adding approximately U.S.$8.1
million to the cash required to settle our positions.


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Write-down of Mineral Properties

Crystallex annually performs property
  evaluations to assess the recoverability of its mining properties. Impairment
  evaluations
compare the undiscounted forecast future cash flow from each operation with its
carrying value and where the cash flows are less, a write-down to estimated fair
value is recorded. In 2003, Crystallex incurred mineral property write-downs
of $23.0 million. Management concluded that the undiscounted cash flow from currently
estimated reserves at the La Victoria property, determined using a US$325 per
ounce gold price and preliminary capital and operating cost estimates for a Bio-Oxidation
plant, would be insufficient to recover the carrying value of the property. In
accordance with Canadian GAAP, Crystallex wrote-down the value of the La Victoria
property by $18.8 million, reducing the carrying value to zero. A lack of capital,
in the past, prevented Crystallex from undertaking a comprehensive drill program
to determine the full extent of La Victorias reserve potential. Crystallex
is presently drilling at La Victoria and expects to have a revised reserve estimate
during the third quarter of 2004. In addition, Crystallex will soon be conducting
a Bio-Oxidation pilot plant test to confirm the amenability of the La Victoria
ore to the Bio-Oxidation process.


The remaining $4.2 million balance of the $23.0 million of mineral property write-downs
is related to various exploration properties, principally the Santa Elena property
in Venezuela.


Liquidity and Capital Resources

Historically, Crystallexs principal source of liquidity has been equity
and equity-equivalent forms of financings as Crystallexs operations have
not generated sufficient cash to meet its operating requirements and planned
capital expenditures. Crystallex anticipates capital needs of approximately US$350
million over the next two years, related to developing Las Cristinas and for
capital projects at existing operations. In addition, over the same period, Crystallex
forecasts cash requirements of between US$30 million to US$40 million to cover
general and administrative requirements, debt service and operating cash flow
deficits. Crystallex will continue to rely on the equity markets for meeting
its commitments and planned expenditures and also intends to access the project
debt finance market to meet a portion of the expected capital expenditures for
the development of Las Cristinas.


Crystallex intends to finance the development of Las Cristinas with a combination
of equity and project finance debt. Crystallex has recently closed an offering
of 28.75 million shares priced at $4.00 per share for gross proceeds of $115
million. The proceeds will primarily be used to fund the development of Las Cristinas.
To advance the Las Cristinas project to commercial production, Crystallex currently
expects to issue equity or arrange other forms of financing later this year or
in early 2005 and expects to close a project finance debt agreement with a syndicate
of commercial banks and possibly export credit agencies during 2005. There can
be no assurance that these financing arrangements will be available, or available
on terms acceptable to Crystallex.


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Working Capital

At December 31, 2003, Crystallexs working capital position improved significantly
to $4.7 million from negative $19.5 million at December 31, 2002. The increase
was due to common share and warrant financings during the third quarter of 2003,
which raised aggregate gross proceeds of US$38.2 million. Crystallexs cash
position at December 31, 2003 was $33.9 million. Furthermore, the recent $115
million common share financing has considerably enhanced Crystallexs
liquidity.


Cash Flow from Operations

Operating cash flow (after working capital changes and before capital expenditures)
was a utilization of $34.3 million in 2003. A cash flow deficit was incurred
as revenues from gold sales were offset by direct operating costs of production;
consequently, there was no cash flow to provide for general and administrative
expenses, interest expenses and working capital changes.


The deficit of $34.3 million in 2003 was $29.8 million higher than the restated
deficit of $4.5 million in 2002. The increase was mainly due to an $11.4 million
increase in General and Administrative cash
expenditures (a portion of G&A expenses in 2003 were paid in shares and warrants
of Crystallex) and a $9.5 million increase in cash used for changes in working
capital items. Also, Crystallex spent $2.3 million on reducing its gold forward
sales positions during the year, including a buyback of 25,000 ounces of forward
sales contracts at a spot price of US$372 per ounce.


Crystallex expects to have a cash flow deficit of approximately US$15 million
in 2004 as cash flow from the operations will be insufficient to fund general
and administrative expenses, debt service and
cash obligations related to Crystallexs gold hedge book.


Investing Activities

Crystallexs principal investing activities are for capital expenditures
at its operations.


Capital expenditures during 2003 totalled $12.3 million, as compared with $42.2
million in 2002. The reduction in capital spending was largely due to reduced
expenditures at Las Cristinas. Expenditures at Las Cristinas were $37.4 million
in 2002 and included a US$15.0 million payment to the CVG under the terms of
the Mining Operating Agreement. The investments in 2003 were principally for
the Las Cristinas project ($9.9 million), including the costs for the Feasibility
Study, maintaining the camp and completing the social development infrastructure
programs. The balance of the capital expenditures were related to the operating
mines in Venezuela.


Crystallex is planning significant
    capital expenditures in 2004 and 2005, mainly for the development of the Las
    Cristinas project. The timing of these expenditures will be determined by
    our ability to raise both equity and debt financing. Capital expenditures
    during 2004 areestimated
    at approximately US$88 million as follows: Las Cristinas US$80 million; Tomi
    US$2 million; Revemin Mill US$3 million and Albino US$3 million.


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If Crystallex proceeds with the
  construction of a Bio Oxidation plant at Revemin for processing La Victoria
  ore, it is presently estimated that capital expenditures of approximately $15
  million will be required for the plant and for development work at the La Victoria
  mine. These expenditures would largely be incurred in 2005.


It is expected that the projected
  operating deficit and capital expenditure requirements for 2004 will be funded
  with the proceeds from the $115 million equity financing and from cash on hand
  of $33.8 million at December 31, 2003. As noted, to complete the development
  of Las Cristinas, Crystallex currently expects to issue equity or arrange other
  forms of financing later in 2004, or in early 2005 and anticipates closing a
  project finance debt transaction in 2005.


Crystallex expects to realize cash
  proceeds of US$2.0 million from the sale of the San Gregorio mine in 2004. The
  first instalment of US$1.0 million was received by Crystallex on April 14, 2004.


Financing Activities

During 2003, Crystallex raised net
  financing proceeds of $75.1 million, of which $61.7 million were proceeds from
  five special warrant financings throughout the year, $9.4 million were proceeds
  from the issuance of common stock and $4.1 million were proceeds from a convertible
  note financing. The convertible notes were converted into common shares during
  the fourth quarter of 2003. Refer to Note 9 of Notes to the Financial Statements
  for details of the special warrant financings.


In addition, common shares were
  issued during the year for the following main activities: on the exercise of
  warrants and special warrants (22.1 million shares); upon the conversion of
  convertible notes (17.0 million shares); for bank loan repayments (2.3 million
  shares); for legal fees (1.3 million shares) and for financial advisory fees
  (350,000 shares). Crystallex also issued warrants and special warrants during
  2003 for the following main activities: 13.9 million warrants and special warrants
  issued for cash; 900,000 common share warrants issued for consulting fees and
  450,000 warrants issued as part of the convertible note financing noted above.
  Payment of various fees in common shares during the first nine months of 2003
  reflects Crystallexs previous lack of liquidity. Equity financings since
  August 2003 (including the recent $115 million common share financing) have
  significantly improved Crystallexs liquidity and it is now Crystallexs
  intention to use cash rather than common shares to meet its obligations.


Debt repayments were $2.1 million
  during 2003. At year end, Crystallexs total debt outstanding was $9.7
  million. The debt is a term loan with Standard Bank London Limited secured by
  certain of Crystallexs assets (excluding Las Cristinas). The loan bears
  interest at approximately 2.5% over Libor with principal payments due semi-annually
  until 2006. Total debt was reduced from $34 million at year end 2002, principally
  by issuing common shares upon the conversion of convertible notes.


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Contractual Obligations and
  Commitments

Crystallexs contractual obligations
    and commitments are tabled below:


|                              |  |   | 2004                                                |  |   | 2005                                                  |  |   | 2006                                                 | 
|----------------------------- |  | - | --------------------------------------------------- |  | - | ----------------------------------------------------- |  | - | ---------------------------------------------------- | 
|                              |  |   |                                                     |  |   |                                                       |  |   |                                                      | 
|Scheduled Debt Repayments     |  | $ | 1,335,344                                           |  | $ | 5,704,600                                             |  | $ | 2,668,806                                            | 
|                              |  |   |                                                     |  |   |                                                       |  |   |                                                      | 
|Operating Lease Obligations   |  | $ | 204,000                                             |  | $ | 208,000                                               |  | $ | 198,000                                              | 
|                              |  |   |                                                     |  |   |                                                       |  |   |                                                      | 
|Precious Metal Contracts:     |  |   |                                                     |  |   |                                                       |  |   |                                                      | 
|Fixed
      Forward Contracts |  |   | 43,430
        oz @ anaverage ofUS300/oz            |  |   | 42,430
        oz @ anaverage ofUS$305/oz             |  |   | 39,996
        oz @ anaverage ofUS$310/oz            | 
|                              |  |   |                                                     |  |   |                                                       |  |   |                                                      | 
|Call
      Options Sold       |  |   | 127,237 oz
        @
        an average ofUS$298/oz |  |   | 94,932
      oz @ an
      average of
      US$309/oz |  |   | 2,000
      oz @ an
      average of
      US$348/oz | 

In addition, Crystallex has royalty
  commitments that are only payable if gold is produced. There is no obligation
  to make payments if gold is not produced. Currently, Crystallexs only
  gold production is from the Tomi concession, which is subject to a 1.75% royalty
  on gold revenue. All gold production in Venezuela is subject to an exploitation
  tax, established under the Mining Law, which is payable to the Republic. The
  exploitation tax is presently 3% of gold revenue.


For presentation of contractual
  obligations and commitments for periods of 1 year, 1-3 years and 3-5 years,
  please refer to Tabular Disclosure of Contractual Obligations on
  page 59-60.


Outstanding Share Data

At May 3, 2004, 179,498,492 common
  shares of Crystallex were issued and outstanding. In addition, at April 12,
  2004 options to purchase 10,234,000 common shares of Crystallex were outstanding
  under Crystallexs option plan and warrants to purchase 18,334,905 common
  shares of Crystallex were issued and outstanding.


Critical Accounting Policies
  and Estimates

Use of Estimates

The preparation of financial statements
  in conformity with accounting principles generally accepted in Canada requires
  management to make estimates and assumptions that affect the reported amount
  of asset and liabilities and disclosure of contingent assets at the date of
  the consolidated financial statements. Significant estimates used herein include
  those relating to gold prices, recoverable proven and probable reserves, available
  resources, fair values of commodity derivative contracts, (principally fixed
  forward contracts and written call options) available operating capital and
  required reclamation costs. Among other things, these estimates each affect
  managements evaluation of asset impairment and the recorded balances of
  inventories, site closure and reclamation and remediation obligations. It is
  reasonably possible that actual results could differ in the near term from those
  and other estimates used in preparing these financial statements and such differences
  could be material.


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The key estimate utilized in the
  preparation of financial statements is the price of gold.


In determining the economic viability/carrying
  value of a mining project, we use an estimate of the gold price over the term
  of the project. That estimate as of December 31, 2003, is currently US$325 per
  ounce which is conservative and lower than the $400 per ounce spot price of
  gold. Should the price of gold fall below $325 per ounce and be sustained for
  an extended period of time a trend, we would have to amend the estimated gold
  price used in our valuation assumptions. In the circumstances where the estimated
  gold price was US$270 per ounce, we would write off the carrying value of the
  current properties.


Other estimates include:


Revenue, cashflow from operations
  and non hedge derivative gain/(loss) are determined utilizing the actual gold
  price at the date of the transaxtion. There is no impact from the estimated
  gold price on these amounts.


Crystallex currently is in compliance
  with exsiting legistlation regarding site closures, remediation and reclamation
  obligations in Venezuela where it operates. We cannot determine what financial
  impact we would face if existing legislation or regulations change.


Property Evaluations

Crystallex reviews and evaluates
  the recoverability of the carrying amounts of all its producing properties and
  related plant and equipment annually or when events and changes in circumstances
  indicate that the carrying value may not be recoverable. Estimated net future
  cashflows, on an undiscounted basis, are calculated using estimated recoverable
  ounces of gold (considering current proven and probable 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, reclamation costs and income taxes. Reductions in the carrying amount
  of property, plant and equipment, with corresponding charges to earnings, are
  recorded to the extent that the estimated future undiscounted net cashflows
  are less than the carrying amount.


Capitalization of Exploration
  and Development Costs

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 a permanent 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. 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
  units-of-production method over the estimated life of the ore body based on
  proven and probable reserves.


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Commodity Derivative Contracts

Crystallex uses commodity derivative contracts, principally fixed forward contracts and written call options, to economically hedge exposure to fluctuations in the market price of gold. These instruments are not designated as hedges for accounting purposes and are carried on the balance sheet under the captions deferred credit and deferred charge, at estimated fair market value.


Premiums received at the inception of written call options are initially recognized on the balance sheet as a liability. Unrealized gains or losses arising from changes in the fair market value of the liability related to both fixed forward contracts and written call options and realized gains/losses on commodity derivative contracts which are either settled financially or through physical delivery, are recognized in the statement of operations in the period of the change or settlement as an unrealized non-hedge derivative loss/gain.


Non GAAP Measures

Total cash costs per ounce are calculated in accordance with the Gold Institute Production Cost Standard, (the Standard). The total cash cost per ounce data are presented to provide additional information and are not prepared in accordance with Canadian or U.S. GAAP. The data should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The measures are not necessarily indicative of operating profit or costs of operations as determined under Canadian or U.S. GAAP. The total cash cost per ounce calculation is derived from amounts included in the Operating Expense line on the Statement of Operations. As this line item is unchanged under US GAAP, the total cash cost per ounce figure is similarly unchanged using US GAAP results of operations.


Data used in the calculation of total cash costs per ounce may not conform to other similarly titled measures provided by other precious metals companies. Management uses the cash cost per ounce data to access profitability and cash flow from Crystallexs operations and to compare it with other precious metals producers. Total cash costs per ounce are derived from amounts included in the Statement of Operations and include mine site operating costs such as mining, processing, administration, royalties and production taxes but exclude amortization, reclamation, capital expenditures and exploration costs.


Total cash costs per ounce sold may be reconciled to our Statement of Operations as follows:


|C$,000                                          | 2003       |  | 2002       |  | 2001       | 
|----------------------------------------------- | ---------- |  | ---------- |  | ---------- | 
|                                                |            |  |            |  |            | 
|                                                |            |  |            |  | restated   | 
|Operating Costs per Financial
      Statements  | 16,240,363 |  | 15,191,619 |  | 11,696,769 | 
|By-Product Credits                              |           |  |           |  |           | 
|Reclamation and Closure Costs                   |           |  |           |  |           | 
|Operating Costs for Per Ounce
      Calculation | 16,240,363 |  | 15,191,619 |  | 11,696,769 | 
|                                                |            |  |            |  |            | 
|Ounces Sold                                     | 30,632     |  | 28,088     |  | 42,690     | 
|Total Cash Cost Per Ounce C$                    | C$530      |  | C$541      |  | C$274      | 
|Average Annual C$/US$ F/X Rate                  | 1.40       |  | 1.57       |  | 1.55       | 
|Total Cash Cost Per Ounce Sold
      US$        | US$378     |  | US$346     |  | US$178     | 

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|B. | REGULATORY AND ENVIRONMENTAL
      RISKS
|-- | ----------------------------------------

Cyanide


Environmental considerations in
    Venezuela focus on the use and containment of cyanide bearing solutions (liquids)
    and cyanide bearing solid tailings. In order to apply effective remediation
    measures, it is important to understand some of the characteristics of cyanide:


| |  | Cyanide
        is a man-made substance consisting of nitrogen and carbon, commonly marketed
    as sodium cyanide (NaCN).               
| | - | -----------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                          
| |  | It
      is toxic and needs to be handled with care.                                                                                     
| |   |                                                                                                                                          
| |  | It
      is a fragile chemical compound (unstable in certain environments).                                                              
| |   |                                                                                                                                          
| |  | It
      is biodegradable, oxidizes rapidly and reverts back to its components of
      carbon which becomes carbon dioxide and nitrogen.
| |   |                                                                                                                                          
| |  | It is destroyed by ultraviolet
      light over time.                                                                                    
| |   |                                                                                                                                          
| |  | It is destroyed rapidly in an
      environment where the ph drops below 10.                                                             
| |   |                                                                                                                                          
| |  | Cyanide
      destruction plants, operate with a pH of 2 in order to destroy 95% of the
      cyanide in less than 1 hour.               

Venezuela


The Revemin plant has obtained
    permits for the use of cyanide in the dissolution of gold, and these permits
    are in good standing. The permit is contingent on our containing all tailings
    which have come into contact with cyanide. Compliance with the permit is achieved
    as follows:


| |  | A
      major North American geotechnical and engineering company designed the tailings
      deposition facility for Bolivar Goldfields                                                                                                                                             
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                      
| |  | The tailings dams were constructed
      according to the specifications set out in the engineering project.                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                      
| |  | The tailings dams are being
      operated according to the specifications set out in the engineering project.                                                                                                                                                                       
| |   |                                                                                                                                                                                                                                                                                      
| |  | The tailings dams are raised
      annually to accommodate the next years production.                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                      
| |  | The
      cost of raising the dams is expensed annually.                                                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                                                      
| |  | Certain areas of the tailings
      impoundment facility are decommissioned as they reach design capacity.                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                      
| |  | These areas are revegetated
      and returned to nature.                                                                                                                                                                                                                            
| |   |                                                                                                                                                                                                                                                                                      
| |  | Since the property has been
      under Crystallex ownership, the annual inspection has been carried out by
      a Canadian geotechnical consultant, M. A. J. Matich, the recipient of the
      prestigious Leggett Award for recognition in the field of Geotechnical Engineering.
| |   |                                                                                                                                                                                                                                                                                      
| |  | Revemin staff inspect the tailings
      dams perimeter once per day.                                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                      
| |  | Representatives
      of the Ministry of the Environment and Natural Resources (MARN)
      conduct planned bi-annual visits and occasionally conduct unplanned inspections.                                                                                                       
| |   |                                                                                                                                                                                                                                                                                      
| |  | Operations
      at Revemin have never been suspended for non-compliance.                                                                                                                                                                                                            

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It is important to note that mined
  out areas are also rehabilitated as an ongoing operating procedure. For example,
  our tailings impoundment facility at Albino was covered over with a thin layer
  of topsoil and revegetated. The Albino mine waste dumps were terraced, and indigenous
  trees were planted in a designed pattern.


In Venezuela, Crystallex records
  reclamation costs as part of the unit costs of ongoing production and expenses
  these costs when incurred. There is no further provision for reclamation or
  closure costs and no provision is currently anticipated. Environmental laws and regulations
  are constantly changing and such changes may impact our obligations for remediation
  and protection of the environment. Crystallex may incur significant costs in
  respect of such obligations which may impact its operating results and financial
  condition. Because of the uncertainty as to the nature of future regulatory
  requirements, Crystallex is not able to determine the impact of future requirements
  upon its compliance obligations and financial position. We will continue to
  closely monitor changes in law and policy which may impact its environmental
  compliance obligations and will update its plans and financial estimates related
  to such obligations in compliance with applicable law and policy.


We will continue its practice of
  progressively rehabilitating our properties during operation to reduce post
  production, closure and post closure obligations, including both operational
  and financial obligations.


|C. | RESEARCH AND DEVELOPMENT, PATENTS AND
      LICENSES, ETC.
|-- | ----------------------------------------------------------

Not Applicable.


|D. | TREND INFORMATION
|-- | -----------------

Not Applicable.


|E. | OFF-BALANCE SHEET ARRANGEMENTS
|-- | ------------------------------

Crystallex had no off-balance sheet
  arrangements as of December 31, 2003.


|F. | TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
|-- | ---------------------------------------------

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|Contractual Obligations                                                               |                         | Payments Due by
      Period
|------------------------------------------------------------------------------------- | ----------------------- | ----------------------------
|                                                                                      |                         |                             
|                                                                                      |                         |                             
|                                                                                      |                         |                             
|Long-term Debt Obligations
      (SeeNote
      8 to                                  |                         |                             
|Notes to Financial Statements)                                                        |                         |                             
|Bank Loan                                                                             | $                       | 9,708,750                   
|                                                                                      |                         |                             
|Interest Payable(2)                                                                   | $                       | 650,000                     
|                                                                                      |                         |                             
|Operating Lease Obligations
      (SeeNote
      15 to Notes to Financial Statements) | $                       | 906,000                     
|                                                                                      |                         |                             
|Precious Metal Contracts(1)(SeeNote 15 to                                             |                         |                             
|Notes to Financial Statements)                                                        |                         |                             
|(i)                                                                                   | Fixed Forward Contracts |                             
|                                                                                      |                         |                             
|                                                                                      |                         |                             
|                                                                                      |                         |                             
|                                                                                      |                         |                             
|(ii)                                                                                  | Written Call Options    |                             
|                                                                                      |                         |                             
|                                                                                      |                         |                             
|                                                                                      |                         |                             
|                                                                                      |                         |                             
|Commodity Contract obligation                                                         | $                       | 52,608,053                  
|                                                                                      |                         |                             

|   
|---
|(1)
|(2)

|                                                                |  | 
|--------------------------------------------------------------- |  | 
|                                                                |  | 
|ITEM
            6  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES | 

|       |                                          
|------ | -----------------------------------------
|**A.** | **Directors
      and Senior Management**

In the following
    table and notes thereto is stated the name of each current Crystallex director
    and member of senior management, all offices of Crystallex now held by him,
    his business experience and principal occupation, the period of time for which
    he has been a director or member of senior management, and, for directors,
    other principal directorships:


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|Name
          and Office,
Function or Position
with Crystallex |  | Business
      Experience and
      Principal Occupation |  | Director
Since |  | Principal
Directorships
|--------------------------------------------------------------- |  | -------------------------------------------------------- |  | -------------- |  | -----------------------
|                                                                |  |                                                          |  |                |  |                        
|Robert
      A. Fung(2)                                         |  | Employee                                                 |  | December 3,    |  | Toronto Waterfront     
|Toronto, Ontario,                                               |  | Orion Securities, Inc.                                   |  | 1996           |  | Revitalization         
|Chairman of the Board,                                          |  |                                                          |  |                |  | Corporation;           
|Director                                                        |  |                                                          |  |                |  | Stockhouse Media       
|                                                                |  |                                                          |  |                |  | Corporation; El        
|                                                                |  |                                                          |  |                |  | Callao Mining Corp.    
|                                                                |  |                                                          |  |                |  |                        
|Todd Bruce(2)(4)                                                |  | President and Chief Executive                            |  | September 22,  |  |                        
|Toronto, Ontario                                                |  | Officer of Crystallex                                    |  | 2003           |  |                        
|President, Chief Executive                                      |  |                                                          |  |                |  |                        
|Officer and Director                                            |  |                                                          |  |                |  |                        
|                                                                |  |                                                          |  |                |  |                        
|Michael J. H.
      Brown(2)(3)(4)                              |  | Principal, Capital Markets                               |  | October 10,    |  | Queenston Mining       
|Toronto, Ontario                                                |  | Advisory                                                 |  | 2002           |  | Inc.;                  
|Director                                                        |  |                                                          |  |                |  | El Callao Mining       
|                                                                |  |                                                          |  |                |  | Corp.                  
|                                                                |  |                                                          |  |                |  |                        
|C. William Longden(1)(4)                                        |  | Vice Chairman, Marshall,                                 |  | July 25, 2000  |  | Marshall, Macklin,     
|Toronto, Ontario`                                               |  | Macklin, Monaghan Limited                                |  |                |  | Monaghan Limited;      
|Director                                                        |  |                                                          |  |                |  | El Callao Mining       
|                                                                |  |                                                          |  |                |  | Corp.                  
|                                                                |  |                                                          |  |                |  |                        
|David I. Matheson(2)(3)                                         |  | Counsel, McMillan Binch,                                 |  | July 25, 2000  |  | Clarke Inc.; El        
|Toronto, Ontario,                                               |  | LLP                                                      |  |                |  | Callao Mining Corp.    
|Director                                                        |  | Barristers & Solicitors                                  |  |                |  |                        
|                                                                |  |                                                          |  |                |  |                        
|Harry J. Near(1)(5)                                             |  | President, Near Consultants                              |  | May 5, 1997    |  | El Callao Mining       
|Ottawa, Ontario,                                                |  | & Associates; Principal, The                             |  |                |  | Corp.                  
|Director                                                        |  | Earnscliffe Strategy Group                               |  |                |  |                        
|                                                                |  |                                                          |  |                |  |                        
|Marc J. Oppenheimer(2)(4)                                       |  | Director,                                                |  | February 20,   |  | Net2Phone, Inc.,       
|Leonia, New
      Jersey,                                       |  | Crystallex International                                 |  | 1995           |  | First Choice           
|Director                                                        |  | Corporation                                              |  |                |  | Industries, Ltd; El    
|                                                                |  |                                                          |  |                |  | Callao Mining          
|                                                                |  |                                                          |  |                |  | Corp.                  
|                                                                |  |                                                          |  |                |  |                        
|Johan C. vant
      Hof(1)(2)(4)                               |  | President,                                               |  | March 12, 2004 |  |                        
|Toronto, Ontario                                                |  | Tonbridge Corporation                                    |  |                |  |                        
|Director                                                        |  |                                                          |  |                |  |                        

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|Armando F. Zullo(2)(5)    |  | President                       |  | December 3,   |  | El Callao Mining
|------------------------- |  | ------------------------------- |  | ------------- |  | ----------------
|Vancouver, British        |  | A.F. Zullo & Company Ltd        |  | 1996          |  | Corp.           
|Columbia                  |  |                                 |  |               |  |                 
|Director                  |  |                                 |  |               |  |                 
|                          |  |                                 |  |               |  |                 
|Daniel R. Ross            |  | Executive Vice President,       |  | July 1, 2001  |  |                 
|Toronto, Ontario,         |  | Corporate
      Counsel, and    |  |               |  |                 
|Executive Vice President, |  | Secretary of Crystallex         |  |               |  |                 
|Corporate Counsel, and    |  | International
      Corporation |  |               |  |                 
|Secretary                 |  |                                 |  |               |  |                 
|                          |  |                                 |  |               |  |                 
|Dr. Sadek El-Alfy         |  | Vice President-Operations       |  | February 1,   |  |                 
|Seattle, Washington,      |  | Crystallex International        |  | 1997          |  |                 
|Vice President           |  | Corporation                     |  |               |  |                 
|Operations                |  |                                 |  |               |  |                 
|                          |  |                                 |  |               |  |                 
|Borden D. Rosiak          |  | Chief Financial Officer         |  | September 1,  |  | Priszm Canadian 
|Toronto, Ontario,         |  | Crystallex International        |  | 2002          |  | Income Fund     
|Chief Financial Officer   |  | Corporation                     |  |               |  |                 
|                          |  |                                 |  |               |  |                 
|Kenneth Thomas,           |  | Chief Operating Officer         |  | April 1, 2003 |  |                 
|Toronto, Ontario,         |  | Crystallex International        |  |               |  |                 
|Chief Operating Officer   |  | Corporation                     |  |               |  |                 

|    |                                                                              
|--- | -----------------------------------------------------------------------------
|   
|(1) | Member
      of the Audit Committee                                          
|(2) | Member
      of the Finance and Risk Management Committee                    
|(3) | Member
      of the Corporate Governance Committee                           
|(4) | Member
      of the Environmental, Health and Safety and Operations Committee
|(5) | Member
      of the Nominating and Compensation Committee                    

All directors serve until the next
  Annual General Meeting of Crystallex unless they resign or are otherwise replaced
  by the shareholders of Crystallex. The following is a brief description of each
  of Crystallexs directors and principal officers:.


Robert A. Fung, Chairman. Prior
      to his appointment as Crystallexs Chairman on February 12, 1998,
      Mr. Fung was a Crystallex Director and Vice Chairman of Gordon Capital
      Corporation, a Canadian investment bank, where he oversaw a broad range
      of investment activities. Currently, Mr. Fung serves as an employee at
      Orion Securities Inc. and from 1997 to 2001 was a Senior Partner of Capital
      West Group. In addition, Mr. Fung serves as Chairman of the Task Force
      to redevelop Torontos Waterfront, a Cdn$12 billion redevelopment
      project and one of the largest urban renewal projects undertaken in the
      history of Canada, and is a partner in Osprey Capital Partners, an investment
      banking firm. He is a Director of the Government of Canadas Export
      Development Corporation. Mr. Fung works closely with the Board of Directors
      and Crystallexs senior management in determining Crystallexs
    business strategy.


Todd Bruce, President and
          Chief Executive Officer.Mr Bruce has served as Crystallexs
          President and Chief Executive Officer and a Crystallex director since
          September 22, 2003. Prior to joining Crystallex Mr. Bruce was President
          and Chief Operating Officer of IAMGOLDCorporation.
    Mr. Bruce is responsible for the overall administration of Crystallex and
    all elements of its business.


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Michael Brown, Director.
    Mr. Brown is the founder and President of Capital Markets Advisory, which
    he established in 2001. Prior to 2001, Mr. Brown held various positions between
    1998 and 2001 with Macquarie Bank of Australia, serving as President and Chief
    Executive Officer of Macquarie North America and then as Vice-Chairman. Prior
    to 1998, Mr. Brown was a Managing Partner with Gordon Capital Corporation,
    responsible for coordinating and marketing investment banking services to
    the mining industry.


C. William Longden, Director.
    Mr. Longden was Vice President (Corporate Development) with Marshall, Macklin,
    Monaghan Limited from 1990 to May 9, 2001, and has been a director of that
    company since 1985. He is also President of Marshall, Macklin, Monaghan International
    Corporation. Mr. Longden has an extensive background and experience in construction
    management and in infrastructure development and management on a global scale.


David I. Matheson, Director.
    Mr. Matheson is counsel to the Toronto law firm McMillan Binch LLP. Prior
    to joing McMillan Binch in December 2001, Mr. Matheson had been a partner
    with the Toronto law firm of Aird & Berlis from 1991 to 2001, when he
    became counsel to that firm. Mr. Matheson has an extensive background in international
    finance and taxation and has lectured on corporate governance, evolving directors
    responsibilities, and other areas of corporate law.


Harry J. Near, Director.
    Mr. Near is the Principal of the government and public affairs consulting
    company, The Earnscliffe Strategy Group. Mr. Near regularly advises companies
    on government policy and regulatory matters. He is a former Chief of Staff
    and Senior Policy Adviser to the Canadian Ministry of Energy Mines and Resources
    and a former adviser to the Prime Minister of Canada.


Marc J. Oppenheimer, Director.
    Mr. Oppenheimer served as Crystallexs President and Chief Executive
    Officer and a Crystallex Board member from February 1995 until September 22,
    2003, and as Crystallexs Vice Chairman from September 22, 2003, until
    May 7, 2004. Prior to coming to Crystallex, he held executive positions at
    The Chase Manhattan Bank and Midlantic National Bank. Immediately before joining
    Crystallex, Mr. Oppenheimer was engaged in merchant banking activities and
    was a consultant to Crystallex.


Johan C. vant Hof,
          Director.
    Mr. vant Hof, a Chartered Accountant, is President and Principal of
    Toronto based Tonbridge Corporation. Prior to forming Tonbridge Corporation
    Mr. vant Hof was Chief Operating Officer of Carter Group Inc from 2001
    to 2003 and was a Partner and Managing Director of PriceWaterhouse Coopers
    Securities Inc from 1991 to 2001.


Armando F. Zullo, Director.
    Mr. Zullo is the founder and President of A.F. Zullo & Company Ltd., a
    supplier of industrial products to commercial and industrial entities including
    mining companies and other multi-national companies.


Daniel R. Ross, Executive Vice
    President and Corporate Counsel. Prior to joining Crystallex full-time
    in September 2001, Mr. Ross was a partner of McCarthy Tetrault, one of Canadas
    largest law firms, having joined McCarthy Tetrault in 1991. Prior to his retirement
    from the firm, Mr. Ross served as managing partner of its London, Canada offices.
    Mr. Ross has served on a number or private and charitable boards and is currently
    Chairman of the Board of the London Health Sciences Centre, one of Canadas
    largest hospitals. Over the past several years, he was instrumental in the
    negotiation and completion of Crystallexs acquisitions and financings.
    Mr. Ross coordinates the placement and execution of legal, administrative
    and related services.


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Dr. Sadek El-Alfy, Vice
          President  Operations. Dr. El-Alfy has more than 20 years of experience in
    mine management and operation. Prior to joining Crystallex in February, 1997,
    he was Vice President of Operations for Royal Oak Mines and previously was
    General Manager of the Iron Ore Company of Canada. He has a degree in mining
    engineering and received his doctorate from the University of London. Dr.
    El-Alfy directs and manages the mining operations of Crystallex and advises
    in acquisitions and exploration programs.


Borden D. Rosiak, Chief Financial
    Officer. Mr. Rosiak joined Crystallex in May, 2002 and became Chief Financial
    Officer of Crystallex in September 2002. Prior to joining Crystallex, Mr.
    Rosiak was Chief Financial Officer of Dorset Partners, a private investment
    firm. From 1994 to 1999 he was Chief Financial Officer of Newcourt Credit
    Group, a global financial services company. Mr. Rosiak managed the capital
    structure of Newcourt, including numerous equity offerings as well as the
    financial and administrative operations. He also served as CFO of Torontos
    2008 Olympic Bid committee. Mr. Rosiak is a Chartered Accountant and also
    holds a bachelors degree in Applied Sciences  Chemical Engineering.
    Mr. Rosiak manages and directs Crystallexs financial administration.


Ken Thomas, Chief Operating
    Officer. Mr. Thomas joined Crystallex on April 1, 2003. He served for
    many years as a senior officer of Barrick Gold Corporation. From 1990 to 1995,
    Mr. Thomas was Barricks Senior Vice-President Metallurgy and Construction
    and from 1995 until his departure in 2001, he served as Senior Vice President,
    Technology. In May 2001, Mr. Thomas joined Hatch, and immediately prior to
    joining Crystallex was Managing Director for Hatch in Western Australia. Mr.
    Thomas is a professional engineer and obtained his doctorate in Technical
    Sciences from Delft University in The Netherlands.


|B. | Compensation
|-- | ------------

All amounts shown in the following three tables are in Canadian dollars unless
    otherwise noted:

[tables begin on next page]

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Summary Compensation Table
    for Executive Officers
  (unless otherwise indicated all dollar amounts are
    in Canadian dollars)

|Name
    and Principal Position      | Year(1) |             |            |                             |                                      |  |           |     | Long Term |  | All OtherCompensation($) |    
|------------------------------------ | ------- | ----------- | ---------- | --------------------------- | ------------------------------------ |  | --------- | --- | --------- |  | ------------------------ | ---
|Compensation                        
|Annual Compensation                  | Awards 
|                                     |        
|Salary($)                            |         | Bonus(2)($) |            | Other AnnualCompensation($) | SecuritiesUnder OptionsGranted(3)(#)
|                                     |         |             |            |                             |                                      | 
|Robert A. Fung                       | 2003    |             | NIL        |                             | $561,800                             |  | $520,000  | (6) | 620,000   |  | NIL                      |    
|Chair of the Board                   | 2002    |             | NIL        |                             | US$100,000                           |  | $180,000  |     | 55,000    |  | NIL                      |    
|                                     | 2001    |             | NIL        |                             | US$100,000                           |  | $180,000  |     | 205,000   |  | NIL                      |    
|                                     |         |             |            |                             | $350,000                             |  |           |     |           |  |                          |    
|                                     |         |             |            |                             |                                      |  |           |     |           |  |                          |    
|Marc J. Oppenheimer                  | 2003    |             | US$505,577 |                             | US$425,000                           |  | US$12,000 | (4) | 450,000   |  | NIL                      |    
|Vice Chair of the                    | 2002    |             | US$449,996 |                             | US$195,000                           |  | US$11,000 | (4) | 40,000    |  | NIL                      |    
|Board                                | 2001    |             | US$418,461 |                             | US$195,000                           |  | US$10,500 | (4) | 190,000   |  | NIL                      |    
|                                     |         |             |            |                             |                                      |  |           |     |           |  |                          |    
|Todd Bruce                           | 2003    |             | $138,267   |                             | NIL                                  |  | $13,267   | (7) | 400,000   |  | NIL                      |    
|President and Chief                  | 2002    |             | NIL        |                             | NIL                                  |  | NIL       |     | NIL       |  | NIL                      |    
|Executive Officer                    | 2001    |             | NIL        |                             | NIL                                  |  | NIL       |     | NIL       |  | NIL                      |    
|                                     |         |             |            |                             |                                      |  |           |     |           |  |                          |    
|Kenneth G. Thomas                    | 2003    |             | $233,100   |                             | $150,000                             |  | NIL       |     | 180,000   |  | $50,000                  | (8)
|Chief Operating                      | 2002    |             | NIL        |                             | NIL                                  |  | NIL       |     | NIL       |  | NIL                      |    
|Officer                              | 2001    |             | NIL        |                             | NIL                                  |  | NIL       |     | NIL       |  | NIL                      |    
|                                     |         |             |            |                             |                                      |  |           |     |           |  |                          |    
|Daniel R. Ross                       | 2003    |             | $400,000   |                             | $345,000                             |  | NIL       |     | 230,000   |  | NIL                      |    
|Executive                            | 2002    |             | $400,000   |                             | $178,024                             |  | NIL       |     | 50,000    |  | NIL                      |    
|Vice-President and Corporate Counsel | 2001    |             | $166,667   |                             | $83,333                              |  | US$6,000  | (5) | 255,000   |  | NIL                      |    
|                                     |         |             |            |                             |                                      |  |           |     |           |  |                          |    
|Dr. Sadek El-Alfy                    | 2003    |             | US$222,000 |                             | US$140,000                           |  | US$1,800  | (4) | 200,000   |  | NIL                      |    
|Vice-President                       | 2002    |             | US$222,000 |                             | US$25,000                            |  | US$1,800  | (4) | NIL       |  | NIL                      |    
|Operations                           | 2001    |             | US$222,000 |                             | US$50,000                            |  | US$1,800  | (4) | 65,000    |  | NIL                      |    
|                                     |         |             |            |                             |                                      |  |           |     |           |  |                          |    
|Borden D.
    Rosiak                 | 2003    |             | $226,667   |                             | 200,000                              |  | NIL       |     | 180,000   |  | NIL                      |    
|Chief Financial
    Officer          | 2002    |             | 49,800     |                             | 20,000                               |  | NIL       |     | NIL       |  | NIL                      |    
|(September
    2002 to present)      | 2001    |             | NIL        |                             | NIL                                  |  | NIL       |     | NIL       |  | NIL                      |    

|      
|------
|Notes:
|(1)   
|(2)   
|(3)   
|(4)   
|(5)   
|(6)   
|(7)   
|(8)   

Stock Options

The following table sets forth
    information concerning option grants during 2003 to Crystallexs executive
    officers
as at December 31, 2003:

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| | Option
            grants during the year ended December 31, 2003
| | -----------------------------------------------------------------
| |                                                                  

|                    |              |     |                          |   |                         |      | Market
            Value   |   |           
|------------------- | ------------ | --- | ------------------------ | - | ----------------------- | ---- | -------------------------- | - | ----------
|                    |              |     | % of
            Total   |   |                         |      | of
            Securities  |   |           
|                    | Securities   |     | Options                  |   |                         |      | Underlying                 |   |           
|                    | Under        |     | Granted
            to   |   | Exercise
            or |      | Options
            on the |   |           
|                    | Option(1)(3) |     | Employees
            in |   | Base
            Price  |      | Date
            of Grant  |   | Expiration
|Name                | (#)          |     | Year(2)                  |   | ($/Security)            |      | ($/Security)               |   | Date      
|                    |              |     |                          |   |                         |      |                            |   |           
|Robert A. Fung      | 525,000      |     | 14.9                     | % | $                       | 3.00 |                            | $ | 3.00      
|                    | 45,000       |     | 1.3                      | % | $                       | 1.90 |                            | $ | 1.90      
|                    | 50,000       |     | 1.4                      | % | $                       | 2.14 |                            | $ | 2.14      
|                    |              |     |                          |   |                         |      |                            |   |           
|Marc J. Oppenheimer | 375,000      |     | 10.6                     | % | $                       | 3.00 |                            | $ | 3.00      
|                    | 25,000       |     | 0.7                      | % | $                       | 1.90 |                            | $ | 1.90      
|                    | 50,000       |     | 1.4                      | % | $                       | 2.14 |                            | $ | 2.14      
|                    |              |     |                          |   |                         |      |                            |   |           
|Todd Bruce          | 400,000      | (4) | 11.3                     | % | $                       | 3.03 |                            | $ | 3.03      
|                    |              |     |                          |   |                         |      |                            |   |           
|Kenneth G. Thomas   | 80,000       |     | 2.3                      | % | $                       | 3.00 |                            | $ | 3.00      
|                    | 100,000      |     | 2.8                      | % | $                       | 1.31 |                            | $ | 1.31      
|                    |              |     |                          |   |                         |      |                            |   |           
|Daniel R. Ross      | 180,000      |     | 5.1                      | % | $                       | 3.00 |                            | $ | 3.00      
|                    | 50,000       |     | 1.4                      | % | $                       | 2.14 |                            | $ | 2.14      
|                    |              |     |                          |   |                         |      |                            |   |           
|Dr. Sadek El-Alfy   | 150,000      |     | 4.2                      | % | $                       | 3.00 |                            | $ | 3.00      
|                    | 50,000       |     | 1.4                      | % | $                       | 2.14 |                            | $ | 2.14      
|                    |              |     |                          |   |                         |      |                            |   |           
|Borden D. Rosiak    | 80,000       |     | 2.3                      | % | $                       | 3.00 |                            | $ | 3.00      
|                    | 50,000       |     | 1.4                      | % | $                       | 1.90 |                            | $ | 1.90      
|                    | 50,000       |     | 1.4                      | % | $                       | 2.14 |                            | $ | 2.14      

|      
|------
|Notes:
|(1)   
|(2)   
|(3)   
|(4)   

The following table sets forth information
  concerning the value realized upon the exercise of options during 2003 and the
  value of unexercised options held by Crystallexs executive officers as
  of December 31, 2003:


[table begins
  on next page]

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|Name                | Aggregated
      option exercises during the year ended December 31, 2003and financial year-end
      option values |           |     |                    
|------------------- | ------------------------------------------------------------------------------------------------------------------- | --------- | --- | -------------------
|                   
|Securities          |                                                                                                                     | Aggregate |     |                    
|Acquired on         |                                                                                                                     | Value     |     | Unexercised Options
|Exercise (#)        |                                                                                                                     | Realized  |     | at Year-End (#)    
|                    |                                                                                                                     |           |     |                    
|                    |                                                                                                                     |           |     |                    
|                    |                                                                                                                     |           |     |                    
|Robert A. Fung      | NIL                                                                                                                 |           | NIL |                    
|                    |                                                                                                                     |           |     |                    
|Marc J. Oppenheimer | NIL                                                                                                                 |           | NIL |                    
|                    |                                                                                                                     |           |     |                    
|Todd Bruce          | NIL                                                                                                                 |           | NIL |                    
|                    |                                                                                                                     |           |     |                    
|Kenneth G. Thomas   | NIL                                                                                                                 |           | NIL |                    
|                    |                                                                                                                     |           |     |                    
|Daniel R. Ross      | NIL                                                                                                                 |           | NIL |                    
|                    |                                                                                                                     |           |     |                    
|Dr. Sadek El-Alfy   | NIL                                                                                                                 |           | NIL |                    
|                    |                                                                                                                     |           |     |                    
|Borden D. Rosiak    | NIL                                                                                                                 |           | NIL |                    

Compensation of Directors

Directors of Crystallex are compensated
  for their services as directors through a combination of annual fees, stock
  options and, in the discretion of the Board in certain circumstances, special
  payments.


Outside directors (in 2003, Messrs.
     Brown, Longden, Matheson, Near and Zullo) receive an annual fee of US$12,000

  payable, at the option of Crystallex, in Common Shares. All directors receive
     an annual grant of 20,000 options to acquire Common Shares. The Chair of
    a Board
  committee receives an additional annual grant of 15,000 options to acquire
    Common  Shares. A member of a Board committee (other than the Chair) receives
    an additional
  annual grant of 10,000 options to acquire Common Shares. The options are granted
     immediately after the annual general meeting of shareholders of Crystallex.


In 2003, Crystallex made special
  payments of $75,000 to Mr. Matheson for the additional work carried out by him
  with respect to the audit and financial review of Crystallex and $145,000 to
  Mr. Near for the additional work carried out by him over the past several years
  in connection with the Las Cristinas project.


Also, in 2003, the Chair of the
     Audit Committee received a special grant of 15,000 options to acquire Common

  Shares and the other members of the Audit Committee received a special grant
     of 10,000 options to acquire Common Shares for the additional work carried
    out
  by them with respect to the audit and financial review of Crystallex.


Crystallexs directors received
  the following options during 2002 (in addition to the options listed above for
  executive officers that are also directors):


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|Name                | Number
      of Options |  | Price
      (Cdn. $) |      | Expiry
      Date
|------------------- | ----------------------- |  | -------------------- | ---- | -----------------
|                    |                         |  |                      |      |                  
|Michael J. H. Brown | 80,000                  |  | $                    | 1.90 |                  
|                    |                         |  |                      |      |                  
|C. William Longden  | 30,000                  |  | $                    | 1.90 |                  
|                    |                         |  |                      |      |                  
|David I. Matheson   | 45,000                  |  | $                    | 1.90 |                  
|                    |                         |  |                      |      |                  
|Harry J. Near       | 180,000                 |  | $                    | 3.00 |                  
|                    |                         |  |                      |      |                  
|                    | 50,000                  |  | $                    | 1.90 |                  
|                    |                         |  |                      |      |                  
|Armando F. Zullo    | 25,000                  |  | $                    | 1.90 |                  

Directors will continue to be paid
  market value for special projects in which they are engaged on behalf of Crystallex,
  such as legal or investment work, etc.SeeItem 7.B - Major Shareholders and Related Party Transactions  Related
  Party Transactions.


|C. | Board Practices
|-- | ---------------

Each member of Crystallexs
     Board of Directors serves for a one year term and is subject to election
    at
  Crystallexs Annual General Meeting. Crystallexs next Annual General
   Meeting is scheduled to be held on June 1, 2004. See Item 6.A for the period

  during which Crystallexs current directors have held their office.


No Crystallex director, except
    for  Robert A. Fung, the Chairman of the Board of Directors, Todd Bruce,
    Crystallexs
  President and Chief Executive Officer, and Marc J. Oppenheimer, Crystallexs
   former President and Chief Executive Officer, has a contract or agreement
  with
  Crystallex or any of its subsidiaries providing for benefits upon termination
   of employment with Crystallex. The Crystallex Board has approved a compensation

  continuation plan protecting management employees in the event of termination
   of employment upon the sale of Crystallex or a change in control of Crystallex.


Corporate Governance

Crystallex is


| | incorporated
      under theCanada
      Business Corporations Act;                                                                                                        
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                            
| | areporting
      issuerunder the securities
      laws of the Provinces of Ontario, British Columbia, Alberta, Québec,
      Nova Scotia and Newfoundland and Labrador; and
|  |                                                                                                                                                                            
| | a reportingforeign
      private issuerwith the United
      States Securities and Exchange Commission.                                                                    

The Common Shares of Crystallex are
  listed on the Toronto Stock Exchange (TSX) and the American Stock
  Exchange (AMEX).


Attached to this Annual Report
    as  Exhibit 12.3 is a copy of the Corporate Governance Statement of Crystallex
    (the
  Statement). The Statement was approved by the Board of Directors
   on April 15, 2004. The corporate governance practices described in the Statement

  have been developedtaking
  into account recent and proposed changes in corporate governance standards
  applicable to Crystallex in Canada and the United States. Crystallex believes
  that its corporate governance practices comply with the guidelines of the TSX
  and the rules of the AMEX currently applicable to it. As noted in the Statement,
  the Board has resolved that, commencing with the annual general meeting of
  shareholders of Crystallex to be held in 2005, a majority of the directors
  will be independent.


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|D. | Employees
|-- | ---------

Crystallex Employees (Full-Time and Part-time)
  As
  of December 31, 2003

|Location      | 2003 |  | 2002 |  | 2001 | 
|------------- | ---- |  | ---- |  | ---- | 
|              |      |  |      |  |     
|Canada        | 9    |  | 6    |  | 4    | 
|              |      |  |      |  |      | 
|United States | 4    |  | 4    |  | 4    | 
|              |      |  |      |  |      | 
|Uruguay       | 0    |  | 170  |  | 164  | 
|              |      |  |      |  |      | 
|Venezuela     | 300  |  | 300  |  | 198  | 
|              |      |  |      |  |      | 

Approximately 90 of Crystallexs employees at its Tomi mine and Revemin
mill are unionized. Crystallex believes that it has good relationships with its
employees, including its unionized employees.


|E. | Share Ownership
|-- | ---------------

The following table sets forth the
    number of Crystallex common shares beneficially owned as of May 3, 2004,
    by each of Crystallexs directors and executive officers, and information
    concerning options to purchase common shares each of such persons owns. All
    dollar amounts shown in this table are in Canadian dollars unless otherwise
  noted.


[table begins on next page]

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|                     | Shares
    Beneficially |            |        |                   
|-------------------- | ----------------------- | ---------- | ------ | ------------------
|Owned                | Options                
|                     |                        
|                     |                         | Percent    |        |                   
|of
    Out-         
|standing            
|Name                 | Amount(1)               | Shares (2) | Number | Exercise
    Price
|                     |                         |            |        |                   
|Robert A. Fung       | 19,500                  |            | 1.36%  |                   
|                     |                         |            |        |                   
|Todd Bruce           | 16,100                  |            | *      |                   
|                     |                         |            |        |                   
|Michael Brown        | 8,546                   |            | *      |                   
|                     |                         |            |        |                   
|C. William Longden   | 81,114                  |            | *      |                   
|                     |                         |            |        |                   
|David I. Matheson    | 13,779                  |            | *      |                   
|                     |                         |            |        |                   
|Harry J. Near        | 126,454                 |            | *      |                   
|                     |                         |            |        |                   
|Marc J. Oppenheimer  | 279,910                 |            | 1.43%  |                   
|                     |                         |            |        |                   
|Johan vant Hof      | NIL                     |            | NIL    |                   
|                     |                         |            |        |                   
|Armando F. Zullo     | 53,102                  |            | *      |                   
|                     |                         |            |        |                   
|Daniel R. Ross       | 128,391                 |            | *      |                   
|                     |                         |            |        |                   
|Dr. Sadek E. El-Alfy | 32,000                  |            | *      |                   
|                     |                         |            |        |                   
|Borden Rosiak        | NIL                     |            | *      |                   
|                     |                         |            |        |                   
|Kenneth Thomas       | NIL                     |            | *      |                   
|                     |                         |            |        |                   
|                     |                         |            |        |                   

|*   | Less than 1% of common shares outstanding as of May 3, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Information on Common
       Shares beneficially owned is not within the knowledge of the managementof
    Crystallex and has been furnished by the respective persons.                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(2) | The percentage indicated
      for each named person is based upon 179,498,492 common shares issued and
      outstanding as of May 3, 2004, and the number of common shares underlying
      the immediately exercisable options held by such person. The percentage
      calculations for each named person do not include any common shares beneficially
      owned by any other person or any common shares issuable upon the exercise
      of any other currently outstanding options, warrants, or other rights to
    acquire common shares, other than those beneficially owned by such person.

Crystallex is authorized to issue
      to its officers, directors, employees, and consultants options to acquire
      an aggregate of up to 13,500,000 common shares under its Incentive Share
      Option Plan that it adopted in 1997 and amended in 1998, 2000, 2001, 2002
      and 2004 the latter amendment requiring
shareholder approval at Crystallexs Annual General Meeting scheduled for
June 1, 2004. As of May 3, 2004, there were 1,812,792 options available for issuance
under the Option Plan, subject to shareholder approvals noted above.


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Employment Contracts

Crystallex has entered into employment
      agreements with each of the Named Executive Officers other than Dr. El-Alfy.


Mr. Fungs agreement sets out
the terms on which Mr. Fung will act as Chair of the Board of Directors. The
agreement is effective January 1, 2004. Under the agreement, Mr. Fung is entitled
to receive annual compensation of $180,000 and, unless otherwise determined by
the Board, a minimum annual
bonus of US$100,000. He is also eligible for an additional annual bonus, based
on performance, in the discretion of the Board. If there is a change of control
of Crystallex or Crystallex sells substantially all of its assets and, as a result,
Mr. Fung ceases to be Chair of the Board, Mr. Fung is entitled to receive a lump
sum payment equal to three times his annual compensation including the minimum
bonus.


Mr. Oppenheimers agreement sets out the terms on which Mr. Oppenheimer
will act as President and Chief Executive Officer of Crystallex. The agreement
is effective March 6, 2000. Under the agreement, Mr. Oppenheimer is entitled
to receive an annual salary of US$390,000 as well as a benefits package. In addition,
he is entitled to negotiate an annual bonus incentive plan with Crystallex. Mr.
Oppenheimers incentive plan provides for the grant to him of such number
of options to purchase Common Shares as the Board of Directors deems appropriate.
If there is a change of control of Crystallex, Mr. Oppenheimer is entitled to
receive a lump sum payment equal to three times his annual salary, bonus and
benefits. Mr. Oppenheimer and Crystallex have agreed to terminate Mr. Oppenheimers
agreement effective April 1, 2004. Mr. Oppenheimer ceased to be Vice Chair of
the Board on April 1, 2004 but remains a director of Crystallex.


Mr. Bruces agreement sets out the terms on which Mr. Bruce will act as
President and Chief Executive Officer of Crystallex. The agreement is effective
September 22, 2003. Under the agreement, Mr. Bruce is entitled to receive an
annual salary of $500,000 and participate in Crystallexs benefit program.
He is also eligible for an annual bonus, based on performance, in the discretion
of the Board of Directors. At the time of his employment, Mr. Bruce received
400,000 options under Crystallexs Share Option Incentive Plan. The options
vest at the rate of one-third per year on the anniversary of the date of grant.
If there is a change of control of Crystallex or Crystallex sells substantially
all of its assets and, as a result, Mr. Bruce ceases to be President and Chief
Executive Officer, Mr. Bruce is entitled to receive a lump sum payment equal
to three times his annual salary and a continuation of his benefits for a period
of three years. Also, all of his unvested options
will vest immediately.


Mr. Thomas agreement sets out the terms on which Mr. Thomas will act as
Chief Operating Officer of Crystallex. The agreement is effective April 1, 2003.
Under the agreement, Mr. Thomas is entitled to receive an annual salary of $300,000
and an annual bonus of $50,000 and participate in Crystallexs benefit program.
He is also eligible for an additional annual bonus, based on performance, in
the discretion of the Board. If there is a change of control of Crystallex or
Crystallex sells substantially all of its assets and, as a result, Mr. Thomas
ceases to be Chief Operating Officer, Mr. Thomas is entitled to receive a lump
sum payment equal to two times his annual salary and a continuation of his benefits
for a period of two years.


Mr. Ross agreement sets out the terms on which Mr. Ross will act as Executive
Vice-President and Corporate Counsel of Crystallex. The agreement is effective
July 1, 2002. Under the agreement, Mr. Ross is entitled to receive an annual
salary of $400,000 and participate in Crystallexs benefit program. In addition,
he is entitled to negotiate an annual bonus. If there is a change of control
of Crystallex or Crystallex sells substantially all of its assets and, as a result,
Mr. Ross ceases to be Executive Vice-President and Corporate Counsel, Mr. Ross
is entitled to receive his annual salary, bonus and benefits for a period of
three years or until the termination date of his agreement (December 31, 2006,
subject to renewal), whichever is greater.


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Mr. Rosiaks agreement sets
    out the terms on which Mr. Rosiak will act as the Chief Financial Officer
    of Crystallex. The agreement is effective the 3rdday of September, 2002. Under the agreement, Mr. Rosiak is entitled to receive
    an annual salary of $265,000 and participate in Crystallexs benefit
    program. He is also eligible for an annual bonus, based on performance, in
    the discretion of the Board. If there is a change of control of Crystallex
    or Crystallex sells substantially all of its assets and, as a result, Mr.
    Rosiak ceases to be Chief Financial Officer, Mr. Rosiak is entitled to receive
    a lump sum payment equal to two times his annual salary and a continuation
    of his benefits for a period of two years.


|ITEM
              7MAJOR
              SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|------------------------------------------------------------------------------------
|                                                                                    

|A. | Major Shareholders
|-- | ------------------
|   |                   

| | (a) | As far as known by Crystallex,
      and except as set forth in subparagraph (b) below, Crystallex is not directly
      or indirectly owned or controlled by another corporation(s) or by any foreign
      government.                                                                                                                                             
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                      
| | (b) | The table below sets forth information
      as of May 3, 2004, with respect to any person who is known to Crystallex
      to be the owner of more than 5% of Crystallex's common voting securities
      outstanding and the total amount of common shares owned to the best knowledge
      of Crystallex, by the officers and directors of Crystallex as a group.
| |     |                                                                                                                                                                                                                                                                                                                                                                      
| | (c) | None of Crystallexs shareholders
      have different voting rights.                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                      

|Name
      andAddress(1) |  | No.
          of
Common Shares |  | Percentage
          of
Outstanding
Common Shares(2) |  
|------------------------ |  | ------------------------------ |  | ---------------------------------------------------- | -
|                         |  |                                |  |                                                      |  
|                         |  |                                |  |                                                      |  
|Cede & Co.               |  | 101,299,515                    |  | 56.4                                                 | %
|Box 20                   |  |                                |  |                                                      |  
|Bowling Green Station    |  |                                |  |                                                      |  
|New York, New York 10274 |  |                                |  |                                                      |  
|                         |  |                                |  |                                                      |  
|CDS & Co.                |  |                                |  |                                                      |  
|25 The Explanade         |  | 58,067,708                     |  | 32.3                                                 | %
|Box 1038, Station A      |  |                                |  |                                                      |  
|Toronto, Ontario M5E 1W5 |  |                                |  |                                                      |  
|                         |  |                                |  |                                                      |  

|   
|---
|(1)
|(2)

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On May 3, 2004, the number and class
  of shares which Crystallex was authorized to issue were an unlimited number
  of common shares, Class A preference shares, and Class B preferenceshares. As
  of May 3, 2004, none of the Class A or Class B preference shares have been issued
  and 179,498,492 common shares were issued and outstanding. In addition, 28,568,905
  common shares were authorized for issuance for various reasons, including for
  the exercise of stock options, finder's fee, exercise of warrants issued in
  private placements, placement agent's fee for a private placement, and exercise
  of warrants issued for convertible notes and broker's fees.


The shareholder records of Crystallex's
  transfer agent, CIBC Mellon Trust Company, indicate that as of May 3, 2004,
  there were a total of 424 United States shareholders and institutions holding
  114,502,043shares, which holdings represented approximately 68% of Crystallex's
  then outstanding non-escrowed common shares.


As of the date of filing this annual
  report, Crystallexs senior management knows of no arrangements, the operation
  of which may at a subsequent date result in a change in control of Crystallex.


|B. | Related Party Transactions
|-- | --------------------------

During 2003, Crystallex entered
  into the following material transactions with related parties:


Legal Fees

| |  | Gomez Cottin & Tejera-Paris:
      Gomez Cottin & Tejera-Paris are Crystallexs Venezuelan legal counsel.
      For a portion of 2003, Gomez Cottin & Tejera-Paris were considered a
      related party as Enrique Tejera-Paris, a principal of Gomez Cottin &
      Tejera-Paris, was a member of the Board of Directors of Crystallex. For
      the portion of the year that Gomez-Cottin & Tejera was a related party,
      they were paid $3,895,582 for providing legal advice to Crystallex.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | McMillan Binch LLP: McMillan
      Binch LLP provides legal services to Crystallex. David Matheson
      is counsel to McMillan Binch LLP and is a member of the Board of Directors
      of Crystallex. During 2003, McMillan Binch LLP was paid $484,896 for providing
      corporate legal services to Crystallex.                                                                                                                                                                               
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

Management and Consulting Fees

| |  | Orion Securities Inc.: Orion
      Securities Inc. is an investment dealer that provided advisory services
      to Crystallex during 2003, and of which Mr. Robert Fung is an employee.
      He is Chairman
      of the Board of Directors of Crystallex. During 2003, Orion was paid $1,196,000
      for advisory services (the payment was made in shares and warrants of Crystallex).                         
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Osprey Capital Partners: During
      2003, Crystallex paid $520,000 to Osprey Capital Partners, a partnership
      in which Robert Fung is a minority partner. The payments toOsprey
      Capital Partners by Crystallex were for investment banking counselling provided
      by other partners of Osprey Capital Partners and Mr. Fung, which advice
      was unrelated to his role as Chairman of Crystallex.

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| |  | Riccio Consulting: Dr. Luca
      Riccio is the Vice President, Exploration for Crystallex. He is paid under
      a consulting arrangement for his services and in 2003 his company, Riccio
      Consulting, received payments of $214,018.                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Capital Markets Advisory Inc.:
      Michael Brown is the principal of Capital Markets Advisory Inc. and he is
      a member of the Board of Directors of Crystallex. During 2003,Crystallex
      paid $160,000 to Capital Markets Advisory Inc. for providing investor relations
      and other corporate advisory services to Crystallex.

Directors Remuneration

| |  | Robert Fung: During 2003 Mr.
      Fung was paid $561,800, which was a one-time special bonus in recognition
      of Mr. Fungs contribution over the years to successfully securing
      the Las Cristinas properties.                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Harry Near: Harry Near is a
      member of the Board of Directors of Crystallex. During2003
      Mr. Near was paid $145,000, which was a one-time special bonus in recognition
      of Mr. Nears contribution over the years to successfully securing
      the Las Cristinas properties.
| |  | David Matheson: David Matheson
      is a member of the Board of Directors of Crystallex. During 2003, Mr. Matheson
      was paid $75,000 for additional time and services as Chairman of the Audit
      Committee.                                                                        

During 2002, Crystallex entered
    into the following transactions with related parties:


| | (a) | Paid mineral property acquisition
        costs and expenses of $38,455,081 (2001 - $4,651,220; 2000 - $12,643,590)
        directly, or on behalf of Ventures (Barbados) Ltd, a wholly owned subsidiary,
        including fees of $13,144,975 in 2002 (2001 - $3,129,283, 2000 - $2,753,031),
        to the Venezuelan law firm of Gomez Cottin & Tejera Paris to assist
        Crystallex in acquiring the rights to Las Cristinas. Enrique Tejera-Paris,
        a Crystallex director through June 2003 (seeManagement  Directors
        and Senior Management), is the father of one of the members of Gomez
        Cottin & Tejera Paris. The fees and expenses that Crystallex paid
        to that law firm included fees and expenses for the legal and professional
        services of other lawyers and professionals in Venezuela who were retained
        by Gomez Cottin & Tejera Paris to assist in Crystallex matters.                                                                                                                                                                                                      
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (b) | Paid or accrued consulting
        and management fees (including directors fees) in an aggregate amount
        of $606,249 (2001 - $665,835, 2000 -$619,530) to Messrs. Armando Zullo
        ($18,668), Michael Brown ($9,478), Gordon Thompson ($18,668), Harry Near
        ($28,145), David Matheson ($28,145), and to William Longden ($28,145),
        each of whom is a Crystallex director, Poseidon Financial Partners, an
        entity affiliated with Robert Fung (Crystallexs Chairman), Borden
        Rosiak, Crystallexs Chief Financial Officer, and Riccio Geoconsulting,
        an entity controlled by Luca Riccio (Crystallexs Vice President
        of Exploration).SeeManagement  Compensation. Included in this amount is
        a $215,000 consulting fee paid to Riccio Geoconsulting, an $180,000 management
        fee paid to Poseidon Financial Partners, and an $80,000 management fee
        paid to Mr. Rosiak. All noted payments were made on normal commercial
        terms and were no less favorable to Crystallex than Crystallex could have
        received from unaffiliated third parties.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (c) | Paid or accrued legal fees
        of $23,815 (2001- $431,908, 2000 - $485,674). For the year 2002, the fees
        relate to the law firm of McMillan Binch LLP. David Matheson, counsel
        to that law firm, is a Crystallex director. In the years 2001 and 2000,
        the fees were paid to the law firm of McCarthy Tetrault, of which Daniel
        Ross, a Crystallex director, was a partner of during 2000 and part of
        2001. The amounts charged to Crystallex for the services provided have
        been determined by negotiation among the parties, and in certain cases,
        are covered by signed agreements. These transactions were in the normal
        course of operations and were measured at the exchange value which represented
        the amount of consideration established and agreed to by the related parties.                                                                                                                                                                                                                                                                                 

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|C. | Interests of Experts
      and Counsel
|-- | --------------------------------------

Not applicable.


ITEM
8  FINANCIAL INFORMATION

|A. | Consolidated Statements
      and Other Financial Information
|-- | -------------------------------------------------------------
|   |                                                              
|   | Financial Information                                        

Crystallexs consolidated
  financial statements are stated in Canadian dollars ($Cdn.) and are prepared
  in accordance with Canadian Generally Accepted Accounting Principles.


Audited financial statements
  for the fiscal years ended December 31, 2003, 2002, and 2001 are included herewith,
  together with the auditors reports..


| | Legal Proceedings
| | -----------------

See Item
  4.D. - Risk Factors  Las Cristinas Properties - Court actions by MINCA
  allege that it has the right to mine the Las Cristinas properties, which actions,
  if successful, might remove the legal authority under which the CVG granted
  to Crystallex the administration of the Las Cristinas properties and -
  The Las Cristinas Deposits are located in an area where mining activities may
  be restricted, thereby impairing the ability of Crystallex to exploit the Las
  Cristinas Deposits.


| | Dividends
| | ---------

Crystallexs Board
  of Directors has never declared a dividend and does not anticipate declaring
  a dividend in the forthcoming fiscal year.


|B. | Significant Changes
|-- | -------------------

None.


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ITEM
9  THE OFFER AND LISTING

|A. | Offer
      and Listing Details
|-- | -------------------------------

(4)     Crystallex's common shares trade on The Toronto Stock Exchange and
  on the American Stock Exchange under stock symbol KRY. The tables
  below are based on information obtained from The Toronto Stock Exchange and
  from the American Stock Exchange:


| | The Toronto
      Stock Exchange
Prices in Canadian Dollars
| | -----------------------------------------------------------

Fiscal
  Year Ended

|     | 2003 |  | 2002 |  | 2001 |  | 2000 |  | 1999 | 
|---- | ---- |  | ---- |  | ---- |  | ---- |  | ---- | 
|     |      |  |      |  |      |  |      |  |      | 
|High | 4.48 |  | 3.85 |  | 3.45 |  | 4.25 |  | 2.50 | 
|     |      |  |      |  |      |  |      |  |      | 
|Low  | 1.00 |  | 1.89 |  | 0.99 |  | 1.19 |  | 0.74 | 
|     |      |  |      |  |      |  |      |  |      | 

Fiscal
  Quarter Ended

|     |       |  | March 31 |  | June 30 |  | Sept. 30 |  | Dec. 31 | 
|---- | ----- |  | -------- |  | ------- |  | -------- |  | ------- | 
|     |       |  |          |  |         |  |          |  |         | 
|2004 | High  |  | 5.00     |  |         |  |          |  |         | 
|     | Low   |  | 3.15     |  |         |  |          |  |         | 
|     | Close |  | 4.02     |  |         |  |          |  |         | 
|     |       |  |          |  |         |  |          |  |         | 
|2003 | High  |  | 2.44     |  | 2.86    |  | 4.48     |  | 4.15    | 
|     | Low   |  | 1.25     |  | 1.00    |  | 2.01     |  | 2.90    | 
|     | Close |  | 1.46     |  | 1.88    |  | 3.10     |  | 3.50    | 
|     |       |  |          |  |         |  |          |  |         | 
|2002 | High  |  | 3.30     |  | 3.79    |  | 3.85     |  | 3.61    | 
|     | Low   |  | 2.53     |  | 2.10    |  | 2.02     |  | 1.89    | 
|     | Close |  | 3.15     |  | 2.71    |  | 3.72     |  | 2.33    | 

Month
  Ended

|     | April |      | March |      | February |  | January |  | December |  | November | 
|---- | ----- | ---- | ----- | ---- | -------- |  | ------- |  | -------- |  | -------- | 
|2004 | 2004  | 2004 | 2004  | 2003 | 2003    
|     |       |      |       |      |          |  |         |  |          |  |          | 
|High | 4.20  |      | 5.00  |      | 3.98     |  | 3.87    |  | 4.00     |  | 4.15     | 
|     |       |      |       |      |          |  |         |  |          |  |          | 
|Low  | 3.05  |      | 3.75  |      | 3.15     |  | 3.15    |  | 3.05     |  | 3.40     | 
|     |       |      |       |      |          |  |         |  |          |  |          | 

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  to Contents

The
       American Stock Exchange
  Prices in U.S. Dollars

|     | 2003 |  | 2002 |  | 2001 |  | 2000 |  | 1999  | 
|---- | ---- |  | ---- |  | ---- |  | ---- |  | ----- | 
|     |      |  |      |  |      |  |      |  |       | 
|High | 3.25 |  | 2.46 |  | 2.20 |  | 2.81 |  | 1-3/4 | 
|     |      |  |      |  |      |  |      |  |       | 
|Low  | 0.69 |  | 1.21 |  | 0.68 |  | 0.75 |  | 1/2   | 
|     |      |  |      |  |      |  |      |  |       | 

Fiscal
  Quarter Ended

|     |       |  | March
      31 |  | June
      30 |  | Sept.
      30 |  | Dec.
      31 | 
|---- | ----- |  | -------------- |  | ------------- |  | -------------- |  | ------------- | 
|     |       |  |                |  |               |  |                |  |               | 
|2004 | High  |  | 3.75           |  |               |  |                |  |               | 
|     | Low   |  | 2.36           |  |               |  |                |  |               | 
|     | Close |  | 3.07           |  |               |  |                |  |               | 
|     |       |  |                |  |               |  |                |  |               | 
|2003 | High  |  | 1.55           |  | 2.15          |  | 3.25           |  | 3.20          | 
|     | Low   |  | 0.85           |  | 0.69          |  | 1.38           |  | 2.17          | 
|     | Close |  | 1.04           |  | 1.39          |  | 2.31           |  | 2.76          | 
|     |       |  |                |  |               |  |                |  |               | 
|2002 | High  |  | 2.10           |  | 2.46          |  | 2.46           |  | 2.30          | 
|     | Low   |  | 1.59           |  | 1.26          |  | 1.28           |  | 1.21          | 
|     | Close |  | 1.99           |  | 1.79          |  | 2.29           |  | 1.46          | 

Month
  Ended

|     | April |      | March |      | February |  | January |  | December |  | November | 
|---- | ----- | ---- | ----- | ---- | -------- |  | ------- |  | -------- |  | -------- | 
|2004 | 2004  | 2004 | 2004  | 2003 | 2003    
|     |       |      |       |      |          |  |         |  |          |  |          | 
|High | 3.22  |      | 3.75  |      | 3.04     |  | 3.02    |  | 3.05     |  | 3.20     | 
|Low  | 2.11  |      | 2.78  |      | 2.35     |  | 2.36    |  | 2.34     |  | 2.58     | 

Crystallex has paid no
  dividends on its shares since incorporation and does not anticipate doing so
  in the foreseeable future.


|B. | Plan of Distribution
|-- | --------------------

Not applicable


|C. | Markets
|-- | -------

Crystallex's common shares
  trade on The Toronto Stock Exchange and on the American Stock Exchange.


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|D. | Selling Shareholders
|-- | --------------------

Not applicable


|E. | Dilution
|-- | --------

Not applicable


|F. | Expenses of the Issue
|-- | ---------------------

Not applicable


ITEM 10  ADDITIONAL INFORMATION

|A. | Share Capital
|-- | -------------

Not applicable


|B. | Memorandum and Articles of Association
|-- | --------------------------------------

Crystallex is continued under the Canada
      Business Corporations Act (the Act) with corporation number
      345631-5. Its articles contain no restrictions on the business that it
      may carry on. Neither Crystallexs articles nor its by-laws contain
      any restriction on a directors power to vote on a proposal, arrangement
      or contract in which the director is materially interested provided that
      the director complies with the provisions of the Act. The Act requires
      a director who is a party to a material contract or proposed material contract
      with Crystallex or who is a director or an officer of or has a material
      interest in any person who is a party to a material contract or proposed
      material contract with Crystallex to disclose in writing to Crystallex,
      or request to have entered in the minutes of meetings of directors, the
      nature and extent of his interest. Such a director is precluded under the
      Act from voting on any resolution to approve such a contract unless the
      contract falls within a specified list of exceptions. The Act provides
      that, subject to the articles, the by-laws or any unanimous shareholder
      agreement, the directors of a corporation may fix the remuneration of the
      directors of the corporation. Neither the articles nor the by-laws or of
      Crystallex restrict the power of the directors in this regard. Crystallex
      has no unanimous shareholder agreements. The Act provides that unless the
      articles or by-laws of or a unanimous shareholder agreement relating to
      a corporation otherwise provides, the directors may borrow money on the
      credit of the corporation and issue debt obligations of the corporation.
      Neither the articles nor the by-laws of Crystallex restrict the power of
      the directors in this regard. Neither the articles nor the by-laws of Crystallex
      contain any mandatory retirement provisions relating to the age of directors
      or any requirement that directors hold any specified number of shares of
      Crystallex.


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The authorized share capital
of Crystallex consists of an unlimited number of common shares, an unlimited
number of Class A preference shares and an unlimited number of Class B preference
shares. Each common share entitles the holder to dividends if, as and when declared
by the directors, to one vote at all meetings of holders of common shares and
to participate ratably in any
distribution of the assets of Crystallex upon liquidation, dissolution or winding-up,
subject to the prior rights of the holders of shares ranking in priority to the
common shares. The Class A preference shares and Class B preference
shares are issuable in series. Each such series may consist of such number of
shares and have such designation, rights, privileges, restrictions and conditions
attached thereto as may be determined by the board of directors of Crystallex,
subject to the provisions attached to the Class A preference shares
as a class or the Class B preference shares as a class, as the case
may be. The Class A preference shares and the Class B preference
shares shall each rank ahead of the common shares with respect to the distribution
of assets of Crystallex upon liquidation, dissolution or a winding-up. The rights
of holders of Crystallex common shares may only be changed by articles of amendment.
Articles of amendment require the passage of a special resolution of shareholders.


An annual meeting of holders of
    common shares must be held no later than 15 months after the date of the
    last annual meeting of shareholders. At such meeting, the audited consolidated
    financial statements of Crystallex must be put before the shareholders, the
    auditors of Crystallex will be appointed and the directors of Crystallex
    will be elected. Voting may be effected in person or by written proxy and
    the quorum for any shareholders meeting shall be not less than two persons
    holding or representing not less than 5 per cent of the total number of shares
    entitled to be voted at the meeting. This provision is different from the
    corporate law of many US states, and the effect of this provision is that
    these two shareholders could (provided they hold the requisite percentage
    of shares) take votes binding on behalf of all shareholders.


There are presently no governmental
    laws, decrees, or regulations in Canada which impose limitations on the right
    of non-resident or foreign owners to hold or vote the common shares of Crystallex.
    However, the Investment Canada Act (the "ICA"), provides, among other things,
    that the acquisition of control (as defined in the ICA) of a corporation
    carrying on a Canadian business (as defined in the ICA) whose assets exceed
    certain prescribed thresholds (which may depend upon the nationality of the
    non-Canadian acquiring control) by a non-Canadian (as defined in the ICA)
    may be subject to the approval of the Canadian Minister of Industry. The
    ICA contains various provisions creating presumptions in determining whether
    a Canadian corporation is or becomes a non-Canadian. For example, if a Canadian
    corporation is controlled by a non-Canadian, the corporation becomes non-Canadian,
    and thereupon the acquisition of control of any other Canadian corporation
    by such corporation may be subject to the approval of the Canadian Minister
    of Industry. The ICA contains a rebuttable presumption that control is acquired
    if one third of the voting shares of a Canadian corporation are acquired
    by a non-Canadian person or entity. Crystallex carries on a Canadian business
    for purposes of the ICA. There is no provision under US corporate law similar
    to the ICA. The impact of the ICA may be to delay or prevent a change in
    Crystallexs control to a non-Canadian person or entity.


Although not part of Crystallexs
    articles or bylaws, Crystallex has adopted a rights plan that could have
    an effect or delaying, deferring, or preventing a change in control of Crystallex. SeeItem
    4.D - Information on Crystallex  Property, Plants and Equipment  Las
    Cristinas 4, 5, 6 and 7.


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|C. | Material Contracts (since April 30, 2002)
|-- | -----------------------------------------

1.     Mine
Operation Agreement dated September 17, 2002, between Crystallex and the Corporacion Venezolana de Guayana for the development of the gold deposits of Las Cristinas
4, 5, 6 and 7. See Item 4D, Property. Plants
and Equipment: Las Cristinas 4, 5, 6 and 7.


2.In
      late June, 2003, Crystallex, through its controlled subsidiaries, El Callao
      Mining Corporation
and ECM (Venco) Ltd., agreed to pay an amount of US$514,755 to Corporacion Vengroup,
S.A., Crystallexs partner in the development of the El Callao properties
in Venezuela. See Item 4D, Property. Plants and Equipment: El Callao Properties  The
Lo Increible Deposits. The payment is in settlement of distributions claimed
by Vengroup under the shareholder agreement governing the relationship of the
parties, as amended, as a result of operations at the El Callao properties during
the period from March 1, 2001 to March 31, 2003. Payment has been made in Crystallex
common shares.


3.     By agreement dated the 9th of October, 2003,
Crystallex agreed to sell to Uruguay Mineral Exploration Inc. the shares of all
subsidiary companies holding Crystallex Uruguayan gold mining assets. (See Item
4A, History and Development of Crystallex, Important Acquistions and Devestitures
Since January 1, 2000)


4.     On March 23, 2004, Crystallex awarded to SNCL
an EPCM contract to provide services for the design, construction and commissioning
of 20,000 tonnes per day facility at Las Cristinas (See Item 4D, Property Plants
and Equipment, Las Cristinas 4, 5, 6 and 7, Engineering Procurement and Construction
Management (EPCM)).


5.     On
    April 5, 2004, Crystallex entered into a letter agreement with BNP Paribas
    (BNPP) appointing BNPP to provide Crystallex with assistance
    and services in connection with the arrangement of debt financing for the
    Las Cristinas project.


6.     By
    agreement dated as at 24th day of April, 2004 Crystallex entered into an
    agreement with Biomin Technologies S. A. whereby Biomin undertook to complete
    certain testwork on samples of ore
from Crystallexs La Victoria Mine in order to establish the feasability
and design data for a full scale plant using Biomins
proprietary BIOX® process.


|D. | Exchange Controls
|-- | -----------------

There are presently no governmental
    laws, decrees, or regulations in Canada restricting the export or import
    of capital, or which impose exchange controls or affect the remittance of
    dividends, interest, or other payments to non-resident holders of Crystallex's
    common shares. However, any such remittance to a resident of the United States
    may be subject to a withholding tax pursuant to the Canada/United States
    tax convention between Canada and the United States (see Item
10.E, Taxation).


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|E. | Taxation
|-- | --------

The
      following summary describes the general Canadian federal income tax consequences
      of acquiring, holding and disposing of Crystallex's common shares generally
      applicable to purchasers of Crystallex's common shares described below.


This summary is applicable only to a purchaser of Crystallex's common shares
(a "Holder") who, (i) for the purposes of the Income Tax Act (Canada) (the "Tax
Act"), at all relevant times, is not and is not deemed to be, resident in Canada,
deals at arm's length with Crystallex, holds Crystallex's common shares as capital
property, does not hold or use and is not deemed or determined to hold or use
Crystallex's common shares in connection with the carrying on of a business in
Canada or the performing of independent personal services in Canada, and, in
the case of a purchaser that carries on an insurance business in Canada and elsewhere,
is not required by or for the purposes of the laws of Canada to include an amount
in respect of any of Crystallex's common shares in computing its income from
its insurance business carried on in Canada, and (ii) for the purposes of the
Canada-US. Income Tax Convention (the "Convention"), is at all relevant times
resident in the United States. This summary is not applicable to a purchaser
who is an organization exempt from tax in the United States and described in
Article XXI of the Convention. Crystallex's common shares will generally be considered
to be capital property to a purchaser unless the purchaser holds Crystallex's
common shares in the course of carrying on a business of buying and selling securities
or is a financial institution and Crystallex's common shares are mark-to-market
property of such purchaser.


This summary is of a general nature only and is not intended to be, nor should
it be, construed to be legal or tax advice to any particular Holder. Accordingly,
Holders are urged to consult their own tax advisors with respect to their particular
circumstances.


This summary is based on the current provisions of the Tax Act, the Regulations
thereunder (the "Tax Regulations") and the Convention in force as of the date
hereof, the current published administrative policies of Canada Customs and Revenue
Agency, and all specific proposals (the "Tax Proposals") to amend the Tax Act
and the Tax Regulations publicly announced by or on behalf of the Minister of
Finance (Canada) prior to the date hereof. This summary is not exhaustive of
all possible Canadian federal income tax consequences and, except for the Tax
Proposals, does not take into account or anticipate any changes in law, whether
by legislative, governmental or judicial action, and does not take into account
provincial, territorial or foreign tax consequences which may differ significantly
form those discussed herein. With respect to the Tax Proposals, no assurances
can be given that the Tax Proposals will be enacted in the form proposed or at
all.


| | (a) | Dividends on Crystallex's
    Common Shares
| | --- | -------------------------------------------

Subject
      to the provisions of the Convention, Canadian withholding tax at a rate
      of 25 % will be payable on dividends paid or credited by Crystallex to
      a Holder of Crystallex's common shares. Under the Convention, the withholding
      tax rate is generally reduced to 15 % or, if the Holder is a corporation
      that owns at least 10 % of Crystallex's voting stock, to 5%. Crystallex
      or its paying agent assumes the responsibility for the withholding tax
      on such dividends.


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| | (b) | Capital Gains and Losses
| | --- | ------------------------

Upon
      a disposition or deemed disposition by a Holder of Crystallex's common
      shares, a capital gain (or loss) will generally be realized by the Holder
      to the extent that the proceeds of disposition, less costs of disposition,
      exceed (or are exceeded by) the adjusted cost base of Crystallex's common
      shares to such Holder. Subject to the provisions of the Convention, capital
      gains realized by a Holder on a disposition of Crystallex's common shares
      will not be subject to Canadian federal income tax unless Crystallex's
      common shares are taxable Canadian property (as defined in the Tax Act)
      to such Holder, in which case the capital gains will be subject to Canadian
      tax at rates which will approximate those payable by a Canadian resident.
      Crystallex's common shares will not be taxable Canadian property to a Holder
      unless, at any time during the 60 month period immediately preceding the
      disposition, such Holder, persons with whom such Holder did not deal at
      arm's length, or such Holder together with all such persons, owned, had
      an interest in or an option in respect of 25 % or more of the issued shares
      of any class or series of shares of Crystallex.


Under the Convention, a Holder will not be subject to Canadian tax on a disposition
of Crystallex's common shares unless, at the time of the disposition, the value
of Crystallex's common shares is derived principally from real property (including
natural resource property) situated in Canada, or unless the Holder was an individual
resident in Canada (a) at any time during the ten years immediately preceding
the disposition of such shares and (b) for 120 months during any period of twenty
consecutive years preceding the disposition of such shares, and such shares were
owned by the Holder when he or she ceased to be a resident of Canada.


|F. | Dividends and Paying Agents
|-- | ---------------------------

Not
      applicable


|G. | Statements By Experts
|-- | ---------------------

Not
      applicable


|H. | Documents on Display
|-- | --------------------

Copies
      of the documents referred to in this annual report may be inspected at
      Crystallexs office at 18 King Street East, Suite 1210, Toronto, Ontario,
      Canada M5C 1C4.


|I. | Subsidiary Information
|-- | ----------------------

Not
      applicable


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ITEM 11  QUANTITATIVE AND QUALITATIVE DISCLOSURES
  ABOUT MARKET RISKS

Crystallexs principal operations are resident in Venezuela. However, aside
from local trade/supplier debt, all transactions from these operations are denominated
in US dollars. Gold sale proceeds, as well as related forward production contracts
and written call options, are all received or denominated in US dollars. To finance
the acquisition of its operations, Crystallex has incurred debt through bank
instruments and convertible notes, both of which
are denominated in US dollars.


Crystallexs variable rate debt consists solely of its long term bank financing
utilized to fund the acquisition of mineral properties. This bank debt bears
interest at LIBOR plus an applicable margin. Considering the amount of debt outstanding
as at December 31, 2003 ($Cdn 9.7 million), a rapid or large increase in the
base rate, LIBOR, would not have a material impact on Crystallexs earnings
statement.


Gold Contracts

Crystallex enters into financial agreements with major financial institutions
to manage underlying revenue and future cash flow exposures arising from changes
in gold prices. Contracts include forward sales and call options.


Crystallex has adopted a policy to become hedge free as we hold the view that
the market ascribes a discount to derivatives. Crystallex plans to eliminate
its existing economic derivative commitments, which consist of call options sold
and forward sales contracts. This will be accomplished by repurchasing forward
sales and call option contracts at opportune times. To facilitate this approach,
Crystallex plans to negotiate with its counterparties to move certain commitments
to future periods.


Crystallex made considerable progress during 2003 in reducing the number of hedged
ounces of gold. Commitments under forward sales and call options were reduced
from 471,872 ounces to 350,025 ounces, a reduction of almost 122,000 ounces.
This was accomplished by delivering gold production into forward sales positions,
buying back 25,000 ounces of forward sales (at a net cost of approximately US$74
per ounce or US$1.84 million) and by retiring 37,640 ounces of forward sales
as part of the sale of the San Gregorio
mine. At year-end, Crystallexs contracted ounces represented just 3% of
our reserves.


As tabled below, at December 31, 2003, Crystallexs derivative position
was comprised of 125,856 ounces of fixed forward contracts at an average price
of US$305 per ounce, and 224,169 ounces of call options sold at an average price
of US$303 per ounce.


[table begins on next page]

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|                                   | 2004 |         | 2005 |   | 2006    |  | Total |       
|---------------------------------- | ---- | ------- | ---- | - | ------- |  | ----- | ------
|                                   |      |         |     
|Fixed Forward Gold Sales (ounces)  |      | 43,430  |      |   | 42,430  |  |       | 39,996
|Average Price (US$/ounce)          | $    | 300     |      | $ | 305     |  | $     | 310   
|Written Gold Call Options (ounces) |      | 127,237 |      |   | 94,932  |  |       | 2,000 
|Average Exercise Price (US$/ounce) | $    | 298     |      | $ | 309     |  | $     | 348   
|Total (ounces)                     |      | 170,667 |      |   | 137,362 |  |       | 41,996
|Average Price (US$/ounce)          | $    | 299     |      | $ | 308     |  | $     | 312   
|                                   |      |         |      |   |         |  |       |       

Accounting for Derivative Instruments

Crystallexs existing forward sales and call options are designated as derivatives
so they do not qualify for the normal sales exemption (or hedge accounting) for
accounting treatment. Crystallexs metal trading contracts are recorded
on the Balance Sheet at fair market value. Crystallex has no off-balance sheet
gold contracts. Changes in the fair value of derivatives recorded on the Balance
Sheet are recorded in earnings as an unrealized non-hedge derivative (loss) gain
in the Statement of Operations. The gains and losses occur because of changes
in commodity prices and interests rates.


The variation in the fair market value of options and forwards from period to
period can cause significant volatility in earnings; however, this fair market
value adjustment is a non-cash item that will not impact
Crystallexs cash flow. Should Crystallex be unable to satisfy its commitments
from gold production, it would be required to financially settle the underlying
positions which will impact future cashflows, thereby reducing its cash position.
For the year, the total unrealized mark-to-market loss on the non-hedge derivative
positions was $19.4 million. In addition, realized losses of $2.3 million arising
from financial settlement of contracts were also recognized.


Mark-to-Market (Fair Value)

At December 31, 2003, the unrealized mark-to-market
value of Crystallexs gold forward sales and call options, calculated at
a year end spot price of US$415 per ounce was negative $52.6 million. This fair
value is recorded on the Balance Sheet as a liability (Deferred Credit) and represents
the replacement value of these contracts based upon the spot gold price at year-end
and does not represent an obligation for payment. Crystallexs obligations
under the forward sales contracts are to deliver an agreed upon quantity of gold
at a predetermined price by the maturity date of the contract, while delivery
obligations under the call options sold are contingent upon the price of gold
and will take effect if the gold price is above the strike price of the relevant
contract at its maturity date and the option is exercised by the option
holder.


In circumstances where Crystallex is unable to meet the obligations under the
fixed forward sales or call options, Crystallex may negotiate with the counterparty
to defer the expiry date of the forward sale or call option, purchase gold in
the market, or settle the positions financially. If Crystallex were to purchase
gold in the market or settle the contracts financially, it would result in a
reduction of Crystallexs cash. The table below illustrates the cash requirement
if Crystallex had to financially settle contract positions in excess of planned
production. The analysis assumes, and Crystallex believes it is reasonably likely
that, Crystallex proceeds with a Bio Oxidation operation at La Victoria and that
the Albino mine is developed on schedule. The analysis excludes future Las Cristinas
production. It also assumes Crystallex is unable to roll existing contracts to
future periods. The December 31, 2003 spot gold price of US$415 per ounce is
used.


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|US$ millions                             | 2004 |         | 2005 |   | 2006    |  | Total |       
|---------------------------------------- | ---- | ------- | ---- | - | ------- |  | ----- | ------
|                                         |      |         |      |  
|Total ounces Committed                   |      | 170,667 |      |   | 137,362 |  |       | 41,996
|Planned Production                       |      | 50,000  |      |   | 75,000  |  |       | 65,000
|Excess Committed Ounces                  |      | 120,667 |      |   | 62,362  |  |       | nil   
|Average Committed Price (US$/oz)         | $    | 299     |      | $ | 308     |  | $     | 312   
|Average Assumed Spot Price (US$/oz)      | $    | 415     |      | $ | 415     |  | $     | 415   
|Cash Required to Settle Excess Positions | $    | 14.0    |      | $ | 6.7     |  |       | nil   
|                                         |      |         |      |   |         |  |       |       
|                                         |      |         |      |   |         |  |       |       

|1 | Represents the average price
    for the years 2004 and 2005 in which there are excess committed ounces.
|- | --------------------------------------------------------------------------------------------------------

Crystallex cautions readers not to place
    undue reliance on the projected production figures illustrated above. Predictions
    and forecasts involve inherent risks and uncertainties. As described in Item
    3D, Key Information  Risk Factors, a number of factors
    could cause actual results to differ from plans.


In the event that there is no production from the La Victoria and Albino mines,
we estimate that the total ounces that we expect to produce in 2004 - 2006 would
be reduced by approximately 81,000 ounces, thereby adding approximately $8.1
million to the cash required to settle our positions.


ITEM
          12  DESCRIPTION OF SECURITIES OTHER THAN
EQUITY SECURITIES

Not Applicable


PART II

ITEM 13  DEFAULTS,
      DIVIDEND ARREARAGES
AND DELINQUENCIES

None


ITEM 14  MATERIAL
      MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND
USE OF PROCEEDS

|A. | Not Applicable
|-- | --------------

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|B. | Crystallex
    Rights Plan
|-- | --------------------------

In 1997, Crystallex's Board of Directors adopted, and the shareholders approved,
a rights plan ("Rights Plan"), in part to prevent third parties from exploiting
the situation created by Crystallex's original acquisition of the Cristinas 4
and 6 Concessions in Venezuela. The purpose of the Rights Plan is to give adequate
time for shareholders of Crystallex to properly assess the merits of a bid without
undue pressure and to allow competing bids to emerge. The Rights Plan is designed
to give the Board of Directors time to consider alternatives to allow shareholders
to receive full and fair value for their Common Shares and to discourage unfriendly
takeover attempts.

The effect of the Rights Plan, when triggered, is that each current Crystallex
shareholder will have the right to purchase, for the exercise price of the rights,
Crystallex's common shares having a value (based on the then prevailing market
price) equal to twice such exercise price (i.e., at a 50 percent discount). The
exercise price of the rights will be equal to five times the prevailing market
price at a specified time. The Board of Directors believes that the adoption
of the Rights Plan does not affect the duty of the Board of Directors to act
honestly and in good faith with a view to the best interests of Crystallex and
its shareholders. Crystallexs shareholders
reapproved the plan in 2003.

|C. | Not Applicable.
|-- | ---------------
|   |                
|D. | Not Applicable.
|   |                
|E. | Use of Proceeds

Not Applicable


ITEM 15  CONTROLS AND PROCEDURES

Crystallex, on April 15, 2004, adopted a Corporate Governance Statement, a copy
of which is included as Exhibit 12.3 to this Form 20-F Annual Report. The corporate
governance practices described in the Statement have been developed taking into
account recent and proposed changes in corporate governance standards applicable
to Crystallex in Canada and the United States. Crystallex believes that its corporate
governance practices comply with the guidelines of the TSX and the rules of the
AMEX currently applicable to it. In accordance with the Statement, Crystallex
has also adopted a Code of Business Conduct and Ethics, a copy of which is included
as Exhibit 11.1 to this Form 20-F Annual Report. In the implementation of the
Corporate Governance Statement, Crystallex has further taken the following actions:


|a)   | It has reconstituted the Board
        Committees so that the Board of Directors of the Corporation now has
    the following committees:
|---- | -----------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                          
|i)   | Audit Committee  Composed
    of three Directors                                                                                        
|ii)  | Nominating and Compensation
        Committee
- Composed of two Directors                                                                
|iii) | Corporate Governance Committee
        - Composed of
three Directors                                                                     

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| |    | iv)                                                                                      | Finance and Risk Management
      Committee - Composed of six Directors                                                                                                                                                                              
| | -- | ---------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                          |                                                                                                                                                                                                                                                      
| |    | v)                                                                                       | Environment, Health and Safety
      Committee - Composed of five Directors                                                                                                                                                                          
| |    |                                                                                          |                                                                                                                                                                                                                                                      
| | b) | It has established
      the following management committees:                           
| |    |                                                                                         
| |    | i)                                                                                       | Executive Management Committee
       Composed of the Chief Executive Officer and his senior managers                                                                                                                                               
| |    |                                                                                          |                                                                                                                                                                                                                                                      
| |    | ii)                                                                                      | Disclosure Committee 
      Composed of the Chief Executive Officer, Executive Vice President &
      Corporate Counsel, Chief Financial Officer, Vice President, Investor Relations
      and a designated representative of the Board of Directors
| |    |                                                                                          |                                                                                                                                                                                                                                                      
| | c) | It has designated
      one of the independent Directors of the Board as a Lead Director
| |    |                                                                                          |                                                                                                                                                                                                                                                      
| | d) | It has prepared
      and approved:                                                     
| |    |                                                                                          |                                                                                                                                                                                                                                                      
| |    | i)                                                                                       | Charters for the Board, Board
      Committees and Management Committees incorporating current and anticipated
      requirements of corporate governance regulations and policies                                                                   
| |    |                                                                                          |                                                                                                                                                                                                                                                      
| |    | ii)                                                                                      | Position descriptions for the
      Chair, Vice Chair, Lead Director and Chief Executive Officer                                                                                                                                                     
| |    |                                                                                          |                                                                                                                                                                                                                                                      
| |    | iii)                                                                                     | A policy on the independence
      of Directors                                                                                                                                                                                                      
| |    |                                                                                          |                                                                                                                                                                                                                                                      
| |    | iv)                                                                                      | A Corporate Governance Statement                                                                                                                                                                                                                     
| |    |                                                                                          |                                                                                                                                                                                                                                                      
| |    | v)                                                                                       | A Code of Business Conduct
      and Ethics                                                                                                                                                                                                          
| |    |                                                                                          |                                                                                                                                                                                                                                                      
| |    | vi)                                                                                      | A Statement of Policies and
      Procedures with respect to confidentiality, disclosure, insider trading
      and tipping and insider reporting.                                                                                                   

The Chief Financial Officer, in conjunction
  with Corporate Counsel, is responsible for annual and quarterly earnings releases
  and financial statements, quarterly reports and the management discussion and
  analysis of financial information (MD&A). All earnings releases,
  financial statements, quarterly reports and MD&A are reviewed first by the
  Disclosure Committee, then by the Audit Committee or the Board of Directors
  in advance of public release.


Crystallex maintains a small head
  office staff which by its very nature, at times, precludes the functioning of
  all internal controls most notably division of duties. To compensate for this
  situation as noted above, management, through the Chief Financial Officer and
  the Disclosure Committee, performs a through review of any and all financial
  information disclosed to the public markets. In addition, managements
  review is verified or amendments are made following the completion of a review
  by the Audit Committee. The Chief Financial Officer also supervises and monitors
  all internal systems and controls on a day to day basis. There have been no other changes
  in Crystallexs controls and procedures in the 90 days prior to this filing.


Crystallexs President and
       Chief Executive Officer and Chief Financial Officer have evaluated these
      controls
    and procedures within the past 90 days and have concluded that these procedures
       are effective in the circumstances in that they provide timely and complete

    disclosure to Crystallexs stakeholders. controls and procedures are
    effective in the circumstances in that they provide timely and complete disclosure
to Crystallexs stakeholders.


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ITEM 16A  AUDIT COMMITTEE
FINANCIAL EXPERT

As a result of its review of corporate
  governance and the adoption and approval of the Corporate Governance Statement,
  the membership of Crystallexs Audit Committee now consists of three directors,
  all of whom are independent (as determined by the Board in accordance with the
  Policy on Independence of Directors) and financially literate (ie, have the
  ability to read and understand a set of financial statements that present a
  breadth and complexity of the accounting issues that can reasonably be expected
  to be raised by the financial statements of Crystallex). The Chairman of the
  Audit Committee, Mr. vant Hof, is also considered financially sophisticated
  due to his past experience in finance and accounting both as a chartered accountant
  and as a regular lecturer to members of the accounting profession on matters
  of audit and finance.


ITEM 16B  CODE OF ETHICS

Crystallex has adopted a Code of
  Business Conduct and Ethics, a copy of which is included as Exhibit 11.1 to
  this Form 20-F Annual Report.


ITEM 16C  PRINCIPAL ACCOUNTANT
FEES AND SERVICES

Set out below are Crystallexs
  accountants fees and services incurred for the years 2003 and 2002 (in
  Cdn$):


|Type                 |                                                                                                                                                                                                                                                                                                         | 2003      |  |   | 2002    | 
|-------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------- |  | - | ------- | 
|                     |                                                                                                                                                                                                                                                                                                         |           |  |   |         | 
|Audit Fee            | $                                                                                                                                                                                                                                                                                                       | 1,037,174 |  | $ | 506,830 | 
|Audit-Related Fee(1) | $                                                                                                                                                                                                                                                                                                       | 167,763   |  |   | 241,132 | 
|Tax Fee(2)           |                                                                                                                                                                                                                                                                                                         | NIL       |  |   | 22,103  | 
|All Other Fees(3)    | $                                                                                                                                                                                                                                                                                                       | 35,000    |  |   | 18,185  | 
|                     |                                                                                                                                                                                                                                                                                                         |           |  |   |         | 
|Totals               | $                                                                                                                                                                                                                                                                                                       | 1,239,937 |  | $ | 788,250 | 
|                     |                                                                                                                                                                                                                                                                                                         |           |  |   |         | 
|                     |                                                                                                                                                                                                                                                                                                         |           |  |   |         | 
|(1)                  | Consisting of a
      review of third quarter 2003 financial statements as well as an analysis
      of the first and second quarter 2003 statements presented to Crystallexs
      audit committee and assisting Crystallex on its responses to various securities
      regulatory agencies filings.
|(2)                  | Consisting of preparing
      certain of Crystallexs Canadian and foreign tax returns.                                                                                                                                                                                                                
|(3)                  | Consisting of reviewing
      Crystallexs short form prospectus filing in Canada and pro-forma financial
      statements in connection with its financing activities and reviewing Crystallexs
      accounting treatment for its acquisition of El Callao Mining Corp and Bolivar
      Goldfields.

ITEM 16D  EXEMPTIONS
FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not Applicable


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ITEM 16E  PURCHASES OF
EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Not Applicable


PARTIII

ITEM 17  FINANCIAL STATEMENTS

Not Applicable.


ITEM 18  FINANCIAL STATEMENTS

Audited financial statements for
  the fiscal years ending December 31, 2003, 2002, and 2001, together with the
  auditors report, are annexed to this report, beginning on page 89.


Item 19  Exhibits

|Exhibit |         |                                                                                                   
|------- | ------- | --------------------------------------------------------------------------------------------------
|No.     | Exhibit
|        |        
|        |         |                                                                                                   
|11.1(1) |         | Code of Business Conduct and
      Ethics                                                         
|        |         |                                                                                                   
|12.1    |         | Certification of Todd Bruce
      pursuant to Section 906 of the Sarbanes Oxley Act of 2002.      
|        |         |                                                                                                   
|12.2    |         | Certification of Borden D. Rosiak
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|        |         |                                                                                                   
|12.3(1) |         | Corporate Governance Statement                                                                    
|        |         |                                                                                                   
|12.4(1) |         | Employment agreement as of January
      1, 2004, between Crystallex and Robert A. Fung.          
|        |         |                                                                                                   
|12.5(1) |         | Employment agreement as of September
      22, 2003, between Crystallex and Todd Bruce.           
|        |         |                                                                                                   
|12.6(1) |         | Employment agreement as of July
      1, 2002, between Crystallex and Daniel R. Ross.             

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|12.7(1)  | Employment agreement
        as of September 3, 2002, between Crystallex and Borden Rosiak.                                                                                                                                                                                                                                                                                  
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |                                                                                                                                                                                                                                                                                                                                                                              
|12.8(1)  | EPCM contract dated
      March 23, 2004, between Crystallex and SNCL for SNCL to provide services
      for the design, construction and commissioning of 20,000 tonnes per day
      facility at Las Cristinas, without appendices.                                                                                                                                        
|         |                                                                                                                                                                                                                                                                                                                                                                              
|12.9 (1) | Letter
      agreement dated April 5, 2004, between Crystallex and BNP Paribas (BNPP),
      appointing BNPP to provide Crystallex with assistance and services in connection
      with the arrangement of debt financing for the Las Cristinas project.                                                                                                                  
|         |                                                                                                                                                                                                                                                                                                                                                                              
|12.10(1) | Agreement dated
      as of April 24, 2004, between Crystallex and BiominTechnologies
      S. A., whereby Biomin undertook to complete certain testwork on samples
      of ore from Crystallexs La Victoria Mine in order to establish the
      feasability and design data for a full scale plant using Biomins
      proprietary BIOX® process, without schedules 3-6.
|         |                                                                                                                                                                                                                                                                                                                                                                              
|13.1     | Certification of Todd Bruce
        pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                               
|         |                                                                                                                                                                                                                                                                                                                                                                              
|13.2     | Certification of Borden D. Rosiak
        pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                         

|   
|---
|(1)

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Consolidated Financial Statements of

CRYSTALLEX INTERNATIONAL
CORPORATION

December 31, 2003, 2002 and 2001

(Expressed in Canadian dollars)

91

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| | Deloitte & Touche
    LLP                                                            
| | -------------------------------------------------------------------------------------
| | BCE Place
    181
    Bay Street
    Suite 1400
    Toronto
    ON M5J 2V1
    Canada
| |                                                                                      
| | Tel: (416)
    601-6150
    Fax: (416) 601-6151
    www.deloitte.ca                  

Independent Auditors' Report

To the Shareholders of 
Crystallex International
Corporation

We have audited the consolidated balance sheets of Crystallex International Corporation
as at December 31, 2003 and 2002 and the related consolidated statements of operations,
shareholders equity and cash flows for each of the years in the three-year
period ended December 31, 2003. 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 in accordance with Canadian generally accepted auditing
standards and auditing standards generally accepted in the United States of America.
Those standards require that we plan and perform an audit to obtain reasonable
assurance whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.


In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 2003
and 2002 and the results of its operations and its cash flows for each of the
years in the three-year period ended December 31, 2003 in accordance with Canadian
generally accepted accounting principles.


Deloitte & Touche LLP

Chartered Accountants

Toronto, Ontario 
April 14, 2004



92

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CRYSTALLEX INTERNATIONAL
  CORPORATION

TABLE OF CONTENTSDecember 31, 2003, 2002 and 2001

|                                                    | Page      
|--------------------------------------------------- | ----------
|                                                    |           
|                                                    |           
|Consolidated Balance Sheet                          | F-1       
|Consolidated Statements of Operations               | F-2       
|Consolidated Statements of Cash Flows               | F-3       
|Consolidated
    Statements of Shareholders Equity | F-4       
|Notes to the
    Consolidated Financial Statements  | F-5  F-54



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CRYSTALLEX INTERNATIONAL
CORPORATION

CONSOLIDATED BALANCE SHEETS
  AS AT DECEMBER 31(Expressed in Canadian dollars)

|                                                   |                                          | 2003         |   |                                 | 2002         |  
|-------------------------------------------------- | ---------------------------------------- | ------------ | - | ------------------------------- | ------------ | -
|                                                   |                                          |              |   |                                
|                                                   |                                          |              |   | Restated  (Note
            3) |             
|ASSETS                                             |                                          |              |   |                                 |              |  
|CURRENT                                            |                                          |              |   |                                 |              |  
|Cash
      and cash equivalents                    | $                                        | 33,863,448   |   | $                               | 5,695,130    |  
|Accounts
      receivable - trade                  |                                          | 1,112,563    |   |                                 | 2,332,437    |  
|Accounts
      receivable - other (Note 14)        |                                          | 2,700,000    |   |                                 |             |  
|Production
      inventories (Note 4)              |                                          | 2,263,767    |   |                                 | 8,544,920    |  
|Prepaid
      expenses and other                   |                                          | 1,219,029    |   |                                 | 745,730      |  
|Due
      from related parties (Note 10)           |                                          |             |   |                                 | 88,164       |  
|                                                   |                                          |              |   |                                 |              |  
|                                                   |                                          | 41,158,807   |   |                                 | 17,406,381   |  
|INVESTMENT (Note 5)                                |                                          |             |   |                                 | 729,329      |  
|PROPERTY, PLANT AND EQUIPMENT
      (Note 6)       |                                          | 132,171,443  |   |                                 | 154,303,830  |  
|DEFERRED CHARGE (Note 15)                          |                                          |             |   |                                 | 7,765,576    |  
|DEFERRED FINANCING FEES (Note
      7)             |                                          | 194,598      |   |                                 | 2,162,868    |  
|                                                   |                                          |              |   |                                 |              |  
|TOTAL ASSETS                                       | $                                        | 173,524,848  |   | $                               | 182,367,984  |  
|                                                   |                                          |              |   |                                 |              |  
|                                                   |                                          |              |   |                                 |              |  
|LIABILITIES                                        |                                          |              |   |                                 |              |  
|CURRENT                                            |                                          |              |   |                                 |              |  
|Accounts
      payable and accrued liabilities     | $                                        | 9,005,683    |   | $                               | 17,385,724   |  
|Due
      to related parties                       |                                          |             |   |                                 | 245,925      |  
|Current
      portion of deferred credit (Note 15) |                                          | 26,117,994   |   |                                 | 11,401,347   |  
|Current
      portion of long-term debt (Note 8)   |                                          | 1,335,344    |   |                                 | 7,850,256    |  
|                                                   |                                          |              |   |                                 |              |  
|                                                   |                                          | 36,459,021   |   |                                 | 36,883,252   |  
|RECLAMATION PROVISION                              |                                          |             |   |                                 | 1,048,726    |  
|LONG-TERM DEBT (Note 8)                            |                                          | 8,373,406    |   |                                 | 26,206,277   |  
|DEFERRED CREDIT (Note 15)                          |                                          | 26,490,059   |   |                                 | 35,001,677   |  
|                                                   |                                          |              |   |                                 |              |  
|                                                   |                                          | 71,322,486   |   |                                 | 99,139,932   |  
|                                                   |                                          |              |   |                                 |              |  
|MINORITY INTEREST                                  |                                          | 143,517      |   |                                 | 143,517      |  
|                                                   |                                          |              |   |                                 |              |  
|COMMITMENTS AND CONTINGENCIES
      (Note 15)      |                                          |              |   |                                 |              |  
|SHAREHOLDERS EQUITY                               |                                          |              |   |                                 |              |  
|SHARE CAPITAL (Note 9)                             |                                          | 257,149,521  |   |                                 | 193,349,000  |  
|SPECIAL WARRANTS (Note 9)                          |                                          | 16,282,987   |   |                                 | 4,557,450    |  
|EQUITY COMPONENT OF CONVERTIBLENOTES (Note 8)      |                                          |             |   |                                 | 3,878,322    |  
|CONTRIBUTED SURPLUS (Note 9)                       |                                          | 36,007,442   |   |                                 | 5,801,535    |  
|DEFICIT                                            |                                          | (207,381,105 | ) |                                 | (124,501,772 | )
|                                                   |                                          |              |   |                                 |              |  
|                                                   |                                          | 102,058,845  |   |                                 | 83,084,535   |  
|                                                   |                                          |              |   |                                 |              |  
|                                                   | $                                        | 173,524,848  |   | $                               | 182,367,984  |  
|                                                   |                                          |              |   |                                 |              |  
|                                                   |                                          |              |   |                                 |              |  
|(Signed)
      "Todd Bruce", Director              | (Signed)
    "Johan van't Hof", Director |             

The accompanying notes are an integral part of the consolidated financial statements.

F-1

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CRYSTALLEX INTERNATIONAL
CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONSYEARS ENDED DECEMBER 31(Expressed in Canadian
dollars)

|                                                   |   | 2003        |   |   | 2002                        |   |   | 2001                        |  
|-------------------------------------------------- | - | ----------- | - | - | --------------------------- | - | - | --------------------------- | -
|                                                   |   |             |   |   |                             |  
|                                                   |   |             |   |   | (Restated 
        Note 3) |   |   | (Restated 
        Note 3) |  
|MINING REVENUE                                     | $ | 15,566,511  |   | $ | 13,317,819                  |   | $ | 16,005,855                  |  
|                                                   |   |             |   |   |                             |   |   |                             |  
|                                                   |   |             |   |   |                             |   |   |                             |  
|OPERATING EXPENSES                                 |   |             |   |   |                             |   |   |                             |  
|Operations                                         |   | 16,240,363  |   |   | 15,191,619                  |   |   | 11,696,769                  |  
|Amortization                                       |   | 1,419,589   |   |   | 1,091,823                   |   |   | 1,300,675                   |  
|Depletion                                          |   | 2,761,533   |   |   | 2,132,964                   |   |   | 2,214,550                   |  
|                                                   |   |             |   |   |                             |   |   |                             |  
|                                                   |   | 20,421,485  |   |   | 18,416,406                  |   |   | 15,211,994                  |  
|                                                   |   |             |   |   |                             |   |   |                             |  
|OPERATING (LOSS) INCOME                            |   | (4,854,974  | ) |   | (5,098,587                  | ) |   | 793,861                     |  
|                                                   |   |             |   |   |                             |   |   |                             |  
|                                                   |   |             |   |   |                             |   |   |                             |  
|OTHER EXPENSES                                     |   |             |   |   |                             |   |   |                             |  
|Amortization                                       |   | 365,135     |   |   | 329,288                     |   |   | 471,530                     |  
|Interest
      on long-term debt                   |   | 1,299,928   |   |   | 2,148,453                   |   |   | 984,631                     |  
|General
      and administrative                   |   | 22,387,757  |   |   | 8,985,885                   |   |   | 4,767,348                   |  
|                                                   |   |             |   |   |                             |   |   |                             |  
|                                                   |   | 24,052,820  |   |   | 11,463,626                  |   |   | 6,223,509                   |  
|                                                   |   |             |   |   |                             |   |   |                             |  
|                                                   |   |             |   |   |                             |   |   |                             |  
|NON-HEDGE DERIVATIVE                               |   |             |   |   |                             |   |   |                             |  
|LOSS
      (Note 15)                               |   | (21,684,044 | ) |   | (34,810,096                 | ) |   | (310,822                    | )
|                                                   |   |             |   |   |                             |   |   |                             |  
|LOSS BEFORE OTHER ITEMS                            |   | (50,591,838 | ) |   | (51,372,309                 | ) |   | (5,740,470                  | )
|                                                   |   |             |   |   |                             |   |   |                             |  
|                                                   |   |             |   |   |                             |   |   |                             |  
|OTHER ITEMS                                        |   |             |   |   |                             |   |   |                             |  
|Interest
      and other income                    |   | 263,631     |   |   | 77,509                      |   |   | 107,325                     |  
|Foreign
      exchange (loss) gain                 |   | (4,467,528  | ) |   | 918,078                     |   |   | (1,947,803                  | )
|Loss
      on sale and write-down of               |   |             |   |   |                             |   |   |                             |  
|marketable
      securities                        |   | (216,486    | ) |   | (210,572                    | ) |   | (2,003,338                  | )
|Write-down
      of mineral properties (Note 6)    |   | (23,014,421 | ) |   | (2,134,678                  | ) |   | (25,001,776                 | )
|Minority
      interest                            |   |            |   |   |                            |   |   | 169,800                     |  
|                                                   |   |             |   |   |                             |   |   |                             |  
|                                                   |   | (27,434,804 | ) |   | (1,349,663                  | ) |   | (28,675,792                 | )
|                                                   |   |             |   |   |                             |   |   |                             |  
|LOSS FROM CONTINUING OPERATIONS                    |   | (78,026,642 | ) |   | (52,721,972                 | ) |   | (34,416,262                 | )
|LOSS FROM DISCONTINUED OPERATIONS
      (Note 14)  |   | (4,027,210  | ) |   | (3,737,840                  | ) |   | (8,136,179                  | )
|                                                   |   |             |   |   |                             |   |   |                             |  
|NET LOSS FOR THE YEAR                              | $ | (82,053,852 | ) | $ | (56,459,812                 | ) | $ | (42,552,441                 | )
|                                                   |   |             |   |   |                             |   |   |                             |  
|BASIC NET LOSS PER SHARE                           |   |             |   |   |                             |   |   |                             |  
|Continuing
      operations                        | $ | (0.67       | ) | $ | (0.63                       | ) | $ | (0.50                       | )
|Discontinued
      operations                      |   | (0.03       | ) |   | (0.04                       | ) |   | (0.12                       | )
|                                                   |   |             |   |   |                             |   |   |                             |  
|                                                   | $ | (0.70       | ) | $ | (0.67                       | ) | $ | (0.62                       | )
|                                                   |   |             |   |   |                             |   |   |                             |  
|                                                   |   |             |   |   |                             |   |   |                             |  
|BASIC WEIGHTED AVERAGE NUMBEROF SHARES OUTSTANDING |   | 118,309,198 |   |   | 84,441,287                  |   |   | 69,117,738                  |  
|                                                   |   |             |   |   |                             |   |   |                             |  

The accompanying notes are an integral part of the consolidated financial statements.

F-2

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CRYSTALLEX INTERNATIONAL CORPORATION

CONSOLIDATED
STATEMENTS OF CASH FLOWSYears ended December
31
(Expressed in Canadian dollars)

|                                                                                                             | 2003 |             | 2002 |                           | 2001        |                           
|------------------------------------------------------------------------------------------------------------ | ---- | ----------- | ---- | ------------------------- | ----------- | --------------------------
|                                                                                                             |      |             |      |                           |             |                           
|                                                                                                             |      |             |      | (Restated 
      Note 3) |             | (Restated 

      Note 3)
|CASH FLOWS FROM CONTINUINGOPERATING
    ACTIVITIES                                                           |      |             |      |                           |             |                           
|Loss
      for the year  continuing operations                                                              | $    | (78,026,642 | )    | $                         | (52,721,972 | )                         
|Adjustments
      to reconcile loss to net cash used in operating activities:                                |      |             |      |                           |             |                           
|Amortization
      and depletion                                                                             |      | 4,546,257   |      |                           | 3,554,075   |                           
|Unrealized
      foreign exchange loss                                                                       |      | 691,768     |      |                           | 4,237,293   |                           
|Gain
      on loan conversion                                                                                |      |            |      |                           |            |                           
|Interest
      on long-term debt                                                                             |      |            |      |                           | 327         |                           
|Management
      and consulting fees                                                                         |      | 2,011,457   |      |                           | 110,955     |                           
|Minority
      interest                                                                                      |      |            |      |                           |            |                           
|Unrealized
      non-hedge derivative loss                                                                   |      | 19,352,704  |      |                           | 34,187,017  |                           
|Loss
      on sale and write-down of marketable securities                                                   |      | 216,486     |      |                           | 210,572     |                           
|Write-down
      of mineral properties                                                                       |      | 23,014,421  |      |                           | 2,134,678   |                           
|                                                                                                             |      |             |      |                           |             |                           
|Changes
      in other operating assets and liabilities(net
      of effects from purchase of subsidiaries): |      |             |      |                           |             |                           
|(Increase)
      decrease in accounts receivable                                                             |      | (2,576,107  | )    |                           | 352,181     |                           
|Increase
      in production inventories                                                                     |      | (1,499,936  | )    |                           | (609,009    | )                         
|(Increase)
      decrease in prepaid expenses and
      other                                                |      | (962,166    | )    |                           | 976,023     |                           
|Decrease
      (increase) in due from related parties                                                        |      | 88,164      |      |                           | (115,256    | )                         
|(Decrease)
          increase in accounts payable and accrued
      liabilities                              |      | (918,533    | )    |                           | 1,738,312   |                           
|(Decrease)
      increase in due to related parties                                                          |      | (245,925    | )    |                           | 247,485     |                           
|Increase
      in deferred credit                                                                            |      |            |      |                           | 1,148,771   |                           
|                                                                                                             |      |             |      |                           |             |                           
|                                                                                                             |      | (34,308,052 | )    |                           | (4,548,548  | )                         
|                                                                                                             |      |             |      |                           |             |                           
|CASH FLOWS FROM INVESTING ACTIVITIES                                                                         |      |             |      |                           |             |                           
|Purchase
      of subsidiaries (net of cash acquired)                                                        |      |            |      |                           |            |                           
|Purchase
      of property, plant and equipment                                                              |      | (12,298,887 | )    |                           | (42,236,842 | )                         
|Sale
      (purchase) of marketable securities                                                               |      | 512,841     |      |                           | (64,000     | )                         
|                                                                                                             |      |             |      |                           |             |                           
|                                                                                                             |      | (11,786,046 | )    |                           | (42,300,842 | )                         
|                                                                                                             |      |             |      |                           |             |                           
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                         |      |             |      |                           |             |                           
|Issuance
      of common shares for cash                                                                     |      | 9,403,552   |      |                           | 7,284,107   |                           
|Special
      warrants and warrants                                                                          |      | 61,688,921  |      |                           | 4,557,450   |                           
|Debt
      borrowings                                                                                        |      | 4,052,842   |      |                           | 30,365,399  |                           
|Debt
      repayments                                                                                        |      | (2,048,247  | )    |                           | (771,120    | )                         
|Deferred
      financing fees                                                                                |      |            |      |                           | (2,005,074  | )                         
|                                                                                                             |      |             |      |                           |             |                           
|                                                                                                             |      | 73,097,068  |      |                           | 39,430,762  |                           
|                                                                                                             |      |             |      |                           |             |                           
|CASH FLOWS FROM CONTINUING
      OPERATIONS                                                                  |      | 27,002,970  |      |                           | (7,418,628  | )                         
|CASH FLOWS FROM DISCONTINUED
      OPERATIONS                                                                |      | 1,165,348   |      |                           | (1,296,073  | )                         
|                                                                                                             |      |             |      |                           |             |                           
|INCREASE (DECREASE)
      IN CASH AND CASH EQUIVALENTS                                                       |      | 28,168,318  |      |                           | (8,714,701  | )                         
|CASH AND CASH
      EQUIVALENTS, BEGINNING OF YEAR                                                           |      | 5,695,130   |      |                           | 14,409,831  |                           
|                                                                                                             |      |             |      |                           |             |                           
|CASH AND CASH EQUIVALENTS,
      END OF YEAR                                                                 | $    | 33,863,448  |      | $                         | 5,695,130   |                           
|                                                                                                             |      |             |      |                           |             |                           

Supplemental disclosure with respect
to cash flows (Note 12)

The accompanying notes are an integral part of the consolidated financial statements.

F-3

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Back to Contents

CRYSTALLEX INTERNATIONAL
      CORPORATION

CONSOLIDATED STATEMENTS
      OFSHAREHOLDERS' EQUITYYears ended December
      31
(Expressed in Canadian dollars)

|                                                       |                         |                 |             |               |         |             |       |       |             |   |            |   |   |            |   |   |              |   |   |            |   |  
|------------------------------------------------------ | ----------------------- | --------------- | ----------- | ------------- | ------- | ----------- | ----- | ----- | ----------- | - | ---------- | - | - | ---------- | - | - | ------------ | - | - | ---------- | - | -
|Equity                                                
|Component                                             
|Numberof common                                        | Number
      of Special | Number
      of | Contributed | ofConvertible
|of
      Shares                                        | Amount                  | Warrants        | Amount      | Warrants      | Surplus | Deficit     | Notes | Total
|                                                       |                         |                 |             |               |         |             |       |       |             |   |            |   |   |            |   |   |              |   |   |            |   |  
|Balance at December 31, 2000 (Restated 
      Note 3) | 59,154,221              |                 | $           | 130,668,458   |         | 1,025,000   |       | $     | 1,387,809   |   | 8,994,000  |   | $ | 631,506    |   | $ | (25,489,519  | ) | $ |           |   | $
|Shares
      issued:                                   |                         |                 |             |               |         |             |       |       |             |   |            |   |   |            |   |   |              |   |   |            |   |  
|On
      exercise of options                           | 340,000                 |                 |             | 468,700       |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|On
      conversion of warrants                        | 1,460,443               |                 |             | 2,318,889     |         |            |       |       |            |   | (1,460,443 | ) |   |           |   |   |             |   |   |           |   |  
|For
      directors' fees                              | 65,466                  |                 |             | 104,550       |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|For
      legal fees                                   | 1,200,000               |                 |             | 2,385,000     |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|For
      El Callao                                    | 3,987,535               |                 |             | 5,150,520     |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|For
      Las Cristinas                                | 1,035,689               |                 |             | 2,597,247     |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|On
      conversion of notes                           | 3,199,055               |                 |             | 3,803,591     |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|On
      settlement of bank loan                       | 4,701,615               |                 |             | 13,214,573    |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|For
      broker fees                                  | 67,059                  |                 |             | 89,189        |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|Warrants
      issued with convertible notes           |                        |                 |             |              |         |            |       |       |            |   | 2,666,938  |   |   | 84,105     |   |   |             |   |   |           |   |  
|Conversion
      of special warrants                   | 1,025,000               |                 |             | 1,387,809     |         | (1,025,000  | )     |       | (1,387,809  | ) |           |   |   |           |   |   |             |   |   |           |   |  
|Shares
      and warrants issued for private placement | 3,111,111               |                 |             | 3,162,042     |         |            |       |       |            |   | 3,111,111  |   |   | 3,699,935  |   |   |             |   |   |           |   |  
|Warrants
      expired during the year                 |                        |                 |             |              |         |            |       |       |            |   | (2,333,334 | ) |   |           |   |   |             |   |   |           |   |  
|Equity
      component of convertible notes            |                        |                 |             |              |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   | 1,557,302  |   |  
|Net
      loss for the year                            |                        |                 |             |              |         |            |       |       |            |   |           |   |   |           |   |   | (42,552,441  | ) |   |           |   |  
|                                                       |                         |                 |             |               |         |             |       |       |             |   |            |   |   |            |   |   |              |   |   |            |   |  
|Balance at December 31, 2001(Restated 
      Note 3)  | 79,347,194              |                 |             | 165,350,568   |         |            |       |       |            |   | 10,978,272 |   |   | 4,415,546  |   |   | (68,041,960  | ) |   | 1,557,302  |   |  
|Shares
      issued:                                   |                         |                 |             |               |         |             |       |       |             |   |            |   |   |            |   |   |              |   |   |            |   |  
|On
      exercise of options                           | 1,104,500               |                 |             | 1,615,650     |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|On
      conversion of warrants                        | 2,495,125               |                 |             | 6,251,422     |         |            |       |       |            |   | (2,495,125 | ) |   | (572,804   | ) |   |             |   |   |           |   |  
|For
      directors' fees                              | 42,612                  |                 |             | 110,955       |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|For
      mineral property                             | 282,554                 |                 |             | 873,182       |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|For
      El Callao dispute settlement                 | 677,711                 |                 |             | 1,714,609     |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|For
      finders fee                                  | 35,430                  |                 |             | 78,655        |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|On
      conversion of notes                           | 7,737,152               |                 |             | 17,353,959    |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   | (1,557,302 | ) |  
|Special
      warrants issued for cash                 |                        |                 |             |              |         | 2,252,500   |       |       | 4,557,450   |   |           |   |   |           |   |   |             |   |   |           |   |  
|Warrants
      issued with convertible notes           |                        |                 |             |              |         |            |       |       |            |   | 3,195,023  |   |   | 1,958,793  |   |   |             |   |   |           |   |  
|Equity
      component of convertible notes            |                        |                 |             |              |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   | 3,878,322  |   |  
|Net
      loss for the year                            |                        |                 |             |              |         |            |       |       |            |   |           |   |   |           |   |   | (56,459,812  | ) |   |           |   |  
|                                                       |                         |                 |             |               |         |             |       |       |             |   |            |   |   |            |   |   |              |   |   |            |   |  
|Balance at December 31, 2002 (Restated 
      Note 3) | 91,722,278              |                 |             | 193,349,000   |         | 2,252,500   |       |       | 4,557,450   |   | 11,678,170 |   |   | 5,801,535  |   |   | (124,501,772 | ) |   | 3,878,322  |   |  
|Shares
      issued:                                   |                         |                 |             |               |         |             |       |       |             |   |            |   |   |            |   |   |              |   |   |            |   |  
|On
      exercise of options                           | 270,000                 |                 |             | 442,500       |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|On
      conversion of warrants                        | 4,803,457               |                 |             | 11,169,788    |         |            |       |       |            |   | (4,803,457 | ) |   | (2,208,736 | ) |   |             |   |   |           |   |  
|For
      directors' fees                              | 40,080                  |                 |             | 82,523        |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|In
      settlement of mineral property dispute        | 229,283                 |                 |             | 732,934       |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|For
      settlement of bank loan and bank fees        | 2,348,184               |                 |             | 2,897,002     |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|For
      financial advisory fees                      | 350,000                 |                 |             | 863,000       |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|For
      finders fee                                  | 61,695                  |                 |             | 157,856       |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|For
      legal fees                                   | 1,281,124               |                 |             | 2,969,416     |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   |           |   |  
|On
      conversion of notes                           | 17,036,967              |                 |             | 23,950,966    |         |            |       |       |            |   |           |   |   |           |   |   |             |   |   | (3,878,322 | ) |  
|Conversion
      of special warrants                   | 17,260,455              |                 |             | 20,534,536    |         | (17,260,455 | )     |       | (20,534,536 | ) |           |   |   |           |   |   |             |   |   |           |   |  
|Special
      warrants and warrants issued for cash    |                        |                 |             |              |         | 27,807,955  |       |       | 32,260,073  |   | 13,903,977 |   |   | 29,428,848 |   |   |             |   |   |           |   |  
|Warrants
      issued for consulting fee               |                        |                 |             |              |         |            |       |       |            |   | 900,000    |   |   | 1,379,985  |   |   |             |   |   |           |   |  
|Warrants
      issued with convertible notes           |                        |                 |             |              |         |            |       |       |            |   | 150,000    |   |   | 278,057    |   |   |             |   |   |           |   |  
|Warrants
      issued with promissory notes            |                        |                 |             |              |         |            |       |       |            |   | 450,000    |   |   | 241,261    |   |   |             |   |   |           |   |  
|Warrants
      expired during the year                 |                        |                 |             |              |         |            |       |       |            |   | (2,235,918 | ) |   |           |   |   |             |   |   |           |   |  
|Options
      issued to non-employees                  |                        |                 |             |              |         |            |       |       |            |   |           |   |   | 261,011    |   |   |             |   |   |           |   |  
|Warrants
      extended during the year                |                        |                 |             |              |         |            |       |       |            |   |           |   |   | 825,481    |   |   | (825,481     | ) |   |           |   |  
|Net
      loss for the year                            |                        |                 |             |              |         |            |       |       |            |   |           |   |   |           |   |   | (82,053,852  | ) |   |           |   |  
|                                                       |                         |                 |             |               |         |             |       |       |             |   |            |   |   |            |   |   |              |   |   |            |   |  
|Balance at December 31, 2003                           | 135,403,523             |                 | $           | 257,149,521   |         | 12,800,000  |       | $     | 16,282,987  |   | 20,042,772 |   | $ | 36,007,442 |   | $ | (207,381,105 | ) | $ |           |   | $
|                                                       |                         |                 |             |               |         |             |       |       |             |   |            |   |   |            |   |   |              |   |   |            |   |  

The accompanying notes are an integral
part of the consolidated financial statements.

F-4

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CRYSTALLEX INTERNATIONAL CORPORATION

NOTES
  TO THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002
and 2001

|1. | NATURE OF OPERATIONS
|-- | --------------------

Crystallex International Corporation
    (Crystallex or the Company) is engaged in the production
    of gold and related activities including exploration, development, mining
  and processing. These activities are conducted in Venezuela.


|2. | SIGNIFICANT ACCOUNTING POLICIES                               
|-- | --------------------------------------------------------------
|   |                                                               
|   | Basis of presentation of
    consolidated financial statements

The consolidated financial statements
    of Crystallex are prepared by management in accordance with accounting principles
    generally accepted in Canada and, except as described in Note 17, conform
    in all material respects with accounting principles generally accepted in
  the United States of America.


The principal accounting policies followed by the Company, which have been consistently
applied in the preparation of these consolidated financial statements, are summarized
as follows:


| | Principles of consolidation
| | ---------------------------

These consolidated financial statements include the accounts of the Company and
its majority-owned subsidiaries. All inter-company balances and transactions
have been eliminated.


| | Translation of foreign currencies
| | ---------------------------------

The accounts of subsidiaries, all of which are considered to be integrated foreign
operations, are translated into Canadian dollars using the temporal method. Under
this method, monetary assets and liabilities are translated at the year end exchange
rates. Non-monetary assets and liabilities are translated using historical rates
of exchange. Revenues and expenses are translated at average rates for the year
and exchange gains and losses on translation are included in income.


Transactions denominated in foreign currencies are translated into Canadian dollars
at the exchange rates prevailing at transaction dates.


| | Cash and cash equivalents
| | -------------------------

Cash and cash equivalents include highly liquid investments with original maturities
of three months or less.


| | Marketable securities
| | ---------------------

Marketable securities are carried at the lower of cost and market value.


F-5

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CRYSTALLEX INTERNATIONAL CORPORATION

NOTES TO THE
      CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003, 2002 and 2001

|2. | SIGNIFICANT ACCOUNTING POLICIES
    (continued)
|-- | -----------------------------------------------
|   |                                                
|   | Long-term investment securities                

Long-term
      investment securities are carried at cost and written down when there has
      been an other than temporary decline in value. The unrealized
loss is recognized in the determination of net loss.


Allowance for doubtful accounts


The Company establishes an allowance for doubtful accounts on a specific account
    basis. No allowance for doubtful accounts was recorded by the Company as
    at December 31, 2003 and December 31, 2002.


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 of plant and equipment used
    directly in exploration projects is included in deferred exploration costs
    and is charged against operations when the related property commences production.
    Amortization is being provided for using the straight-line method over the
    following periods, not to exceed the estimated life of mine:


|Buildings               | 5 years 
|----------------------- | --------
|Field vehicles          | 5 years 
|Furniture and equipment | 5 years 
|Mill and plant          | 20 years
|Mining equipment        | 10 years

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 a permanent 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. 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 units-of-production method
    over the estimated life of the ore body based on proven and probable reserves.


F-6

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CRYSTALLEX INTERNATIONAL
      CORPORATION

NOTES TO THE
      CONSOLIDATED FINANCIAL STATEMENTS
  December 31, 2003, 2002 and 2001

|2. | SIGNIFICANT ACCOUNTING POLICIES
          (continued)
|-- | -----------------------------------------------------
|   |                                                      
|   | Property evaluations                                 

The Company reviews and evaluates the recoverability of the carrying amounts
                of all its producing properties and related plant and equipment annually
                or when events or changes in circumstances indicate that the carrying amount
                may not be recoverable. 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 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, reclamation costs and income taxes. Reductions in the carrying
                amount of property, plant and equipment, with corresponding charges to earnings,
                are recorded to the extent that the estimated future undiscounted net cash
  flows are less than the carrying amount.


Non-producing mineral properties
    are evaluated for impairment based
on managements intentions and are written down when the long-term expectation
is that the net carrying amount will not be recovered.


Production inventories


Gold in doré, gold in process
    and stockpiled ore are stated at the lower of average production cost which
    includes all direct and indirect
costs, including amortization of equipment and facilities, and net realizable
value.


Consumables and spare parts inventory are valued at the lower of average and
    replacement cost.


Income taxes


The Company uses the liability method of accounting for income taxes whereby
    future income taxes are recognized for the tax consequences of temporary
    differences by applying statutory tax rates applicable to future years to
    differences between the financial statement carrying amounts and the tax
    bases of certain assets and liabilities. The Company recognizes a future
    income tax asset when it appears more likely than not that some or all of
    the future income tax assets will be realized.


Reclamation costs


The Companys subsidiaries
    conduct reclamation on an ongoing basis and costs related thereto are expensed
    as incurred.


F-7

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CRYSTALLEX INTERNATIONAL
      CORPORATION

NOTES TO THE
      CONSOLIDATED FINANCIAL STATEMENTS
  December 31, 2003, 2002 and 2001

|2. | SIGNIFICANT ACCOUNTING POLICIES
          (continued)
|-- | -----------------------------------------------------
|   |                                                      
|   | Revenue
    recognition                              

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


Deferred financing fees


Costs related to the Companys
    debt financings are deferred
and amortized over the term of the related financing.


Income/loss per share


Income/loss per share is calculated using the weighted-average number of common
    shares outstanding during the year plus outstanding warrants that are unconditionally
    convertible into common shares. Diluted income per share is calculated using
    the treasury stock method.


Commodity derivative contracts


The Company uses commodity derivative contracts, principally fixed forward contracts
    and written call options, to economically hedge exposure to fluctuations
    in the market price of gold. These instruments are not designated as hedges
    for accounting purposes and are carried on the balance sheets, under the
    captions deferred credit and deferred charge, at estimated fair market value.


Premiums received at the inception of written call options are initially
    recognized on the balance sheet as a liability. Unrealized gains and losses
    arising from changes in the fair value of the liability related to both fixed
    forward contracts and written call options and realized gains/losses on commodity
    derivative contracts which are either settled financially or through physical
    delivery, are recognized in the Statement of Operations in the period of
    the change or settlement as a non-hedge derivative loss/gain.


Stock-based compensation plan


The Company has a stock option plan
    for employees and directors. The Company records no compensation expense in
    the Statement of Operations on the date of granting the options to the employees
    under the plan. The Company does however, disclose additional information
    for options granted to employees, including disclosure of pro forma earnings
    and pro forma earnings per share as if the fair value based accounting method
    had been used to account for employee stock options.


The Company accounts for all stock-based
    payments to non-employees and employee awards that are direct awards of stock,
    call for settlement in cash or other assets, or are stock appreciation rights
    that call for settlement by the issuance of equity instruments, using the
    fair value-based method.


F-8

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO THE CONSOLIDATED
  FINANCIAL STATEMENTSDecember 31, 2003,
  2002 and 2001

|2. | SIGNIFICANT ACCOUNTING POLICIES
      (continued)
|-- | -------------------------------------------------

Use of estimates


The preparation of financial statements
  in conformity with accounting principles generally accepted in Canada 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. Significant estimates
  used herein include those relating to gold prices, recoverable proven and probable
  reserves, available resources, fair values of commodity derivative contracts
  (principally fixed forward contracts and written call options), available operating
  capital and required reclamation costs. Among other things, these estimates
  each affect managements evaluation of asset impairment and the recorded
  balances of inventories, site closure and reclamation and remediation obligations.
  It is reasonably possible that actual results could differ in the near term
  from those and other estimates used in preparing these financial statements
  and such differences could be material.


Reclassification


Certain comparative figures have
  been reclassified to conform with the presentation adopted in the current year.


|3. | RESTATEMENTS
|-- | ------------

In May 2003, the Company issued
    its consolidated financial statements for the year ended December 31, 2002
    which included restatements as summarized in paragraphs 3(a) through (i),
    reflected in the tables below. Subsequent to the issuance of those consolidated
    financial statements, a further restatement was identified as summarized
    in paragraph 3(j) below, relating to commodity derivative contracts.


The following tables include for the
  years presented, the restatements previously reported in the consolidated financial
  statements issued in May 2003 and the further restatements arising from adjustments
  to the accounting for commodity derivative contracts. The effect of the further
  adjustments on the 2002 figures, as previously reported in the consolidated
  financial statements issued in May 2003, is summarized in paragraph 3(j) below.


The restatements had the following
  effect on previously reported deficits:


F-9

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES
  TO THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31,
  2003, 2002 and 2001

|3. | RESTATEMENTS
      (continued)
|-- | ------------------------------
|   |                               

|                                                        |   | 2002         |   |   | 2001        |   |   | 2000        |   |   | 1999        |  
|------------------------------------------------------- | - | ------------ | - | - | ----------- | - | - | ----------- | - | - | ----------- | -
|                                                        |   |              |   |   |             |   |   |            
|Deficit, end of year,                                   |   |              |   |   |             |   |   |             |   |   |             |  
|as originally
      reported                            | $ | (105,684,858 | ) | $ | (21,361,808 | ) | $ | (21,430,202 | ) | $ | (24,734,758 | )
|Restatements                                            |   |              |   |   |             |   |   |             |   |   |             |  
|Included
      in the consolidated financial statements |   |              |   |   |             |   |   |             |   |   |             |  
|previously
      issued in May 2003:                    |   |              |   |   |             |   |   |             |   |   |             |  
|Write
      down of plant and equipment (a)             |   |             |   |   | (16,292,449 | ) |   | (7,450,481  | ) |   | (3,954,016  | )
|Write
      down of mineral properties (b)              |   |             |   |   | (19,746,087 | ) |   |            |   |   |            |  
|Misstatement
      of expenses (c)                      |   |             |   |   | (102,363    | ) |   | (301,966    | ) |   | (176,599    | )
|Foreign
      exchange conversion                       |   |              |   |   |             |   |   |             |   |   |             |  
|gain
      (loss) (d)                                   |   |             |   |   | (2,780,352  | ) |   | 39,581      |   |   |             |  
|Gold
      loan conversion (e)                          |   |             |   |   | (1,529,364  | ) |   |            |   |   |            |  
|Minority
      interest (f)                             |   |             |   |   | (704,643    | ) |   |            |   |   |            |  
|Write
      down of investment (g)                      |   |             |   |   | (2,003,338  | ) |   |            |   |   |            |  
|Reversal
      of capitalized costs (h)                 |   |             |   |   | (1,188,225  | ) |   |            |   |   |            |  
|Other                                                   |   |             |   |   | (204,370    | ) |   | (119,577    | ) |   | 11,185      |  
|Further
      restatements:                             |   |              |   |   |             |   |   |             |   |   |             |  
|Commodity
      derivative contracts (j)                |   | (18,816,914  | ) |   | (2,128,961  | ) |   | 3,773,126   |   |   | (1,184,191  | )
|                                                        |   |              |   |   |             |   |   |             |   |   |             |  
|Deficit, end of year, as restated                       | $ | (124,501,772 | ) | $ | (68,041,960 | ) | $ | (25,489,519 | ) | $ | (30,038,379 | )
|                                                        |   |              |   |   |             |   |   |             |   |   |             |  

F-10

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Back to Contents

CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES
  TO THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31,
  2003, 2002 and 2001

|3. | RESTATEMENTS
      (continued)
|-- | ------------------------------
|   |                               

The restatements had the following
    effect on assets and liabilities as previously reported as at December 31,
  2002 and 2001:


|                                        |        | Current     |             |   | Other       |   |   | Current    |  |   | Other      |  
|--------------------------------------- | ------ | ----------- | ----------- | - | ----------- | - | - | ---------- |  | - | ---------- | -
|Assets                                  | Assets | Liabilities | Liabilities
|                                        |        |             |             |   |             |   |   |            |  |   |            |  
|Balance as at December 31,
      2002,  |        |             |             |   |             |   |   |            |  |   |            |  
|as
      originally reported            | $      | 17,286,823  |             | $ | 157,315,585 |   | $ | 30,473,172 |  | $ | 42,227,787 |  
|Restatements                            |        |             |             |   |             |   |   |            |  |   |            |  
|Commodity
      derivative              |        |             |             |   |             |   |   |            |  |   |            |  
|contracts
      (j)                     |        |            |             |   | 7,765,576   |   |   | 6,410,080  |  |   | 20,172,410 |  
|                                        |        |             |             |   |             |   |   |            |  |   |            |  
|                                        |        |             |             |   |             |   |   |            |  |   |            |  
|Balance
      as at December 31, 2002,  |        |             |             |   |             |   |   |            |  |   |            |  
|as
      restated                       | $      | 17,286,823  |             | $ | 165,081,161 |   | $ | 36,883,252 |  | $ | 62,400,197 |  
|                                        |        |             |             |   |             |   |   |            |  |   |            |  
|                                        |        |             |             |   |             |   |   |            |  |   |            |  
|                                        |        | Current     |             |   | Other       |   |   | Current    |  |   | Other      |  
|Assets                                  | Assets | Liabilities | Liabilities
|                                        |        |             |             |   |             |   |   |            |  |   |            |  
|Balance as at December 31, 2001,        |        |             |             |   |             |   |   |            |  |   |            |  
|as originally
      reported            | $      | 27,859,341  |             | $ | 170,484,662 |   | $ | 19,926,621 |  | $ | 34,478,863 |  
|Restatements                            |        |             |             |   |             |   |   |            |  |   |            |  
|Included in the consolidated financial  |        |             |             |   |             |   |   |            |  |   |            |  
|statements
      previously issued      |        |             |             |   |             |   |   |            |  |   |            |  
|in
      May 2003                       |        |             |             |   |             |   |   |            |  |   |            |  
|Reduction
      to plant and            |        |             |             |   |             |   |   |            |  |   |            |  
|equipment
      (a)                     |        |            |             |   | (16,292,449 | ) |   |           |  |   |           |  
|Reduction
      to mineral              |        |             |             |   |             |   |   |            |  |   |            |  
|properties
      (b)                    |        |            |             |   | (19,746,087 | ) |   |           |  |   |           |  
|Misstatement
      of expenses (c)      |        |             |             |   |            |   |   | 102,363    |  |   |           |  
|Foreign
      exchange conversion       |        |             |             |   |             |   |   |            |  |   |            |  
|gain
      (loss) (d)                   |        | (151,247    | )           |   | 1,934,867   |   |   |           |  |   | (111,953   | )
|Gold
      loan conversion (e)          |        |            |             |   |            |   |   |           |  |   | 1,529,364  |  
|Minority
      interest (f)             |        |            |             |   | (8,313,225  | ) |   |           |  |   | (7,608,582 | )
|Write
      down of investment (g)      |        |            |             |   | (2,003,338  | ) |   |           |  |   |           |  
|Reversal
      of capitalized costs (h) |        |            |             |   | (1,188,225  | ) |   |           |  |   |           |  
|Equity
      component of convertible   |        |             |             |   |             |   |   |            |  |   |            |  
|notes
      (i)                         |        |            |             |   |            |   |   |           |  |   | (1,347,164 | )
|Other                                   |        |            |             |   |            |   |   |           |  |   | 204,370    |  
|Further
      restatements:             |        |             |             |   |             |   |   |            |  |   |            |  
|Commodity
      derivative              |        |             |             |   |             |   |   |            |  |   |            |  
|contracts
      (j)                     |        | 4,234,427   |             |   | 10,161,956  |   |   | 2,651,882  |  |   | 13,873,462 |  
|                                        |        |             |             |   |             |   |   |            |  |  
|Balance as at December 31, 2001,        |        |             |             |   |             |   |   |            |  |   |            |  
|as restated                             | $      | 31,942,521  |             | $ | 135,038,161 |   | $ | 22,680,866 |  | $ | 41,018,360 |  
|                                        |        |             |             |   |             |   |   |            |  |  

F-11


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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO THE
      CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002
and 2001

|3. | RESTATEMENTS (continued)
|-- | ------------------------

The restatements had the following
  effect on net (loss) income and (loss) income per share, as previously reported,
  for the years ended December 31, 2001 and 2000:


|                                                            |   | 2002        |   |   | 2001        |   |   | 2000       |  
|----------------------------------------------------------- | - | ----------- | - | - | ----------- | - | - | ---------- | -
|                                                            |   |             |   |   |             |  
|Net income (loss), as originally
      reported             | $ | (39,771,859 | ) | $ | 68,394      |   | $ | 3,304,556  |  
|Restatements                                                |   |             |   |   |             |   |   |            |  
|Included in
      the consolidated financial statements     |   |             |   |   |             |   |   |            |  
|previously
      issued in May 2003:                        |   |             |   |   |             |   |   |            |  
|;;Write
      down of plant and equipment (a)               |   |            |   |   | (8,841,968  | ) |   | (3,496,465 | )
|;;Write
      down of mineral properties (b)                |   |            |   |   | (19,746,087 | ) |   |           |  
|;;Misstatement
      of expenses (c)                        |   |            |   |   | 199,603     |   |   | (125,367   | )
|;;Foreign
          exchange conversiongain(loss)
      (d) |   |            |   |   | (2,819,933  | ) |   | 39,581     |  
|;;Gold
      loan conversion (e)                            |   |            |   |   | (1,529,364  | ) |   |           |  
|;;Minority
      interest (f)                               |   |            |   |   | (704,643    | ) |   |           |  
|;;Write
      down of investment (g)                        |   |            |   |   | (2,003,338  | ) |   |           |  
|;;Reversal
      of capitalized costs (h)                   |   |            |   |   | (1,188,225  | ) |   |           |  
|;;Other                                                     |   |            |   |   | (84,793     | ) |   | (130,762   | )
|Further
      restatements:                                 |   |             |   |   |             |   |   |            |  
|Commodity
      derivative contracts (j)                    |   | (16,687,953 | ) |   | (5,902,087  | ) |   | 4,957,317  |  
|                                                            |   |             |   |   |             |   |   |            |  
|Net (loss) income, as restated                              | $ | (56,459,812 | ) | $ | (42,552,441 | ) | $ | 4,548,860  |  
|                                                            |   |             |   |   |             |   |   |            |  
|                                                            |   |             |   |   |             |   |   |            |  
|Net (loss) income per share, basic                          |   |             |   |   |             |   |   |            |  
|as originally
      reported                                | $ | (0.47       | ) | $ | 0.00        |   | $ | 0.06       |  
|Per share effect of above noted                             |   |             |   |   |             |   |   |            |  
|restatements
      on net income (loss)                     |   | (0.20       | ) |   | (0.62       | ) |   | 0.03       |  
|                                                            |   |             |   |   |             |   |   |            |  
|Net (loss) income per share, basicas
      restated         | $ | (0.67       | ) | $ | (0.62       | ) | $ | 0.09       |  
|                                                            |   |             |   |   |             |   |   |            |  

Effect of further restatement
   on previously issued 2002 figures:


As a result of accounting for the
  written call option contracts that were outstanding at the end of 1999, 2000,
  and 2001, the non-hedge derivative loss previously reported for 2002 was restated
  to reflect the cumulative mark to market adjustment. Furthermore, as a result
  of the change in accounting for fixed forward contracts, for the year ended
  December 31, 2002 the Company recorded an additional restatement to both mining
  revenue and net income to reflect the settlement gains and losses and the required
  mark to market adjustment for the estimated fair values. In summary, the impact
  of the restatements to the accounting for commodity derivative contracts on
  the previously reported 2002 audited consolidated financial statements that
  have an audited report dated May 13, 2003 is as follows:


F-12

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31,
2003, 2002 and 2001

|3. | RESTATEMENTS (continued)
|-- | ------------------------

|                                                               |            |             | 
|-------------------------------------------------------------- | ---------- | ----------- | 
|Deficit, as at December
      31, 2002, as previously reported | $          | 105,684,858 | 
|Effect of restatement
      on loss for the year               | 16,687,953 |            
|Effect of restatement
      on prior year losses               |            | 2,128,961   | 
|                                                               |            |             | 
|Deficit, as at December
      31, 2002, as restated            | $          | 124,501,772 | 
|                                                               |            |            

Balance sheet adjustments


|                              |   | Current    |             |             | Other       |  |   | Current    |  |   | Other      | 
|----------------------------- | - | ---------- | ----------- | ----------- | ----------- |  | - | ---------- |  | - | ---------- | 
|Assets                        |   | Assets     | Liabilities | Liabilities
|                              |   |            |             |             |             |  |   |           
|Balance at December 31, 2002, |   |            |             |             |             |  |   |            |  |   |            | 
|as
      previously reported  | $ | 17,286,823 |             | $           | 157,315,585 |  | $ | 30,473,172 |  | $ | 42,227,787 | 
|Restatements                  |   |           |             |             | 7,765,576   |  |   | 6,410,080  |  |   | 20,172,410 | 
|                              |   |            |             |             |             |  |   |            |  |   |            | 
|Balance at December 31, 2002, |   |            |             |             |             |  |   |            |  |   |            | 
|as restated                   | $ | 17,286,823 |             | $           | 165,081,161 |  | $ | 36,883,252 |  | $ | 62,400,197 | 
|                              |   |            |             |             |             |  |   |            |  |   |            | 

Loss for the year and loss
    per share


|Net loss for 2002, as previously
      reported  | $           | (39,771,859 | )
|------------------------------------------------ | ----------- | ----------- | -
|Restatement of non-hedge derivative
      loss   | (17,728,125 | )          
|Restatement of mining revenue                    |             | 1,040,172   |  
|                                                 |             |            
|Net loss for 2002, as restated                   | $           | (56,459,812 | )
|                                                 |             |            
|                                                 |             |             |  
|Net loss per share, as previously
      reported | $           | (0.47       | )
|Per share effect of restatements                 |             | (0.20       | )
|                                                 |             |            
|Net loss per share, as restated                  | $           | (0.67       | )
|                                                 |             |            

|    |                                       | 
|--- | ------------------------------------- | 
|(a) | Write
    down of plant and equipment

The Companys Uruguay mill assets
  had previously been amortized over a 20-year period and its mine equipment had
  been amortized over a 10-year period. These amortization periods exceeded life
  of mine estimates at the date of acquisition in 1998, estimated at 5 to 7 years.
  Accordingly, amortization expense of these assets has been increased by $3,586,279
  and $3,496,465 for the years ended December 31, 2001 and 2000, respectively,
  and by $3,954,016 for fiscal years 1999 and 1998 through a cumulative adjustment
  of the deficit as at December 31, 1999.


Management further concluded that
  the carrying values of its Venezuelan Albino project plant and equipment assets
  were overstated based upon a recoverability analysis, using assumptions and
  information existing at December 31, 2001, including information that certain
  tools, equipment and supplies would have to be purchased because of vandalism
  and theft. Accordingly, management has retroactively written down these assets
  by $5,255,689 to record the impairment in 2001.


F-13

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002
and 2001

|3. | RESTATEMENTS
      (continued)
|-- | ------------------------------
|   |                               
|   | (b)                           

As a result of detailed formal life
    of mine analyses for each of the Companys mineral properties, management
    concluded that the undiscounted cash flows from ongoing operations at the
    Companys Venezuelan Albino and Tomi Properties, determined using assumptions
    and information existing at December 31, 2001, were insufficient to support
    the recovery of the respective carrying values. Accordingly, management retroactively
    reduced the December 31, 2001 carrying values of the two mineral properties
    by $13,337,942 and $6,408,145, respectively, with a corresponding charge
    to operations in 2001 to reflect the year in which impairment should have
    been recognized.


| | (c) | Misstatement of expenses
| | --- | ------------------------

Management determined that certain
  expenditures incurred by the Company had not been reflected within the financial
  statements in the year in which the underlying transaction occurred. Accordingly,
  general and administrative expenses have been reduced by $199,603 and increased
  by $125,367 for the years ended December 31, 2001 and 2000, respectively and
  increased by $176,599 for the fiscal years 1999 and prior through adjustment
  of the deficit as at December 31, 1999.


| | (d) | Foreign exchange conversion
      gain (loss)
| | --- | ---------------------------------------------

Upon review of the Companys
  foreign subsidiaries management confirmed that each of the Companys majority
  owned subsidiaries were fully integrated foreign operations with their parent
  throughout the reporting period. Accordingly, from the date of acquisition,
  each of these subsidiaries should be translated into Canadian dollars using
  the temporal method. In the prior years the Company had accounted for its Minera
  San Gregorio S.A. (Stel BVI Inc.) and Bolivar Goldfields A.V.V. subsidiaries
  as being self-sustaining operations. Accordingly, the total adjustment required
  to reflect the appropriate foreign exchange translation, since their respective
  acquisitions, was to reduce and eliminate the previously recorded Cumulative
  Translation Account by $4,675,924 and $344,513 as at December 31, 2001 and 2000,
  respectively. This restatement reduced net income by $2,819,933 in fiscal 2001
  and increased net income by $39,581 in fiscal 2000.


| | (e) | Gold loan conversion
| | --- | --------------------

During fiscal 2001, the Company converted
  its gold loan into a cash loan. Upon settlement, management recorded a gain
  in excess of the amount that should have been recorded. Accordingly, at December
  31, 2001, management increased the long-term debt payable and reduced the conversion
  gain previously recorded by $1,529,364, respectively.


F-14

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CRYSTALLEX INTERNATIONAL
      CORPORATIONNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002 and 2001

|3. | RESTATEMENTS
      (continued)
|-- | ------------------------------
|   |                               
|   | (f)                           

During fiscal 2001,
      upon the acquisition of the 79.4% interest in El Callao, the Company recorded
      the acquisition using the purchase accounting method. Upon review, management
      has revised its purchase equation, which resulted in a reduction in the
      fair value assigned to both the plant and equipment acquired and the minority
    interest share therein by $8,738,994, respectively.


As a result of the inappropriate
    value being assigned to plant and equipment, the depletion expense charged
    to the statement of operations was overstated. Accordingly, depletion expense
  has been reduced by $425,769 for the year ended December 31, 2001.


Furthermore, as the
    original purchase equation assigned an overstated net asset value to the minority
    shareholders interest, the Company subsequently overstated the amount
    of the minority shareholders share of the post acquisition net loss
    incurred by El Callao in 2001. Accordingly, at December 31, 2001 an adjustment
    of $1,130,412 was recorded to correct the minority interests share of
    the loss.


| | (g) | Write down of investment
| | --- | ------------------------

During 2001 management determined
    that the decline in the market value of the shares in a long-term investment
    to be other than temporary. Although the market value declined below the carrying
    value of the investment, management did not reflect this other than temporary
    impairment in its previously issued 2001 consolidated financial statements.
    Accordingly, management retroactively recorded an impairment loss of $2,003,338
    in 2001.


| | (h) | Reversal of capitalized
      costs
| | --- | -----------------------------------

During fiscal 2001 the Company capitalized
    amounts to mineral properties that should have been charged to the statement
    of operations. Accordingly, as at December 31, 2001 mineral properties has
    been reduced by $1,188,225 while general and administrative expenses for the
    fiscal 2001 year have been increased by an equal amount.


| | (i) | Equity component of convertible
      notes
| | --- | -------------------------------------------

Upon issuance of convertible notes,
    the net proceeds received are allocated between the liability and equity components
    of the notes. As at December 31, 2001, the equity component of the convertible
    notes has been increased by $1,347,163, and long-term debt has been decreased
    by an equal amount, as a result of a recalculation of these components.


F-15

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CRYSTALLEX INTERNATIONAL
      CORPORATIONNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002 and 2001

|3. | RESTATEMENTS
      (continued)
|-- | ------------------------------
|   |                               
|   | (j)                           

Written call options


Upon re-examination
      of the accounting for the Companys written call options, management
      determined that call option contracts outstanding at the end of 1999, 2000
      and 2001 had not been properly accounted for and as a result the Company
      had reflected premiums received in income on the date of receipt and had
      not reflected the amount of the related mark to market adjustments for
      changes in estimated fair values within the consolidated financial statements.
      Accordingly, management has reclassified premiums received, previously
      reported in revenue, as a liability (deferred credit) on the balance sheet
      and has recorded the mark to market adjustments to the recorded liabilities
      for options outstanding at the end of each year. The change in fair value
    of the liability has been recorded as a non-hedge derivative (loss) gain.


Fixed forward contracts


Previously the Company had treated
    fixed forward contracts as transactions qualifying as hedges for accounting
    purposes and had recorded the contracts off balance sheet until the settlement
    date at which time the contract settlement amount was recorded in mining revenue.
    Upon re-examination, it has been determined that certain transactions with
    the counterparty had modified the fixed forward contracts prior to their maturity
    resulting in a reassessment of hedge designation and effectiveness. Consequently,
    the Company has redesignated its forward contracts as trading activity and
    accordingly has recorded the estimated fair values of these contracts on the
    balance sheets and related mark to market restatements for changes in estimated
    fair values in the statements of operations as non-hedge derivative (loss)
    gain. Mining revenue has also been restated to reclassify settlement gains
    and losses on fixed forward contracts as non-hedge gains or losses.


As a result, net income for the
    year ended December 31, 2001 has been reduced by $5,902,087 and net income
    for the year ended December 31, 2000 has been increased by $4,957,317, relating
    to the restatement for written call option premiums and the impact on previously
    reported mark to market adjustments. Furthermore, mining revenue for the years
    ended December 31, 2001 and 2000 have been restated to reflect the reclassification
    of settlement gains and losses on fixed forward contracts as non-hedge derivative
    (loss) gain. These restatements also result in an increase in the current
    and long-term deferred credit and the recording of a current and long-term
    deferred charge as at December 31, 2001 of $2,651,882, $13,873,462, $4,234,427
    and $10,161,956, respectively.


|4. | PRODUCTION INVENTORIES
|-- | ----------------------



|                            |   | **2003**  |  |   | **2002**  | 
|--------------------------- | - | --------- |  | - | --------- | 
|                            |   |           |  |   |           | 
|Gold in doré                | $ | 847,800   |  | $ | 870,186   | 
|Gold in process             |   | 208,375   |  |   | 663,882   | 
|Stockpiled ore              |   | 230,994   |  |   | 141,117   | 
|Consumables and spare parts |   | 976,598   |  |   | 6,869,735 | 
|                            |   |           |  |   |           | 
|                            | $ | 2,263,767 |  | $ | 8,544,920 | 
|                            |   |           |  |   |           | 

F-16

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO
        THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002 and 2001

|5. | INVESTMENT
|-- | ----------

The Company acquired the common
      shares of a publicly listed company in prior years, with the intention
      of holding these shares as a long-term investment. These shares were disposed
      of during 2003. The quoted market value of the long-term investment at
    December 31, 2002 was $816,000.


|6. | PROPERTY, PLANT AND EQUIPMENT
|-- | -----------------------------

The components of
    property, plant and equipment at December 31, are as follows:


|                               |   | 2003                                          | 
|------------------------------ | - | --------------------------------------------- | 
|                               |   |                                               | 
|                               |   | Cost,
          NetofWrite-down               | 
|                               |   |                                               | 
|Plant and equipment            | $ | 21,043,180                                    | 
|Mineral properties             |   | 117,093,989                                   | 
|Deferred exploration and       |   |                                               | 
|development
      expenditures |   | 5,980,277                                     | 
|                               |   |                                               | 
|                               | $ | 144,117,446                                   | 
|                               |   |                                               | 
|                               |   |                                               | 
|                               |   |                                              
|                               |   | **Cost,
      Net
      of
      Write-down** | 
|                               |   |                                               | 
|Plant and equipment            | $ | 60,435,141                                    | 
|Mineral properties             |   | 126,937,198                                   | 
|Deferred exploration and       |   |                                               | 
|development
      expenditures |   | 10,232,150                                    | 
|                               |   |                                               | 
|                               | $ | 197,604,489                                   | 
|                               |   |                                               | 

Costs of mineral properties represent
  acquisition costs, net of write-downs, related to the following:


|                                                       |   | 2003        |   |   | 2002        |  
|------------------------------------------------------ | - | ----------- | - | - | ----------- | -
|                                                       |   |             |   |   |             |  
|                                                       |   |             |   |   |             |  
|Albino 1 Concession                                    | $ | 7,338,381   |   | $ | 7,338,381   |  
|Bolivar Goldfields Properties                          |   | 15,699,956  |   |   | 15,699,956  |  
|Cristinas Concessions                                  |   | 94,055,652  |   |   | 81,004,253  |  
|El Callao Properties                                   |   |            |   |   | 19,478,031  |  
|Santa Elena, San Miguel and Carabobo
      Concessions |   |            |   |   | 3,416,577   |  
|                                                       |   |             |   |   |             |  
|                                                       |   | 117,093,989 |   |   | 126,937,198 |  
|Less: Accumulated depletion                            |   | (5,417,228  | ) |   | (5,082,643  | )
|                                                       |   |             |   |   |             |  
|                                                       | $ | 111,676,761 |   | $ | 121,854,555 |  
|                                                       |   |             |   |   |             |  

Deferred exploration and development expenditures are
        not re-characterized as costs of mineral properties once production has
        commenced.





F-17

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Back to Contents

CRYSTALLEX
  INTERNATIONAL CORPORATION

NOTES
  TO THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002
  and 2001

|6. | PROPERTY, PLANT
      AND EQUIPMENT (continued)
|-- | -----------------------------------------------

Annually, the Company reviews the carrying amounts of all of its producing
      and non-producing properties and their related plant and equipment. The results
      of this review revealed that the carrying values for the El Callao Properties
      and the Santa Elena, San Miguel and Carabobo Concessions were in excess of
      their estimated future undiscounted net cash flows. As a result, the Company
      recorded a write-down to the El Callao mineral properties and deferred exploration
      and development expenditures of $18,832,345, and to the Santa Elena, San Miguel
      and Carabobo mineral properties and deferred exploration and development expenditures
      of $4,182,076. In total, write-downs amounting to $23,014,421 (2002  $2,134,678;
    2001  $25,001,776) were included within the Statement of Operations.


|Albino 1 Concession
|-------------------

The Company, through its
    subsidiaries, owns a 100% interest in the Albino 1 concession in Bolivar State,
    Venezuela. A 1% Net Smelter Return Royalty is payable to the Venezuelan Ministry
    of Energy and Mines (MEM) from the proceeds of gold production.


|Bolivar Goldfields
    Properties
|---------------------------------

The Company owns all of
    the outstanding share capital of Bolivar Goldfields A.V.V. This includes the
    Tomi concession, Revemin mill and exploration lands in Venezuela. The exploration
    lands include the Dividival I and II, the Belen II, and the Marwani 1,2,5,6,7,9,
  and 11 concessions in the El Callao greenstone belt in Venezuela.


The Company has not yet
    submitted feasibility studies for the Marwani 1,2,5,6,7,9, and 11 concessions
    but has requested extensions of time for their presentation. If the extension
    is not granted the concession rights to the Marwani property could be revoked.
    The Company believes the extensions will be granted as it is common practice
  to grant such extensions; however, there is no assurance of this.


|Cristinas Concessions
|---------------------

In November 2001, the Corporacion
    Venezolana de Guayana (CVG) terminated a contract with a third party
    for the exploitation of the Las Cristinas deposits. In March 2002, the Venezuelan
    Ministry of Energy and Mines (MEM) passed a resolution repossessing
    the Cristinas Concessions on behalf of the Republic of Venezuela which in turn
    declared the underlying deposits reserved for the Republic of Venezuela and
    authorized the MEM to contract the direct exploitation of the area to the CVG.
    Subsequently, the MEM and the CVG entered into an agreement for the development
    of the deposits, authorizing the CVG to enter into a mine operating contract
  with a third party.


On September 17, 2002, the
    Company entered into a non-assignable mining agreement (the Agreement)
    with the CVG, acting under the authority of the MEM, pursuant to Venezuelan
    mining law, under which the Company has been granted the exclusive right to
    explore, develop and exploit the Las Cristinas 4, 5, 6 and 7 gold deposits including
    the commercialization and sale of gold. The Agreement provides to the Company
    the full right to develop and exploit the Cristinas deposits and, as a result
    of entering into the Agreement, the Company has discontinued previous legal
    proceedings to confirm its title rights to the Cristinas 4 and 6 concessions
  (Note 15).


F-18

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CRYSTALLEX
  INTERNATIONAL CORPORATION

NOTES
  TO THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002
  and 2001

|6.                                    | PROPERTY, PLANT
      AND EQUIPMENT (continued)
|------------------------------------- | -----------------------------------------------
|                                      |                                                
|Cristinas Concessions
    (continued)

The aggregate cost incurred by the Company to December 31, 2003 to obtain
      the right to exploit the area is $94,055,652, represented by $72,184,179 of
      payments in cash and $21,871,473 made through the issuance of common shares
      of the Company. Costs are comprised of property payment and finders
    fees of $46,743,852 ($32,280,068 cash; and $14,463,784 through shares) and
      professional fees and related expenses of $47,311,800 ($39,904,111 cash; and
      $7,407,689 through shares). Share issuances are valued at the prior 5 day
      weighted average trading price for the common shares on the American Stock
      Exchange. The preceding amounts include payments to related parties (law firms,
      partners of whom are directors of the Company - Note 10) of $3,895,582 during
      the year ended December 31, 2003 (2002  $13,144,975; 2001  $3,129,283) and
      travel and administrative costs of $454,007 during the year ended December
    31, 2003 (2002  $409,489; 2001  $325,728).


|El Callao Properties
|--------------------

By an agreement with Bema
    dated September 12, 2000 and concurrently with the completion of the February
    27, 2001 acquisition of El Callao Mining Corp. (ECM), the Company
    acquired 79.4% of the outstanding shares of ECM and, from Bema, certain assets
    related to ECM. As a result of the acquisition, the Company now controls the
  Lo Increible project in Venezuela comprised of the following:


| | Central Property
| | ----------------

Subsequent to the acquisition
    of ECM by the Company, ECM, through its wholly owned subsidiary, ECM Venco Ltd.,
    and Corporacion Vengroup S.A. (Vengroup), the owner of the remaining
    49% interest in the El Callao properties, agreed to waive certain obligations
    with respect to the development of the La Victoria concession in the Central
    Property, including the requirement of a first feasibility study in order to
    allow the Company to commence production. As consideration, the Company paid
    the last two payments related to the La Victoria concessions (US$2,150,000)
    under the terms of the original purchase agreement for the El Callao properties.


ECM has the right to acquire
    up to an additional 9% interest in the Central Property by making payments to
    Vengroup equivalent to the net present value of a 9% interest in the evaluated
    deposit and up to an additional 10% interest by making payments to Vengroup
  equivalent to a 3% net smelter return royalty.


| | Surrounding Ground
| | ------------------

The mining rights to the
    Surrounding Ground, held by a 70% owned indirect subsidiary of ECM, required
    ECM to make an initial payment of US$500,000 (US$250,000 of which has been paid
    to date) and to fund minimum exploration expenditures of US$3,000,000 over five
  years from the time certain environmental permits are granted.


As at December 31, 2003,
    ECM has expended US$1,182,626 (December 31, 2002  US$1,026,522) towards the
    exploration commitment but is still awaiting the receipt of certain environmental
  permits in order to further its exploration activities on the Surrounding Ground.


F-19

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Back to Contents

CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO THE CONSOLIDATED
  FINANCIAL STATEMENTSDecember 31, 2003, 2002
  and 2001

|6. | PROPERTY, PLANT
    AND EQUIPMENT (continued)   
|-- | ------------------------------------------------
|   | Santa Elena, San Miguel and Carabobo Concessions

The Company entered into a joint venture agreement with Associacion Cooperative
  Minera del Sur R.L. (ACOMISUR), a mining cooperative, regarding
  the Santa Elena, San Miguel and Carabobo properties, all located in Bolivar
  State, Venezuela. Under this agreement, the Companys Venezuelan subsidiary
  owns 80% of the joint venture and ACOMISUR owns 20%, with the Companys
  subsidiary being the perator. During the year ended December 31, 2003, the
  carrying value of this property was written off.


|7.DEFERRED
    FINANCING FEES
|-----------------------------

Deferred financing
       fees of $194,598, net of accumulated amortization of $199,133 (December
      31,
  2002  $2,162,868, net of accumulated amortization of $312,647) relate to costs
       incurred in the issuance of convertible notes and for a non-recourse credit

  facility.


During the year ended December
      31, 2003, the remaining unamortized deferred financing fees of $1,840,836
      that related to convertible notes that were converted during the year,
      were treated as a reduction of the associated share capital value assigned
    to the common shares issued on conversion of the respective notes.


|8.LONG-TERM
    DEBT
|--------------------

| |                                               |   |            |      |   |           
| | --------------------------------------------- | - | ---------- | ---- | - | ----------
| | 2003                                          |   |            | 2002
| |                                               |  
| | Bank loans                                    | $ | 9,708,750  |      | $ | 16,916,484
| | Convertible notes                             |   |           |      |   | 17,140,049
| |                                               |   |            |      |   |           
| |                                               |   | 9,708,750  |      |   | 34,056,533
| | Less: Current portion of long-term
      debt |   | (1,335,344 | )    |   | (7,850,256
| |                                               |   |            |      |   |           
| |                                               | $ | 8,373,406  |      | $ | 26,206,277
| |                                               |   |            |      |   |           

Bank loans


On October 12, 2001 an amended and restated loan agreement was signed between the Companys subsidiary, Minera San Gregorio S.A., and the Standard Bank London Limited (SBL). The loan, in the amount of U.S $2,500,000, which was to mature on October 15, 2004, was secured by a guarantee of the Company, and bore interest at the LIBOR rate plus 2% per annum. The loan agreement also restricted the Companys ability to enter into agreements relating to the sale or purchase of gold. This loan was settled in fully during 2003.


On August 10, 2000, the Company, together with its subsidiary Mineras Bonanza C.A., entered into a Credit Agreement with the SBL. The loan, which was subsequently amended by a First Amendment to the Credit Agreement in the amount of U.S. $8,500,000, matures on January 15, 2006, is secured by charges against the Venezuelan mining properties of the Company (save and except the Lo Increible properties), a charge against the Companys Revemin mill and a pledge of the securities of certain of the Companys subsidiaries, and bears interest at the LIBOR rate plus 2.5% per annum. The credit agreement also imposes restrictions on the Companys ability to enter into metal trading agreements.


F-20

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Back to Contents

CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO THE CONSOLIDATED
  FINANCIAL STATEMENTSDecember 31, 2003, 2002
  and 2001

|8. | LONG-TERM DEBT (continued)
|-- | --------------------------

Bank loans (continued)


Certain loan repayments have been made by the issuance of Crystallex common shares
(Note 12). These shares are subject to an orderly disposition agreement with
SBL, which amongst other conditions, specifies that any gain/loss on final disposition
of the shares issued is for the Companys account. Any ultimate gain is
to be applied to further loan repayments or settling of derivative contracts.
As at December 31, 2003, SBL had 2,099,734 common shares issued in relation to
the Agreement on which there exists an unrealized gain of approximately U.S.
$4,000,000.


Principal payments due on the bank loan are as follows:


| | 2004 |  | $ | 1,335,344 | 
| | ---- |  | - | --------- | 
| | 2005 |  |   | 5,704,600 | 
| | 2006 |  |   | 2,668,806 | 
| |      |  |   |           | 
| |      |  | $ | 9,708,750 | 
| |      |  |   |           | 

Convertible notes


The Company has issued convertible
    notes under various note indentures. Upon issuance of the notes, the net proceeds
    received were allocated between the liability and equity components of the
    notes. The liability component represented the present value of the notes
    discounted using the interest rate that would have been applicable to non-convertible
    debt. The equity component represented the present value of the interest payments,
    which the Company could settle through the issuance of cash or shares, discounted
    at the same rate as the liability component (the interest component) and the
    right of the holders to convert the principal of the debt into common shares,
    determined as the residual amount at the date of issuance of the notes. Over
    the term of the notes the liability and the interest components were accreted
    to their face value. As at December 31, 2002, the Company had the following
    convertible notes outstanding, which during 2003 were converted into common
    shares:


|(a) | Notes with an aggregate
      principal amount of US$11,200,000 which were scheduled to mature on September
      25, 2005, which bore interest at 4% per annum and which were convertible
      into common shares of the Company at the option the holder. The agreed upon
      conversion price of the notes was equal to the lower of US$2.25 per common
      share or 95% of the current market price of the common shares on the date
      immediately prior to the conversion.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(b) | A note with a principal
      amount of US$2,200,000 which matured on September 30, 2003, bore interest
      at 5% per annum was convertible into common shares of the Company at the
      option of the holder. The agreed upon conversion price of the notes was
      equal 95% of the current market price of the common shares on the date of
      the conversion.                                                                                                              

F-21

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Back to Contents

CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO THE CONSOLIDATED
  FINANCIAL STATEMENTSDecember 31, 2003, 2002 and 2001

|9. | SHARE CAPITAL
|-- | -------------



|                                                        |   | 2003        |  |   | 2002        | 
|------------------------------------------------------- | - | ----------- |  | - | ----------- | 
|                                                        |   |             |  |  
|                                                        |   |             |  |   |             | 
|Authorized                                              |   |             |  |   |             | 
|Unlimited common shares, without par value              |   |             |  |   |             | 
|Unlimited Class A preference shares, no par value     |   |             |  |   |             | 
|Unlimited
    Class B preference shares, no par value |   |             |  |   |             | 
|Issued                                                  |   |             |  |   |             | 
|135,403,523 Common Shares (2002 - 91,722,278)           | $ | 257,149,521 |  | $ | 193,349,000 | 
|                                                        |   |             |  |   |             | 

Warrants


As at December 31, 2003, Common Share purchase warrants were outstanding enabling
the holders to acquire common shares as follows:


|                        |  | Numberof
    Shares |  | WeightedAverageRemainingContractualLife
    (Years) | 
|----------------------- |  | ------------------- |  | --------------------------------------------------- | 
|Range of Exercise Price
|                        |  |                     |  |                                                     | 
|$1.60 to $2.28          |  | 4,662,194           |  | 1.33                                                | 
|$2.29 to $3.34          |  | 2,076,899           |  | 1.16                                                | 
|$3.35 to $4.69          |  | 13,303,679          |  | 1.70                                                | 
|                        |  |                     |  |                                                     | 
|                        |  | 20,042,772          |  |                                                     | 
|                        |  |                     |  |                                                     | 

During the year, the Company extended by one year the terms of certain Common Share purchase warrants, previously issued as part of debt financing, that were coming to maturity. To reflect the value of the benefit conferred to the warrant holders as a result of the extension, a charge of $825,481 was made directly against retained earnings, and contributed surplus was increased by the same amount.


Stock options


The Company has a stock option plan that provides for the granting of options to executive officers, directors, employees and service providers of the Company.  Under the stock option plan, the exercise price of each option equals the closing price of the Companys stock on the trading day immediately preceding the date of the grant.  Stock options granted to service providers and employees, executive officers, and directors have a life of two, five and ten years, respectively. Unless otherwise stated, all stock options granted vest immediately.


F-22

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CRYSTALLEX INTERNATIONAL
CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  December 31, 2003, 2002 and 2001



|9. | SHARE CAPITAL (continued)
|-- | -------------------------

The
      following table is a summary of the status of stock options outstanding
      at December 31, 2003:


|                           | Outstanding and Exercisable
    Options |                     
|-------------------------- | --------------------------------------- | --------------------
|                           |                                         |                     
|Range of    Exercise Price |                                         | Number
    of Shares
|                           |                                         |                     
|$0.85 to $1.00             |                                         | 1,672,500           
|$1.41 to $1.75             |                                         | 1,971,000           
|$2.00 to $3.00             |                                         | 5,322,500           
|                           |                                         |                     
|                           |                                         | 8,966,000           
|                           |                                         |                     

A summary of the status of the stock option plan as at December 31, 2003, 2002
and 2001 and changes during each year ended on those dates follows:


|                                                                               | 2003      |           | 2002 |           | 2001                   |          
|------------------------------------------------------------------------------ | --------- | --------- | ---- | --------- | ---------------------- | ---------
|                                                                               |           |           |     
|                                                                               |           |           |      |           | Weighted
      Average |          
|                                                                               | Number    | Exercise  |      | Number    | Exercise               | Number   
|                                                                               | of Shares | Price     |      | of Shares | Price                  | of Shares
|                                                                               |           |           |      |           |                        |          
|Outstanding and exercisable,beginning of year                                  |           | 6,952,500 |      | $         | 1.76                   |          
|Granted - Employees                                                            |           | 2,248,500 |      |           | 2.56                   |          
|Granted - Non Employees                                                        |           | 250,000   |      |           | 2.12                   |          
|Exercised                                                                      |           | (270,000  | )    |           | 1.64                   |          
|Cancelled                                                                      |           | (215,000  | )    |           | 1.85                   |          
|                                                                               |           |           |      |           |                        |          
|Outstanding and exercisable,end of year                                        |           | 8,966,000 |      | $         | 1.97                   |          
|                                                                               |           |           |      |           |                        |          
|Weighted
        average fair value of options
        granted during the year | $         | 1.92      |      |           |                        |          
|                                                                               |           |           |      |           |                        |          

Supplemental information for stock-based
compensation


Effective January 1, 2002, in accordance with
CICA Handbook Section 3870 Stock-Based Compensation and Other Stock-Based
Payments, pro forma information regarding net loss and net loss per share
is to be determined and disclosed as if the Company had accounted for its employees stock
options under the fair value method. The fair value for these options was estimated
at the date of grant using a Black-Scholes option pricing model with the following
weighted average assumptions: risk-free interest rate of 4.04% (2002  4.22%),
dividend yield of nil (2002  nil), volatility factor of 108% (2002  75%),
and a weighted-average expected life of the options of 3.95 years (2002 - 3.75
years).


F-23

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Back to Contents

CRYSTALLEX INTERNATIONAL
      CORPORATION

NOTES TO
        THE CONSOLIDATED FINANCIAL STATEMENTS December 31, 2003, 2002 and 2001

|9. | SHARE CAPITAL (continued)
|-- | -------------------------

Supplemental
                  information for stock-based compensation (continued)


The
                following table presents the net loss and net loss per share for the
                two years ended December 31, 2003 had the Company recorded stock options
                as compensation expense on the date of grant, which corresponds to the
                date on which the options automatically vest.


|                                 |   | 2003        |   |                     | 2002        |  
|-------------------------------- | - | ----------- | - | ------------------- | ----------- | -
|                                 |   |             |   |                     |             |  
|                                 |   |             |   | (Restated  Note 3) |            
|Net loss                         | $ | (82,053,852 | ) | $                   | (56,459,812 | )
|Incremental compensation expense |   | (4,273,069  | ) |                     | (404,979    | )
|                                 |   |             |   |                     |             |  
|Pro forma net loss               | $ | (86,326,921 | ) | $                   | (56,864,791 | )
|                                 |   |             |   |                     |             |  
|Pro forma basic loss per share   | $ | (0.74       | ) | $                   | (0.67       | )
|                                 |   |             |   |                     |             |  

Financing Transactions


Fiscal 2003 Activities


On March 5, 2003, the Company completed a private placement of 2,562,500 special
warrants at a price of $1.60 per special warrant for aggregate proceeds of $4.1
million. Each special warrant entitles the holder, upon exercise and without
payment of additional consideration, to acquire one Common Share and one-half
of one common share purchase warrant of the Company. Each whole purchase warrant
is exerciseable for one Common Share until March 5, 2005 at a price of $2.00
per share. The special warrants were deemed to have been exercised in accordance
with their terms on July 6, 2003.


On March 14, 2003, the Company arranged a U.S.$3.0 million debt financing which
closed in three tranches on March 14, 2003 (U.S.$1.5 million), May 2, 2003 (U.S.$1.0
million) and May 15, 2003 (U.S.$0.5 million). Under the terms of the transaction,
the Company issued U.S.$3.0 million principal amount of non-interest bearing
promissory notes due August 11, 2003, September 29, 2003 and October 12, 2003,
respectively, common share purchase warrants exerciseable for 300,000 Common
Shares until May 2, 2005 at an exercise price of U.S.$1.32 per share and common
share purchase warrants exerciseable for 150,000 Common Shares until May 15,
2005 at an exercise price of U.S.$1.27 per share. The notes were subsequently
exchanged for convertible notes due August 27, 2005. The convertible notes are
non-interest bearing until the occurrence of an event of default (after which
they bear interest at the rate of 4% per annum) and are convertible at the option
of the holder into a specified number of Common Shares. The Company also issued
common share purchase warrants exerciseable for 150,000 Common Shares until August
27, 2005 at an exercise price of U.S.$3.61 per share as part of the debt exchange
transaction. On October 7, 2003, the convertible notes were converted into 1,363,574
Common Shares in accordance with their terms.


F-24

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Back to Contents

CRYSTALLEX INTERNATIONAL
      CORPORATION

NOTES TO
        THE CONSOLIDATED FINANCIAL STATEMENTS December 31, 2003, 2002 and 2001

|9. | SHARE CAPITAL
                    (continued)
|-- | ---------------------------------------------

Financing
        Transactions (continued)


Fiscal
                           2003 Activities (continued)


On May 9, 2003, the Company completed a private placement of 2,400,000 special warrants at a price of $1.25 per special warrant for aggregate proceeds of $3.0 million. Each special warrant entitles the holder, upon exercise and without payment of additional consideration, to acquire one Common Share and one-half of one common share purchase warrant of the Company. Each whole purchase warrant is exerciseable for one Common Share until May 9, 2005 at a price of $1.60 per share. The special warrants were deemed to have been exercised in accordance with their terms on September 10, 2003.


On June 20, 2003, the Company completed a private placement of 5,500,000 special
warrants at a price of $1.25 per special warrant for aggregate proceeds of $6.9
million. Each special warrant entitles the holder, upon exercise and without
payment of additional consideration, to acquire one Common Share and one-half
of one common share purchase warrant of the Company. Each whole purchase warrant
is exerciseable for one Common Share until June 20, 2005 at a price of $1.60
per share. The special warrants were deemed to have been exercised in accordance
with their terms on October 21, 2003.


On August 29, 2003, the Company completed a private placement of 4,545,455 special
warrants at a price of U.S.$2.20 per special warrant for aggregate proceeds of
U.S.$10.0 million. Each special warrant entitles the holder, upon exercise and
without payment of additional consideration, to acquire one Common Share per
special warrant. The special warrants were deemed to have been exercised in accordance
with their terms on September 16, 2003. As part of the transaction, the Company
also issued common share purchase warrants to acquire 2,272,727 Common Shares.
Each whole purchase warrant is exerciseable for one Common Share until September
16, 2006 at a price of U.S.$2.75 per share.


On September 8, 2003, the Company issued 12,800,000 special warrants at a price
of U.S.$2.20 per special warrant for aggregate proceeds of U.S.$28.2 million.
Each special warrant entitles the holder, upon exercise and without payment of
additional consideration, to acquire one Common Share and one-half of one warrant.
Each whole warrant is exerciseable for one Common Share until September 8, 2006
at a price of U.S.$2.75 per share. Subsequent to the year end, all of the special
warrants were deemed to have been exercised in accordance with their terms on
January 9, 2004.


Fiscal 2002 Activities


On October 8, 2002, the Company issued 52,500 special warrants under a private
placement financing at a price of $3.02 for aggregate net proceeds of $158,550.
Each special warrant entitles the holder to acquire, without payment of any additional
consideration, one Common Share in the capital of the Company.


On November 26, 2002, the Company issued 2,200,000 special warrants under a private
placement financing at a price of $2.15 for aggregate net proceeds of $4,398,900,
net of issuance expenses of $331,100. Each special warrant entitles the holder
to acquire, without payment of any additional consideration, one Common Share
in the capital of the Company.


F-25

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Back to Contents

CRYSTALLEX INTERNATIONAL CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL
      STATEMENTS
December 31, 2003, 2002 and 2001

|9. | SHARE CAPITAL (continued)
|-- | -------------------------

Financing
  Transactions (continued)


Fiscal 2001 Activities


On December 24, 2001, the Company issued 3,111,111 special warrants under
                    a private placement financing at a price of $2.25 for aggregate net proceeds
                    of $6,861,977, net of issuance expenses of $138,023. Each unit consisted
                    of one Common Share, and one Common Share purchase warrant. Each common
                    share purchase warrant entitled the holder to acquire from the Company,
                    for a period of two years, at a price of $3.00 per warrant, one additional
                    common share. During 2003, all of these common share purchase warrants
  were exercised.


Loss per common share


The following table outlines the calculation of the basic loss per common share:


|                                          |   | 2003        |   |                     | 2002        |                     |   | 2001        |  
|----------------------------------------- | - | ----------- | - | ------------------- | ----------- | ------------------- | - | ----------- | -
|                                          |   |             |   |                     |             |                     |   |             |  
|                                          |   |             |   | (Restated  Note 3) |             | (Restated  Note 3) |  
|Numerator for basic loss
    per          |   |             |   |                     |             |                     |   |             |  
|common
    share:                         |   |             |   |                     |             |                     |   |             |  
|Loss
    from continuing operations       |   |             |   |                     |             |                     |   |             |  
|attributable
    to common shareholders   | $ | (78,026,642 | ) | $                   | (52,721,972 | )                   | $ | (34,416,262 | )
|Benefit
    conferred to warrant holders  |   | (825,481    | ) |                     |            |                     |   |            |  
|                                          |   |             |   |                     |             |                     |   |             |  
|Loss
    from continuing operations       |   |             |   |                     |             |                     |   |             |  
|attributable
    to common shareholders   | $ | (78,852,123 | ) | $                   | (52,721,972 | )                   | $ | (34,416,262 | )
|                                          |   |             |   |                     |             |                     |   |             |  
|Denominator for basic loss
    per common |   |             |   |                     |             |                     |   |             |  
|share
    adjusted weighted average      |   |             |   |                     |             |                     |   |             |  
|number
    of shares outstanding          |   | 118,309,198 |   |                     | 84,441,287  |                     |   | 69,117,738  |  
|                                          |   |             |   |                     |             |                     |   |             |  

Shareholder Rights Plan


Effective March 10, 1997 (the Record Date), the Company adopted a shareholder rights plan (the Plan). The rights issued under the Plan will expire at the close of the Companys annual meeting in 2007 (the Expiration Time), unless earlier redeemed or exchanged by the Company. The Plan was re-ratified by the shareholders at the Companys
  2003 annual meeting.


Pursuant to the Plan, the Board of Directors declared a distribution of one right (a Right) for each outstanding Common Share of the Company to shareholders of record at the close of business on the Record Date and authorized the issuance of one Right for each Common Share issued after the Record Date and prior to the Separation Time (described below) and the Expiration Time. 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) 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 Plan.


F-26

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CRYSTALLEX INTERNATIONAL CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL
      STATEMENTS
  December 31, 2003, 2002 and 2001

|9. | SHARE CAPITAL (continued)
|-- | -------------------------

Shareholder Rights Plan (continued)


In
        order to constitute a Permitted Bid, an offer must be made
        in compliance with the 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 10 business day period.


|10. | RELATED PARTY TRANSACTIONS
|--- | --------------------------

During the year, the Company entered into the
following transactions with related parties:


| | a) | Paid or accrued consulting
       and management fees of $2,651,829 (2002  $606,249; 2001  $665,835)
       to directors and an officer of the Company
    and companies related to directors and an officer of the Company.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                               
| | b) | Paid or accrued legal fees of
      $4,380,478 (2002- $13,168,790; 2001  $3,561,191) to law firms, partners
    of whom are directors of the Company.                                                                        

The amounts charged to the Company for the services provided have been determined
    by negotiation among the parties. These transactions were in the normal course
    of operations and were measured at the exchange value which represented the
    amount of consideration established and agreed to by the related parties.


|11. | INCOME TAXES
|--- | ------------

Income tax expense varies from the amount that
    would be computed by applying the combined federal and provincial income
    tax rate of 36.7%
        (2002  40.1%; 2001  44.5%) to loss before income taxes as
  follows:


|                                     |   | 2003                |                     |   | 2002        |   |   | 2001        |  
|------------------------------------ | - | ------------------- | ------------------- | - | ----------- | - | - | ----------- | -
|                                     |   |                     |                     |   |            
|                                     |   | (Restated  Note 3) | (Restated  Note 3)
|                                     |   |                     |                     |   |             |   |   |             |  
|Loss before income taxes             | $ | (82,053,852         | )                   | $ | (56,459,812 | ) | $ | (42,552,441 | )
|                                     |   |                     |                     |   |             |   |   |             |  
|Expected income taxes recoverable    | $ | (30,113,764         | )                   | $ | (22,640,385 | ) | $ | (18,935,837 | )
|Difference in foreign tax rates      |   | 614,647             |                     |   | 1,013,320   |   |   | 5,131,725   |  
|Non recognition of benefit of losses |   | 29,499,117          |                     |   | 21,627,065  |   |   | 13,804,112  |  
|                                     |   |                     |                     |   |             |   |   |             |  
|Actual income taxes                  | $ |                    |                     | $ |            |   | $ |            |  
|                                     |   |                     |                     |   |             |   |   |             |  

The Company has certain source related deductions and losses which are available
    to be offset against future income taxes. The benefits of these deductions
    and losses are not reflected in these financial statements, as they are not
    more likely than not to be realized.


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CRYSTALLEX INTERNATIONAL CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL
      STATEMENTS
December 31, 2003, 2002 and 2001

|12. | SUPPLEMENTAL DISCLOSURES WITH RESPECT
    TO CASH FLOWS
|--- | -------------------------------------------------------
|    |                                                        

|                                           |   | 2003    |  |   | 2002      |  |   | 2001      | 
|------------------------------------------ | - | ------- |  | - | --------- |  | - | --------- | 
|                                           |   |         |  |   |           |  |   |           | 
|Cash paid during the year for interest     | $ | 937,225 |  | $ | 1,205,221 |  | $ | 1,897,879 | 
|                                           |   |         |  |   |           |  |   |           | 
|Cash paid during the year for income taxes | $ |        |  | $ |          |  | $ |          | 
|                                           |   |         |  |   |           |  |   |           | 

Significant non-cash transactions for the year ended December 31, 2003 included:


| | i)    | The Company issued 40,080 common shares,
    with a value of $82,523, for directors fees.                                                                    
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                               
| | ii)   | The Company issued 229,283 common shares,
        with a value of $732,934, for the El Callao mineral property dispute
    settlement.                        
| |       |                                                                                                                                                               
| | iii)  | The Company issued 350,000 common shares,
    with a value of $863,000, for financial advisory fees.                                                          
| |       |                                                                                                                                                               
| | iv)   | The Company issued 61,695 common shares,
    with a value of $157,856, for finders fee.                                                                       
| |       |                                                                                                                                                               
| | v)    | The Company issued 2,348,184 common shares,
    with a value of $2,897,002, for loan payments and bank fees.                                                  
| |       |                                                                                                                                                               
| | vi)   | The Company issued 1,281,124 common shares,
    with a value of $2,969,416, for legal fees.                                                                   
| |       |                                                                                                                                                               
| | vii)  | The Company issued 17,036,967 common shares
        upon conversion of convertible and promissory notes and accrued interest
    in the amount of $23,950,966.
| |       |                                                                                                                                                               
| | viii) | The Company issued 17,260,455 common shares
    upon conversion of special warrants with a value of $20,534,536.                                              
| |       |                                                                                                                                                               
| | ix)   | The Company applied $1,840,836 of deferred
        financing fees against share capital upon conversion of loan and notes
    to common shares.               

Significant non-cash transactions for the year ended December 31, 2002 included:


| | i)   | The Company issued 42,612 common shares,
    with a value of $110,955, for directors fees.                                                    
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                
| | ii)  | The Company issued 282,554 common shares,
    with a value of $873,182, for a mineral property payment.                                        
| |      |                                                                                                                                                
| | iii) | The Company issued 677,711 common shares,
    with a value of $1,714,609, for a loan payment.                                                  
| |      |                                                                                                                                                
| | iv)  | The Company issued 35,430 common shares,
    with a value of $78,655, for a finders fee.                                                       
| |      |                                                                                                                                                
| | v)   | The Company issued 7,737,152 common shares
        upon conversion of convertible notes and accrued interest in the amount
    of $17,353,959. 
| |      |                                                                                                                                                
| | vi)  | The Company applied $1,233,792 of deferred
        financing fees against share capital upon conversion of loan and notes
    to common shares.

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CRYSTALLEX INTERNATIONAL CORPORATION

NOTES TO THE CONSOLIDATED
      FINANCIAL STATEMENTS
December 31, 2003, 2002 and 2001

|12. | SUPPLEMENTAL DISCLOSURES
      WITH RESPECT TO CASH FLOWS (continued)                 
|--- | --------------------------------------------------------------------------------------
|    |                                                                                       
|    | Significant non-cash
      transactions for the year ended December 31, 2001 included:
|   
|    | i)                                                                                    
|    |                                                                                       
|    | ii)                                                                                   
|    |                                                                                       
|    | iii)                                                                                  
|    |                                                                                       
|    | iv)                                                                                   
|    |                                                                                       
|    | v)                                                                                    
|    |                                                                                       
|    | vi)                                                                                   
|    |                                                                                       
|    | vii)                                                                                  
|    |                                                                                       
|    | viii)                                                                                 

|    |                      
|--- | ---------------------
|13. | SEGMENTED INFORMATION

Operating segments
      are defined as components of an enterprise about which separate financial
      information is available that is evaluated regularly by the chief operation
      decision maker, or decision-making group, in deciding how to allocate resources
      and in assessing performance. All of the Companys operations are within the mining sector. Due to geographic and political diversity, the Companys mining operations are decentralized whereby mine general managers are responsible for business results and regional corporate offices provide support to the mines in addressing local and regional issues. The Companys operations are therefore segmented on a district basis. The Companys
      only product is gold, produced from mines located in Uruguay and Venezuela.




The segments accounting policies are the same as those described in the summary of significant accounting policies except that other expenses, the non-hedge derivative loss and other items are not allocated to the individual operating segments when determining profit or loss, but are rather attributed to the corporate office.


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CRYSTALLEX INTERNATIONAL CORPORATION



|13. | SEGMENTED INFORMATION (continued)
|--- | ---------------------------------
|    |                                  

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002 and 2001

|                                         |        |               |           |            | Bolivar/     |       |   |             |   |   |            |  |   | Discontinued |   |   | Intersegment |   |   |             |  
|---------------------------------------- | ------ | ------------- | --------- | ---------- | ------------ | ----- | - | ----------- | - | - | ---------- |  | - | ------------ | - | - | ------------ | - | - | ----------- | -
|Corporate                                | Albino | El
    Callao | Cristinas | Operations | Eliminations | Total
|                                         |        |               |           |            |              |       |   |             |   |   |            |  |   |             
|2003                                     |        |               |           |            |              |       |   |             |   |   |            |  |   |              |   |   |              |   |   |             |  
|Mining revenue                           | $      |              |           | $          | 12,862,999   |       | $ | 2,703,512   |   | $ |           |  | $ |             |   | $ |             |   | $ | 15,566,511  |  
|Mining revenue
        - intersegment    | $      |              |           | $          | 4,034,635    |       | $ |            |   | $ |           |  | $ |             |   | $ | (4,034,635   | ) | $ |            |  
|Operating
        costs                  | $      |              |           | $          | (12,958,420  | )     | $ | (3,281,943  | ) | $ |           |  | $ |             |   | $ |             |   | $ | (16,240,363 | )
|Operating
        costs - intersegment   | $      |              |           | $          |             |       | $ | (4,034,635  | ) | $ |           |  | $ |             |   | $ | 4,034,635    |   | $ |            |  
|Interest
        and other income        | $      | 231,121       |           | $          | 32,510       |       | $ |            |   | $ |           |  | $ |             |   | $ |             |   | $ | 263,631     |  
|Interest
        expense                 | $      | (759,111      | )         | $          | (540,612     | )     | $ | (205        | ) | $ |           |  | $ |             |   | $ |             |   | $ | (1,299,928  | )
|Depletion
        and amortization       | $      | (365,135      | )         | $          | (3,987,796   | )     | $ | (193,326    | ) | $ |           |  | $ |             |   | $ |             |   | $ | (4,546,257  | )
|Write-down
        of mineral properties | $      | (4,182,076    | )         | $          |             |       | $ | (18,832,345 | ) | $ |           |  | $ |             |   | $ |             |   | $ | (23,014,421 | )
|Segment
        profit/(loss)            | $      | (59,289,543   | )         | $          | 2,097,408    |       | $ | (20,834,507 | ) | $ |           |  | $ | (4,027,210   | ) | $ |             |   | $ | (82,053,852 | )
|Segment
        assets                   | $      | 44,020,439    |           | $          | 35,246,112   |       | $ | 202,645     |   | $ | 94,055,652 |  | $ |             |   | $ |             |   | $ | 173,524,848 |  
|Capital
        expenditures             | $      | 70,399        |           | $          | 2,016,102    |       | $ | 353,798     |   | $ | 9,858,588  |  | $ |             |   | $ |             |   | $ | 12,298,887  |  
|                                         |        |               |           |            |              |       |   |             |   |   |            |  |   |              |   |   |              |   |   |             |  
|2002 (Restated 
        Note 3)         |        |               |           |            |              |       |   |             |   |   |            |  |   |              |   |   |              |   |   |             |  
|Mining revenue                           | $      |              |           | $          | 2,511,783    |       | $ | 10,806,036  |   | $ |           |  | $ |             |   | $ |             |   | $ | 13,317,819  |  
|Mining revenue
        - intersegment    | $      |              |           | $          | 11,713,510   |       | $ |            |   | $ |           |  | $ |             |   | $ | (11,713,510  | ) | $ |            |  
|Operating
        costs                  | $      |              |           | $          | (11,111,734  | )     | $ | (4,079,885  | ) | $ |           |  | $ |             |   | $ |             |   | $ | (15,191,619 | )
|Operating
        costs - intersegment   | $      |              |           | $          |             |       | $ | (11,713,510 | ) | $ |           |  | $ |             |   | $ | 11,713,510   |   | $ |            |  
|Interest
        and other income        | $      | 68,603        |           | $          | 8,906        |       | $ |            |   | $ |           |  | $ |             |   | $ |             |   | $ | 77,509      |  
|Interest
        expense                 | $      | (1,557,428    | )         | $          | (591,025     | )     | $ |            |   | $ |           |  | $ |             |   | $ |             |   | $ | (2,148,453  | )
|Depletion
        and amortization       | $      | (329,288      | )         | $          | (2,285,146   | )     | $ | (939,641    | ) | $ |           |  | $ |             |   | $ |             |   | $ | (3,554,075  | )
|Write-down
        of mineral properties | $      | (2,134,678    | )         | $          |             |       | $ |            |   | $ |           |  | $ |             |   | $ |             |   | $ | (2,134,678  | )
|Segment
        loss                     | $      | (44,731,866   | )         | $          | (1,610,936   | )     | $ | (6,379,170  | ) | $ |           |  | $ | (3,737,840   | ) | $ |             |   | $ | (56,459,812 | )
|Segment
        assets                   | $      | 28,896,082    |           | $          | 32,439,136   |       | $ | 18,776,610  |   | $ | 81,004,253 |  | $ | 21,251,903   |   | $ |             |   | $ | 182,367,984 |  
|Capital
        expenditures             | $      | 105,840       |           | $          | 3,682,741    |       | $ | 1,082,004   |   | $ | 37,366,257 |  | $ |             |   | $ |             |   | $ | 42,236,842  |  
|                                         |        |               |           |            |              |       |   |             |   |   |            |  |   |              |   |   |              |   |   |             |  
|2001(Restated 
        Note 3)          |        |               |           |            |              |       |   |             |   |   |            |  |   |              |   |   |              |   |   |             |  
|Mining revenue                           | $      |              |           | $          | 6,239,562    |       | $ | 9,766,293   |   | $ |           |  | $ |              |   | $ |             |   | $ | 16,005,855  |  
|Mining revenue
        - intersegment    | $      |              |           | $          | 11,236,739   |       | $ |            |   | $ |           |  | $ |             |   | $ | (11,236,739  | ) | $ |            |  
|Operating
        costs                  | $      |              |           | $          | 1,766,448    |       | $ | (13,463,217 | ) | $ |           |  | $ |             |   | $ |             |   | $ | (11,696,769 | )
|Operating
        costs - intersegment   | $      |              |           | $          |             |       | $ | (11,236,739 | ) | $ |           |  | $ |             |   | $ | 11,236,739   |   | $ |            |  
|Interest
        and other income        | $      | 65,349        |           | $          | 41,739       |       | $ | 237         |   | $ |           |  | $ |             |   | $ |             |   | $ | 107,325     |  
|Interest
        expense                 | $      | (318,015      | )         | $          | (666,616     | )     |   |             |   | $ |           |  | $ |             |   | $ |             |   | $ | (984,631    | )
|Depletion
        and amortization       | $      | (471,530      | )         | $          | (2,580,073   | )     | $ | (935,152    | ) | $ |           |  | $ |             |   | $ |             |   | $ | (3,986,755  | )
|Write-down
        of mineral properties | $      | (18,593,631   | )         | $          | (6,408,145   | )     | $ |            |   | $ |           |  | $ |             |   | $ |             |   | $ | (25,001,776 | )
|Segment
        loss                     | $      | (26,944,912   | )         | $          | (3,570,659   | )     | $ | (3,900,691  | ) | $ |           |  | $ | (8,136,179   | ) | $ |             |   | $ | (42,552,441 | )
|Segment
        assets                   | $      | 42,430,722    |           | $          | 32,594,212   |       | $ | 18,803,110  |   | $ | 41,453,363 |  | $ | 31,699,275   |   | $ |             |   | $ | 166,980,682 |  
|Capital
        expenditures             | $      | 857,789       |           | $          | 4,297,683    |       | $ | 1,012,873   |   | $ | 3,462,995  |  | $ |             |   | $ |             |   | $ | 9,631,340   |  
|                                         |        |               |           |            |              |       |   |             |   |   |            |  |   |              |   |   |              |   |   |             |  

F-30

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CRYSTALLEX INTERNATIONAL CORPORATION

NOTES TO THE CONSOLIDATED FINANICIAL STATEMENTS
  December 31, 2003,
      2002 and 2001

|13. | SEGMENTED INFORMATION (continued)
|--- | ---------------------------------
|    |                                  
|    | Geographic information:          

|              |      | Mining Revenue |  |                     | Property, Plant
    and Equipment |                    
|------------- | ---- | -------------- |  | ------------------- | --------------------------------- | -------------------
|              |     
|              | 2003 |                |  | 2002                |                                   |                    
|              |      |                |  |                     |                                   |                    
|              |      |                |  | (Restated  Note 3) |                                   | (Restated  Note 3)
|Venezuela     | $    | 15,566,511     |  | $                   | 13,317,819                        |                    
|Discontinued  |      |                |  |                     |                                   |                    
|operations    |      |               |  |                     |                                  |                    
|Brazil        |      |               |  |                     |                                  |                    
|              |      |                |  |                     |                                   |                    
|Total Foreign |      | 15,566,511     |  |                     | 13,317,819                        |                    
|Canada        |      |               |  |                     |                                  |                    
|              |      |                |  |                     |                                   |                    
|Total         | $    | 15,566,511     |  | $                   | 13,317,819                        |                    
|              |      |                |  |                     |                                   |                    



|14. | DISCONTINUED OPERATIONS
|--- | -----------------------

On October 27, 2003, the Company closed
      a purchase and sale agreement (the Agreement) with Uruguayan Mineral Explorations Inc. (UME) for the sale of the Companys
      Uruguayan mining operations. Under the terms of the Agreement, which was
      effective October 1, 2003, UME will pay the Company cash consideration of
      $2,700,000 (US$2,000,000), payable in two equal installments and will transfer
      to the Company, two exploration drills with a combined estimated value of
      US$600,000. The first payment of US$1,000,000 is due six months after the
      closing date of the transaction and the second US$1,000,000 payment will
      be due 12 months after the closing date.


The Company incurred a net loss on the disposal of the Uruguayan mining operations of $1.3 million. This loss has been reflected in the statement of operations as a component of the Loss From Discontinued Operations. As a condition of the closing of the transaction, UME agreed to retire in full the outstanding commodity derivative contracts associated with the Uruguayan mining operations.  As a result, an additional US $2.85 million liability obligation which represented the fair value of the outstanding forward contracts and swap agreement associated with the Uruguayan mining operations was assumed by UME.


During the nine month period ended September 30, 2003 and for each of the years in the two year period ended December 31, 2002, the Companys Uruguayan operations incurred revenue of $19,109,761, $32,843,402 and $29,978,353, respectively, and a net loss of $4,027,210, $3,737,840 and $8,136,179, respectively.


F-31

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CRYSTALLEX INTERNATIONAL CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003,
  2002 and 2001

|15. | COMMITMENTS AND CONTINGENCIES
|--- | -----------------------------

Call Agreement


The Company structured the following
        transaction to protect the interest of the Companys shareholders in the event that third parties sought to gain control of the Company in a transaction which was not supported by the Companys
directors.


The Company entered into an agreement dated February 14, 1997 whereby it acquired an exclusive call right to acquire all of the common shares of Ventures (Barbados) Ltd. (Ventures), whose common shares are owned by two directors who are also officers of the Company, effectively on behalf of the Companys shareholders (the Call Agreement). Ventures was incorporated in February, 1997 specifically for the purpose of acquiring the interest in Inversora Mael C.A. (Mael).  The two directors of the Company became directors and shareholders of Ventures immediately following its incorporation and prior to Ventures acquisition of any interest directly or indirectly in Mael. The Ventures shares were issued to the Companys directors for nominal cash consideration of $1.00 and their investment in Ventures has at all times remained nominal. The Ventures shareholders granted the Company an exclusive right for the
Company to acquire, at the Companys option, all of the shares of Ventures at any time at a purchase price equal to the shareholders cost of those shares, which cost, as noted, is nominal. The directors have no interest in Ventures or Mael other than their shareholdings in Ventures.  Any funding or other consideration to complete the acquisition of Mael required by Ventures has been provided by the Company.  The total cost of the acquisition of Mael is US$30,000,000, which was subsequently renegotiated by Red Glove A. V. V. (Red Glove) and Ventures as hereinafter more particularly described. All amounts paid have been treated as inter company loans from the Company to Ventures and the assets and liabilities of Ventures have been combined with the Company on consolidation for accounting purposes. As at December 31, 2003, there are no future commitments existing.


It is not the individual directors but Ventures which indirectly purchased and indirectly owns, as its sole material asset, all of the outstanding shares of Mael.  That interest was acquired through an acquisition agreement dated February 14, 1997. The acquisition of Mael was structured as a purchase by Ventures of all 1,200 of the outstanding shares of Stay Management Ltd. (Stay) from Red Glove.  Stay owns all 50,000 of the outstanding shares of Mael, and, at the time of purchase, both Stay and Red Glove were independent and arms length from the Company and Ventures.  Mael is therefore wholly owned and controlled by Stay, which is a simple holding company wholly owned and controlled by Ventures. Ventures is controlled by the Company through the application of the Call Agreement. The directors of Stay and Mael are nominee directors only who sit at the request of Ventures, and indirectly the Company. Mael and its assets are therefore subject to
the ultimate control and direction of the Company. As nominee directors, taking direction from the Company, the directors of Stay and Mael would have no independent authority to direct the business and affairs of Mael or to transfer, directly or indirectly, in whole or in part, any interest in Mael. Management believes that at all times, the Companys and Ventures relationship with Red Glove have been conducted at terms no less advantageous than had they been conducted directly with an unrelated third party.


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CRYSTALLEX INTERNATIONAL CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002
and 2001

|15. | COMMITMENTS AND CONTINGENCIES
          (continued)
|--- | ---------------------------------------------------

Call Agreement (continued)


The cost of acquiring the shares of Stay
    was initially US$30,000,000, of which the Company paid US$6,500,000 (Cdn. $9,100,000)
    as of December 31, 1998. Effective April 30, 1999, Ventures and Red Glove, through
    arms length negotiation, agreed to reduce the remaining portion of the purchase price from US$23,500,000 to US$10,000,000 plus 5,000,000 warrants to purchase common shares of the Company at a price of US$2.00 per share. No value was attributed to the warrants for the purposes of the acquisition transaction. The Company required that Red Glove modify the purchase price as consideration for the Company continuing with the transaction. Absent such modification, the Company had the option to terminate the acquisition without obligation to make further payments in excess of the initial US$6,500,000 payment. Consequently, April 30, 1999 was determined to be the date the Company was obligated to complete the purchase for the revised consideration noted above. The price of the warrants, being US$2.00 per warrant, was settled by arms length negotiation with Red Glove at the time of renegotiation. The warrants had staggered expiry dates and, as of December 31, 2003, 4,000,000 of the warrants had
expired and 1,000,000 were exercised during 2003. During 1999 and 2000, the US$10,000,000 was fully paid through the Companys
    issuance of its common shares, valued at the average closing sales price on the
    American Stock Exchange for the 30 day period immediately preceding the issuance
    of the shares, and by cash of US$250,000 (Cdn. $364,000). The shares were issued
    in several tranches during the period commencing December 9, 1998 and ending
    June 9, 2000. A total of 8,034,445 shares were issued having an aggregate value
    of US$9,837,534 (Cdn. $14,463,784). The amount of the final tranche includes
    a negotiated amount paid to Red Glove in compensation for costs incurred in the
    renegotiation, as a result of which the amount paid, by cash and by issuance
    of shares, slightly exceeds US$10,000,000. These payments have been capitalized
as part of the Las Cristinas property cost.


The Call Agreement contains a call right which is irrevocable and unconditional for the benefit of the Company unless, prior to its exercise, a person together with any parties acting jointly or in concert with such person acquires 20% or more of the Companys outstanding voting shares without the approval of the Companys Board of Directors. In such an event, the call right will be terminated and Ventures and its shareholders will be required to dispose of the investment in Mael in a commercially reasonable manner with a view to maximizing the proceeds of such a disposition. The net proceeds of disposition, whether represented by cash or securities, would be distributed after payment of liabilities to those persons who were shareholders of the Company immediately prior to the 20% ownership threshold being surpassed, rather than to the two directors of the Company in their capacity as Ventures shareholders. There are no material liabilities which
would need to be repaid to the directors or shareholders of Ventures or to any parties other than the Company which funded the Mael transactions. Under the Call Agreement, the Company has the right to vote the shares of Ventures. The Call Agreement, in conjunction with a rights plan approved by the Companys shareholders, was designed to give adequate time for the Companys shareholders to assess properly the merits of any bid for common shares of the Company without undue pressure, to allow competing bids to emerge and to allow the Companys directors to consider alternatives to allow shareholders to receive full and fair value for their common shares. In the event that the shares of Mael were sold, all proceeds, after payment of costs related to the sale, would be payable to the Company.


F-33

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CRYSTALLEX INTERNATIONAL CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002
and 2001

|15. | COMMITMENTS AND CONTINGENCIES
          (continued)
|--- | ---------------------------------------------------

Commodity derivative
contracts


At December 31, 2003, the Company had fixed forward contracts outstanding as follows:


|                            | 2004 |        | 2005 |   | 2006   | 
|--------------------------- | ---- | ------ | ---- | - | ------ | 
|                            |      |       
|Ounces                      |      | 43,430 |      |   | 42,430 | 
|Average price (US$ per oz.) | $    | 300    |      | $ | 305    | 
|                            |      |        |      |   |        | 

Written call options are contracts in which the writer, for a fee (premium), sells the purchaser the right, but not the obligation, to buy on a specific future date a stipulated quantity of gold at a predetermined price. At December 31, 2003, the Company had written call options outstanding as follows:


|                            | 2004 |         | 2005 |   | 2006   | 
|--------------------------- | ---- | ------- | ---- | - | ------ | 
|                            |      |        
|Ounces                      |      | 127,237 |      |   | 94,932 | 
|Average price (US$ per oz.) | $    | 298     |      | $ | 309    | 
|                            |      |         |      |   |        | 

Gold production for the years ended
December 31, 2003 and 2002 was 76,935 and 94,623 ounces, respectively.


A summary of the cost to settle these contracts, based on a spot price of gold of $US 415 per ounce as at December 31, 2003, is as follows:


| | 2004  | $ | 26,117,994 | 
| | ------ | - | ---------- | 
| | 2005  |   | 20,233,313 | 
| | 2006  |   | 6,256,746  | 
| |        |   |           
| |        | $ | 52,608,053 | 
| |        |   |            | 

This obligation will vary with the actual price of gold on the settlement date. The cash cost of the financial settlement will be reduced by the actual settlement of gold that the Company is able to utilize to settle these contracts.


Fair value of financial instruments

Fair values of financial instruments, including fixed forward contracts and written call options are determined based on estimates using net present value, Black-Scholes and other valuation techniques. The estimates are significantly affected by the assumptions used including current market and contractual prices of the underlying instruments, as well as time value, and by yield curve and volatility factors underlying the positions. The estimated fair values attributed to these contracts are carried on the balance sheet under the captions deferred credit and deferred charge.


For the year ended December 31, 2003,
the Company recorded an unrealized loss of $19,352,704 (2002  $34,187,017;
2001  $4,119,293) in marking its portfolio of written call options and
fixed forward contracts to market. These losses are included in non-hedge derivative
loss in the Statement of Operations. The balance sheet carrying amounts
    for cash and cash equivalents, accounts receivable, marketable securities
    and accounts payable and accrued liabilities approximate fair value due to
    their short-term nature. The carrying value for long-term debt approximates
    fair value primarily due to the floating rate nature of the debt instrument.


F-34

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO THE CONSOLIDATED
  FINANCIAL STATEMENTSDecember 31, 2003,
  2002 and 2001

|**15.**          | **COMMITMENTS
      AND CONTINGENCIES (continued)**
|---------------- | ---------------------------------------------------
|                 |                                                    
|Lease agreements

The Company has entered into various
  operating lease agreements which expire over a period of six years. Total rent
  expense charged to operations under these agreements was $174,105 (2002  $175,066;
  2001  $111,724).


Minimum lease payments under
  operating leases in effect through 2008 are as follows:


|2004 | $ | 204,000
|---- | - | -------
|2005 |   | 208,000
|2006 |   | 198,000
|2007 |   | 158,000
|2008 |   | 138,000
|     |   |        
|     | $ | 906,000
|     |   |        



|Las Cristinas Properties
|------------------------

The rights of Crystallex to develop the Las Cristinas deposits are derived from the agreement between the Company and the CVG (Note 6). The rights to develop the Las Cristinas deposits have been subject to various legal proceedings. Crystallex cannot predict the outcome of the various legal actions and cannot provide assurance that any legal challenge by the third parties will not impact its right to develop the deposits granted by the CVG pursuant to the agreement.


The agreement does not transfer any property ownership rights to Crystallex (Note 6) and the right to develop the deposits is contingent upon the Company continuing to meet its ongoing obligations under the agreement; principally, the Company is to:


| | a. | make all investment
      and complete all works necessary to exploit the mineral resources,                                                                           
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                        
| | b. | present to the CVG
      for approval by September 17, 2003 a feasibility study, together with an
      investment and financing plan to support the feasibility study,
| |    |                                                                                                                                                                        
| | c. | present to the CVG
      for approval, life of mine, annual production plans and annual production
      commitments,                                                  
| |    |                                                                                                                                                                        
| | d. | commence production
      of the mining project by May 2004; such start may be extended in the event
      permitting delays are encountered,                          
| |    |                                                                                                                                                                        
| | e. | pay a royalty and
      exploitation tax, as set out in the agreement, based on the value of gross
      monthly gold production,                                      
| |    |                                                                                                                                                                        
| | f. | provide for certain
      social programs and for the employment, training and technical assistance
      to small miners,                                             
| |    |                                                                                                                                                                        
| | g. | supply performance
      bonds related to the development and environmental obligations,                                                                               
| |    |                                                                                                                                                                        
| | h. | bear all costs relating
      to a technical liaison office to be created by the CVG.                                                                                  

The Company submitted the feasibility study inclusive of an investment and financing plan, referred to in (b) above, within the prescribed timeframe and subsequent to the year end, the CVG approved the feasibility study.


F-35

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO
  THE CONSOLIDATED FINANCIAL STATEMENTS December 31, 2003, 2002 and 2001

|15.                                  | COMMITMENTS AND CONTINGENCIES
      (continued)
|------------------------------------ | -----------------------------------------------
|                                     |                                                
|Las Cristinas Properties (continued)

Although
    the agreement grants certain rights to the Company to develop the deposits,
    the ultimate development will require significant financial resources requiring
    the Company to raise project financing, debt and equity. There is no assurance
    that sufficient additional financing will be available to Crystallex and failure
    to obtain such financing could result in delays or indefinite postponement
    which could lead to a default under the agreement.


|16. | RISK MANAGEMENT    
|--- | -------------------
|    |                    
|    | Currency
      risk

The Company is exposed to currency
  risk as certain of its purchases are denominated in foreign currency. Unfavourable
  changes in the applicable exchange rate may result in a decrease or increase
  in foreign exchange gains or losses. The Company does not use derivative instruments
  to reduce its exposure to foreign currency risk.


The Companys Venezuelan operations
  are currently subject to currency and exchange controls. These government imposed
  controls may adversely affect the Company as such controls restrict the Companys
  ability to flow U.S. dollars, generated from the sale of its gold production,
  out of the country.


| | Credit and market risk
| | ----------------------

The Company enters into financial
  agreements (financial instruments) with major international banks and other
  international financial institutions in order to manage underlying revenue and
  future cash flow exposures arising from commodity prices. Financial instruments,
  which subject the Company to market risk and concentrations of credit risk,
  consist primarily of cash, accounts receivable, securities and fixed forward
  contracts and option contracts for metals.


Market risk is the risk that the value of a financial instrument might be adversely affected by a change in commodity prices, interest rates, or currency exchange rates.  The Company manages the market risk associated with commodity prices by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.


Credit risk is the risk that a counterparty might fail to fulfill its performance obligations under the terms of a derivative contract or accounts receivable. The Company limits the amount of credit exposure in cash and securities by placing these financial instruments in high quality securities issued by government agencies, financial institutions and major corporations and by diversifying its holdings. The Company also has concentrations of credit risk with respect to accounts receivable as large amounts of its accounts receivable are primarily concentrated amongst a small number of customers in Venezuela.  These receivables are primarily with government banks in Venezuela and one international bank. The Company does not anticipate any losses for non-performance on these receivables. As at December 31, 2003, one customer accounted for all trade accounts receivable.


The Company is exposed to credit
    risk in the event of non-performance by counterparties in connection with
    metal forward and option contracts. The Company does not obtain any security
    to support financial instruments subject to credit risk but mitigates this
    risk by dealing only with a diverse group of financially sound counterparties
    and, accordingly, does not anticipate loss for non-performance. Further, the
    Company minimizes its credit risk in derivative instruments by entering into
    transactions with high-quality counterparties whose credit ratings are high
    and by monitoring the financial condition of its counterparties. The Company
    continually monitors the market risk of its activities. F-36


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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO
  THE CONSOLIDATED FINANCIAL STATEMENTS December 31, 2003, 2002 and 2001

|**16.** | **RISK MANAGEMENT
      (continued)**
|------- | -------------------------------------
|        |                                      
|        | Title risk                           

Title to mineral properties and mining
     rights involves certain inherent risks due to the difficulties of determining

  the validity of certain claims as well as the potential for problems arising
     from the frequently ambiguous conveyancing history characteristic of many
    mining
  properties. Although the Company has investigated title to all of its mineral
     properties for which it holds concessions or other mineral leases or licenses,

  Crystallex cannot give an assurance that title to such properties will not
    be  challenged or impugned and cannot be certain that it will have valid
    title to
  its mining properties. The Company relies on title opinions by legal counsel
     who base such opinions on the laws of countries in which the Company operates.


|17. | EVENTS SUBSEQUENT TO DECEMBER
      31, 2003                  
|--- | --------------------------------------------------------------
|    |                                                               
|    | Engineering Procurement
      Construction Management Contract

On March 25, 2004, following completion
  of a competitive bidding process, the Company entered into an Engineering Procurement
  Construction Management (EPCM) contract with SNC-Lavalin Engineers
  & Constructors Inc. (SNCL) relating to the development of the
  Las Cristinas project. The Company expects to pay SNCL approximately $27.8 million
  for its services under the EPCM contract.


| | Public Equity Offering
| | ----------------------

On April 5, 2004, the Company completed a $100 million public equity offering whereby 25,000,000 common shares were issued at $4.00 per common share. The net proceeds received by the Company in U.S. dollars, after considering the underwriters fee, amounted to US$71,694,731. The Company estimates that additional expenditures related to this offering will amount to approximately $500,000.


F-37

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO THE CONSOLIDATED
      FINANCIAL STATEMENTS
December 31, 2003, 2002 and 2001

|18. | DIFFERENCES BETWEEN CANADIAN
      AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
|--- | ---------------------------------------------------------------------------------------------

The Company prepares its consolidated
  financial statements in accordance with accounting principles generally accepted
  in Canada (Canadian GAAP) which differ from those principles that
  the Company would have followed had its consolidated financial statements been
  prepared in accordance with accounting principles generally accepted in the
  United States of America (U.S. GAAP). The following adjustments
  and/or additional disclosures would be required in order to present the financial
  statements in accordance with U.S. GAAP and in accordance with practices prescribed
  by the United States Securities and Exchange Commission.


Basis of Presentation

These financial statements are the
  combined accounts of Crystallex International Corporation and its majority owned
  subsidiaries, and the accounts of Ventures (Barbados) Ltd. (Ventures)
  and its wholly owned subsidiaries. Ventures (Note 15) is controlled by two directors
  of the Company who are also officers, and as such the financial statements for
  U.S. GAAP purposes have been presented as combined financial statements. Under
  Canadian GAAP, these financial statements are presented as consolidated financial
  statements.


F-38

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO THE CONSOLIDATED
      FINANCIAL STATEMENTS
December 31, 2003, 2002 and 2001

|18. | DIFFERENCES BETWEEN CANADIAN
      AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)
|--- | ---------------------------------------------------------------------------------------------------------

Balance Sheets

The impact of differences between
  Canadian GAAP and U.S. GAAP on the combined balance sheets is as follows:


|                              | 2003          |            
|----------------------------- | ------------- | -----------
|                             
|Canadian GAAP                 |               | Adjustments
|                              |               |            
|Current assets                | $             | 41,158,807 
|Property, plant and equipment |               | 132,171,443
|Deferred financing fees       |               | 194,598    
|                              |               |            
|                              | $             | 173,524,848
|                              |               |            
|Current liabilities           | $             | 36,459,021 
|Long-term debt                |               | 8,373,406  
|Deferred credit               |               | 26,490,059 
|Minority interest             |               | 143,517    
|Shareholders' equity          |               | 102,058,845
|                              |               |            
|                              | $             | 173,524,848
|                              |               |            
|                              | 2002          |            
|                              |               |            
|                              | Canadian GAAP |            
|                              |               |            
|(As
      restated  Note 3)  |               |            
|Current assets                | $             | 17,406,381 
|Investment                    |               | 729,329    
|Property, plant and equipment |               | 154,303,830
|Deferred charge               |               | 7,765,576  
|Deferred financing fees       |               | 2,162,868  
|                              |               |            
|                              | $             | 182,367,984
|                              |               |            
|                              |               |            
|Current liabilities           | $             | 36,883,252 
|Reclamation provision         |               | 1,048,726  
|Long-term debt                |               | 26,206,277 
|Deferred credit               |               | 35,001,677 
|Minority interest             |               | 143,517    
|Shareholders' equity          |               | 83,084,535 
|                              |               |            
|                              | $             | 182,367,984
|                              |               |            

|    
|----
|(i) 
|    
|(ii)

F-39

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO THE CONSOLIDATED
      FINANCIAL STATEMENTS
December 31, 2003, 2002 and 2001

|18. | DIFFERENCES BETWEEN CANADIAN
      AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)
|--- | ---------------------------------------------------------------------------------------------------------

Statement of Operations

The impact of the above differences between Canadian GAAP and U.S. GAAP on the loss for the year would be as follows:


|                                                   |     |   | 2003        |   |                              | 2002        |                                          |   | 2001        |  
|-------------------------------------------------- | --- | - | ----------- | - | ---------------------------- | ----------- | ---------------------------------------- | - | ----------- | -
|                                                   |     |   |             |   |                              |             |                                          |   |             |  
|                                                   |     |   |             |   | (As
      restated  Note 3) |             | (As restated  Notes
      3 and 18 (g)) |  
|                                                   |     |   |             |   |                              |             |                                          |   |            
|Net loss for the year per Canadian
      GAAP      |     | $ | (82,053,852 | ) | $                            | (56,459,812 | )                                        | $ | (42,552,441 | )
|Adjustments to mineral properties                  | (b) |   | (3,761,273  | ) |                              | (40,734,141 | )                                        |   | (13,306,689 | )
|Accretion of interest on convertible
      notes   | (c) |   | (4,571,277  | ) |                              | (2,346,126  | )                                        |   | (1,057,605  | )
|Fair value of employee stock options
      granted | (d) |   | (4,273,069  | ) |                              | (404,979    | )                                        |   | (2,129,539  | )
|Unrealized gain (loss) on trading
      securities | (a) |   | (18,329     | ) |                              | 18,329      |                                          |   | 34,987      |  
|                                                   |     |   |             |   |                              |             |                                          |   |             |  
|Net loss for the year per U.S.
      GAAP          |     | $ | (94,677,800 | ) | $                            | (99,926,729 | )                                        | $ | (59,011,287 | )
|                                                   |     |   |             |   |                              |             |                                          |   |             |  
|Net loss per sharebasic                           |     | $ | (0.81       | ) | $                            | (1.18       | )                                        | $ | (0.85       | )
|                                                   |     |   |             |   |                              |             |                                          |   |             |  

Statement of Operations
    Presentation

For U.S. GAAP purposes, the measures
  Loss before other items and Non-hedge derivative (loss) gain
  are not recognized terms and would therefore not be presented. In addition,
  the Operating (loss) income measure included within the Canadian
  GAAP statement of operations is not comparable to Operating loss
  per U.S. GAAP. The following table reconciles Loss for the year
  per U.S. GAAP to Loss from operations for U.S. GAAP.


|                                                   |  |   | 2003        |                                         |   | 2002        |   |   | 2001        |  
|-------------------------------------------------- |  | - | ----------- | --------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                   |  |   |             |                                         |  
|                                                   |  |   |             | (As restated  Notes
      3 and 18(g))
|                                                   |  |  
|Net loss for the year per U.S.
      GAAP          |  | $ | (94,677,800 | )                                       | $ | (99,926,729 | ) | $ | (59,011,287 | )
|                                                   |  |   |             |                                         |   |             |   |   |             |  
|Non-operating loss components                      |  |   |             |                                         |   |             |   |   |             |  
|Per Canadian
      GAAP:                           |  |   |             |                                         |   |             |   |   |             |  
|Interest
      on long-term debt                   |  |   | 1,299,928   |                                         |   | 2,148,453   |   |   | 984,631     |  
|Non-hedge
      derivative loss                    |  |   | 21,684,044  |                                         |   | 34,810,096  |   |   | 310,822     |  
|Foreign
      exchange (gain) loss                 |  |   | 4,467,528   |                                         |   | (918,078    | ) |   | 1,947,803   |  
|Interest
      and other income                    |  |   | (263,631    | )                                       |   | (77,509     | ) |   | (107,325    | )
|Minority
      Interest                            |  |   |            |                                         |   |            |   |   | (169,800    | )
|Loss
      and write-down of marketable securities |  |   | 216,486     |                                         |   | 210,572     |   |   | 2,003,338   |  
|U.S. GAAP reconciling
      items:                 |  |   |             |                                         |   |             |   |   |             |  
|Accretion
      of interest on convertible notes   |  |   | 4,571,277   |                                         |   | 2,346,126   |   |   | 1,057,605   |  
|Unrealized
      (gain) loss on trading securities |  |   | 18,329      |                                         |   | (18,329     | ) |   | (34,987     | )
|                                                   |  |   |             |                                         |   |             |   |   |             |  
|Non-operating loss per U.S. GAAP                   |  |   | 31,993,961  |                                         |   | 38,501,331  |   |   | 5,992,087   |  
|                                                   |  |   |             |                                         |   |             |   |   |             |  
|Loss from operations per U.S.
      GAAP           |  | $ | (62,683,839 | )                                       | $ | (61,425,398 | ) | $ | (53,019,200 | )
|                                                   |  |   |             |                                         |   |             |   |   |             |  

F-40

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO THE CONSOLIDATED
  FINANCIAL STATEMENTSDecember 31, 2003,
  2002 and 2001

|18. | DIFFERENCES BETWEEN CANADIAN
      AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)
|--- | ---------------------------------------------------------------------------------------------------------

Statements 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:

|                                                    | 2003 |             | 2002 |   | 2001        |  
|--------------------------------------------------- | ---- | ----------- | ---- | - | ----------- | -
|                                                    |      |             |      |   |             |  
|                                                    |      |             |      |   |             |  
|Cash flows (used in) provided
      by continuing   |      |             |      |   |             |  
|operating activities,
      Canadian GAAP           | $    | (34,308,052 | )    | $ | (4,548,548  | )
|Adjustments to mineral properties                   |      | (15,236,032 | )    |   | (37,170,359 | )
|                                                    |      |             |      |   |             |  
|Cash flows used in continuing
      operating       |      |             |      |   |             |  
|activities,
      U.S. GAAP                         |      | (49,544,084 | )    |   | (41,718,907 | )
|                                                    |      |             |      |   |             |  
|Cash flows used in investing activities,            |      |             |      |   |             |  
|Canadian GAAP                                       |      | (11,786,046 | )    |   | (42,300,842 | )
|Adjustments to mineral properties                   |      | 15,236,032  |      |   | 37,170,359  |  
|                                                    |      |             |      |   |             |  
|Cash flows provided by (used in)
      investing    |      |             |      |   |             |  
|activities,
      U.S. GAAP                         |      | 3,449,986   |      |   | (5,130,483  | )
|                                                    |      |             |      |   |             |  
|Cash flows provided by financing
      activities,  |      |             |      |   |             |  
|Canadian and
      U.S. GAAP                        |      | 73,097,068  |      |   | 39,430,762  |  
|                                                    |      |             |      |   |             |  
|Cash flows provided by (used in)
      continued    |      |             |      |   |             |  
|operations,
      Canadian and U.S. GAAP            |      | 27,002,970  |      |   | (7,418,628  | )
|Cash flows provided by (used in)
      discontinued |      |             |      |   |             |  
|operations,
      Canadian and U.S. GAAP            |      | 1,165,348   |      |   | (1,296,073  | )
|                                                    |      |             |      |   |             |  
|Net increase (decrease) in cash
      and cash      |      |             |      |   |             |  
|equivalents
      during the year                   |      | 28,168,318  |      |   | (8,714,701  | )
|                                                    |      |             |      |   |             |  
|Cash and cash equivalents, beginning
      of year  |      | 5,695,130   |      |   | 14,409,831  |  
|                                                    |      |             |      |   |             |  
|Cash and cash equivalents, end
      of year        | $    | 33,863,448  |      | $ | 5,695,130   |  
|                                                    |      |             |      |   |             |  

|(a) | Investments
|--- | -----------

In accordance with Canadian GAAP, short term marketable securities are carried at the lower of aggregate cost and current market values, with unrealized losses being included in the determination of net income (loss) for the year. Long-term investment securities are carried at cost and are only written down when there has been an other than temporary decline in value. Any unrealized loss on write-down is recognized in the determination of net income (loss) for the year.


F-41

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO THE CONSOLIDATED
  FINANCIAL STATEMENTSDecember 31, 2003, 2002 and 2001

|18. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)
|--- | ---------------------------------------------------------------------------------------------------
|   
|(a) | Investments (continued)                                                                            

Statement of Financial Accounting
    Standard (SFAS) No. 115, Accounting for Certain Investments
    in Debt and Equity Securities, requires that equity securities that
    have readily determinable fair values be classified as either available-for-sale
    or trading securities, and that they be reported at fair market values. For
    available-for-sale securities, unrealized gains or losses are to be reported
    as other comprehensive income, a separate component of shareholders equity,
    until realized. For trading securities, unrealized gains or losses are included
    in the determination of net income (loss) for the year. The Companys
    investments classified as trading securities and available-for-sale securities
is as follows:


|                              | 2003       |       
|----------------------------- | ---------- | ------
|                             
|                              |            | Gross 
|Unrealized                    | Unrealized | Market
|Cost                          | Gain       | Loss  
|                              |            |       
|Trading securities            | $          | 89,329
|Available-for-sale securities |            |      
|                              |            |       
|                              | $          | 89,329
|                              |            |       

|                              | 2002       |        
|----------------------------- | ---------- | -------
|                             
|                              |            | Gross  
|Unrealized                    | Unrealized | Market 
|Cost                          | Gain       | Loss   
|                              |            |        
|Trading securities            | $          | 89,329 
|Available-for-sale securities |            | 640,000
|                              |            |        
|                              | $          | 729,329
|                              |            |        

|(b) | 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 there to be a permanent impairment in value.


Under U.S. GAAP, mineral property expenditures are expensed as incurred. Once a final feasibility study has been completed however, additional costs incurred to bring the mine into production are capitalized as development costs. Costs incurred to access ore bodies identified in the current mining plan after production has commenced are considered production costs and are expensed as incurred. Costs incurred to extend production beyond those areas identified in the mining plan where additional reserves have been established are deferred as development costs until the incremental reserves are produced. Capitalized costs are amortized using the unit-of-production method over the estimated life of the ore body based on proven and probable reserves.


F-42

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO THE CONSOLIDATED
  FINANCIAL STATEMENTSDecember 31, 2003,
  2002 and 2001

|18. | DIFFERENCES BETWEEN
      CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)
|--- | ---------------------------------------------------------------------------------------------------------

|(b) | Mineral
    Properties and Exploration and Development Costs (continued)
|--- | ------------------------------------------------------------------------

Under Canadian GAAP, travel costs directly related to the acquisition and development of mineral properties are capitalized as a part of the underlying asset. Under U.S. GAAP, included in the mineral property adjustments for the years ended December 31, 2003, 2002 and 2001 are expenses of $454,007, $502,263 and $333,712, respectively, related thereto.


Under Canadian GAAP, the carrying amounts of all of the Companys mineral property development costs, producing properties and related plant and equipment are reviewed and evaluated when events or changes in circumstances indicate that the carrying amount may not be recoverable.  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 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, reclamation costs and income taxes.  Reductions in the carrying amount of property, plant and equipment, with corresponding charges to earnings, are recorded to the extent that the estimated future undiscounted net cash flows are less than the
carrying amount.


In fiscal 2002, for United States reporting purposes, the Company applied SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. In periods prior to fiscal 2002, the Company applied SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of.  In the event that facts and circumstances indicate that the carrying amount of an asset may not be recoverable and an estimate of future undiscounted cash flows is less than the carrying amount of the asset, an impairment loss will be recognized, determined on the basis of discounted cash flows. Managements estimates of gold prices, recoverable proven and probable reserves, operating capital, and reclamation costs are subject to certain risks and uncertainties which may affect the recoverability of the Companys investment in property, plant, and equipment. Although management has made its best estimate of these
factors based on current conditions, it is possible that changes could occur which could adversely affect managements estimate of the net cash flow expected to be generated from its operations.


F-43

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES
  TO THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002
  and 2001

|18. | DIFFERENCES
          BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
      (continued)
|--- | -------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                    
|    | (b)                                                                                                                
|    |                                                                                                                    
|    |                                                                                                                    

|                                                                                                       |   | 2003         |   |   | 2002         |  
|------------------------------------------------------------------------------------------------------ | - | ------------ | - | - | ------------ | -
|                                                                                                       |   |              |   |  
|Net book value under Canadian
      GAAP                                                               | $ | 132,171,443  |   | $ | 154,303,830  |  
|                                                                                                       |   |              |   |  
|Adjustments to mineral propertiesand,
          deferred exploration anddevelopmental
    expenditures |   |              |   |   |              |  
|Las
    Cristinas Concessions                                                                          |   | (94,055,652  | ) |   | (78,819,620  | )
|Santa
           Elena, San Miguel andCarobobo
      Concessions                                       |   |             |   |   | (4,182,075   | )
|Bolivar
      Properties                                                                               |   | (4,072,671   | ) |   | (4,909,518   | )
|Albino
      1 Concessions                                                                             |   | (6,114,000   | ) |   | (6,114,000   | )
|El
      Callao Properties                                                                             |   |             |   |   | (6,455,837   | )
|                                                                                                       |   |              |   |   |              |  
|Total adjustment                                                                                       |   | (104,242,323 | ) |   | (100,481,050 | )
|                                                                                                       |   |              |   |   |              |  
|Net book value under U.S. GAAP                                                                         | $ | 27,929,120   |   | $ | 53,822,780   |  
|                                                                                                       |   |              |   |   |              |  

| |     |                  
| | --- | -----------------
| | (c) | Convertible Notes

Under Canadian GAAP, upon issuance of the
    convertible notes, the net proceeds received are allocated between the liability
    and equity components of the notes. The liability portion of the convertible
    notes is calculated by determining the carrying amount of the convertible
    notes by discounting the stream of future payments of principal at the prevailing
    market rate for a similar liability that does not have an associated equity
    component.


Under U.S. GAAP, on issuance,
        the  convertible notes would be recorded as a liability and then reclassified
        as
  equity only upon conversion. Further, under U.S. GAAP, the beneficial conversion
         feature represented by the excess of the fair value of the shares issuable
        on
  conversion of the notes, measured on the commitment date, over the amount of
         the proceeds to be allocated to the common shares upon conversion, would
        be
  allocated to additional paid in capital. This results in a discount on the
        note  that is accreted as additional interest expense over the term of
        the note and
  any unamortized balance is expensed immediately upon conversion of the note.
         Accordingly, for U.S. GAAP purposes, for the year ended December 31,
        2003, an
  additional interest expense (including accretion) of $4,571,277 (2002 - $2,346,126;
         2001  $1,057,605) has been recorded. The balance sheet adjustment
         represents  the difference between the portion of the convertible debt
         allocated to equity
  under Canadian GAAP, net of accretion to date, and the portion allocated to
          the beneficial conversion feature under U.S. GAAP, also net of accretion
         to
  date.


F-44

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO THE
      CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002
and 2001

|18. | DIFFERENCES
          BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
      (continued)
|--- | -------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                    
|    | (d)                                                                                                                

In accordance with Canadian GAAP,
    the Company has not recorded any expense with respect to stock options granted
    to employees, but rather includes additional financial statement disclosures.


Under U.S. GAAP, the Company measures
  its employee stock-based awards using the fair value method as prescribed under
  SFAS No. 123 Accounting for Stock-Based Compensation and SFAS No.
  148, Accounting for Stock-Based Compensation  Transition and Disclosure
  an amendment to SFAS No. 123.


Under U.S. GAAP, on the date of issuance,
  the Company determines the fair value of the employee stock options using the
  Black-Scholes option pricing model. In determining the fair value of these employee
  stock options, the following assumptions were used:


|                        | 2003       |  | 2002       |  | 2001    | 
|----------------------- | ---------- |  | ---------- |  | ------- | 
|                        |            |  |            |  |         | 
|                        |            |  |            |  |         | 
|Risk free interest rate | 4.04%      |  | 4.22%      |  | 3.12%   | 
|Expected life           | 3.95 years |  | 3.75 years |  | 2 years | 
|Expected volatility     | 108%       |  | 75%        |  | 83%     | 
|Expected dividends      |           |  |           |  |        | 

For the year ended December 31, 2003,
  an expense of $4,273,069 (2002 - $404,979; 2001 -$2,129,539) has been recorded
  with respect to the stock options granted in the year.


F-45

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO THE
      CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002
and 2001

|18. | DIFFERENCES
          BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
      (continued)
|--- | -------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                    
|    | (e)                                                                                                                

SFAS No. 130 Reporting Comprehensive
    Income establishes standards for the reporting and display of comprehensive
    income and its components in a full set of general purpose financial statements.
    SFAS 130 requires that all items that are required to be recognized under
    accounting standards as components of comprehensive income be reported in
    the financial statements. For the Company, the only components of comprehensive
    loss are the net loss for the period, and the unrealized gains and losses
  on the available-for-sale securities. This information is presented below.


Accumulated Other Comprehensive
    Income (Loss)


For U.S. GAAP, the accumulated other
  comprehensive income would be calculated as follows:


|                                                                             |   | 2003     |   |   | 2002             |  |   | 2001       |  
|---------------------------------------------------------------------------- | - | -------- | - | - | ---------------- |  | - | ---------- | -
|                                                                             |   |         
|                                                                             |   |          |   |   | (Restated  (g))
|Accumulated other
            comprehensiveincome
    (loss)                 |   |          |   |   |                  |  |   |            |  
|Accumulated other comprehensiveincome
    (loss), beginning of year          | $ | 176,000  |   | $ | -               |  | $ | (1,339,338 | )
|Change in market value ofavailable-for-sale
    securities                   |   |         |   |   | 176,000          |  |   |           |  
|Reclassification adjustment for
         amountsincluded in
      net income |   | (176,000 | ) |   |                 |  |   | 1,339,338  |  
|                                                                             |   |          |   |   |                  |  |   |            |  
|Accumulated other comprehensiveincome,
    end of year                       | $ |         |   | $ | 176,000          |  | $ |           |  
|                                                                             |   |          |   |   |                  |  |   |            |  

Comprehensive Loss


For U.S. GAAP, the comprehensive loss
  would be calculated as follows:


|                                                           |   | 2003        |   |   | 2002        |   |                  | 2001        |  
|---------------------------------------------------------- | - | ----------- | - | - | ----------- | - | ---------------- | ----------- | -
|                                                           |   |             |   |   |             |  
|                                                           |   |             |   |   |             |   | (Restated  (g)) |            
|                                                           |   |             |   |   |             |   |                  |            
|Comprehensive loss                                         |   |             |   |   |             |   |                  |             |  
|Net
      loss for the year                                | $ | (94,677,800 | ) | $ | (99,926,729 | ) | $                | (59,011,287 | )
|Change in market value ofavailable-for-sale
    securities |   | (176,000    | ) |   | 176,000     |   |                  | 1,339,338   |  
|                                                           |   |             |   |   |             |   |                  |             |  
|Comprehensive loss for the year                            | $ | (94,853,800 | ) | $ | (99,750,729 | ) | $                | (57,671,949 | )
|                                                           |   |             |   |   |             |   |                  |             |  

F-46

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  to Contents

CRYSTALLEX
  INTERNATIONAL CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002
  and 2001

|18. | DIFFERENCES
      BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
      (continued)
|--- | ---------------------------------------------------------------------------------------------------------------
|    |                                                                                                                
|    | (f)                                                                                                            

In 2003, the CICA issued
    Handbook Section 3110  Asset Retirement Obligations (CICA
    3110), which is consistent with SFAS 143, Accounting for Asset
    Retirement Obligations. The standard provides for the recognition, measurement
    and disclosure of liabilities for asset retirement obligations and the associated
    asset retirement costs. It addresses obligations required to be settled as
    a result of an existing law, regulation or contract related to asset retirements.The
    new CICA standard is applicable for fiscal years commencing January 1, 2004.
    Upon adoption, CICA Section 3110 will require retroactive restatement of all
    comparative periods. The US GAAP standard, SFAS 143, is applicable for fiscal
    years beginning January 1, 2003. Upon implementation of SFAS 143, the adjustment
    necessary to recognize the fair value liability of an asset retirement obligation
    is accounted for as a charge against income in the period where a reasonable
    estimate of fair value can be made. As the Companys only asset retirement
    obligation as at January 1, 2003, relates to operations that were disposed
    of during 2003 and which were accounted for as discontinued operations for
    the year ended December 31, 2003, it was not considered necessary to separately
    disclose the adjustment required to recognize the fair value liability of
    the associated asset retirement obligation. There are currently no material
    legal asset retirement obligations with respect to continuing operations.
    Should a legal obligation occur in the future, or should the Company enter
    into a separate formal commitment, any resulting asset retirement obligation
    will be recognized when a reasonable estimate of fair value can be made.


In November 2002, the FASB
  issued Interpretation Bulletin No. 45 (FIN 45), Guarantors
  Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees
  of Indebtedness of Others (FIN 45), which requires elaborating
  on the disclosures that must be made by a guarantor in financial statements
  about its obligations under certain guarantees. It also requires that a guarantor
  recognize, at the inception of certain types of guarantees, a liability for
  the fair value of the obligation undertaken in issuing the guarantee. The disclosure
  requirements of FIN 45 are effective for financial statements issued after December
  15, 2002, and have been considered in the presentation of the accompanying combined
  financial statements. The recognition requirements of FIN 45 are applicable
  for guarantees issued or modified after December 31, 2002. As the Company had
  no guarantees issued or modified after December 31, 2002, there is no impact
  as a result of this new pronouncement.


In January 2003, the FASB
  issued Interpretation No. 46 (FIN 46), Consolidation of Variable
  Interest Entities, an Interpretation of ARB No. 51. FIN 46 requires certain
  variable interest entities to be consolidated by the primary beneficiary of
  the entity investors if the equity investors in the entity do not have the characteristics
  of a controlling financial interest or do not have sufficient equity at risk
  for the entity to finance its activities without additional subordinated financial
  support from other parties On December 24, 2003, the FASB issued a revision
  to FIN 46 (FIN 46R) to clarify certain provisions of FIN 46 exempting
  certain entities from its requirements. FIN 46R will be effective for the Companys
  2004 consolidated financial statements. Adoption of this standard is not expected
  to have a material effect on the Companys results of operations, financial
  position or disclosures.


F-47

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  to Contents

CRYSTALLEX
  INTERNATIONAL CORPORATION

NOTES
  TO THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002
  and 2001

|18. | DIFFERENCES
      BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
      (continued)
|--- | ---------------------------------------------------------------------------------------------------------------
|    |                                                                                                                
|    | (f)                                                                                                            

In April 2003, the FASB
  issued SFAS No. 149, Amendment of SFAS No. 133 on Derivative Instruments
  and Hedging Activities (SFAS 149). The Statement amends and
  clarifies accounting for derivative instruments, including certain derivative
  instruments embedded in other contracts, and for hedging activities under SFAS
  133. In particular, it (1) clarifies under what circumstances a contract with
  an initial net investment meets the characteristic of a derivative as discussed
  in SFAS 133, (2) clarifies when a derivative contains a financing component,
  (3) amends the definition of an underlying to conform it to the language used
  in FIN 45. SFAS 149 was adopted by the Company on July 1, 2003, and did not
  have any effect on the Companys results of operations, financial position
  or disclosure.


In 2002, the CICA Handbook
    Sections 3063  Impairment of Long Lived Assets and 3475
     Disposal of Long Lived Assets and Discontinued Operations
    were amended to harmonize with SFAS 144. The standards will require an impairment
    loss to be recognized when the carrying amount of an asset held for use exceeds
    the sum of the undiscounted cash flows. The impairment loss would be measured
    as the amount by which the carrying amount exceeds the fair value of the asset.
    An asset held for sale is to be measured at the lower of carrying cost or
    fair value less cost to sell. In addition, this guidance broadens the concept
    of a discontinued operation and eliminates the ability to accrue operating
    losses expected between the measurement date and the disposal date. Section
    3063 is effective for fiscal years beginning on or after April 1, 2003 and
    Section 3475 applies to disposal activities initiated by an enterprises
    commitment to a plan on or after May 1, 2003.


F-48

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  to Contents

CRYSTALLEX
  INTERNATIONAL CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002
  and 2001

|18. | DIFFERENCES
      BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
      (continued)
|--- | ---------------------------------------------------------------------------------------------------------------
|    |                                                                                                                
|    | (f)                                                                                                            

In 2002, the Accounting
    Standards Board of the CICA issued Accounting Guideline No. 13  Hedging
    Relationships that increases the documentation, designation and effectiveness
    criteria to achieve hedge accounting. The guidelines require the discontinuance
    of hedge accounting for hedging relationships established that do not meet
    the conditions at the date it is first applied. It does not change the method
    of accounting for derivatives in hedging relationships, but requires fair
    value accounting for derivatives that do not qualify for hedge accounting.
    The new guideline is applicable for fiscal years commencing on or after July
    1, 2003.


In 2003, the Accounting Standards
    Board of the CICA issued Accounting Guideline No. 14  Disclosure
    of Guarantees. The guideline requires the disclosure of guarantees including
    indemnification pursuant to contractual arrangement. This guideline is consistent
    with FIN 45 described above.


In July 2003, the CICA
    issued Handbook Section 1100 Generally Accepted Accounting Principles
    (CICA 1100) and Handbook Section 1400 General Standards
    of Financial Statement Presentation (CICA 1400). CICA 1100
    describes what constitutes Canadian GAAP and its sources. CICA 1400 clarifies
    what constitutes fair presentation in accordance with generally accepted accounting
    principles. Both sections are effective for fiscal years beginning on or after
    October 1, 2003. The Company is currently evaluating the potential impact
    these standards may have on its results of operations, financial position
    and note disclosures.


The Emerging Issues Task
    Force (EITF) of FASB, has as part of its agenda, a review of a
    broad range of accounting policies related to the mining industry. The outcome
    of this review may result in changes to U.S. GAAP as applied to these consolidated
    financial statements. In addition, as a result of an ongoing harmonization
    process with U.S. GAAP, the outcome may also result in changes to Canadian
    GAAP.


| | (g) | Error Corrections
      for US GAAP
| | --- | -----------------------------------

The Company has amended originally filed U.S. GAAP combined financial statements.
    As referred to in Note 3, in May 2003, the Company issued its consolidated
    financial statements which included restatements of the fiscal 2001 and prior
    combined financial statements. Subsequent to the issuance of those consolidated
    financial statements, a further restatement was identified relating to commodity
    derivative contracts as summarized in Note 3 paragraph 3(j) which affected
    the fiscal 2001 and prior combined financial statements. The following tables
    summarize adjustments made to previously reported amounts.


F-49

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CRYSTALLEX INTERNATIONAL
CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  December 31, 2003, 2002 and 2001

|18. | DIFFERENCES
         BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
    (continued)
|--- | ----------------------------------------------------------------------------------------------------------------
|    |                                                                                                                 
|    | (g)                                                                                                             

|                            |                                                         |                
|--------------------------- | ------------------------------------------------------- | ---------------
|                            | US
          GAAP Balance Sheet
As at December 31, 2001 |                
|                            |                                                         |                
|                            |                                                         | As     Reported
|                            |                                                         |                
|                            |                                                         |                
|Current Assets              | $                                                       | 27,893,158     
|Security Deposits           |                                                         | 306,218        
|Investment                  |                                                         | 610,000        
|Property, plant & equipment |                                                         | 118,908,244    
|Deferred charges            |                                                         |               
|Deferred financing fees     |                                                         | 1,269,652      
|                            |                                                         |                
|                            | $                                                       | 148,987,272    
|                            |                                                         |                
|Current liabilities         | $                                                       | 19,926,621     
|                            |                                                         |                
|Reclamation provision       |                                                         | 1,250,151      
|                            |                                                         |                
|Long term debt              |                                                         | 24,968,891     
|Deferred credit             |                                                         | 646,821        
|Minority interest           |                                                         | 7,752,099      
|Shareholders equity         |                                                         | 94,442,689     
|                            |                                                         |                
|                            | $                                                       | 148,987,272    
|                            |                                                         |                

F-50

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CRYSTALLEX INTERNATIONAL
      CORPORATION

NOTES TO
        THE CONSOLIDATED FINANCIAL STATEMENTS December 31, 2003, 2002 and 2001

|18. | DIFFERENCES BETWEEN CANADIAN
    AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)
|--- | -------------------------------------------------------------------------------------------------------

| |     |                                              
| | --- | ---------------------------------------------
| | (g) | Error Corrections
    for US GAAP (continued)

|                                                                |  |   |             |        |   |             |       
|--------------------------------------------------------------- |  | - | ----------- | ------ | - | ----------- | ------
|                                                                |  |   | 2001        |        |   | 2000        |       
|                                                                |  |   |             |        |   |             |       
|Loss for the year per US GAAP                                   |  | $ | (6,662,770  | )      | $ | (11,786,801 | )     
| as originally
         reported                               |  |   |             |        |   |             |       
|                                                                |  |   |             |        |   |             |       
|Error corrections for both Canadian
    and U.S. GAAP: (Note 3) |  |   |             |        |   |             |       
|Write down of plant & equipment                                 |  |   | (8,841,968  | )      |   | (3,496,465  | )     
|Write down of mineral properties                                |  |   | (19,746,087 | )      |   |            |       
|Misstatement of expenses                                        |  |   | 199,603     |        |   | (125,367    | )     
|Foreign exchange conversion
    gain (loss)                     |  |   | (2,819,933  | )      |   | 39,581      |       
|Gold loan conversion                                            |  |   | (1,529,364  | )      |   |            |       
|Minority interest                                               |  |   | (704,643    | )      |   |            |       
|Write down of investment                                        |  |   | (2,003,338  | )      |   |            |       
|Reversal of capitalized costs                                   |  |   | (1,188,225  | )      |   |            |       
|Commodity derivative contracts                                  |  |   | (5,902,087  | )      |   | 4,957,317   |       
|Other                                                           |  |   | (84,793     | )      |   | (130,762    | )     
|                                                                |  |   |             |        |   |             |       
|Error Corrections for U.S. GAAP
    only                        |  |   |             |        |   |             |       
|Accretion of interest on convertible notes                      |  |   | (1,128,644  | )(iii) |   | (2,677,699  | )(iii)
|                                                                |  |   |             |        |   |             |       
|Adjustments to mineral properties                               |  |   | (8,640,208  | )(ii)  |   |            |       
|Urealized gain on trading securities                            |  |   | 1,170       | (vi)   |   | 40,558      | (vi)  
|Writedown of investment                                         |  |   | 30,000      | (i)    |   |            |       
|Other                                                           |  |   | 10,000      |        |   |            |       
|                                                                |  |   |             |        |   |             |       
|Loss for the year per U.S. GAAP as
    restated                |  | $ | (59,011,287 | )      | $ | (13,179,638 | )     
|                                                                |  |   |             |        |   |             |       

F-51

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CRYSTALLEX INTERNATIONAL
      CORPORATION

NOTES TO
        THE CONSOLIDATED FINANCIAL STATEMENTS December 31, 2003, 2002 and 2001

|18. | DIFFERENCES BETWEEN CANADIAN
    AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)
|--- | -------------------------------------------------------------------------------------------------------

| |     |                                                      
| | --- | -----------------------------------------------------
| | (g) | Error
            Corrections for US GAAP (continued)

|                                                                   |   |            |      |   |            |     
|------------------------------------------------------------------ | - | ---------- | ---- | - | ---------- | ----
|Accumulated Other Comprehensive Income (Loss)                      |   | 2001       |      |   | 2000       |     
|                                                                   |   |            |      |   |            |     
|Accumulated other comprehensiveloss,                               |   |            |      |   |            |     
|end
           of year aspreviously
           reported            | $ | (8,048,600 | )    | $ | (3,023,189 | )   
|Error corrections under Canadian
    GAAP                          |   |            |      |   |            |     
|Reversal
    of cumulative translation adjustments
    (Note 3(d)) |   | 4,675,924  |      |   | 344,513    |     
|Writedown of investment (Note
    3(g))                            |   | 2,003,338  |      |   |           |     
|Error corrections
    under U.S. GAAP                              |   |            |      |   |            |     
|Change
         in market value of available-for-sale securities   |   | 1,339,338  | (iv) |   | 1,339,338  | (iv)
|Writedown of investment                                            |   | 30,000     | (i)  |   |           |     
|                                                                   |   |            |      |   |            |     
|Accumulated other comprehensive                                    |   |            |      |   |            |     
|Loss,
         end of year as restated                             | $ |           |      | $ | (1,339,338 | )   
|                                                                   |   |            |      |   |            |     

| |     |            
| | --- | -----------
| | (i) | Investments

In 2001,
      for U.S. GAAP purposes, the Company incorrectly recognized a cumulative
      unrealized loss of $2,033,338 pertaining to the market value of its available
      for sale securities, resulting in a reported carrying value of $610,000
      for its long-term investment securities as at December 31, 2001. The correct
      carrying value of long-term investment securities as at December 31, 2001
      was $640,000. Accordingly, to correct this error an adjustment of $30,000
      has been made to the previously reported loss for the year ended December
      31, 2001 for U.S. GAAP.


| | (ii) | Writedown of mineral properties
| | ---- | -------------------------------

As a
      result of detailed formal life of mine
analyses for each of the Companys mineral properties, management concluded
that the discounted cash flows from ongoing operations at the Companys
Venezuelan Albino and Tomi Properties, determined using assumptions and information
existing at December 31, 2001, were insufficient to support the recovery of the
respective carrying values. Accordingly in addition to the writedowns described
in Note 3(b), management retroactively reduced theDecember 31, 2001 carrying values
of these two mineral properties by $8,640,208 with a corresponding charge to
operations in 2001 to reflect the year in which impairment should have been recognized.


F-52

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO THE CONSOLIDATED
      FINANCIAL STATEMENTSDecember 31, 2003, 2002
and 2001

|18. | DIFFERENCES
          BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
      (continued)
|--- | -------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                    
|    | (g)                                                                                                                

| |      |                                                 | 
| | ---- | ----------------------------------------------- | 
| | (ii) | Writedown of mineral properties
    (continued)

The Company also concluded that the
     discounted cash flows at its Mineiro Concessions in Venezuela determined
    using
  assumptions and information existing at December 31, 1999, was insufficient
     to support the recovery of the carrying value of this property. Accordingly,

  management retroactively reduced the December 31, 1999 carrying value of the
     Mineiro Concessions by $1,614,813 with a corresponding charge to operations

  in 1999 to reflect the year in which impairment should have been recognized.


Under United States GAAP, the Company
  did not attribute a value to the warrants issued in connection with the acquisition
  in 1999 of the shares of Mael (Note 15). As a result, the Company has retroactively
  increased both additional paid in capital and deficit by $2,461,905 during 2001
  and 2000, and loss for the year and additional paid in capital were both increased
  by $2,461,905 during 1999.


| | (iii) | Convertible Notes
| | ----- | -----------------

During the years ended December 31,
  2001 and 2000 the Company issued convertible notes. Under U.S. GAAP, on issuance,
  the convertible notes should have been recorded as a liability and then reclassified
  as equity only upon conversion. Further, under U.S. GAAP, the beneficial conversion
  feature represented by the excess of the fair value of the shares issuable on
  conversion of the notes, measured on the commitment date, over the amount of
  the proceeds to be allocated to the common shares upon conversion, should have
  been allocated to additional paid in capital. This results in a discount on
  the note that is accreted as additional interest expense over the term of the
  note and any unamortized balance is expensed immediately upon conversion of
  the note. Accordingly, for U.S. GAAP purposes, for the years ended December
  31, 2001 and 2000 an additional interest expense (including accretion) of $1,128,644
  and $2,677,699 respectively, has been retroactively recorded. The balance sheet
  error correction represents the difference between the portion of the convertible
  debt allocated to equity under Canadian GAAP, net of accretion to date, and
  the portion allocated to the beneficial conversion feature under U.S. GAAP,
  also net of accretion to December 31, 2001.


| | (iv) | Change in market value of available-for-sale
    securities
| | ---- | -----------------------------------------------------------

In determining accumulated other comprehensive
  loss as at December 31, 1998 the Company incorrectly included a writedown of
  $1,339,338 against available-for-sale securities. As a resulted management has
  restated the accumulated other comprehensive loss as at December 31, 1998 to
  correct this error.


F-53

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CRYSTALLEX INTERNATIONAL
  CORPORATION

NOTES TO
  THE CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2003, 2002
  and 2001

|18. | DIFFERENCES BETWEEN
      CANADIAN AND UNITED STATES GENERALLY ACCEPTED
      ACCOUNTING PRINCIPLES (continued)
|--- | ---------------------------------------------------------------------------------------------------------------
|    |                                                                                                                

| | (g) | Error
    Corrections for US GAAP (continued)
| | --- | ---------------------------------------------
| |     |                                              

| | (v) | Accounting for Commodity Derivative
    Contracts
| | --- | -------------------------------------------------

Written Call Options


Previously issued consolidated financial
     statements, under Canadian and U.S. GAAP, did not reflect the mark to market

  adjustment for outstanding contracts at the end of 1999, 2000 and 2001, as
    such  contracts had not been property accounted for. As a result, management
    has restated
  the Canadian GAAP financial statements (Note 3(j)) to record the mark to market
     adjustment on these contracts. Consequently as a result of this restatement,

  no difference between Canadian and U.S. GAAP exists for written call options.


Fixed forward contracts


Previously, under Canadian GAAP, the
  Company had treated fixed forward contracts as transactions qualifying as hedges
  for accounting purposes. Upon re-examination, it has been determined that certain
  restructuring transactions with its counterparty had modified the forward contracts
  prior to their maturity resulting in a reassessment of hedge designation and
  effectiveness. Consequently, for Canadian GAAP purposes, the Company has redesignated
  its forward contracts as trading activity and accordingly has recorded the estimated
  fair values of these contracts on the balance sheets and related mark to market
  adjustments for changes in estimated fair values in the statements of operations
  as non-hedge derivative (loss) gain. Mining revenue has also been restated to
  reclassify settlement gains and losses on forward contracts as non-hedge derivative
  (loss) gain.


Previously, for the purposes of U.S.
  GAAP, the Company had treated fixed forward contracts as transactions eligible
  for the normal purchases and sales exemption, which requires, amongst other
  things, physical delivery of the gold in satisfaction of the contract. Upon
  re-examination, it has been determined that the delivery of amounts in Venezuela
  have been satisfied by physical delivery to the Central Bank rather than directly
  to the counterparty. In addition, certain restructuring transactions with the
  counterparty that modified the forward contracts prior to their maturity, have
  indicated that the characterization of forward contracts as settled by physical
  delivery was not necessarily the method of settlement of all forward contracts.
  As a result the Company, for the purposes of U.S. GAAP, has redesignated the
  forward contracts as trading activity, and reflected the changes in the market
  value of these contracts in income in accordance with SFAS 133.


In summary, fixed forward contracts
    were previously reported as qualifying for hedge accounting under Canadian
    GAAP and as transactions eligible for normal purchases and sales exemption
    under U.S. GAAP, resulting in no GAAP difference. In these restated consolidated
    financial statements, fixed forward contracts are being treated as trading
    activity under both Canadian and U.S. GAAP and consequently no GAAP difference
    exists.


| | (vi) | Unrealized gain on trading
      securities
| | ---- | -------------------------------------------

During 2001 and 2000 the Company incorrectly
  calculated its unrealized gain on trading securities. Accordingly management
  has adjusted the previously reported losses for 2001 and 2000 to reflect the
  correction of this error.


F-54

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SIGNATURE

Pursuant to the requirements of
  Section 12 of the Securities Exchange Act of 1934, the Registrant certifies
  that it meets all of the requirements for filing this Form 20-F/A  No.
  3 and that it has duly caused and authorized the undersigned to sign this annual
  report on its behalf.


CRYSTALLEX INTERNATIONAL
  CORPORATION

|                        | BY: | /s/
      Daniel R. Ross                                                                      
|----------------------- | --- | ----------------------------------------------------------------------------------------------
|                        |     |                                                                                               
|                        |     | Daniel R. RossExecutive Vice-President,
      Corporate Counsel,
      Secretary, and Director
|                        |     |                                                                                               
|Date: February 11, 2005 |     |                                                                                               

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Exhibit Index

|Exhibit  |         |                                                                                                                                                                                                                                                                                                                                                                              
|-------- | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.      | Exhibit
|         |        
|11.1(1)  |         | Code of Business Conduct and
      Ethics                                                                                                                                                                                                                                                                                                                                    
|         |         |                                                                                                                                                                                                                                                                                                                                                                              
|12.1     |         | Certification of Todd Bruce
      pursuant to Section 906 of the Sarbanes Oxley Act of 2002.                                                                                                                                                                                                                                                                                 
|         |         |                                                                                                                                                                                                                                                                                                                                                                              
|12.2     |         | Certification of Borden D. Rosiak
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                           
|         |         |                                                                                                                                                                                                                                                                                                                                                                              
|12.3(1)  |         | Corporate Governance Statement                                                                                                                                                                                                                                                                                                                                               
|         |         |                                                                                                                                                                                                                                                                                                                                                                              
|12.4(1)  |         | Employment agreement as of January
      1, 2004, between Crystallex and Robert A. Fung.                                                                                                                                                                                                                                                                                     
|         |         |                                                                                                                                                                                                                                                                                                                                                                              
|12.5(1)  |         | Employment agreement as of September
      22, 2003, between Crystallex and Todd Bruce.                                                                                                                                                                                                                                                                                      
|         |         |                                                                                                                                                                                                                                                                                                                                                                              
|12.6(1)  |         | Employment agreement as of July
      1, 2002, between Crystallex and Daniel R. Ross.                                                                                                                                                                                                                                                                                        
|         |         |                                                                                                                                                                                                                                                                                                                                                                              
|12.7(1)  |         | Employment agreement as of September
      3, 2002, between Crystallex and Borden Rosiak.                                                                                                                                                                                                                                                                                    
|         |         |                                                                                                                                                                                                                                                                                                                                                                              
|12.8(1)  |         | EPCM contract dated March 23,
      2004, between Crystallex and SNCL for SNCL to provide services for the design,
      construction and commissioning of 20,000 tonnes per day facility at Las
      Cristinas, without appendices.                                                                                                                                        
|         |         |                                                                                                                                                                                                                                                                                                                                                                              
|12.9(1)  |         | Letter agreement dated April
      5, 2004, between Crystallex and BNP Paribas (BNPP), appointing
      BNPP to provide Crystallex with assistance and services in connection with
      the arrangement of debt financing for the Las Cristinas project.                                                                                                                  
|         |         |                                                                                                                                                                                                                                                                                                                                                                              
|12.10(1) |         | Agreement dated as of April
      24, 2004, between Crystallex and Biomin Technologies S. A., whereby Biomin
      undertook to complete certain testwork on samples of ore from Crystallexs
      La Victoria Mine in order to establish the feasability and design data for
      a full scale plant using Biomins proprietary BIOX®process, without schedules
      3-6.
|         |         |                                                                                                                                                                                                                                                                                                                                                                              
|13.1     |         | Certification of Todd Bruce pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                       
|         |         |                                                                                                                                                                                                                                                                                                                                                                              
|13.2     |         | Certification of Borden D. Rosiak pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                 

|   
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