Exhibit 99.1





CRYSTALLEX INTERNATIONAL CORPORATION











ANNUAL
                INFORMATION FORM

FOR THE YEAR ENDED DECEMBER 31, 2004













March 30, 2005



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TABLE OF CONTENTS

|                                                                      | Page |  |                                                                | Page               
|--------------------------------------------------------------------- | ---- |  | -------------------------------------------------------------- | -------------------
|                                                                      |      |  |                                                                |                    
|DOCUMENTS INCORPORATED BY REFERENCE                                   | 3    |  | DESCRIPTION
          OF SHARE CAPITAL AND RELATED             |                    
|FOREIGN
          EXCHANGE AND ACCOUNTING PRINCIPLES                  | 3    |  | INFORMATION                                                    | 26                 
|GLOSSARY
          AND METRIC/IMPERIAL CONVERSION TABLE               | 3    |  | Authorized
          Capital                                   | 26                 
|SPECIAL
          NOTE REGARDING FORWARD-LOOKING                      |      |  | Common
          Shares                                        | 26                 
|STATEMENTS                                                            | 4    |  | Class “A” Preference
          Shares and Class “B” Preference |                    
|CRYSTALLEX                                                            | 5    |  | Shares                                                         | 26                 
|Overview                                                              | 5    |  | Shareholder
          Rights Plan                              | 26                 
|Corporate
          Chart                                             | 6    |  | Price
          Range and Trading Volume of the Common Shares  | 27                 
|MINERAL
          RESERVES AND RESOURCES                              | 7    |  | Dividend
          Policy                                      | 27                 
|INFORMATION
          WITH RESPECT TO THE GOLD INDUSTRY               | 9    |  | Capitalization                                                 | 28                 
|MINING
          IN VENEZUELA                                         | 10   |  | LEGAL
          PROCEEDINGS                                    | 29                 
|Venezuela                                                             | 10   |  | Withdrawal
          of MINCA Litigation                       | 29                 
|Mining
          Law                                                  | 10   |  | MINCA
          Litigation                                     | 29                 
|Introduction                                                          | 10   |  | Vannessa
          Arbitration                                 | 29                 
|Mineral
          Concessions                                         | 10   |  | Vengroup
          Arbitration                                 | 30                 
|Direct
          Exploitation                                         | 11   |  | Background                                                     | 30                 
|Environmental
          Laws                                          | 11   |  | Notice
          of Arbitration                                | 30                 
|General                                                               | 11   |  | RISK
          FACTORS                                         | 32                 
|Environmental
          Impact Assessment                             | 11   |  | Arbitration
          Proceedings                              | 32                 
|Mine
          Closure and Remediation                                | 11   |  | Mine
          Operation Agreement                             | 32                 
|Taxation                                                              | 11   |  | Lack
          of Ownership Rights                             | 32                 
|Corporate
          Income Tax                                        | 11   |  | Lack
          of Copper Rights                                | 32                 
|Dividends
          and Branch Profits Tax                            | 12   |  | Additional
          Funding Requirements                      | 32                 
|Financial
          Transactions Tax                                  | 12   |  | Reserve
          and Resource Estimates                       | 33                 
|VAT
          and Import Duties                                       | 12   |  | Title
          to Mineral Properties                          | 33                 
|Tax
          Treaties                                                | 12   |  | Gold
          Price Volatility                                | 33                 
|Exchange
          Controls                                           | 12   |  | Gold
          Hedging Activities                              | 33                 
|LAS
          CRISTINAS PROJECT                                       | 13   |  | Mineral
          Exploration and Exploitation                 | 34                 
|Location
          and Property Descriptions                          | 13   |  | Country
          Risk                                         | 34                 
|Mine
          Operation Agreement                                    | 14   |  | Uninsurable
          Risks                                    | 34                 
|Accessibility,
          Physiography and Climate and Local Resources |      |  | Competition                                                    | 34                 
|and
          Infrastructure                                          | 15   |  | Limited
          Mining Operations                            | 35                 
|Accessibility                                                         | 15   |  | Production
          Risks                                     | 35                 
|Physiography
          and Climate                                    | 15   |  | Environmental
          Regulation and Liability               | 35                 
|Local
          Resources and Infrastructure                          | 16   |  | Regulations
          and Permits                              | 35                 
|History                                                               | 16   |  | Currency
          Fluctuations                                | 36                 
|Geology
          and Mineralization                                  | 16   |  | Recent
          Losses and Write-downs                        | 36                 
|Regional
          Geology                                            | 16   |  | Credit
          Agreement Restrictions                        | 36                 
|Local
          Geology                                               | 16   |  | Dependence
          on Key Employees                          | 36                 
|Mineralization                                                        | 17   |  | Potential
          Dilution                                   | 36                 
|Drilling,
          Sampling and Data Verification                    | 17   |  | DIRECTORS
          AND SENIOR OFFICERS                        | 37                 
|Mineral
          Reserves                                            | 19   |  | Audit
          Committee                                      | 39                 
|Additional
          Mineral Resources                                | 19   |  | Composition                                                    | 39                 
|Feasibility
          Studies                                         | 19   |  | Charter                                                        | 39                 
|Project
          Control Budget                                      | 20   |  | Policy
          on the Provision of Services by External      |                    
|Engineering,
          Procurement and Construction Management        | 21   |  | Auditors                                                       | 40                 
|Permits                                                               | 21   |  | External
          Auditors Service Fees                       | 41                 
|Project
          Management Team                                     | 21   |  | Corporate
          Governance Statement                       | 41                 
|OTHER
          ASSETS                                                | 22   |  | TRANSFER
          AGENT AND REGISTRAR                         | 41                 
|Tomi
          Operations                                             | 22   |  | MATERIAL
          CONTRACTS                                   | 41                 
|Overview                                                              | 22   |  | INTEREST
          OF EXPERTS                                  | 42                 
|Mining                                                                | 22   |  | ADDITIONAL
          INFORMATION                               | 42                 
|Mine
          Production                                             | 23   |  | CONSOLIDATED
          FINANCIAL STATEMENTS                    | Annex
            A
|Mineral
          Reserves                                            | 23   |  | MANAGEMENT’S
          DISCUSSION AND ANALYSIS                 |                    
|Additional
          Mineral Resources                                | 23   |  | OF
          FINANCIAL CONDITION AND RESULTS                   |                    
|Lo
          Incréible Operations                                     | 24   |  | OF
          OPERATIONS                                        | Annex
            B
|Overview                                                              | 24   |  | GLOSSARY
          AND METRIC/IMPERIAL CONVERSION              |                    
|Mining                                                                | 24   |  | TABLE                                                          | Annex
            C
|Mine
          Production                                             | 24   |  | MINE
          OPERATION AGREEMENT AND                         |                    
|Mineral
          Resources                                           | 25   |  | RELATED
          DOCUMENTS                                    | Annex
            D
|Revemin
          Mill                                                | 25   |  |                                                                |                    
|Overview                                                              | 25   |  |                                                                |                    
|Production                                                            | 25   |  |                                                                |                    
|Albino
          Project                                              | 25   |  |                                                                |                    

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DOCUMENTS INCORPORATED BY REFERENCE

The following documents of Crystallex International Corporation (the “Corporation”) filed with the securities regulatory authorities in certain of the provinces of Canada are incorporated by reference in this Annual Information Form:


| | (a) | the audited consolidated balance sheets of the Corporation as at December 31, 2004 and 2003 and consolidated statements of operations, cash flows and shareholders’ equity of the Corporation for each of the years in the three year period ended December 31, 2004, including the notes thereto and the auditors report thereon (the “Consolidated Financial Statements”);
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |     |                                                                                                                                                                                        
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | management’s discussion and analysis of financial condition and results of operations of the Corporation for the year ended December 31, 2004 (“Management’s Discussion and Analysis”);

| |     |                                                                                                                                                    
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------
| | (c) | a mineral reserves and resources report dated April 30, 2003 prepared by Mine Development Associates with respect to the Las Cristinas Project; and

| |     |                                                                                                                                                                                                                                                                                                                                                  
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (d) | the executive summary of a feasibility study completed by SNC-Lavalin Engineers & Constructors Inc. and other independent consultants in September 2003 with respect to the development of the Las Cristinas Project and the construction and operation of a mining and processing facility at a production rate of 20,000 tonnes of ore per day.

Copies of these documents are available on the SEDAR website at www.sedar.com.  Copies of the Consolidated Financial Statements and Management’s Discussion and Analysis are attached to this Annual Information Form as Annex A and Annex B, respectively. Any statement contained in a document incorporated by reference in this Annual Information Form (a “prior statement”) shall be deemed to be modified or superseded for purposes of this Annual Information Form to the extent that any statement contained in this Annual Information Form (a “subsequent statement”) modifies or supersedes such statement.  A subsequent statement need not state that it has modified or superseded a prior statement.  The making of a subsequent statement will not be deemed an admission for any purposes that the prior statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be
stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made.  Any prior statement so modified or superseded will not constitute part of this Annual Information Form except as so modified or superseded.


FOREIGN CURRENCY AND ACCOUNTING PRINCIPLES

In this Annual Information Form, unless otherwise specified, all references to “C$” are to Canadian dollars and all references to “U.S.$” or “U.S. dollars” are to United States dollars.  The Consolidated Financial Statements are reported in U.S. dollars. The following table sets out the rates of exchange for Canadian dollars (“C$”) per U.S. dollar in effect at the end of the periods indicated and the average rates of exchange during such periods based on the noon spot rate quoted by the Bank of Canada:


|                        |  |  | Year ended December 31, | 
|----------------------- |  |  | ----------------------- | 
|                        |  |  |                         | 
|                        |  |  | 2004                    | 
|                        |  |  |                         | 
|Rate at end of period   |  |  | C$1.2036                | 
|Average rate for period |  |  | C$1.3015                | 

The Consolidated Financial Statements have been prepared in accordance with Canadian generally accepted accounting principles and, except as described in note 20 to the Consolidated Financial Statements, conform in all material respects with accounting principles generally accepted in the United States.


GLOSSARY AND METRIC/IMPERIAL CONVERSION TABLE

A glossary of certain defined terms and technical mining terms and abbreviations and a metric/imperial conversion table are included in Annex C to this Annual Information Form.


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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements included or incorporated by reference in this Annual Information Form, including information as to the future financial or operating performance of the Corporation, its subsidiaries and its projects, constitute forward-looking statements.     The words “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule” and similar expressions identify forward-looking statements.  Forward-looking statements include, among other things, statements regarding targets, estimates
and assumptions in respect of gold production and prices, operating costs, results and capital expenditures, mineral reserves and mineral resources and anticipated grades and recovery rates.  Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Corporation, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies.  Many factors could cause the Corporation’s actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Corporation.  Such factors include, among others, risks relating to additional funding requirements, reserve and resource estimates, gold prices, hedging
activities, exploration, development and operating risks, illegal miners, political and foreign risk, uninsurable risks, competition, limited mining operations, production risks, environmental regulation and liability, government regulation, currency fluctuations, recent losses and write-downs, restrictions in the Corporation’s loan facility and dependence on key employees.  See “Risk Factors” and “Risk Factors” in Management’s Discussion and Analysis.  Investors are cautioned that forward-looking statements are not guarantees of future performance and, accordingly, investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein.  Forward-looking statements are made as of the date of this Annual
Information Form, or in the case of documents incorporated by reference herein, as of the date of such document, and the Corporation disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or results or otherwise.

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CRYSTALLEX

Overview

Crystallex International Corporation (the “Corporation”) is a corporation continued under the Canada Business Corporations Act.  The registered and head office of the Corporation is located at 18 King Street East, Suite 1210, Toronto, Ontario, M5C 1C4. The Corporation and its subsidiaries (collectively, “Crystallex”) explore for, mine and produce gold, with a primary focus on Venezuela.  The Corporation’s principal asset is its interest in the Las Cristinas Project located in Bolivar State, Venezuela.  The Corporation’s other assets include the Tomi operations, the Lo Incréible operations (which include the La Victoria deposit), the Revemin mill and the Albino project also located in Bolivar State, Venezuela. The primary focus of the Corporation over the past three years has been the development of the Las Cristinas Project, including:


| |  |  | entering into a mine operation agreement dated September 17, 2002 with Corporacíon Venezolana de Guayana;
| |  | - | ---------------------------------------------------------------------------------------------------------

| |  |   |                                                                                                                                                                                                                                                                           
| |  | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | supervising the preparation of a mineral reserves and resources report (completed in April 2003 by Mine Development Associates) and feasibility studies (completed in September 2003 and January 2004 under the supervision of SNC-Lavalin Engineers & Constructors Inc.);

| |  |   |                                                                                                                                                                             
| |  | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | completing financing transactions (including a C$115 million common share offering completed in April 2004 and a U.S.$100 million debt offering completed in December 2004);

| |  |   |                                                                                             
| |  | - | --------------------------------------------------------------------------------------------
| |  |  | obtaining the necessary permits (including the submission of an environmental impact study);

| |  |   |                                                                                                                                                                                        
| |  | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | entering into an Engineering, Procurement and Construction Management Contract with SNC-Lavalin Engineers & Constructors Inc. and supervising the engineering and construction process;

| |  |   |                                                                                                                             
| |  | - | ----------------------------------------------------------------------------------------------------------------------------
| |  |  | carrying out additional drilling to validate historic project work and reclassify mineral resources to mineral reserves; and
| |  |   |                                                                                                                             
| |  |  | recruiting additional senior management
    personnel.                                                                      



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Corporate Chart

The
      following chart lists the principal subsidiaries of the Corporation and
      their jurisdictions of incorporation. Except where noted, all subsidiaries
      are wholly-owned, directly or indirectly, by the Corporation.


Notes:


|    |                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------
|(1) | The Corporation holds its interest in the Las Cristinas Project directly.  See “Las Cristinas Project  Mine Operation Agreement”.

|    |                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The Corporation holds its interest in the Tomi operations indirectly through Mineras Bonanza, C.A.  See “Other Assets  Tomi Operations  Mining”.

|    |                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | The Corporation holds its interest in the Lo Incréible operations indirectly through Osmin Holdings Limited.  An unrelated third party owns 49% of Osmin Holdings Limited.  See “Other Assets  Lo Incréible Operations  Mining”.

|    |                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------
|(4) | The Corporation holds its interest in the Revemin mill indirectly through Revemin II, C.A.  See “Other Assets Revemin Mill  Overview”.

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MINERAL RESERVES AND RESOURCES

The following table summarizes the mineral reserves and resources at the Las Cristinas Project and certain of the Corporation’s other mineral properties as at December 31, 2004.  The mineral reserve and resource estimates have been prepared in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and National Instrument 43-101 of the Canadian Securities Administrators (“NI 43-101”) and, as set out in the notes below, are based on technical reports prepared by independent experts, or have been prepared by the Corporation under the direction of, and verified by, Dr. Luca Riccio, P. Geo. and Qualified Person (as such term is defined in NI 43-101). Mineral resources are not mineral reserves and do not have demonstrated economic viability, but do have reasonable prospects for economic extraction.  Measured and indicated mineral resources are sufficiently well defined to allow geological and grade continuity to be reasonably assumed and permit the application of technical and economic parameters in assessing the economic viability of the resource.  Inferred resources are estimated on limited information not sufficient to verify geological and grade continuity and to allow technical and economic parameters to be applied.  Inferred resources are too speculative geologically to have economic considerations applied to them to enable them to be categorized as mineral
reserves.  There is no certainty that mineral resources will be upgraded to mineral reserves through continued exploration.  See Annex C for detailed definitions of mineral reserve, proven mineral reserve, probable mineral reserve, mineral resource, measured mineral resource, indicated mineral resource, inferred mineral resource, cut-off grade and Qualified Person.


|                               | RESERVES                        
|------------------------------ | --------------------------------
|                               |                                 
|                               | PROVEN                          
|                               |                                 
|                               | Tonnes                          
|                               |                                 
|                               |                                 
|                               | (tonnes and ounces in thousands)
|                               |                                 
|Las Cristinas Project(1)       | 46,717                          
|Tomi operations(2)             |                                
|                               |                                 
|Total                          | 46,717                          
|                               |                                 
|                               |                                 
|                               | RESOURCES(5)                    
|                               |                                 
|                               | MEASURED                        
|                               |                                 
|                               | Tonnes                          
|                               |                                 
|                               |                                 
|                               | (tonnes and ounces in thousands)
|                               |                                 
|Las Cristinas Project(1)       | 17,024                          
|Tomi operations(2)             |                                
|Lo Incréible operations(3) (4) |                                
|                               |                                 
|Total                          | 17,024                          
|                               |                                 
|                               |                                 
|                               | INFERRED                        
|                               |                                 
|                               | Tonnes                          
|                               |                                 
|                               |                                 
|                               | (tonnes and ounces in thousands)
|                               |                                 
|Las Cristinas Project(1)       | 172,417                         
|Tomi operations(2)             |                                
|Lo Incréible operations(3) (4) | 974                             
|                               |                                 
|Total                          | 173,391                         
|                               |                                 

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________________
Notes:

|(1) | The mineral reserves and resources with respect to the Las Cristinas Project are based on estimates prepared by Mine Development Associates (Steve Ristorcelli, P. Geo., and Scott Hardy, P. Eng., of Mine Development Associates were the Qualified Persons).  The mineral reserves estimated by Mine Development Associates are based on a U.S.$350 per ounce gold price and cut-off grades ranging from 0.4 grams of gold per tonne to 0.5 grams of gold per tonne depending on the mineral type.  The mineral resources estimated by Mine Development Associates are based on a cut-off grade of 0.5 grams of gold per tonne.  See “Las Cristinas Project  Mineral Reserves” and “  Additional Mineral Resources”.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The mineral reserves with respect to the Tomi open pit mines (which represent approximately 65% of the estimated mineral reserves at the Tomi operations) have been estimated by the Corporation under the direction of, and verified by, Dr. Luca Riccio, P. Geo.  The mineral reserves estimated by the Corporation are based on a U.S.$350 per ounce gold price and a cut-off of 1.5 grams of gold per tonne.  The mineral reserves with respect to the Tomi underground mine (which represent the balance of the estimated mineral reserves at the Tomi operations) are based on estimates prepared by Mine Development Associates (Matthew J. Blattman, P. Eng., of Mine Development Associates was the Qualified Person).  The mineral reserves estimated by Mine
Development Associates are based on a U.S.$320 per ounce gold price and a cut-off grade of 5.0 grams of gold per tonne.  The mineral resources with respect to the Tomi operations (both with respect to the open pit mines and the underground mine) have been estimated by the Corporation under the direction of, and verified by, Dr. Luca Riccio, P. Geo.  The mineral resources estimated by the Corporation are based on cut-off grades ranging from 1.0 grams of gold per tonne to 1.5 grams of gold per tonne.  See “Other Assets  Tomi Operations  Mineral Reserves” and “  Additional Mineral Resources”.

|    |                                                                                                                                                                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | The mineral resources with respect to the Lo Incréible operations have been estimated by the Corporation under the direction of, and verified by, Dr. Luca Riccio, P. Geo.  The mineral resources estimated by the Corporation are based on a cut-off grade of 1.44 grams of gold per tonne.  See “Other Assets  Lo Incréible Operations  Mineral Resources”.

|    |                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | 100% of the mineral resources estimate with respect to the Lo Incréible operations.  See “Crystallex  Corporate Chart” and “Other Assets  Lo Incréible Operations  Mining”.

|    |                                                                          
|--- | -------------------------------------------------------------------------
|(5) | Mineral resources are in addition to and do not include mineral reserves.

The criteria set forth in NI 43-101 are similar to the reserve definitions and guidelines for classification of mineral resources used by the U.S. Geological Survey.  However, the definitions in NI 43-101 differ in certain respects from the definitions set forth in the United States Securities and Exchange Commission’s Industry Guide 7 concerning mining operations.


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INFORMATION WITH RESPECT TO THE GOLD INDUSTRY

The principal uses of gold are product fabrication and bullion investment.  A broad range of end uses is included within the fabrication category, the most significant of which is the production of jewelry.  Other end uses include official coins, electronics, miscellaneous industrial and decorative uses, medals and medallions. Global gold industry production is expected to be flat to declining for the next few years after significant growth from 1995 to 2001.  The lack of growth is attributable, among other things, to relatively few recent material discoveries as a result of a decline in gold exploration activities from 1996 to 2002.  In addition, gold producers are being forced to explore new regions as their deposits in conventional locations are depleted. The cost of gold production expressed in U.S. dollars is rising globally primarily due to U.S. dollar weakness and a declining quality of reserves at producing mines. The price of gold has rebounded from its lows during the period 1998 to 2002, primarily due to U.S. dollar weakness.  Since 2000, there has been a strong inverse correlation between the trade-weighted U.S. dollar exchange rate and the gold price.  Other factors affecting the gold price have been an increase in the demand for gold for investment purposes, primarily attributed to the Asian and Indian markets and underpinned by jewelry demand, de-hedging by gold producers, negative real U.S. treasury bill yields, the Washington Accord which has limited central bank gold sales, global reflationary pressures and a general increase in global geopolitical tensions. The period of relatively low gold prices from 1998 to 2002 coincided with significant consolidation among senior gold producers.  Approximately one-half of all global gold production is now controlled by the world’s top 10 producers. The table below shows the average daily morning gold price fixing on the London Bullion Market from 1990 to 2004.


|     |  |  | Average Gold Price | 
|---- |  |  | ------------------ | 
|     |  |  |                    | 
|     |  |  | (U.S.$/oz)         | 
|1990 |  |  | 384                | 
|1991 |  |  | 362                | 
|1992 |  |  | 344                | 
|1993 |  |  | 361                | 
|1994 |  |  | 385                | 
|1995 |  |  | 384                | 
|1996 |  |  | 388                | 
|1997 |  |  | 331                | 
|1998 |  |  | 294                | 
|1999 |  |  | 279                | 
|2000 |  |  | 279                | 
|2001 |  |  | 271                | 
|2002 |  |  | 311                | 
|2003 |  |  | 363                | 
|2004 |  |  | 410                | 

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MINING IN VENEZUELA

The Las Cristinas Project and the Corporation’s other properties are located in Venezuela.  The following is a brief description of certain aspects of mining in Venezuela.


Venezuela

Venezuela is a democratic federal republic comprising 23 states, two federal territories, one federal district and 72 federal dependencies.  The Republic is governed by a National Executive, comprising an elected President and an appointed (by the President) Council of Ministers, and an elected 165 member unicameral National Assembly. The President is elected for a renewable (one-time) six-year term.  The current President is Hugo Chávez Frías, the leader of the Movimiento Quinta República (MVR), a faction of the Movimiento al Socialismo (MAS) and Patria Para Todos (PPT) political parties.  Mr. Chávez was elected to his first six-year term as President in 2000.  He defeated a recall referendum organized by opposition political parties in 2004. Venezuela’s natural resources sector is dominated by the hydrocarbon sector.  In 2004, oil and natural gas production represented approximately 25% of Venezuela’s gross domestic product and approximately 82% of its exports.  Mineral production, primarily bauxite, alumina and primary aluminium, iron ore and steel, gold and diamonds, represented less than 1% of Venezuela’s gross domestic product. The Guayana Region of southeastern Venezuela, an area that is rich in minerals and covers approximately one-half of Venezuela, is the focus of Venezuela’s efforts to diversify its economy away from petroleum and natural gas.  Corporacíon Venezolana de Guyana (“CVG”), a decentralized autonomous public administrative institution created in 1960 pursuant to the Law for the Development of Guayana, is responsible for the development and administration of the Guayana Region.  The CVG, directly and through its subsidiary companies, is involved in the mining and production of bauxite, alumina and primary aluminium, iron ore and steel and gold as well as electricity and cement.  The CVG is
Venezuela’s second largest industrial group after Petróleos de Venezuela, S.A., the state-owned petroleum and natural gas company. The Guayana Region is the primary source of Venezuela’s hydroelectric capacity, including the Guri Dam that supplies over 67% of Venezuela’s electricity requirements.  Electricity costs in Venezuela are low by world standards. Venezuela has entered into bilateral investment treaties with a number of countries, including Canada.


Mining Law

| | Introduction
| | ------------

Under the Venezuelan constitution, all hydrocarbon and mineral resources belong to the Republic.  The Mining Law of 1999 (“VML”) regulates the exploration and exploitation of mineral resources (other than some industrial minerals not found on government lands).  The Ministry of Basic Industries and Mining (“MIBM”) (formerly, the Ministry of Energy and Mines) is responsible for administering the VML. The VML permits the exploration and exploitation of mineral resources in several ways, including concessionary exploration and exploitation by private parties pursuant to mineral concessions granted by the MIBM and direct exploration and exploitation by the Government of Venezuela.


| | Mineral Concessions         
| | ----------------------------
| |                             
| | Rights of Concession Holders

Prospecting and staking are not permitted in Venezuela.  Private parties that have identified interesting prospects may apply for a combined 20-year exploration and exploitation concession over an area not to exceed 12,312 hectares for exploration and 3,078 hectares for exploitation.  The concession is renewable for a period not to exceed 20 years.  The exploration period of the concession is limited to three years (with a possible extension of one year).  A financial, technical and environmental feasibility study must be presented to the MIBM for approval before the end of the exploration period.  Upon the expiration of the concession, all equipment and installations relating to mining and production activities on
the concession area become the property of the Republic without compensation to the concession holder.




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Mineral Concession Taxes Holders of mineral concessions are required to pay an annual exploration tax of up to 0.38 tax units per hectare (one tax unit equals approximately U.S.$15.30).  This tax is replaced by a surface tax of 0.38 tax units per hectare commencing in the fourth year of the concession.  Once production begins, concession holders are required to pay an exploitation tax equal to, in the case of gold, 3% of the Caracas commercial value of the refined mineral. Ownership of Concessions There are no restrictions on who (domestic or foreign) may hold mineral concessions.  Mineral concessions may not be transferred without the consent of the MIBM. Sale of Production Except for gold, there are no restrictions on the right to sell mineral production in world markets.  In the case of gold, concession holders must offer to sell at least 15% of their gold production at world market prices to the Venezuelan Central Bank, which may or may not elect to purchase such amount.  The balance may be exported with the permission of the Venezuelan Central Bank. Direct Exploitation The Government of Venezuela may reserve for itself through a decree the right to directly explore and exploit specific areas or some or all of the minerals within specific areas.  Direct exploration and exploitation may be carried out either by the Government itself through the MIBM or by a public entity such as the CVG.  The effect of such a reservation is to prohibit the grant of mineral concessions to private parties. Operation Agreements If the Government of Venezuela has reserved direct exploration and exploitation of minerals for itself, the MIBM or the public entity may enter into operation agreements with third parties with respect the exploration and exploitation of the reserved minerals.


Environmental Laws

| | General
| | -------

Venezuela has a comprehensive set of environmental laws administered by the Ministry of the Environment and Natural Resources (“MARN”). Venezuela is also party to a number of important international conventions and treaties concerned with environmental protection and nature conservation. Environmental Impact Assessment All mining projects require both a permit to occupy territory issued by the MIBM and an authorization to impact the natural resources issued by the MARN and must be preceded by an environmental impact assessment (“EIA”) administered by the MARN.  The EIA process includes the filing of a comprehensive environmental, socio-economic and cultural impact study by the developer of the mining project. Mine Closure and Remediation All developers of mining projects have a general obligation to restore the environment to its natural condition when the project is completed.  Specific laws regarding mine closure and remediation are limited.  Such matters are normally covered in authorizations to affect the natural environment issued by the MARN.


Taxation

| | Corporate
    Income Tax
| | ------------------------

Venezuelan corporations and non-Venezuelan corporations carrying on business in Venezuela through a permanent establishment (ie, Venezuelan branches) are subject to corporate income tax on their worldwide income (in the case of a Venezuelan corporation) or their income attributable to the permanent establishment (in the case of a Venezuelan branch) at a maximum rate of 34%.  They are also subject to municipal tax of between 0.5% and 10% of their gross revenues depending on the municipality where they carry on business and the nature of their business.




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Venezuelan corporations and branches
    are subject to a system of inflation adjustments. If it owns a mining project,
    at the time the project is completed, a Venezuelan corporation or branch
    must revalue its non-monetary assets, liabilities and equity in accordance
    with the inflation rate and pay a one-time tax of 3% of the amount of the
    increase. At the end of each taxation year thereafter, the corporation or
    branch must revalue its non-monetary assets, liabilities and equity in accordance
    with the inflation rate. The corporation’s or branch’s taxable
    income for the taxation year may increase or decrease as a result of the
    adjustment. Venezuelan corporations and branches are entitled to amortize their capital assets on a straight-line basis over the useful life of the assets.  Foreign exchange gains and losses are included in calculating income.  Losses may be carried forward for three years in the case of exploitation losses and one year in the case of inflation losses from the year in which they are incurred. Dividends and Branch Profits Tax Dividends paid by Venezuelan corporations are subject to withholding tax at the rate of 34%.  This rate may be reduced under applicable tax treaties. Net earnings repatriated by Venezuelan branches are subject to a branch profits tax of 34%.  This rate may be reduced under applicable tax treaties.  The tax does not apply to net earnings reinvested in Venezuela for a minimum period of five years. Only those dividends and repatriations that originate from income that has not been subject to corporate income tax at the corporation or branch level are subject to the withholding or branch profits tax. Financial Transactions Tax All debits made to accounts maintained with Venezuelan financial institutions are subject to financial transactions tax at the rate of 0.5%. VAT and Import Duties Venezuelan corporations and branches are required to pay value added tax (“VAT”) of 15% on goods and services purchased by them, including imported goods and services.  They may recover the VAT paid by them from the VAT charged and collected by them on goods and services sold by them in Venezuela.  Export sales are subject to VAT of 0%.  Exporters recover VAT previously paid by them through certificates issued to them by the Ministry of Finance.  The certificates may be used as a credit against future VAT and income taxes or may be transferred to third parties for value and thereby monetized. Import duties of various rates are also payable on goods imported into Venezuela. A Venezuelan corporation or branch that is proposing to carry out a mining project that is in the national interest may apply to the National Executive for an exemption from the VAT and import duties applicable to machinery and equipment imported by it into Venezuela for the project. Tax Treaties Venezuela has entered into tax treaties with a number of countries including Canada.


Exchange Controls

Venezuela reintroduced exchange controls in February 2003. All foreign currencies brought into Venezuela must be converted into Bolivars at the prevailing official exchange rate.  Also, the net proceeds of all exports of goods and services must be repatriated and converted into Bolivars at the prevailing official exchange rate.  Venezuelan corporations and branches have access to foreign currencies at the prevailing official exchange rate to pay principal and interest on registered prescribed debt and to purchase prescribed imported goods and services under registered agreements.  They must apply to the Venezuelan Foreign Exchange Administration Commission to obtain foreign currencies at the prevailing official exchange rate for other purposes, including paying dividends and
repatriating net earnings.


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LAS CRISTINAS PROJECT

The information set out below is based on, among other things:

| |  | a mineral reserves and resources report dated April 30, 2003 prepared by Mine Development Associates (“MDA”) (the “MDA Report”);
| | - | --------------------------------------------------------------------------------------------------------------------------------

| |   |                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a feasibility study completed by SNC-Lavalin Engineers & Constructors Inc. (“SNCL”) and other independent consultants (including MDA) in September 2003 with respect to the development of the Las Cristinas Project and the construction and operation of a mining and processing facility at a production rate of 20,000 tonnes of ore per day (the “20,000 TPD Feasibility Study”); and

| |   |                                                                                                                                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a feasibility study completed by SNCL and other independent consultants (including MDA) in January 2004 with respect to the development of the Las Cristinas Project and the construction and operation of a mining and processing facility at a production rate of 40,000 tonnes of ore per day (the “40,000 TPD Feasibility Study”).

A copy of the MDA Report and copies of the executive summaries of the 20,000 TPD Feasibility Study and the 40,000 TPD Feasibility Study are available for review on the SEDAR website at www.sedar.com. The 20,000 TPD Feasibility Study is the Corporation’s current base case and current technical report for purposes of NI 43-101.  The 40,000 TPD Feasibility Study was prepared to assess the economics of a larger scale operation. The MDA Report and the executive summary of the 20,000 TPD Feasibility Study are incorporated by reference into this Annual Information Form for purposes of satisfying certain of the disclosure requirements of National Instrument 51-102 and Form 51-102F2 with respect to the Las Cristinas Project, including mineralization, drilling, sampling, analysis and security of samples and metallurgical testwork.


Location and Property Description

The Las Cristinas Project is located the Municipality of Sifontes in Bolivar State, Venezuela, approximately six kilometres west of the village of Las Claritas and 670 kilometres southeast of Caracas and approximately 360 kilometres southeast of Puerto Ordaz. The Las Cristinas Project consists of four areas (referred to individually as Las Cristinas 4, 5, 6 and 7 and collectively as the “Las Cristinas Deposits”) which together cover an area of 3,885.6 hectares.


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The location of the Las Cristinas Deposits is shown in the following map.




Mine Operation Agreement

The Corporation’s interests in the Las Cristinas Deposits are derived from:

| |  | a Presidential decree pursuant to which the Government of Venezuela reserved for itself through the Ministry of Energy and Mines the direct exploration and exploitation of the gold mineral located in the Las Cristinas Deposits and granted to the Ministry of Energy and Mines the right to contract with the CVG the activities required to carry out such exploration and exploitation;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |   |                                                                                                                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | an agreement between the Ministry of Energy and Mines and the CVG pursuant to which the Ministry of Energy and Mines granted to the CVG the right to explore and exploit the gold mineral located in the Las Cristinas Deposits and to enter into operation agreements with third parties for such purposes; and

| |   |                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------
| |  | a mine operation agreement between the CVG and the Corporation dated September 17, 2002 (the “Mine Operation Agreement”).

See “Mining in Venezuela  Mining Law  Direct Exploitation”.  English language translations of the Presidential decree, the agreement between the Ministry of Energy and Mines and the CVG and the Mine Operation Agreement referred to above are attached to the Annual Information Form as Annex D. The principal provisions of the Mine Operation Agreement are summarized below.


| |  | Authorization.  The CVG authorized the Corporation and the Corporation agreed to make all investments and carry out all works necessary to explore, develop, exploit, commercialize and sell the gold mineral contained in the Las Cristinas Deposits for the CVG.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |   |                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Fees and Payments.  In consideration for its services, the Corporation is entitled to a fee equal to the value of the gold produced from the Las Cristinas Deposits less:

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| |  |     |                                                                                                                                       
| |  | --- | --------------------------------------------------------------------------------------------------------------------------------------
| |  | (a) | the following royalty to which the CVG is entitled based on the commercial value of the gold produced from the Las Cristinas Deposits:
| |  |     |                                                                                                                                       

| |  |  | Commercial Value                                                              | Royalty |       
| |  |  | ----------------------------------------------------------------------------- | ------- | ------
| |  |  | less than U.S.$280 per ounce                                                  | 1.0     | %     
| |  |  | equal to or more than U.S.$ 280 per ounce 
  and less than U.S.$350 per ounce | 1.5     | %     
| |  |  | equal to or more than U.S.$350 per ounce 
  and less than U.S.$400 per ounce  | 2.0     | %     
| |  |  | more than U.S.$400 per ounce                                                  | 3.0     | %; and
| |  |  |                                                                               |         |       

| |  | (b) | the Venezuelan exploitation tax payable by the CVG equal to 3% of the value of the gold produced from the Las Cristinas Deposits.
| |  | --- | ---------------------------------------------------------------------------------------------------------------------------------

| |  |                                                                                                                                   
| |  | ----------------------------------------------------------------------------------------------------------------------------------
| |  | The Corporation is required to pay the exploitation tax on behalf of the CVG and is entitled to be reimbursed by the CVG therefor.

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Covenants.The Corporation is required, among other things, to: prepare and present to the CVG for approval annual production plans (which include information with respect to capital investments, production volumes, processing capacity, operating costs, number of workers, projected price of gold and income from sales of gold and other material information relating to such matters) and annual and life-of-mine development plans (which include operational information relating to volumes of excavation, waste exploitation, handling of effluents and     information with respect to environmental protection and security and other material information relating to such matters); provide certain social development programs (including employment and training
programs for employees and groups of small miners, improving community health care facilities, providing local housing and infrastructure improvements to water and sewage systems and road access to the project site); compensate the CVG for loss of profits if the project fails to meet approved production volumes for reasons other than as a result of force majeure; and carry out its activities in accordance with applicable Venezuelan environmental, mining and other laws and in accordance with principles of sustainable development.

| |   |                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------
| |  | Non-Assignment by the Corporation.The Corporation is not permitted to assign the Mine Operation Agreement.

| |   |                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Term and Termination.The term of the Mine Operation Agreement is 20 years subject to extension by the parties for two renewal terms (each 10 years).  The Mine Operation Agreement may be terminated by either party on 90 days written notice if the other party defaults in the performance of its obligations under the Mine Operation Agreement.

| |   |                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Dispute Resolution.If a dispute arises under the Mine Operation Agreement that the parties are unable to resolve, the parties have agreed to refer the matter for determination to tribunals of Bolivar State, Venezuela.

| |   |                                                                                                
| | - | -----------------------------------------------------------------------------------------------
| |  | Governing Law.The Mine Operation Agreement is governed by the laws of Bolivar State, Venezuela.

Accessibility, Physiography and Climate and Local Resources and Infrastructure

Accessibility The Las Cristinas Project is accessed by driving approximately five hours southeast from Puerto Ordaz.  The highway is four-lane for approximately 55 kilometres and continues for approximately 280 kilometres thereafter as a well maintained two-lane paved road to the camp-site turn-off at kilometer 84.  From there, the Project is accessed using a 19-kilometre road which the Corporation is in the process of upgrading in order to bypass local villages.  Puerto Ordaz is a port city located on the Orinoco River with access to the Caribbean Sea and is served by four airlines with numerous daily flights to Caracas and other major cities in Venezuela.  The nearest commercial airstrip to the Project is at El Dorado, which is
located approximately one hundred kilometres north of the camp-site towards Puerto Ordaz.  A charter flight from Puerto Ordaz to El Dorado takes approximately one hour. Physiography and Climate There is very little topographic relief around the Las Cristinas Project.  The average elevation is 130 metres above sea level, with small rounded hills reaching a maximum elevation of 160 metres above sea level.  Four streams or rivers flow through the property:  Amarilla, Las Claritas, Sofia and Morrocoy.  The river valleys are wide and shallow, and occasionally flood during the rainy season.  Much of the Project area has been deforested and hydraulically mined by itinerant miners. As a result, there are numerous water filled pits and large areas of tailings material.  The tailings material tends to mimic quicksand and makes access to some areas difficult.




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The climate is tropical and humid.
    Temperatures range from 22° celsius to 36° celsius and operations
    can be conducted year around. Annual rainfall is approximately 2.5 metres,
    most of which falls in hourlong cloudbursts during the day. Annual evaporation
    is approximately 1.8 metres. The rainy season extends from May to October
    with a short rainy season in December. Rainfall in the dry season is not
    uncommon, but is usually less intense than in the rainy season. Undisturbed primary vegetation is typical of the Sub-Amazon type rain forest.  Large trees dominate the forest, with their canopy up to 30 metres above the ground.  The forest floor is relatively open.  Secondary vegetation, which has now invaded the mined or otherwise disturbed areas, consists of small weed trees, bushes, creeping vines and various grasses.  This secondary growth is often quite dense and can be difficult to penetrate on foot. Local Resources and Infrastructure There is sufficient infrastructure in the region to support mining operations.  Additional personnel will, however, have to be brought in for construction and mining operations.  There is ample water and land surface for mining, plant sites and tailings disposal. An existing construction camp is in the process of being refurbished.  Administration offices have been completed and work is ongoing with respect to dining facilities and dormitories. Power requirements will increase from an average of about 10 MW at the commencement of construction to about 45 MW when the plant is in full production.  Maximum demand could reach 55 MW.  A 400 KVA power line (with a capacity of 300 MW and a current demand of approximately 100 MW) has been installed near the Project to supply power to Brazil.  The Government of Venezuela has installed a substation near the town of Las Claritas that is capable of supplying the Las Cristinas Project.


History

Gold was first discovered in the Las Claritas area in 1920.  Gold mining at the Las Cristinas Project site was initiated in the 1930s and continued sporadically on a minor scale until the early 1980s when a “garimpeiro” (itinerant, small miners) gold rush occurred, with some 5,000 to 7,000 garimpeiros working alluvial and saprolite-hosted gold deposits using hydraulic mining techniques.  The amount of gold recovered is unknown.  Much of the Project site is covered with tailings. See also “Legal Proceedings  Withdrawal of MINCA Litigation”.


Geology and Mineralization

Regional Geology TheLas Cristinas Project is located in the granite-greestone terrain of the Guyana Shield.  The Guyana Shield underlies the eastern part of Venezuela, Guyana, Surinam, French Guiana and parts of northern Brazil.  Three major geologic subdivisions have been established for the Guyana Shield:  Archean rocks older than 2.5 million years consisting of high-grade metamorphic gneiss, local charnockite and widespread granitoid bodies; sedimentary and volcanic rocks of the early Proterozoic age which have undergone compressional tectonism and are metamorphosed and intruded by syn-orogenic granites of Trans-Amazonian Orogeny; and mid-Proterozoic continental clastic units of Roraima Formation which unconformably overlie
the early Proterozoic rocks. Local Geology Weathered Profile The weathered profile at Las Cristinas includes an upper layer of ferralitic soil (up to 2 metres thick) overlying a thin mottled clay zone (averaging two metres thick) which in turn overlies a saprolite zone, which is generally 20 metres to 60 metres thick and locally over 90 metres thick.  The saprolite is subdivided into an upper oxide saprolite horizon in which copper minerals have been leached and a lower sulphide bearing saprolite horizon.  Secondary copper minerals are concentrated in a relatively narrow zone in the upper part of the sulphide bearing saprolite horizon.  The contact between oxide and sulphide saprolite is generally defined by a distinct colour change.  A zone of mixed saprolite and bedrock,
known as saprock, separates the base of the sulphide saprolite from the bedrock. The upper 50 metres of bedrock is characterized by centimetre size vugs and voids derived from the weathering of carbonate veins or carbonate matrix.  This zone is termed carbonate-leached bedrock.




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Structure

Four structural orientations dominate the Las Cristinas area:


| |  |  | Host rocks have a pervasive, penetrative foliation that is sub-parallel to stratigraphy and strikes north-northeast and dips shallowly to the west.  The intensity of foliation development is variable, with coarser-grained tuffaceous strata tending to have a stronger cleavage.  Higher grade zones lie sub-parallel to bedding and pervasive foliation.  In the more intensely deformed parts of the orebody the sulphide-bearing veinlets and clots tend to parallel foliation while in less deformed zones the same veinlets cut the foliation at angles of 30 to 45 degrees.
| |  | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |   |                                                                                                                                                                                             
| |  | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | Tourmaline breccia bodies, which are linked to mineralization by a common alteration assemblage, have a preferred northwest strike.  This orientation is shared by some gabbroic intrusives.

| |  |   |                                                                                                                                                                                                                                                                   
| |  | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | Structural orientations change across the Amarilla river, which separates the Las Cristinas Deposits into two distinct domains.  Dykes of gabbroic intrusives trend northeast in the vicinity of the river and are suspected to mark the location of a fault zone.

| |  |   |                                                  
| |  | - | -------------------------------------------------
| |  |  | Late, barren, bull quartz veins strike east-west.

Alteration Sulphide-bearing quartz-tourmaline breccia pipes constitute the highest temperature cores of alteration at Las Cristinas.  Tourmaline content decreases outward from these centres which are enclosed by pervasive secondary biotite alteration with disseminated magnetite.  Epidote, calcite and chlorite alteration is superimposed on the secondary biotite alteration as pervasive replacements and cross-cutting veinlets.  Pyrite and chalcopyrite occur as disseminations and blebs within the biotite-magnetic and epidote-calcite-chlorite alteration zones and within quartz and carbonate veinlets.  The bulk of the economic mineralization is hosted by the biotite-magnetite alteration, although some of the highest-grade gold
mineralization is hosted by the cross-cutting epidote-calcite-chlorite veins.  Minor phyllic alteration assemblages, which are dominated by quartz-sericite-pyrite, typically contain 0.1  0.3 g/t gold. Mineralization There are two main deposits at Las Cristinas: Conductora/Cuatro Muertos (“Conductora”) and Mesones/Sofia (“Mesones”). At Conductora, gold associated with pyrite-chalcopyrite disseminations, veinlets (2-5% sulphides) and blebs generally oriented parallel to the foliation.  The most intense biotite-magnetite alternation is developed within tuff layers with adjacent lava beds having less secondary biotite and more epidote alteration.  Higher gold grades are associated with zones of most intense secondary biotite-magnatite alteration and with cross-cutting, or epidote-carbonate-chlorite alteration that is superimposed on the secondary biotite alteration.  On a microscopic scale, gold can be found as free grains in quartz and as blebs and fracture fillings in pyrite and chalcopyrite.  Silicate-carbonate-sulphide veins tend to parallel
foliation. At Mesones, gold mineralization occurs within tourmaline breccia zones which have obliterated primary volcanic textures.  Sulphide concentrations are coarser grained and more chalcopyrite rich than those at Conductora. Within the upper oxidized part of the saprolite, copper has been predominantly leached but gold generally retains its original distribution.  The sulphide saprolite which has been enriched in copper leached from the overlying oxide saprolite also retains the original gold distribution.  Copper and gold grade distributions in the bedrock have not been affected by weathering.


Drilling, Sampling and Data Verification

The most detailed work on the property was carried out by Placer Dome Inc. (“Placer”), the previous holder of an interest in the Las Cristinas Deposits (see “Legal Proceedings  Withdrawal of MINCA Litigation”).  The work included:


| |  | mapping and rock sampling (geologic mapping was done at scales of 1:5,000 and 1:500 and over 1,200 samples were collected);
| | - | ---------------------------------------------------------------------------------------------------------------------------

| |   |                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | soil sampling (approximately 3,700 samples were taken from upper saprolite on a 50 metre by 100 metre grid in the main mineralized zones and on a 50 metre by 200 metre grid in the peripheral areas); soil samples were analyzed for gold;

| |   |                                                             
| | - | ------------------------------------------------------------
| |  | drilling of 1,174 drill holes totalling over 110,000 metres;

| |   |                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------
| |  | geophysics (ground magnetometer, induced polarization, radiometry, air magnetic and transient electromagnetic geophysical surveys); and

| |   |                     
| | - | --------------------
| |  | tailings evaluation.

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The work performed by Placer culminated in a comprehensive feasibility study in 1996 which was subsequently updated in 1998.

Under the Mine Operation Agreement, the Corporation obtained an electronic data base which included drilling, topographic, geologic and engineering data derived from previous work completed by Placer.  The data base included information on 160,600 metres of drilling and trenching, 162,806 gold assays, 145,547 copper assays, 60,655 cyanide-soluble copper assays, 145,221 silver assays and 108 trenches.  As part of the preparation of the MDA Report, MDA visited the Las Cristinas site in October 2002 and found drill pads, drill collars, drill cores and samples, core photographs and other supporting data that exploration was carried on in the manner described in the documentation of Placer’s work.  MDA also took
independent samples of core, pulps and coarse rejects as part of the beginning of the verification process.  MDA concluded that Placer’s exploration and sampling procedures conformed to or exceeded industry standards. In 2003, the Corporation completed a six week, 2,199 metre drill program designed to validate the historic project work.  MDA was on site for the first three weeks of the program.  The program included 12 diamond drill holes and 1,016 samples from the holes.  In addition, the Corporation analyzed 341 quarter cores, 198 coarse rejects and 259 pulps left at the site by Placer.  As part of the verification program, blanks and standards were systematically inserted into the sample stream.  MDA supervised drill sampling, sample collection and sample packaging for the first half of the program.  Sample preparation and assaying was done by independent laboratories.  MDA also took independent core samples to verify the work
completed by the Corporation and requested that independent surveying be done on existing drill holes.  As part of the MDA Report and following the completion of the verification program, MDA concluded that the Las Cristinas database could be used for feasibility level study and mineral reserve and resource estimation. In 2004, the Corporation completed a 7,120 metre, 18-hole drill program on a block of inferred mineral resources located within the planned pit in the southwestern part of the Conductora deposit.  In 2005, the Corporation intends to complete an additional 5,000 metre drill program.


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Mineral Reserves

The estimated mineral reserves at the Las Cristinas Project as at December 31, 2004 were as follows:


|           |  |  | Mineral Reserves(1) |  |  | Average Grade |  |  | Contained Gold(2) | 
|---------- |  |  | ------------------- |  |  | ------------- |  |  | ----------------- | 
|           |  |  | (tonnes  000’s)    |  |  | (g/t)         |  |  | (ounces  000’s)  | 
|           |  |  |                     |  |  |               |  |  |                   | 
|Conductora |  |  |                     |  |  |               |  |  |                   | 
|Proven     |  |  | 46,717              |  |  | 1.30          |  |  | 1,954             | 
|Probable   |  |  | 263,006             |  |  | 1.18          |  |  | 10,009            | 
|Mesones    |  |  |                     |  |  |               |  |  |                   | 
|Probable   |  |  | 23,589              |  |  | 1.17          |  |  | 885               | 
|           |  |  |                     |  |  |               |  |  |                   | 
|Total      |  |  | 333,312             |  |  | 1.20          |  |  | 12,849            | 
|           |  |  |                     |  |  |               |  |  |                   | 

___________________
Notes:

|(1) | The mineral reserve estimates are based on the 20,000 TPD Feasibility Study which was updated by MDA in November 2004 (the update includes results from the 2,199 metre program completed by the Corporation in 2003 and the 7,120 metre drill program completed by the Corporation in 2004) using the same procedures contained in the 20,000 TPD Feasibility Study.   As a result of the November 2004 update, some mineral resources were reclassified as mineral reserves.  The overall mineral reserves and resources did not, however, change in any material respect.  The Corporation does not believe that the increase in mineral reserves has a material impact on the project economics.  The mineral reserves estimates: (a) are based on a U.S.$350 per
ounce gold price and cut-off grades ranging from 0.4 grams of gold per tonne to 0.5 grams of gold per tonne depending on the mineral type and (b) have been updated to reflect the operating costs described below under “Project Control Budget”.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|    |                              
|--- | -----------------------------
|(2) | Does not add due to rounding.

Additional Mineral Resources

The estimated additional mineral resources at the Las Cristinas Project at December 31, 2004 were as follows:


|                             |  |  | Mineral Resources(1) (2) |  |  | Average Grade |  |  | Contained Gold   | 
|---------------------------- |  |  | ------------------------ |  |  | ------------- |  |  | ---------------- | 
|                             |  |  | (tonnes  000’s)         |  |  | (g/t)         |  |  | (ounces  000’s) | 
|                             |  |  |                          |  |  |               |  |  |                  | 
|Conductora                   |  |  |                          |  |  |               |  |  |                  | 
|Measured                     |  |  | 7,619                    |  |  | 0.72          |  |  | 176              | 
|Indicated                    |  |  | 97,975                   |  |  | 0.83          |  |  | 2,618            | 
|Inferred                     |  |  | 151,910                  |  |  | 0.88          |  |  | 4,288            | 
|Mesones                      |  |  |                          |  |  |               |  |  |                  | 
|Measured                     |  |  | 9,405                    |  |  | 1.20          |  |  | 364              | 
|Indicated                    |  |  | 14,016                   |  |  | 0.47          |  |  | 214              | 
|Inferred                     |  |  | 20,507                   |  |  | 0.65          |  |  | 431              | 
|Total Measured and Indicated |  |  | 129,015                  |  |  | 0.81          |  |  | 3,372            | 
|Total Inferred               |  |  | 172,417                  |  |  | 0.85          |  |  | 4,719            | 

________________
Notes:

|(1) | The additional mineral resource estimates are derived from the 20,000 TPD Feasibility Study which was updated by MDA in November 2004.  See note (1) to the table under “Mineral Reserves”.   The mineral resources estimates are based on a cut-off grade of 0.5 grams of gold per tonne.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|    |                                                                          
|--- | -------------------------------------------------------------------------
|(2) | Mineral resources are in addition to and do not include mineral reserves.

Feasibility Studies

In September 2003, SNCL and other independent consultants (including MDA) completed the 20,000 TPD Feasibility Study.   The 20,000 TPD Feasibility Study was approved by the CVG in accordance with the terms of the Mine Operation Agreement in March 2004.  The 20,000 TPD Feasibility Study is the Corporation’s current base case. In January 2004, SNCL and other independent consultants (including MDA) completed the 40,000 TPD Feasibility Study.  The Corporation believes that the 40,000 TPD Feasibility Study demonstrates that the economics of the 20,000 TPD Feasibility Study can be improved by constructing a larger scale operation.  The decision whether to proceed with a larger scale operation will depend on, among other things, the availability of financing, market conditions and the price of gold.




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The conclusions, estimates and findings of the 20,000 TPD Feasibility Study are set out below.  The conclusions, estimates and findings of the 40,000 TPD Feasibility Study are also set out below for comparative purposes.


| |  | Mining.Mining at Las Cristinas will be by conventional open pit methods using excavators and haul trucks.
| | - | ---------------------------------------------------------------------------------------------------------

| |  |                                                                                                                                                                                                                                                                                                                                         
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The mine production schedule contemplated under the 20,000 TPD Feasibility Study provides for processing 20,000 tonnes of ore per day (7.3 million tonnes annually), an overall stripping ratio of 1.34:1 (ranging from 0.21:1 in the second quarter of year one to 3:1 in year 28 of production) and an expected mine life of 34 years.

| |  |                                                                                                                                                                                                                                                                                                                                              
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The mine production schedule contemplated under the 40,000 TPD Feasibility Study provides for processing 40,000 tonnes of ore per day (14.6 million tonnes annually), an overall stripping ratio of 1.04:1 (ranging from 0.21:1 in the second quarter of year one to 1.7:1 in year 16 of production) and an expected mine life of 21.5 years.

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Processing and Recovery.Processing will consist of crushing, semi-autogeneous primary grinding and secondary ball mill grinding.  A gravity circuit is contemplated to recover free gold.  Gold extraction will be achieved using a conventional carbon-in-leach circuit.  Under this method of recovery, a slurry of gold ore, carbon granules and cyanide are mixed together, the cyanide dissolves the gold content and the gold is adsorbed onto the carbon and the loaded carbon is separated from the slurry for further processing.  Gold is removed from the loaded carbon by pressure stripping the carbon to produce a pregnant eluate solution, electrowinning the solution to produce gold cathodes and smelting the cathodes to produce gold doré.  Pilot-plant
metallurgical testing conducted under the supervision of an independent consultant during the feasibility study resulted in an overall recovery rate of 89% for the planned ore blend.

| |  |                                                                                                                                                                           
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The average annual gold production contemplated under the 20,000 TPD Feasibility Study is 266,000 ounces for the life of mine and 311,000 ounces for the first five years.

| |  |                                                                                                                                                                           
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The average annual gold production contemplated under the 40,000 TPD Feasibility Study is 490,000 ounces for the life of mine and 549,000 ounces for the first five years.

| |   |                                                                                                                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Environmental Matters.The feasibility studies conclude that, subject to further analysis to be conducted at subsequent stages of the project, the risk of significant environmental impacts and/or schedule delays arising from environmental or socio-economic concerns (eg, stability of tailings storage facility and risk of environmental contamination from effluent discharges) is low.

| |   |                                                                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Capital Costs.The estimated capital costs of the Las Cristinas Project under the 20,000 TPD Feasibility Study are approximately U.S.$242.8 million (including approximately U.S.$160.7 million for mine development and a processing plant, tailings management facilities and related infrastructure).

| |  |                                                                                                                                                                                                                                                                            
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The estimated capital costs of the project under the 40,000 TPD Feasibility Study are approximately U.S.$365.4 million (including approximately U.S.$246.0 million for mine development and a processing plant, tailings management facilities and related infrastructure).

| |   |                                                                                                                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Cash Operating Costs.The estimated average total cash operating costs of the Las Cristinas Project under the 20,000 TPD Feasibility Study are approximately U.S.$197 per ounce (including royalties) for the life of mine and approximately U.S.$144 per ounce (including royalties) for the first five years.

| |  |                                                                                                                                                                                                                                                                            
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The estimated average total cash operating costs of the project under the 40,000 TPD Feasibility Study are approximately U.S.$193 per ounce (including royalties) for the life of mine and approximately U.S.$153 per ounce (including royalties) for the first five years.

Project Control Budget

In August 2004, the Corporation announced that it had revised the capital cost estimate of the Las Cristinas Project and, together with the SNCL, had developed a control budget for the Project based on a production rate of 20,000 tonnes of ore per day. The material terms of the control budget are summarized below:


| |  | The estimated capital cost of the Las Cristinas Project under the control budget is approximately U.S.$265.5 million, representing an increase of approximately U.S.$22.7 million (9.3%) over the estimated capital cost set out in the 20,000 TPD Feasibility Study.  The increase comprises discretionary investment items (U.S.$11.3 million or 4.6%) to improve the Project and revised costs (U.S.$11.4 million or 4.7%).  The principal components of the increase are:  U.S.$6.8 million to reflect revised equipment and material estimates following the receipt of firm quotes under the EPCM Contract (see “Engineering, Procurement and Construction Management” below);  U.S.$5.9 million to incorporate design changes to avoid a shutdown of operations during an
expansion from 20,000 tonnes of ore per day to 40,000 tonnes of ore per day; and U.S.$5.4 million to acquire additional mining equipment in order to replace contract mining of saprolite ores with owner operated mining of such ores.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |  | The control budget contemplates owner operated mining of the saprolite ore (rather than mining by a contractor as contemplated under the 20,000 TPD Feasibility Study and the 40,000 TPD Feasibility Study).  The Corporation believes that owner operated mining will improve project economics by reducing operating costs by approximately U.S.$70 million over the first 10 years of the project.  The estimated average total cash operating costs under the control budget (after giving effect to the updated mineral reserve estimates described above under “Mineral Reserves”) are approximately U.S.$206 per ounce (including royalties) for the life of mine and approximately U.S.$125 per ounce (including royalties) for the first five years.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Corporation does not believe that the information described above has a material impact on the project economics described above under “Feasibility Studies”.  The updated information has been provided for information purposes only and has not been included in the feasibility studies referred to above under “Feasibility Studies”.


Engineering, Procurement and Construction Management

On March 25, 2004, following completion of a competitive bidding process, the Corporation entered into an Engineering, Procurement and Construction Management Contract (the “EPCM Contract”) with SNCL relating to the development of the Las Cristinas Project.  The Corporation expects to pay SNCL approximately U.S.$24.4 million for its services under the EPCM Contract. Engineering design work was 66% completed at the end of 2004 and is expected to be substantially completed by the end of the first quarter of 2005.  Procurement of equipment and supplies is progressing.  At the end of 2004, 100 of a total of 168 purchase orders and construction contracts had been awarded.  The construction and development schedule is currently estimated to be approximately 16 months from the date of the issue of the final permit necessary to commence development of the Las Cristinas Project  (see “Permits” below) to mechanical completion.


Permits

In August 2004, the Corporation announced that the land occupation permit (authorizing the occupation and use of the Las Cristinas Deposits for the purpose of mining) had been confirmed by the MARN. In April 2004, the Corporation initiated the process for obtaining the required mining permits by submitting an environmental impact study to the CVG and the MARN.  The Corporation currently expects to receive the final permit necessary to commence the development of the Las Cristinas Project (the Permisso de Afectacíon de Recursos  Permit to Impact the Environment or its equivalent) during the second quarter of 2005.


Project Management Team

At the end of 2004, most of the senior positions for the Las Cristinas Project had been filled.


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OTHER ASSETS

The Corporation’s other assets are also located in Bolivar State, Venezuela and include:


| |  | Tomi operations mines ore from two open pit mines and one underground mine which is delivered to the Revemin mill for processing.
| | - | ----------------------------------------------------------------------------------------------------------------------------------

| |   |                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------
| |  | Lo Incréible operations mines ore from one open pit mine which is delivered to the Revemin mill for processing.

| |   |                                                                                       
| | - | --------------------------------------------------------------------------------------
| |  | Revemin mill processes ore from the Tomi and Lo Incréible operations to produce gold.

See “Operations Review” under Management’s Discussion and Analysis for financial information relating to these assets.

Tomi Operations

Overview The Tomi operations are located approximately 16 kilometres northeast of the town of El Callao in the El Callao District, Bolivar State, Venezuela.  Ore from Tomi is trucked approximately 21 kilometres to the Revemin mill for processing.  See “Revemin Mill” below. The Tomi operations are located in the El Callao greenstone belt which consists of a basal mafic and ultramafic volcanic pile overlain by intermediate to felsic volcanic rocks, volcanoclastic rocks and sediments.  Gold mineralization at the Tomi operations is associated with quartz-carbonate veins hosted by refolded gabbro intrusives and adjacent country rocks. Crystallex acquired the Tomi operations from Bolivar Goldfields Ltd. in August 2000.  In 2004, the Tomi operations were the source of 85% of Crystallex’s total gold production. Mining The Tomi operations comprise approximately 500 hectares and are held by Mineras Bonanza, C.A. (an indirect, wholly-owned subsidiary of the Corporation) under a concession.  See “Mining in Venezuela  Mining Law  Mineral Concessions”. The Tomi operations currently consist of two open pit mines (Mackenzie and Milagrito) and one underground mine (Charlie Richards).  In 2004, the open pit mines accounted for approximately 86% and the underground mine accounted for approximately 14% of the production at the Tomi operations. The mineral reserves at the open pit mines are expected to be depleted by the end of 2005. The underground mine is expected to reach full production of 200 tonnes of ore per day during the third quarter of 2005.




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Mine Production The annual production from the Tomi operations for the three years ended December 31, 2004 is set out below.


|                 |                         |  |  | 2004      |   |  | 2003    |   |  | 2002   |  
|---------------- | ----------------------- |  |  | --------- | - |  | ------- | - |  | ------ | -
|                 |                         |  |  |           |   |  |         |   |  |        |  
|Open pit mines   |                         |  |  |           |   |  |         |   |  |       
|                 | Ore mined (tonnes)      |  |  | 334,289   |   |  | 268,169 |   |  | 25,644 |  
|                 | Waste mined (tonnes)    |  |  | 2,751,124 |   |  | 919,137 |   |  | 2,908  |  
|                 | Ore processed (tonnes)  |  |  | 350,008   |   |  | 247,644 |   |  | 27,998 |  
|                 | Average ore grade (g/t) |  |  | 3.46      |   |  | 3.48    |   |  | 3.01   |  
|                 | Recovery rate (%)       |  |  | 92        | % |  | 88      | % |  | 87     | %
|                 | Production (ounces)     |  |  | 35,961    |   |  | 24,360  |   |  | 2,347  |  
|                 |                         |  |  |           |   |  |         |   |  |       
|Underground mine |                         |  |  |           |   |  |         |   |  |       
|                 | Ore mined (tonnes)      |  |  | 26,966    |   |  | 12,698  |   |  | ─      |  
|                 | Ore processed (tonnes)  |  |  | 28,454    |   |  | 11,070  |   |  | ─      |  
|                 | Average ore grade (g/t) |  |  | 6.89      |   |  | 8.31    |   |  | ─      |  
|                 | Recovery rate (%)       |  |  | 94        | % |  | 93      | % |  | ─      |  
|                 | Production (ounces)     |  |  | 5,891     |   |  | 2,753   |   |  | ─      |  
|                 |                         |  |  |           |   |  |         |   |  |        |  

| | Mineral Reserves
| | ----------------

The estimated mineral reserves at the Tomi operations at December 31, 2004 were as follows:


|                    |  |  | Mineral Reserves |  |  | Average Grade |  |  | Contained Gold   | 
|------------------- |  |  | ---------------- |  |  | ------------- |  |  | ---------------- | 
|                    |  |  | (tonnes  000’s) |  |  | (g/t)         |  |  | (ounces  000’s) | 
|                    |  |  |                  |  |  |               |  |  |                  | 
|Open pit mines(1)   |  |  |                  |  |  |               |  |  |                  | 
|Probable            |  |  | 211              |  |  | 3.9           |  |  | 28               | 
|Underground mine(2) |  |  |                  |  |  |               |  |  |                  | 
|Probable            |  |  | 115              |  |  | 16.8          |  |  | 62               | 

_________________
Notes:

|(1) | The mineral reserves have been estimated by the Corporation under the direction of, and verified by, Dr. Luca Riccio, P. Geo., and are based on a U.S.$350 per ounce gold price and a cut-off grade of 1.5 grams of gold per tonne.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|    |                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The mineral reserves are derived from estimates prepared by MDA (Matthew J. Blattman., P. Eng., of MDA was the Qualified Person) and are based on a gold price of U.S.$320 per ounce and a cut-off grade of 5.0 grams of gold per tonne.

| |                             
| | ----------------------------
| | Additional Mineral Resources

The estimated additional mineral resources at the Tomi operations mines at December 31, 2004 were as follows:


|          |  |  | Mineral Resources (1) (2) |  |  | Average Grade |  |  | Contained Gold   | 
|--------- |  |  | ------------------------- |  |  | ------------- |  |  | ---------------- | 
|          |  |  | (tonnes  000’s)          |  |  | (g/t)         |  |  | (ounces  000’s) | 
|          |  |  |                           |  |  |               |  |  |                  | 
|          |  |  |                           |  |  |               |  |  |                  | 
|All mines |  |  |                           |  |  |               |  |  |                  | 
|Indicated |  |  | 391                       |  |  | 4.4           |  |  | 55               | 

___________________
Notes:

|(1) | The mineral resources have been estimated by the Corporation under the direction of, and verified by, Dr. Luca Riccio, P. Geo., and are based on cut-off grades ranging from 1.0 grams of gold per tonne to 1.5 grams of gold per tonne.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|    |                                                                          
|--- | -------------------------------------------------------------------------
|(2) | Mineral resources are in addition to and do not include mineral reserves.

The Corporation believes that there is good potential for additional mineralization along the down plunge extension of the existing underground mine and that the open pit mines may host high grade ore shoots below the existing pits.  In 2005, the Corporation plans to drill at the open pit mines to test for higher grade extensions of the orebody.


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Lo Incréible Operations

Overview The Lo Incréible operations are located approximately three kilometres north of the town of El Callao in the El Callao District, Bolivar State, Venezuela.  Ore from Lo Incréible is delivered to the Revemin mill (located adjacent to Lo Incréible) for processing.  See “Revemin Mill” below. The Lo Incréible operations are located in the El Callao greenstone belt which consists of a basal mafic and ultramafic volcanic pile overlain by intermediate to felsic volcanic rocks, volcanoclastic rocks and sediments.  Gold mineralization in the district is largely controlled by a combination of favourable structural and lithologic features.  Most gold deposits and occurrences in the region are located along shear systems and structural intersections, particularly where the favourable structures intersect mafic rocks. The Corporation acquired its interest in the Lo Incréible operations in February 2001 and commenced mining operations at La Victoria (the largest of the six deposits comprising Lo Incréible) in April 2001.  In 2002 and 2003, the  La Victoria mine was the source of 100% of the production from the Lo Incréible operations.  During the fourth quarter of 2003, the Corporation reduced activities at La Victoria to a waste stripping operation as a result of lower recovery rates due to the presence of refractory ore.  In February 2005, Micon International Limited completed a pre-feasibility study of the La Victoria deposit that concluded that it was not economic to construct a bioxidation plant at the
Revemin mill to treat the refractory ore.  See “Operations Review  La Victoria” under Management’s Discussion and Analysis for additional information with respect to the results of the pre-feasibility study. The Corporation is currently evaluating an alternative processing option for the La Victoria sulphide material which contemplates a flotation plant followed by sale of concentrate to a smelter or another plant that requires sulphide concentrate.  In 2005, the Corporation intends to conduct additional exploration with respect to a possible extension of the La Victoria orebody. Mining The Lo Incréible operationscomprise 9,704 hectares and are held indirectly by Osmin Holdings Limited (“Osmin”) under a combination of mining operation agreements and concessions.  See “Mining in Venezuela  Mining Law  Mineral Concessions” and “ Direct Exploitation”.  The Corporation owns 51% and Corporacíon Vengroup, S.A. (“Vengroup”), a Panamanian company unrelated to Crystallex, owns 49% of Osmin.  The Corporation’s subsidiary, ECM (Venco) Ltd., and Vengroup are parties to a shareholders agreement dated May 21, 1993 setting out their rights and obligations as shareholders of Osmin.  The information presented below
under “Mine Production” and “Mineral Resources” represents 100% of the production and mineral resources with respect to the Lo Incréible operations. Mine Production The annual production from the Lo Incréible operations for the three years ended December 31, 2004 is set out below.


|                 |                         |  |  | 2004    |   |  | 2003    |   |  | 2002    |  
|---------------- | ----------------------- |  |  | ------- | - |  | ------- | - |  | ------- | -
|                 |                         |  |  |         |   |  |         |   |  |         |  
|La Victoria mine |                         |  |  |         |   |  |         |   |  |        
|                 | Ore mined (tonnes)      |  |  | 36,012  |   |  | 86,078  |   |  | 333,857 |  
|                 | Waste mined (tonnes)    |  |  | 481,210 |   |  | 461,163 |   |  | 937,949 |  
|                 | Ore processed (tonnes)  |  |  | 25,974  |   |  | 89,025  |   |  | 326,572 |  
|                 | Average ore grade (g/t) |  |  | 3.18    |   |  | 2.8     |   |  | 2.8     |  
|                 | Recovery rate (%)       |  |  | 91      | % |  | 68      | % |  | 76      | %
|                 | Production (ounces)     |  |  | 2,412   |   |  | 5,564   |   |  | 22,548  |  

| | 
| | 

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Mineral Resources The mineral resources at the Lo Incréible
    operations at December 31, 2004 were as follows:


|          |  |  | Mineral Resources(1) (2) |  |  | Average Grade |  |  | Contained Gold   | 
|--------- |  |  | ------------------------ |  |  | ------------- |  |  | ---------------- | 
|          |  |  | (tonnes  000’s)         |  |  | (g/t)         |  |  | (ounces  000’s) | 
|          |  |  |                          |  |  |               |  |  |                  | 
|Indicated |  |  | 6,272                    |  |  | 4.0           |  |  | 808              | 

________________
Notes:

|(1) | The mineral resources have been estimated by the Corporation under the direction of, and verified by, Dr. Luca Riccio, P. Geo.  The mineral resources estimated by the Corporation are based on a cut-off grade of 1.44 grams of gold per tonne.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|    |                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Certain of the mineralization at the Lo Incréible operations has been reclassified from the reserve to the resource category as a result of the developments described above under “Overview”.

Revemin Mill

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

The Revemin mill is located approximately three kilometres north of the town of El Callao in the El Callao District, Bolivar State, Venezuela and has the capacity to treat 1,250 metric tonnes of ore per day.  The Revemin mill processes ore from the Tomi and Lo Incréible operations and ore purchased from independent miners at nearby operations.The Corporation holds its interest in the Revemin mill through Revemin II, C.A. The Revemin mill extracts gold using a conventional carbon-in-leach circuit.


| | Production
| | ----------

The annual production from the Revemin mill for the three years ended December 31, 2004 is set out below.

|                                        |  |  | 2004    |   |  | 2003    |   |  | 2002    |  
|--------------------------------------- |  |  | ------- | - |  | ------- | - |  | ------- | -
|                                        |  |  |         |   |  |         |   |  |         |  
|Revemin Mill                            |  |  |         |   |  |         |   |  |         |  
|Tomi Open Pit Ore Processed (tonnes)    |  |  | 350,008 |   |  | 247,644 |   |  | 27,998  |  
|Tomi Underground Ore Processed (tonnes) |  |  | 28,454  |   |  | 11,070  |   |  | ─       |  
|La Victoria Ore Processed (tonnes) (1)  |  |  | 25,974  |   |  | 89,025  |   |  | 326,572 |  
|Purchased Ore Processed (tonnes)        |  |  | 39,068  |   |  | 22,537  |   |  | 12,339  |  
|                                        |  |  |         |   |  |         |   |  |         |  
|Total
    Ore Processed (tonnes)        |  |  | 443,504 |   |  | 370,276 |   |  | 366,909 |  
|                                        |  |  |         |   |  |         |   |  |         |  
|Head Grade of Ore Processed (g/t)       |  |  | 3.71    |   |  | 3.51    |   |  | 3.0     |  
|Total Recovery Rate (%)                 |  |  | 93      | % |  | 84      | % |  | 79      | %
|Total Gold Recovered (ounces)           |  |  | 48,973  |   |  | 35,244  |   |  | 27,791  |  

__________________
Note:

|(1) | Represents 100% of La Victoria ore.
|--- | -----------------------------------

The Corporation is currently assessing the viability of maintaining gold production at the Revemin mill during the exploration programs referred to above under “Tomi Operations  Additional Mineral Resources” and “Lo Incréible Operations  Mineral Resources”.  See “Operations Review” under Management’s Discussion and Analysis.


Albino Project

On February 25, 2005, the Corporation announced that the MIBM had terminated its concession rights with respect to the Albino project.  The decision was based upon a review by the MIBM of properties which are perceived to be inactive or non-compliant.  The decision has been appealed by the Corporation.  The Special Commission of the Permanent Commission of Energy and Mines of the National Assembly has issued a report recommending that MIBM reconsider the termination of the concession rights with respect to the Albino project.  Due to the uncertainty of the outcome of the appeal, the Corporation has written down the carrying value of its investment in the Albino project to nil and determined not to report any mineral
reserves or mineral resources with respect to the Albino project.  See “Development Projects” under Management’s Discussion and Analysis.


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DESCRIPTION OF SHARE CAPITAL AND RELATED INFORMATION

Authorized Capital

The share capital of the Corporation 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.  As at December 31, 2004, there were 189,836,735 common shares, no Class “A” preference shares and no Class “B” preference shares issued and outstanding.  The following is a summary of the material provisions attached to the common shares, the Class “A” preference shares and the Class “B” preference shares.


Common Shares

Each common share entitles the holder to receive dividends if, as and when declared by the directors, to have one vote at all meetings of holders of common shares and to participate rateably in any distribution of the assets of the Corporation upon liquidation, dissolution or winding-up, subject to the prior rights of holders of shares ranking in priority to the common shares.


Class “A” Preference Shares and Class “B” Preference Shares

The Class “A” preference shares and the Class “B” preference shares are issuable in series.  Each 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 the Corporation, subject to the provisions attached to the Class “A” preference shares as a class or the Class “B” preference shares as a class.  The Class “A” preference shares and the Class “B” preference shares each rank ahead of the common shares with respect to the distribution of assets of the Corporation upon liquidation, dissolution or winding-up.


Shareholder Rights Plan

On March 10, 1997, the board of directors of the Corporation adopted and, on June 27, 1997, the shareholders of the Corporation confirmed a shareholder rights plan (the “Plan”), to take effect at the close of business on March 10, 1997 (the “Record Date”).  Subject to shareholder reconfirmation at every third annual meeting of shareholders, unless earlier redeemed or exchanged, the rights issued under the Plan will expire at the close of the Corporation’s annual meeting in 2007 (the “Expiration Time”).  The Plan was last reconfirmed by the shareholders of the Corporation at the annual meeting of shareholders held on June 26, 2003. Pursuant to the Plan, the board of directors of the Corporation declared a distribution of one right (a “Right”) for each outstanding common share of the Corporation 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 before the earlier of the Separation Time (described below) and the Expiration Time.  The Rights will separate from the common shares in accordance with the terms of the Plan at the time (the “Separation Time”) which is the close of business on the eighth trading day (or such later day as determined by the board of directors of the Corporation) after the public
announcement of the acquisition of, or intention to acquire, beneficial ownership of 20% or more of the common shares of the Corporation by any person other than pursuant to a “Permitted Bid”.  In order to constitute a Permitted Bid, an offer must be made to all shareholders (other than the offeror) in compliance with the Plan, 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. A copy of the Plan is available on the SEDAR website at www.sedar.com.




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Price Range and Trading Volume of the Common Shares

The common shares of the Corporation are listed on the Toronto Stock Exchange (the “TSX”) and the American Stock Exchange (the “AMEX”).  The closing price range and the trading volume of the common shares for each of the months in 2004 are set forth in the following table.


|          |  |  | TSX  |  |  | AMEX | 
|--------- |  |  | ---- |  |  | ---- | 
|          |  |  |      |  |  |      | 
|          |  |  | High |  |  | Low  | 
|          |  |  |      |  |  |      | 
|          |  |  | (C$) |  |  | (C$) | 
|          |  |  |      |  |  |      | 
|January   |  |  | 3.80 |  |  | 3.20 | 
|February  |  |  | 3.90 |  |  | 3.16 | 
|March     |  |  | 4.61 |  |  | 3.83 | 
|April     |  |  | 4.12 |  |  | 3.07 | 
|May       |  |  | 3.31 |  |  | 2.75 | 
|June      |  |  | 3.44 |  |  | 2.93 | 
|July      |  |  | 3.62 |  |  | 2.70 | 
|August    |  |  | 3.75 |  |  | 3.00 | 
|September |  |  | 4.21 |  |  | 3.25 | 
|October   |  |  | 4.76 |  |  | 3.82 | 
|November  |  |  | 5.41 |  |  | 4.33 | 
|December  |  |  | 4.50 |  |  | 4.05 | 

Dividend Policy

No dividends have been paid on the common shares of the Corporation.  The Corporation does not have any intention to pay dividends on the common shares in 2005.  Any decision to pay dividends on the common shares in the future will be made by the board of directors of the Corporation on the basis of the earnings, financial position and financing requirements of Crystallex and other relevant factors.




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Capitalization

The following table sets forth the consolidated cash and cash equivalents, short term investments and capitalization of the Corporation as at December 31, 2004.


|                                                           |  |   | U.S.$                     |  
|---------------------------------------------------------- |  | - | ------------------------- | -
|                                                           |  |   | (millions)                |  
|                                                           |  |   |                           |  
|Cash and cash equivalents and short term investments       |  |   |                           |  
|Unrestricted                                               |  | $ | 36.0                      |  
|Restricted                                                 |  | $ | 98.0                      |  
|                                                           |  |   |                           |  
|Total cash and cash equivalents and short term investments |  | $ | 134.0                     |  
|                                                           |  |   |                           |  
|Long-term debt                                             |  |   |                           |  
|Bank
    indebtedness(1)                                   |  | $ | 6.5                       |  
|Notes
    due December 23, 2011(2)                         |  | $ | 78.6                      |  
|                                                           |  |   |                           |  
|Total long-term debt                                       |  | $ | 85.1                      |  
|                                                           |  |   |                           |  
|Shareholders’ equity                                       |  |   |                           |  
|Common
    shares (authorized  unlimited)(3)              |  | $ | 306.0(189,836,735 shares) |  
|Contributed
    surplus                                    |  | $ | 31.8                      |  
|Cumulative
    translation adjustment                      |  | $ | 12.0                      |  
|Deficit                                                    |  | $ | (206.2                    | )
|                                                           |  |   |                           |  
|Total shareholders’ equity                                 |  | $ | 143.6                     |  
|                                                           |  |   |                           |  
|Total capitalization                                       |  | $ | 228.7                     |  
|                                                           |  |   |                           |  

_________________
Notes:

|(1) | Includes current portion of U.S.$4.4 million.  See note 8 to the Consolidated Financial Statements.
|--- | ---------------------------------------------------------------------------------------------------

|    |                                                     
|--- | ----------------------------------------------------
|(2) | See note 8 to the Consolidated Financial Statements.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Does not include: (a) 13,008,235 common shares of the Corporation issuable upon the exercise of warrants at exercise prices ranging from C$1.60 to C$4.69 per share outstanding as at December 31, 2004; and (b) 10,950,250 common shares of the Corporation issuable upon the exercise of stock options at exercise prices ranging from C$1.00 to C$4.12 per share outstanding as at December 31, 2004.  See note 9 to the Consolidated Financial Statements.

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LEGAL PROCEEDINGS

Withdrawal of MINCA Litigation

| | MINCA Litigation
| | ----------------

In early 1991, the CVG called for bids to develop the Las Cristinas Deposits.  Placer was the winning bidder.  In July 1991, Placer and the CVG entered into a joint venture agreement pursuant to which they agreed to form a joint venture company, Mineras Las Cristinas, C.A. (“MINCA”), to explore and, if feasible, develop the gold mineral in the Las Cristinas Deposits.  In early 1992, the CVG and MINCA entered into a contract (the “MINCA Contract”) with respect to the exploration and exploitation of the Las Cristinas Deposits. The work plan provided for in the MINCA Contract contained milestones with respect to the development of the Las Cristinas Deposits.  During the period 1996 to 2000, MINCA suspended its development activities on several occasions. In August 2000, Placer and the CVG agreed that Placer would have the right, until July 15, 2001 to engage an investment bank to attempt to find an approved buyer or joint venture partner to develop the Las Cristinas Deposits.  In early July 2001, Placer assigned its interest in MINCA to Vannessa Ventures Ltd. (“Vannessa”).  Shortly after July 15, 2001, the CVG declared MINCA to be in default of its obligations under the MINCA Contract and gave MINCA notice that it had the cure period specified under the MINCA Contract to cure the default.  In early November 2001, after expiry of the cure period, the CVG terminated the MINCA Contract for cause and took possession of the Las Cristinas Deposits and related
assets. In March 2002, the MIBM repossessed the Las Cristinas Deposits and related assets on behalf of the Republic of Venezuela.  In April 2002, by Presidential decree, the Venezuelan government reserved for itself through the MIBM the direct exploration and exploitation of the gold mineral located in the Las Cristinas Deposits and granted to the MIBM the right to contract with the CVG the activities required to carry out such exploration and exploitation.  In May 2002, the MIBM and the CVG entered into an agreement pursuant to which the MIBM granted to the CVG the right to explore and exploit the gold mineral located in the Las Cristinas Deposits and to enter into operation agreements with third parties for such purposes.
In September 2002, the CVG and the Corporation entered into the Mine Operation Agreement.  See “Las Cristinas Project  Mine Operation Agreement”. Beginning in March 2002, MINCA and Vannessa commenced a number of proceedings, (the “MINCA Litigation”) before the Venezuelan Supreme Court against the Republic of Venezuela and the CVG seeking, among other things, restitution of MINCA’s rights under the MINCA Contract or damages in lieu thereof. Vannessa Arbitration In July 2004, Vannessa filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes (“ICSID”) against the Republic of Venezuela pursuant to the Agreement between the Government of Canada and the Government of the Republic of Venezuela for the Promotion and Protection of Investments (the “Treaty”).  The Request for Arbitration alleges that the Republic of Venezuela, including its agency, the CVG, breached the Treaty; that the Republic of Venezuela expropriated the investments of Vannessa and MINCA without due process of law, in a discriminatory manner and without prompt, adequate and effective compensation contrary to Article VII of the Treaty; and that
the Republic of Venezuela failed to accord fair and equitable treatment and full security to Vannessa and MINCA contrary to Article II of the Treaty.  Vannessa has requested restitution and monetary damages or, in lieu of restitution, monetary damages, including out-of-pocket expenses and lost profits.  Vannessa has reported that ICSID registered the Request for Arbitration in October 2004. Section 3(b) of Article XII of the Treaty provides that an investor may submit a dispute to arbitration under the Treaty only if “the investor has waived its right to initiate or continue any other proceedings in relation to the measure that is alleged to be in breach of [the Treaty] before the courts or tribunals of [Venezuela] or in a dispute settlement procedure of any kind”.  Section 10 of Article XII of the Treaty provides that “an award of arbitration shall be final and binding”. In July 2004, MINCA and Vannessa discontinued the MINCA Litigation. Although the Corporation is not a party to the arbitration proceedings and cannot predict the outcome of these proceedings, including whether any arbitration award could have a material adverse effect on the Corporation’s rights under the Mine Operation Agreement, the Corporation believes (on the basis of advice received from special Canadian and Venezuelan legal counsel to the Corporation) that:




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| | (a) | the possibility of an award being made that would have a material adverse effect on the Corporation’s rights under the Mine Operation Agreement is remote (on the basis that the MINCA Contract was properly terminated by the CVG; equitable remedies are normally not granted when damages are a proper and available remedy; Vannessa has included the remedy of monetary damages in lieu of restitution in its Request for Arbitration; and the Republic of Venezuela has contractually committed the Las Cristinas Deposits to a third party);
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |     |                                                                                                                             
| | --- | ----------------------------------------------------------------------------------------------------------------------------
| | (b) | if an arbitration award were made against the Republic of Venezuela, it would likely be in the form of monetary damages; and

| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (c) | if an restitution award were made against the Republic of Venezuela, the Republic would likely exercise its unilateral right under Section 9(b) of Article XII of the Treaty to pay monetary damages in lieu of restitution since, if the Republic were to terminate the Mine Operation Agreement, the Corporation would have a more substantial claim for damages against the Republic, particularly in light of the advanced stage of the Las Cristinas Project and the likelihood that the Project will be complete before the arbitration is completed.

Vengroup Arbitration

Background The Corporation indirectly owns 51% and Vengroup owns 49% of Osmin.  Osmin indirectly holds the Lo Incréible operations, which include the La Victoria deposit.  See “Other Assets  Lo Incréible Operations”. The Corporation’s subsidiary, ECM and Vengroup are parties to a shareholders agreement dated May 21, 1993 (the “Shareholders Agreement”) setting out their rights and obligations as shareholders of Osmin.  ECM controls the board of directors of Osmin (ie, has the right to elect a majority of the directors).  With limited exceptions, all decisions of the board and board committees are by majority vote.  Historically, ECM has advanced the additional funds required to pay all administrative, development and operating expenses with respect to Lo Incréible (“Advances”).  All Advances made by ECM are interest-bearing loans (“Loans”) repayable by Osmin out of the net operating
cash flow from Lo Incréible (the “Cash Available for Distribution”).  The Cash Available for Distribution is to be applied as follows:  50% is to be paid to ECM to repay the Loans and the balance is to be paid 51% to ECM and 49% to Vengroup.  Any dispute arising under the Shareholders Agreement is to be referred to arbitration by a single arbitrator. The Corporation, ECM and Vengroup are parties to a term sheet dated March 31, 2001 as amended by a memorandum of understanding dated July 19, 2001 (collectively, the “Term Sheet’) pursuant to which they agreed, among other things, to negotiate and execute an amended and restated Shareholders Agreement and to implement a mining and milling agreement pursuant to which ore extracted from Lo Incréible would be mined and processed by the Corporation and its subsidiaries on a cost plus basis subject to an agreed maximum (the “Maximum Mining and Milling Costs”).  The parties have not negotiated and executed an amended and restated Shareholders Agreement or a mining and milling agreement.  The
Term Sheet makes no reference to levels of mining or production or the term over which mining and production will be sustained. At the time that they entered into the Term Sheet, the Corporation, ECM and Vengroup agreed to proceed immediately to mine the gold mineral in the La Victoria deposit and to process the mined gold mineral at the Revemin mill.  Mining and processing of the gold mineral in the La Victoria deposit commenced in the second quarter of 2001 but substantially ended in the third quarter of 2003 as a result of reduced gold recoveries and increased operating costs attributable to refractory ore in the La Victoria deposit.  See “Other Assets  Lo Incréible Operations”. The Corporation has written off the carrying value of its interest in the La Victoria deposit.  At December 31, 2003, the outstanding amount of the Loans was approximately U.S.$34.6 million. Notice of Arbitration Vengroup has delivered a notice of arbitration to the Corporation and ECM dated November 24, 2004 (the “Notice of Arbitration”) alleging, among other things, that:


| | (a) | at the time that the parties entered into the Term Sheet, the Corporation made representations to Vengroup that created a binding mining and milling agreement between the parties (the “Implied Mining and Milling Agreement”) pursuant to which the Corporation agreed that the Corporation and its subsidiaries would mine and process ore from Lo Incréible using the Revemin mill at a specified rate (the “Processing Requirement”) and produce gold from the mined and processed ore at a specified rate (the “Production Requirement”) at a cost not to exceed the Maximum Mining and Milling Costs; and
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| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | the Corporation and its subsidiaries have failed to comply with Processing Requirement and the Production Requirement and, as a result, Osmin has failed to generate the Cash Available for Distribution that would have been generated had the Corporation and its subsidiaries complied with the Processing Requirement and the Production Requirement.



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In the Notice of Arbitration, Vengroup
    seeks, among other things, an award that Cash Available for Distribution
    will be determined by applying the Processing Requirement, the Production
    Requirement and the Maximum Mining and Milling Costs. Vengroup also seeks
    a declaration that, as a result of the award, as at October 31, 2004, the
    Loans have been reduced to approximately U.S.$18.9 million and Vengroup’s
    unpaid share of Cash Available for Distribution is approximately U.S.$7.8
    million. ECM and the Corporation dispute the allegations of Vengroup and, in the arbitration proceedings, will assert the terms and conditions of the written agreements between the parties based upon actual production, actual grades and agreed costs experienced at Lo Incréible. The arbitration is at a preliminary stage.  Legal counsel to the Corporation has advised the Corporation that it is too early to form an assessment of the potential exposure, if any, of the Corporation to liability for the awards requested in the Notice of Arbitration.


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RISK FACTORS

The business and operations of the Corporation are subject to a variety of risks including those described below and in Management’s Discussion and Analysis under “Risk Factors”.


Arbitration Proceedings

The Corporation is a party to or is interested in two arbitration proceedings.  See “Legal Proceedings”.


Mine Operation Agreement

| | Lack of Ownership Rights
| | ------------------------

Under Venezuelan law, all mineral resources belong to the Republic of Venezuela.  In accordance with the VML, the Government of Venezuela has reserved for itself the right to directly explore and exploit the Las Cristinas Deposits and has elected to do so through the CVG.  See “Las Cristinas Project  Mine Operation Agreement”.  The Mine Operation Agreement is an operation agreement and does not transfer any property ownership rights to the Corporation.  Rather, the Corporation has been authorized to exploit the Las Cristinas Deposits for the CVG in accordance with to the Mine Operation Agreement.  The interests of the Corporation in the Las Cristinas Deposits are contingent upon the Corporation
continuing to satisfy its obligations under the Mine Operation Agreement.  Failure to do so could result in the CVG having the right to terminate the Mine Operation Agreement.


| | Lack of Copper Rights
| | ---------------------

In addition to gold, the Las Cristinas Deposits contain copper.  Under the Mine Operation Agreement, the Corporation is only entitled to exploit the gold contained in the Las Cristinas Deposits.  Based on the feasibility studies carried out by the Corporation and following discussions with the CVG, the Corporation has determined that exploiting the copper contained in the Las Cristinas Deposits would detract from the economics of the Las Cristinas Project.  The Corporation does not need the right to exploit the copper contained in the Las Cristinas Deposits in order to exploit the gold and does not currently intend to negotiate with the CVG for the right to exploit the copper contained in the Las Cristinas
Deposits. Although the Corporation does not believe that the MIBM would do so, the MIBM retains the right to grant exploitation and other rights with respect to the copper contained in the Las Cristinas Deposits to the CVG or a third party.  The Corporation has been advised by its Venezuelan counsel that:


| | (a) | if the MIBM grants the right to exploit the copper contained in the Las Cristinas Deposits to the CVG, subject to fulfilling all necessary requirements of Venezuelan law (including the additional grant by the MIBM to the CVG of the right to negotiate the exploitation of the copper with third parties), the CVG has agreed under the terms of the Mine Operation Agreement to negotiate the exploitation of the copper with the Corporation; and
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| |     |                                                                                                                                                                                                                                                                                                                                              
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | if the MIBM grants the right to exploit the copper contained in the Las Cristinas Deposits to a third party, the Corporation’s right under the Mine Operation Agreement to exploit the gold contained in the Las Cristinas Deposits would, as a matter of Venezuelan law, take precedence over the third party’s right to exploit the copper.

If the MIBM grants the right to exploit the copper contained in the Las Cristinas Deposits to the CVG, there can be no assurance that the MIBM will grant to the CVG the additional right to negotiate the exploitation of the copper with third parties or that the Corporation will be able to negotiate an agreement with respect to the exploitation of the copper with the CVG.  Also, if the MIBM grants the right to exploit the copper contained in the Las Cristinas Deposits to a third party, or if the MIBM grants the right to exploit the copper contained in the Las Cristinas Deposits to the CVG and the CVG grants the right to exploit the copper to a third party, there can be no assurance that the Corporation will be
successful under Venezuelan law in asserting that its right to exploit the gold contained in the Las Cristinas Deposits takes precedence over the third party’s right to exploit the copper.


Additional Funding Requirements

Under the terms of the Mine Operation Agreement, the Corporation 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 Mine Operation Agreement.  In order to carry out the Las Cristinas Project and its other mining projects, the Corporation will need to raise substantial additional financing which may include one or more of non-recourse project debt and other forms of public markets debt and equity.  See “Liquidity and
Capital Resources” in Management’s Discussion and Analysis. The Corporation currently has limited financial resources and there can be no assurance that sufficient additional financing will be available to the Corporation on acceptable terms or at all.  Failure to obtain such additional financing could result in a delay or the indefinite postponement of the Las Cristinas Project and other mining projects of the Corporation and could also result in the Corporation defaulting in the performance of its obligations under the Mine Operation Agreement.




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Reserve and Resource Estimates

The Corporation’s reported mineral reserves and resources are estimates only.  As a result, there can be no assurance that they will be recovered at the rates estimated or at all.  Mineral reserve and resource estimates are based on limited sampling and are uncertain because the samples may not be representative.  Mineral reserve and resource estimates may require revision (either up or down) based on actual production experience.  Market fluctuations in the price of metals, increased production costs or reduced recovery rates may render estimated mineral reserves and resources uneconomic and may ultimately result in a restatement of mineral reserves and resources.  In addition, short-term operating factors,
such as the need for sequential development of ore bodies and the processing of new or different ore grades, may adversely affect the Corporation’s profitability in any particular accounting period.  If its mineral reserve and resource estimates are incorrect, the Corporation will not correctly allocate its financial resources, causing it either to spend too much on what could be a less than economic deposit or to fail to mine what could be a significant deposit.


Title to Mineral Properties

Acquisition of title to mineral properties is a very detailed and time-consuming process.  Title to, and the area of, mineral properties may be disputed or impugned.  Although the Corporation has investigated its title to the mineral properties for which it holds concessions or mineral leases or licenses, there can be no assurance that the Corporation has valid title to such mineral properties or that its title thereto will not be challenged or impugned.  For example, mineral properties sometimes contain claims or transfer histories that examiners cannot verify; and transfers under foreign law often are complex.  The Corporation does not carry title insurance with respect to its mineral properties.  A successful
claim that the Corporation does not have title to a mineral property could cause the Corporation to lose its rights to mine that property, perhaps without compensation for its prior expenditures relating to the property.  Furthermore, as noted above under “Mine Operation Agreement  Lack of Ownership Rights”, the Mine Operation Agreement does not transfer any property ownership rights to the Corporation.


Gold Price Volatility

The gold price can fluctuate widely and is affected by numerous factors beyond the Corporation’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 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.  The gold price is also subject to rapid short-term changes due to speculative activities.  During the period 1998 to 2004, the gold price fluctuated between a low of U.S.$253 and a high of U.S.$454.  On December 31, 2004, the p.m. fixing price of gold sold in the
London Bullion Market was U.S.$438. The Corporation’s revenues, cash flow and profitability are significantly affected by changes in the gold price.  If the gold price declines below the cost of production at any of the Corporation’s operations for a significant period, the Corporation may be required to suspend or terminate production at the affected operation.  In addition, the Corporation may be required to restate its mineral reserves and resources, write down its investment and increase or accelerate reclamation and closure charges at the affected operation.  Any of these developments could negatively affect the Corporation’s profitability, cash flows and financial position.  Accordingly, even if the Corporation discovers and
produces gold, there can be no assurance that the gold price will be high enough to enable the Corporation to sell the gold produced by it profitably. The market price of the common shares of the Corporation is also affected by fluctuations in the gold price.


Gold Hedging Activities

The Corporation has entered into forward contracts and written call options to sell a significant portion of the gold that it anticipates it will produce at its existing operations (see note 10 to the Consolidated Financial Statements).  These contracts obligate the Corporation to sell specified quantities of gold at a prices set when it enters into the contracts, regardless of the price when the Corporation actually mines the gold.  Accordingly, there is a risk that the price of gold will be higher at the time the Corporation mines the gold than when it entered into the contracts, with the result that the Corporation must sell the gold at a lower price than it would have received had it not entered into the
contracts.  In addition, if the Corporation is not able to produce the specified quantities of gold, it will be required to buy gold at market prices to satisfy its contract obligations.  These market prices may be higher than the contract prices or higher than the Corporation’s own cost of production.  In addition, the entity contracting to buy gold from the Corporation under the forward contracts could default and, if the contract price were higher than the market price at the time of default, the Corporation would not likely be able to resell the contracted gold at the higher contract price.




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Mineral Exploration and Exploitation

Mineral exploration and exploitation 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, labour disruptions, flooding, explosions, tailings impoundment failures, cave-ins, landslides and the inability to obtain adequate machinery, equipment or labour are some of the risks involved in mineral exploration and exploitation activities.  The Corporation has relied on and may continue to rely on consultants and others for mineral exploration and exploitation expertise.  Substantial expenditures are required to establish mineral reserves and resources 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.  There can be no assurance that the Corporation will discover mineral reserves and resources in sufficient quantities to justify exploitation or that the funds required to exploit any mineral reserves and resources discovered by the Corporation will be obtained on a timely basis or at all.  The economics of exploiting mineral reserves and resources discovered by the Corporation are affected by many factors, many outside the control of the Corporation, including the cost of operations, variations in the grade of ore mined and metals recovered, price fluctuations in the 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.  There can be no assurance that the Corporation’s mineral exploration and exploitation activities will be successful. The Corporation’s operations may also be affected by the presence of illegal miners: something that is not uncommon in the gold mining areas of the Guyana Shield area of Venezuela.  Although the Corporation, in conjunction with the local authorities, employs strategies to control the presence of illegal miners, there can be no assurance that these strategies will be successful or that the Corporation’s operations will not be adversely affected by the presence of illegal miners.


Country Risk

The Corporation’s mineral exploration and exploitation activities may be adversely affected by political instability and legal and economic uncertainty in the countries where the Corporation has operations.  The risks associated with the Corporation’s foreign operations may include political unrest, labour disputes, invalidation of governmental orders and permits, corruption, war, civil disturbances and terrorist actions, arbitrary changes in laws, regulations and policies, taxation, price controls, exchange controls, delays in obtaining or the inability to obtain necessary permits, opposition to mining from environmental or other non-governmental organizations, limitations on foreign ownership,
limitations on the repatriation of earnings, limitations on mineral exports and increased financing costs.  These risks may limit or disrupt the Corporation’s projects or operations, restrict the movement of funds or result in the deprivation of contractual rights or the taking of property by nationalization, expropriation or other means without fair compensation. The Corporation’s principal mineral properties are located in Venezuela.  Venezuela currently has exchange controls that affect the ability of companies doing business in Venezuela to convert Venezuelan source income into foreign currency.  There can be no assurance that exchange controls will not continue and, if they do, that they will not adversely affect the Corporation’s operations, including its ability to satisfy its foreign currency obligations.  See also “Mining in Venezuela”.


Uninsurable Risks

Mineral exploration and exploitation activities involve numerous risks, including unexpected or unusual geological operating conditions, rock bursts, cave-ins, fires, floods, earthquakes and other environmental occurrences and political and social instability.  It is not always possible to obtain insurance against all such risks and the Corporation may decide not to insure against certain risks as a result of high premiums or other reasons.  Should such liabilities arise, they could negatively affect the Corporation’s profitability and financial position and the value of the common shares of the Corporation.  The Corporation does not maintain insurance against environmental risks.


Competition

The competition to discover and acquire mineral properties considered to have commercial potential is intense.  The Corporation competes with other mining companies, many of which have greater financial resources than the Corporation, with respect to the discovery and acquisition of interests in mineral properties and the recruitment and retention of qualified employees and other personnel to carry on its mineral exploration and exploitation activities.  There can be no assurance that the Corporation will be able to successfully compete against such companies.




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Limited Mining Operations

The Corporation’s Tomi operations and Revemin mill currently account for substantially all of the Corporation’s mineral production and revenues.  Any adverse development affecting these operations would have a material adverse effect on the Corporation’s financial performance and results of operations.


Production Risks

The Corporation prepares estimates of future production at its operations.  Failure to meet these estimates could adversely affect the corporation’s profitability, cash flows and financial position.  There can be no assurance that the Corporation will achieve its production estimates. The Corporation’s actual production may vary from its estimates for a variety of reasons, including actual ore mined varying from estimates of grade, tonnage, dilution and metallurgical and other characteristics; 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; labour shortages or strikes; civil disobedience and protests; and restrictions or regulations imposed by governmental or regulatory authorities 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 the Corporation 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 the Corporation to cease production.  These factors also apply to the Corporation’s future operations.  For example, it is not unusual for new mining and processing operations to
experience unexpected problems during the start-up phase.


Environmental Regulation and Liability

The Corporation’s activities are subject to laws and regulations controlling not only mineral exploration and exploitation activities themselves but also the possible effects of such activities upon the environment.  Environmental legislation may change and make the mining and processing of ore uneconomic or result in significant environmental or reclamation costs.  Environmental legislation provides for restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain mineral exploitation activities, such as seepage from tailings disposal areas that could result in environmental pollution.  A breach of environmental legislation may result in the
imposition of fines and penalties or the suspension or closure of operations.  In addition, certain types of operations require the submission of environmental impact statements and approval thereof by government authorities.  Environmental legislation is 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 directors, officers and employees.  Permits from a variety of regulatory authorities are required for many aspects of mineral exploitation activities, including closure and reclamation.  Future environmental legislation could cause additional expense, capital expenditures, restrictions,
liabilities and delays in the development of the Corporation’s properties, the extent of which cannot be predicted.  In the context of environmental permits, including the approval of closure and reclamation plans, the Corporation must comply with standards and 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.  The Corporation does not maintain environmental liability insurance. The Las Cristinas Deposits are located within the Imataca Forest Reserve.  Presidential Decree 3.110, which establishes an ordinance plan and regulations for the use of the Reserve, permits mining activities in the Reserve and establishes the legal framework for such activities.  Presidential Decree 3.110 replaced a previous Presidential decree that was the subject of a legal challenge before the Venezuelan Supreme Court.  It is possible that Presidential Decree 3.110 could be similarly challenged and that such challenge, if ultimately successful, could prevent the Corporation from exploiting or fully exploiting the Las Cristinas Deposits.


Regulations and Permits

The Corporation’s activities are subject to wide variety of 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.  The Corporation is required to have a wide variety of permits from governmental and regulatory authorities to carry out its activities.  These permits relate to virtually every aspect of the Corporation’s exploration and exploitation activities.  Changes in these laws and regulations or changes in their enforcement or interpretation could result in changes in legal requirements or in the
terms of the Corporation’s permits that could have a significant adverse impact on the Corporation’s existing or future operations or projects.  Obtaining permits can be a complex, time-consuming process.  There can be no assurance that the Corporation will be able to obtain the necessary permits on acceptable terms, in a timely manner or at all.  The costs and delays associated with obtaining permits and complying with these permits and applicable laws and regulations could stop or materially delay or restrict the Corporation from continuing or proceeding with existing or future operations or projects.  Any failure to comply with permits and applicable laws and regulations, even if inadvertent, could result in the interruption or closure of operations or material fines,
penalties or other liabilities.




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Currency Fluctuations

Currency fluctuations may affect costs at the Corporation’s operations.  Gold is sold throughout the world based principally on a U.S. dollar price, but a portion of the Corporation’s operating expenses is in non-U.S. dollar currencies.  The appreciation of these non-U.S. dollar currencies against the U.S. dollar could negatively affect the Corporation’s profitability, cash flows and financial position.


Recent Losses and Write-downs

The Corporation incurred net losses in each of 2004, 2003 and 2002.  The Corporation’s profitability depends, among other things, on the gold price, gold production and cash operating costs at its operations and other factors discussed in this section of the Annual Information Form.  Substantially all of these factors are beyond the control of the Corporation.  There can be no assurance that the Corporation will become profitable in the near future. As part of the preparation of its audited consolidated financial statements for the year ended December 31, 2004, the Corporation undertook a detailed review of the carrying value of its mineral properties and plant and equipment.  This review resulted in asset write-downs of U.S.$32.0 million (of which U.S.$13.8 million related to the Revemin mill, U.S.$10.4 million related to the Albino project, U.S.$3.6 million related to the Tomi operations and U.S.$4.2 million related to three exploration properties). As part of the preparation of its audited consolidated financial statements for the years ended December 31, 2003 and 2002, the Corporation undertook a detailed review of the carrying value of its mineral properties, deferred exploration costs and plant and equipment.  These reviews resulted in asset write-downs of U.S.$17.5 million in the 2003 financial statements (of which U.S.$14.3 million related to the La Victoria property) and provisions to reduce the reported values of various properties, plant and equipment of U.S.$1.4 million in the 2002 financial statements.


Credit Agreement Restrictions

The Corporation and an indirect,
      wholly-owned subsidiary of the Corporation are parties to a credit agreement
      that, among other things, requires the Corporation to maintain specific
      financial ratios and satisfy specific financial condition tests. Events
      beyond the control of the Corporation, including changes in general economic
      and business conditions, may affect the Corporation’s ability to
      satisfy these ratios and tests. Failure to do so could result in a default
      under the credit agreement. If an event of default occurs under the credit
      agreement, the lender could elect to declare all principal amounts outstanding
      thereunder, together with accrued interest, to be immediately due and payable
      and to enforce its security over substantially all of the Tomi operations
      and the Revemin mill. See note 8 to the Consolidated Financial Statements
      for additional information with respect to the credit agreement.


Dependence on Key Employees

The Corporation’s business
    and operations are dependent on retaining the services of a small number
    of key employees. The success of the Corporation is, and will continue to
    be, to a significant extent, dependent on the expertise and experience of
    these employees. The loss of one or more of these employees could have a
    materially adverse effect on the Corporation. The Corporation does not maintain
    insurance on any of its key employees.


Potential Dilution

As at December 31, 2004, the Corporation
    has outstanding options to purchase approximately 11.0 million common shares
    of the Corporation and warrants to purchase approximately 13.0 million common
    shares of the Corporation. See note 9 to the Consolidated Financial Statements
    for additional information with respect to the option and warrants. The issue
    of common shares of the Corporation upon the exercise of the options and
    warrants will dilute the ownership interest of the Corporation’s current
    shareholders. The Corporation may also issue additional option and warrants
    or additional common shares from time to time in the future. If it does so,
    the ownership interest of the Corporation’s then current shareholders
    could also be diluted.


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DIRECTORS AND SENIOR OFFICERS

The following table sets forth, for each of the directors and senior officers of the Corporation, the name, municipality of residence, office, principal occupation and, if a director, the date on which the person became a director.  Each director is elected to serve until the Corporation’s next annual meeting of shareholders.


|Name andMunicipality of Residence                  |  |  | Office                                                    |  |  | Principal Occupation                                                                                          |  |  | Director Since     |  |  | Expiry ofCurrent Term(6) | 
|-------------------------------------------------- |  |  | --------------------------------------------------------- |  |  | ------------------------------------------------------------------------------------------------------------- |  |  | ------------------ |  |  | ------------------------ | 
|                                                   |  |  |                                                           |  |  |                                                                                                               |  |  |                    |  |  |                          | 
|Robert A. Fung (1)Toronto, Ontario                 |  |  | Director, Chairman of the Board                           |  |  | EmployeeOrion Securities, Inc. (investment bank)                                                              |  |  | December 3, 1996   |  |  | June 24, 2005            | 
|                                                   |  |  |                                                           |  |  |                                                                                                               |  |  |                    |  |  |                          | 
|Todd Bruce (1)(4)Unionville, Ontario               |  |  | Director, President and Chief Executive Officer           |  |  | President and Chief Executive Officer, Crystallex International Corporation                                   |  |  | September 22, 2003 |  |  | June 24, 2005            | 
|                                                   |  |  |                                                           |  |  |                                                                                                               |  |  |                    |  |  |                          | 
|Michael J.H. Brown (1)(3)(4)Toronto, Ontario       |  |  | Director                                                  |  |  | Principal, Capital Markets Advisory (a financial and capital markets advisory firm)                           |  |  | October 10, 2002   |  |  | June 24, 2005            | 
|                                                   |  |  |                                                           |  |  |                                                                                                               |  |  |                    |  |  |                          | 
|C. William Longden (2)(4)Toronto, Ontario          |  |  | Director                                                  |  |  | Vice Chairman, Marshall, Macklin, Monaghan Limited (an engineering and construction management company)       |  |  | July 25, 2000      |  |  | June 24, 2005            | 
|                                                   |  |  |                                                           |  |  |                                                                                                               |  |  |                    |  |  |                          | 
|David I. Matheson (1)(3)Toronto, Ontario           |  |  | Director                                                  |  |  | Counsel, McMillan Binch LLP (law firm)                                                                        |  |  | July 25, 2000      |  |  | June 24, 2005            | 
|                                                   |  |  |                                                           |  |  |                                                                                                               |  |  |                    |  |  |                          | 
|Harry J. Near (2)(5)Ottawa, Ontario                |  |  | Director                                                  |  |  | President, Near Consultants & Associates; Principal, The Earnscliffe Strategy Group (political advisory firm) |  |  | May 5, 1997        |  |  | June 24, 2005            | 
|                                                   |  |  |                                                           |  |  |                                                                                                               |  |  |                    |  |  |                          | 
|Marc J. Oppenheimer (1)(4)Leonia, New Jersey       |  |  | Director                                                  |  |  | Executive Vice President, Kenmar Global Investment Management Inc.                                            |  |  | February 20, 1995  |  |  | June 24, 2005            | 
|                                                   |  |  |                                                           |  |  |                                                                                                               |  |  |                    |  |  |                          | 
|Johan C. van’t Hof (1)(2)(4)Toronto, Ontario       |  |  | Director                                                  |  |  | President, Tonbridge Corporation (infrastructure fund manager)                                                |  |  | March 12, 2004     |  |  | June 24, 2005            | 
|                                                   |  |  |                                                           |  |  |                                                                                                               |  |  |                    |  |  |                          | 
|Armando F. Zullo (3)(5)Vancouver, British Columbia |  |  | Director                                                  |  |  | President, A.F. Zullo & Company Ltd. (construction company)                                                   |  |  | December 3, 1996   |  |  | June 24, 2005            | 
|                                                   |  |  |                                                           |  |  |                                                                                                               |  |  |                    |  |  |                          | 
|Borden D. RosiakToronto, Ontario                   |  |  | Chief Financial Officer                                   |  |  | Chief Financial Officer, Crystallex International Corporation                                                 |  |  |                   |  |  |                         | 
|                                                   |  |  |                                                           |  |  |                                                                                                               |  |  |                    |  |  |                          | 
|Daniel R. RossToronto, Ontario                     |  |  | Executive Vice President, Corporate Counsel and Secretary |  |  | Executive Vice President, Corporate Counsel and Secretary, Crystallex International Corporation               |  |  |                   |  |  |                         | 
|                                                   |  |  |                                                           |  |  |                                                                                                               |  |  |                    |  |  |                          | 
|Kenneth ThomasMississauga, Ontario                 |  |  | Chief Operating Officer                                   |  |  | Chief Operating Officer, Crystallex International Corporation                                                 |  |  |                   |  |  |                         | 
|                                                   |  |  |                                                           |  |  |                                                                                                               |  |  |                    |  |  |                          | 
|Dr. Sadek El-AlfySeattle, Washington               |  |  | Vice President, Operations                                |  |  | Vice President, Operations, Crystallex International Corporation                                              |  |  |                   |  |  |                         | 

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|Name andMunicipality of Residence                    |  |  | Office                                                   |  |  | Principal Occupation                                                                                          |  |  | Director Since |  |  | Expiry ofCurrent Term(6) | 
|---------------------------------------------------- |  |  | -------------------------------------------------------- |  |  | ------------------------------------------------------------------------------------------------------------- |  |  | -------------- |  |  | ------------------------ | 
|                                                     |  |  |                                                          |  |  |                                                                                                               |  |  |                |  |  |                          | 
|John Binns
      Toronto, Ontario                    |  |  | Vice President,
      Environmental                      |  |  | Vice President,
      Environmental Vice President,
      Environmental, Crystallex International Corporation |  |  |               |  |  |                         | 
|                                                     |  |  |                                                          |  |  |                                                                                                               |  |  |                |  |  |                          | 
|Ronald Colquhoun
      Newmarket, Ontario            |  |  | Vice President,
      Technical Services                 |  |  | Vice President,
      Technical Services, Crystallex International Corporation                                |  |  |               |  |  |                         | 
|                                                     |  |  |                                                          |  |  |                                                                                                               |  |  |                |  |  |                          | 
|Robert Crombie
      Toronto, Ontario                |  |  | Vice President,
      Corporate Development and Planning |  |  | Vice President,
      Corporate Development and Planning, Crystallex International Corporation                |  |  |               |  |  |                         | 
|                                                     |  |  |                                                          |  |  |                                                                                                               |  |  |                |  |  |                          | 
|Dan Hamilton
      Toronto, Ontario                  |  |  | Vice President,
      Controller                         |  |  | Vice President,
      Controller, Crystallex International Corporation                                        |  |  |               |  |  |                         | 
|                                                     |  |  |                                                          |  |  |                                                                                                               |  |  |                |  |  |                          | 
|Richard Marshall
      Alpharetta, Georgia           |  |  | Vice President,
      Investor Relations                 |  |  | Vice President,
      Investor Relations, Crystallex International Corporation                                |  |  |               |  |  |                         | 
|                                                     |  |  |                                                          |  |  |                                                                                                               |  |  |                |  |  |                          | 
|Dr. Richard Spencer (7)
      Richmond Hill, Ontario |  |  | Vice President,
      Exploration                        |  |  | Vice President,
      Exploration, Crystallex International Corporation                                       |  |  |               |  |  |                         | 

___________________
Notes:

|(1) | Member of the Finance and Risk Management Committee.  The role of the Finance and Risk Management Committee is to assist the board of directors in fulfilling its responsibilities with respect to financial matters (including short- and long-term financings, issuances of shares, foreign currency, hedging and derivatives transactions, capital expenditures and long-term commitments and policies and guidelines for the investment of cash) and its oversight responsibilities with respect to non-financial risk management systems.  A copy of the charter of the Finance and Risk Management Committee may be viewed on the Corporation’s website at www.crystallex.com.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|    |                                                             
|--- | ------------------------------------------------------------
|(2) | Member of the Audit Committee.  See “Audit Committee” below.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Member of the Corporate Governance Committee.  The role of the Corporate Governance Committee is to assist the board of directors in fulfilling its responsibilities with respect to the composition and operation of the board of directors and committees of the board and corporate governance standards and practices.  A copy of the charter of the Corporate Governance Committee may be viewed on the Corporation’s website at www.crystallex.com.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Member of the Environment, Health and Safety and Operations Committee.  The role of the Environment, Health and Safety and Operations Committee is to assist the board of directors with respect to environment, health and safety matters arising out of the activities of Crystallex and to oversee the operations of Crystallex.  A copy of the charter of the Environment, Health and Safety and Operations Committee may be viewed on the Corporation’s website at www.crystallex.com.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(5) | Member of the Nominating and Compensation Committee.  The role of the Nominating and Compensation Committee is to assist the board of directors in fulfilling its responsibilities with respect to the composition of the board of directors, including recommending candidates for election or appointment as directors of the Corporation, the recruitment and compensation of the Chief Executive Officer and other officers of the Corporation, executive compensation disclosure and oversight of the compensation structure and benefit programs of the Corporation.  A copy of the charter of the Nominating and Compensation Committee may be viewed on the Corporation’s website at www.crystallex.com.

|    |                                                                         
|--- | ------------------------------------------------------------------------
|(6) | Proposed date for the Corporation’s 2005 annual meeting of shareholders.

|    |                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(7) | Dr. Spencer replaced Dr. Luca Riccio, P. Geo. who ceased to be an employee of the Corporation on December 31, 2004.  Dr. Riccio continues to be a consultant to the Corporation.

All of the directors and senior officers of the Corporation have held the principal occupations identified above with the same or associated companies or organizations for not less than five years, except for Mr. Fung who was a Senior Partner of Capital West Group (a mid-market investment bank) prior to January 2001; Mr. Bruce who was President and Chief Operating Officer of IAMGOLD Corporation (a gold mining company) prior to January 2003; Mr. Brown who held various positions with Macquarie Bank of Australia (a bank) prior to October 2001; Mr. Longden who was Vice President, Corporate Development of Marshall, Macklin, Monaghan Limited (an engineering and construction management company) prior to May 2001; Mr.
Matheson who was of counsel with Aird & Berlis LLP (law firm) prior to December 2001; Mr. Oppenheimer who was Vice-Chairman of the Corporation from September 2003 to May 2004 and the President and Chief Executive Officer of the Corporation prior to September 2003; Mr. van’t Hof who was the Chief Operating Officer of Carter Group Inc. (an automobile parts manufacturer) from July 2001 until May 2003 and was a partner and managing director with PricewaterhouseCoopers LLP prior to January 2001; Mr. Rosiak who was the Chief Financial Officer of Dorset Partners (a private investment firm) prior to April 2002; Mr. Ross who was a partner with McCarthy Tétrault LLP (law firm) prior to September 2001; Mr. Thomas who was a Managing Director of Hatch (an engineering and construction
management company) from April 2001 to January 2003 and a Senior Vice President, Technical Services of Barrick Gold Corporation (gold mining company) prior to April 2001; Messrs. Binns and Colquhoun who held a variety of positions in operations and project management with Barrick Gold Corporation prior to February 2004; Mr. Crombie who was a Vice President of Dresdner Bank prior to April 2001; Mr. Hamilton who was VP Group Controller of AMEC Inc. (a construction and engineering company) prior to August 2003; and Dr. Spencer who was the Exploration Manager (South America) of IAMGOLD Corporation prior to October 2004.




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No director or senior officer of the Corporation has, within ten years prior to the date of this Annual Information Form:

| |  | been a director or officer of any reporting issuer that, while that individual was acting in that capacity, was the subject of a cease trade or similar order or an order that denied the reporting issues access to any statutory exemption for a period of more than 30 consecutive days or was declared bankrupt or made a voluntary assignment in bankruptcy, made a proposal under any legislation relating to bankruptcy or been subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver-manager or trustee appointed to hold the assets of that individual;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |   |                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | been subject to any penalties or sanctions imposed by a court or securities regulatory authority relating to trading in securities, promotion or management of a publicly traded issuer or theft or fraud; or

| |   |                                                                                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or been subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold the assets of that individual.

The directors and executive officers of the Corporation, and their associates and affiliates, as a group, beneficially own, directly or indirectly, 1,091,382 common shares of the Corporation or approximately 0.6% of the outstanding common shares of the Corporation.


Audit Committee

The board of directors of the Corporation has established the Audit Committee to assist the board in fulfilling its corporate governance and oversight responsibilities with respect to accounting and financial reporting processes, internal financial control structure, financial risk management systems and external audit function.


| | Composition
| | -----------

The Audit Committee is composed of Johan C. van’t Hof (Chair), C. William Longden and Harry J. Near, each of whom is independent and financially literate (ie, has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of accounting issues that can reasonably be expected to be raised by the financial statements of the Corporation) within the meaning of applicable Canadian and U.S. securities laws. Mr. van’t Hof was a partner and managing director with PricewaterhouseCoopers LLP, between 1991 and 2001 and is financially sophisticated (ie, has past employment 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) within the meaning of applicable U.S. securities laws.


| | Charter
| | -------

The composition, responsibilities and authority of the Audit Committee are set out in its charter.  Under the terms of its charter, the Audit Committee is responsible for:


| |  | managing the relationship between the Corporation and its external auditors, including: appointing and replacing the external auditors, subject to shareholder approval; setting the compensation of the external auditors, overseeing the work of the external auditors (including resolving disagreements between management and the external auditors with respect to financial reporting); pre-approving all audit services and permitted non-audit services to be provided to the Corporation and its subsidiary entities by the external auditors; ensuring that the external auditors report to the Audit Committee in a timely manner with respect to all required matters; reviewing and approving the hiring policies of the Corporation with respect to present and former partners and
employees of the external auditors; overseeing the rotation of the audit partner having primary responsibility for the audit of the Corporation, the audit partner responsible for reviewing the external audit and the external auditors at such intervals as may be required; overseeing any change in the external auditors (including the notice of change as required under applicable laws); and reviewing and assessing the performance, independence and objectivity of the external auditors;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |  | overseeing the external audit of the Corporation, including: reviewing and approving the engagement letter and audit plan (including identified risk areas) and facilitating coordination where more than one audit firm is involved; reviewing and assessing the accounting and reporting practices and principles used by the Corporation in preparing its financial statements; reviewing and assessing the results of the external audit and the external auditors’ opinion on the financial statements; reviewing and discussing with the external auditors and management any management or internal control letters issued or proposed to be issued by the external auditors; reviewing and discussing with the external auditors any problems or difficulties encountered by them in
the course of their audit work and management’s response (including any restrictions on the scope of activities or access to requested information and any significant disagreements with management); and reviewing and discussing with legal counsel and other advisors any matters that may have a material impact on the financial statements, operations, assets or compliance policies of the Corporation and any material reports or enquiries received by the Corporation and its subsidiary entities from regulators or government agencies;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | reviewing, approving and, where required, recommending to the board of directors of the Corporation for approval, the financial statements, management’s discussion and analysis of financial condition and results of operations and interim financial reports of the Corporation and other public disclosure of financial information extracted from the financial statements of the Corporation with particular focus on the quality and appropriateness of accounting and reporting practices and principles and any changes thereto, major estimates or judgments, including alternative treatments of financial information discussed with management and the external auditors, the results of such discussions and the treatment preferred by the external auditors, material
financial risks, material transactions, material adjustments, compliance with loan agreements, material off-balance sheet transactions and structures, related party transactions, compliance with accounting standards, compliance with legal and regulatory requirements and disagreements with management;

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | overseeing the internal financial control structure and financial risk management systems of the Corporation, including: reviewing and discussing with management and the external auditors the quality and adequacy of the internal control over the financial reporting structure of the Corporation (including any material deficiencies and the steps taken by management to rectify these deficiencies or weaknesses); reviewing and discussing with management and the external auditors the quality and adequacy of the financial risk management systems of the Corporation (including the major risk exposures of the Corporation and the steps taken by management to monitor and control these exposures; reviewing and discussing with management and the external auditors compliance
with the Corporation’s Code of Business Conduct and Ethics (which includes whistleblower provisions); and reviewing and discussing with the Chief Executive Officer and the Chief Financial Officer of the Corporation the procedures undertaken by them in connection with the certifications required to be given by them in connection with annual and other filings required to be made by the Corporation under applicable securities laws; and

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | establishing adequate procedures, or ensuring that adequate procedures are in place, with respect to the following (and annually assessing the adequacy of these procedures): the review of the public disclosure of financial information extracted from the financial statements of the Corporation (other than as described above); the receipt, retention and treatment of complaints received by the Corporation with respect to accounting, internal accounting controls or auditing matters; and the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters.

A copy of the charter of the Finance and Risk Management Committee may be viewed on the Corporation’s website at www.crystallex.com.


| | Policy on the Provision of Services by External Auditors
| | --------------------------------------------------------

The Audit Committee has developed a Policy on the Provision of Services by External Auditors.  Under the terms of the Policy:


| |  | the external auditors may not provide services to Crystallex that impair or have the ability to impair the independence and objectivity of the external auditors in relation to the external audit function (generally, prohibited services include services where the external auditors participate in activities that are normally undertaken by management of Crystallex, are remunerated through a “success fee” structure, act in an advocacy role for Crystallex or may be required to audit their own work;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |  | the Audit Committee has pre-approved certain audit and permitted non-audit services as services that the auditors may provide to Crystallex, including: services that constitute the agreed scope of the external audit or interim reviews of Crystallex; services that are outside the agreed scope of, but are consistent with, the external audit or interim reviews of Crystallex; tax services that do not compromise the independence and objectivity of the external auditors in relation to the external audit; and other services of an advisory nature that do not compromise the independence and objectivity of the external auditors in relation to the external; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | an authorization process has been established which provides, among other things: the Audit Committee must authorize in advance all engagements of the external auditors to provide pre-approved services to Crystallex (provided however that the Chair of the Audit Committee and the Chief Financial Officer may together authorize in advance all engagements of the external auditors to provide pre-approved services to Crystallex up to a maximum of C$50,000 per engagement and up to a maximum of C$150,000 for all such engagements in each calendar quarter and the Chair of the Audit Committee and the Chief Financial Officer must report all engagements authorized by them to the Audit Committee at its next meeting); and services that are not pre-approved services must be
authorized by the Audit Committee before the external auditors are engaged regardless of the dollar value of the services..

Exceptions can be made to this Policy where the exceptions are in the interests of Crystallex and appropriate arrangements are established to ensure the independence and objectivity of the external auditors in relation to the external audit.  Any exception must be authorized by the Audit Committee and must be reported to the board of directors of the Corporation. Copies of the Corporation’s Policy on the Provision of Services by External Auditors and the Corporation’s Code of Business Conduct and Ethics may be viewed on the Corporation’s website at www.crystallex.com.


| | External Auditors Service Fees
| | ------------------------------

The Corporation’s auditors are Deloitte & Touche LLP, Chartered Accountants. The table below sets out the fees billed by the Corporation’s auditors for each of last two years in respect of the services noted below.


|                      |  |  | Year ended December 31, | 
|--------------------- |  |  | ----------------------- | 
|                      |  |  |                         | 
|                      |  |  | 2004                    | 
|                      |  |  |                         | 
|                      |  |  |                         | 
|Audit-related fees(1) |  |  | U.S.$694,131            | 
|Tax fees(2)           |  |  | U.S.$870,553            | 
|All other fees(3)     |  |  | U.S.$737,018            | 

____________________
Notes:

|(1) | Includes fees for financial audits, interim reviews and assurance and related services.
|--- | ---------------------------------------------------------------------------------------

|    |                              
|--- | -----------------------------
|(2) | Includes fees for tax advice.

|    |                                                                       
|--- | ----------------------------------------------------------------------
|(3) | Includes fees other than those referred to in Notes (1) and (2) above.

Corporate Governance Statement

The Corporation’s Corporate Governance Statement (together with the documents referred to in the Corporate Governance Statement) may be viewed on the Corporation’s website at www.crystallex.com.


TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the common shares of the Corporation is CIBC Mellon Trust Company at its principal office in Toronto, Ontario.


MATERIAL CONTRACTS

Except for the following, neither the Corporation nor any of its subsidiaries has entered into any material contract within the two years before the date of this Annual Information Form, other than contracts in the ordinary course of business:




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| | (a) | the EPCM Contract with SNCL with respect to the development of the Las Cristinas Project described under “Las Cristinas Project  Engineering, Procurement and Construction Management; and
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |     |                                                                                                                                        
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------
| | (b) | the indenture, supplemental indenture and escrow agreement with respect to a U.S.$100 million debt offering completed in December 2004.

| |                                                                                | 
| | ------------------------------------------------------------------------------ | 
| | Copies of these documents are available at the SEDAR website at www.sedar.com.

INTEREST OF EXPERTS

Deloitte & Touche LLP has prepared the audit report on the Consolidated Financial Statements which are incorporated by reference in this Annual Information Form.  Mine Development Associates, SNC-Lavalin Engineers & Constructors Inc. and certain other consultants have been involved in the preparation of certain technical reports which are incorporated by reference in this Annual Information Form.  The foregoing experts have advised the Corporation that they do not own any common shares or other property of Crystallex.


ADDITIONAL INFORMATION

Additional information with respect to Crystallex may be found at the SEDAR website at www.sedar.com. Additional information including directors and officers remuneration and indebtedness, principal holders of the Corporation’s securities and securities authorized for issuance under equity compensation plans, where applicable, is or will be contained in the management information circular for use at the next annual meeting of shareholders of the Corporation (currently scheduled for June 24, 2005). Additional financial information is provided in the Consolidated Financial Statements and Management’s Discussion and Analysis, copies of which are attached to this Annual Information Form as Annex A and Annex B, respectively.


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ANNEX ACONSOLIDATED FINANCIAL STATEMENTS

A-1

---









Consolidated Financial Statements of

CRYSTALLEX INTERNATIONALCORPORATION

December 31, 2004, 2003 and 2002

(Expressed in United States dollars)





---



Report of Independent Registered Chartered Accountants

To the Board of Directors and the Shareholders ofCrystallex International Corporation

We have audited the consolidated balance sheets of Crystallex International Corporation as at December 31, 2004 and 2003 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, 2004.  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.  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.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2004 and 2003 and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2004 in accordance with Canadian generally accepted accounting principles.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting.  Accordingly we express no such opinion.

Deloitte & Touche LLPChartered AccountantsToronto, OntarioMarch 11, 2005.

---





|CRYSTALLEX
            INTERNATIONAL CORPORATIONTable of Contents
      December 31, 2004, 2003 and
    2002 | 
|------------------------------------------------------------------------------------------------------------ | 



|                                                    | Page  
|--------------------------------------------------- | ------
|                                                    |       
|Consolidated Balance Sheets                         | 1     
|                                                    |       
|Consolidated Statements of Operations               | 2     
|                                                    |       
|Consolidated Statements of Cash Flows               | 3     
|                                                    |       
|Consolidated Statements of
    Shareholders Equity | 4     
|                                                    |       
|Notes to the Consolidated Financial Statements      | 5  42
|                                                    |       



---



CRYSTALLEX INTERNATIONAL
        CORPORATION Consolidated Balance Sheets
  As at December 31
(Expressed in United States dollars  See Note 2)


---



|                                                            |  |   |              |   |   |              |  
|----------------------------------------------------------- |  | - | ------------ | - | - | ------------ | -
|                                                            |  |   | 2004         |   |   | 2003         |  
|                                                            |  |   |              |   |   |              |  
|ASSETS                                                      |  |   |              |   |   |              |  
|                                                            |  |   |              |   |   |              |  
|CURRENT                                                     |  |   |              |   |   |              |  
|Cash and cash equivalents                                   |  | $ | 5,766,742    |   | $ | 26,203,536   |  
|Short-term investments                                      |  |   | 30,277,280   |   |   |             |  
|Restricted cash and cash equivalents (Note 5)               |  |   | 2,500,000    |   |   |             |  
|Accounts receivable  trade                                 |  |   | 529,907      |   |   | 860,901      |  
|Accounts receivable  other (Note 17)                       |  |   |             |   |   | 2,000,000    |  
|Production inventories (Note 4)                             |  |   | 1,784,788    |   |   | 1,751,703    |  
|Prepaid expenses and other                                  |  |   | 2,785,264    |   |   | 1,032,545    |  
|                                                            |  |   |              |   |   |              |  
|                                                            |  |   | 43,643,981   |   |   | 31,848,685   |  
|RESTRICTED CASH AND CASH EQUIVALENTS (Note 5)               |  |   | 95,505,636   |   |   |             |  
|PROPERTY, PLANT AND EQUIPMENT (Note 6)                      |  |   | 117,329,337  |   |   | 102,274,263  |  
|DEFERRED FINANCING FEES (Note 7)                            |  |   | 3,639,702    |   |   | 150,580      |  
|                                                            |  |   |              |   |   |              |  
|TOTAL ASSETS                                                |  | $ | 260,118,656  |   | $ | 134,273,528  |  
|                                                            |  |   |              |   |   |              |  
|                                                            |  |   |              |   |   |              |  
|LIABILITIES                                                 |  |   |              |   |   |              |  
|                                                            |  |   |              |   |   |              |  
|CURRENT                                                     |  |   |              |   |   |              |  
|Accounts payable and accrued liabilities                    |  | $ | 6,595,329    |   | $ | 6,968,598    |  
|Current portion of commodity contract obligations (Note 10) |  |   | 16,724,215   |   |   | 20,210,104   |  
|Current portion of long-term debt (Note 8)                  |  |   | 4,400,000    |   |   | 1,030,000    |  
|                                                            |  |   |              |   |   |              |  
|                                                            |  |   | 27,719,544   |   |   | 28,208,702   |  
|LONG-TERM DEBT (Note 8)                                     |  |   | 80,687,719   |   |   | 6,458,000    |  
|COMMODITY CONTRACT OBLIGATIONS (Note 10)                    |  |   | 5,855,897    |   |   | 20,498,008   |  
|ASSET RETIREMENT OBLIGATIONS (Note 11)                      |  |   | 2,301,181    |   |   |             |  
|                                                            |  |   |              |   |   |              |  
|                                                            |  |   | 116,564,341  |   |   | 55,164,710   |  
|                                                            |  |   |              |   |   |              |  
|MINORITY INTEREST                                           |  |   |             |   |   | 111,053      |  
|                                                            |  |   |              |   |   |              |  
|                                                            |  |   |              |   |   |              |  
|COMMITMENTS AND CONTINGENCIES (Note 18)                     |  |   |              |   |   |              |  
|                                                            |  |   |              |   |   |              |  
|SHAREHOLDERS EQUITY                                        |  |   |              |   |   |              |  
|                                                            |  |   |              |   |   |              |  
|SHARE CAPITAL (Note 9)                                      |  |   | 306,031,783  |   |   | 171,994,591  |  
|SPECIAL WARRANTS (Note 9)                                   |  |   |             |   |   | 11,886,581   |  
|CONTRIBUTED SURPLUS (Note 9)                                |  |   | 31,824,328   |   |   | 25,808,171   |  
|CUMULATIVE TRANSLATION ADJUSTMENT                           |  |   | 11,958,981   |   |   | 11,958,981   |  
|DEFICIT                                                     |  |   | (206,260,777 | ) |   | (142,650,559 | )
|                                                            |  |   |              |   |   |              |  
|                                                            |  |   | 143,554,315  |   |   | 78,997,765   |  
|                                                            |  |   |              |   |   |              |  
|                                                            |  | $ | 260,118,656  |   | $ | 134,273,528  |  
|                                                            |  |   |              |   |   |              |  

|                                                                                          |                                                 
|----------------------------------------------------------------------------------------- | ------------------------------------------------
|(Signed) Todd Bruce,
            Director                                               | (Signed) Johan vant
            Hof, Director
|The accompanying notes are an
    integral part of the consolidated financial statements. |                                                 




Page 1 of 42

---



CRYSTALLEX INTERNATIONAL
CORPORATIONConsolidated Statements of Operations
  Year ended December 31
(Expressed in United States dollars  See Note 2)

---



|                                                             | 2004 |             | 2003 |   | 2002        |  
|------------------------------------------------------------ | ---- | ----------- | ---- | - | ----------- | -
|                                                             |      |             |      |   |             |  
|MINING REVENUE                                               | $    | 20,245,690  |      | $ | 11,329,407  |  
|                                                             |      |             |      |   |             |  
|OPERATING EXPENSES                                           |      |             |      |   |             |  
|Operations                                                   |      | 18,037,768  |      |   | 11,783,185  |  
|Amortization                                                 |      | 1,161,042   |      |   | 1,019,566   |  
|Depletion                                                    |      | 4,869,005   |      |   | 2,034,962   |  
|                                                             |      |             |      |   |             |  
|                                                             |      | 24,067,815  |      |   | 14,837,713  |  
|                                                             |      |             |      |   |             |  
|OPERATING LOSS                                               |      | (3,822,125  | )    |   | (3,508,306  | )
|                                                             |      |             |      |   |             |  
|OTHER EXPENSES                                               |      |             |      |   |             |  
|Amortization                                                 |      | 158,969     |      |   | 276,722     |  
|Interest on long-term debt                                   |      | 548,131     |      |   | 906,490     |  
|General and administrative                                   |      | 18,223,193  |      |   | 16,375,534  |  
|Stock based compensation
        (Notes 3 and 9)             |      | 5,296,977   |      |   |            |  
|                                                             |      |             |      |   |             |  
|                                                             |      | 24,227,270  |      |   | 17,558,746  |  
|                                                             |      |             |      |   |             |  
|COMMODITY CONTRACT LOSS (Note 10)                            |      | (963,717    | )    |   | (16,475,340 | )
|                                                             |      |             |      |   |             |  
|LOSS BEFORE OTHER ITEMS                                      |      | (29,013,112 | )    |   | (37,542,392 | )
|                                                             |      |             |      |   |             |  
|OTHER ITEMS                                                  |      |             |      |   |             |  
|Interest and other income                                    |      | 697,638     |      |   | 195,992     |  
|Foreign exchange gain (loss)                                 |      | 397,313     |      |   | (3,528,401  | )
|Write-down of property, plant
        and equipment (Note 6) |      | (32,003,253 | )    |   | (17,506,337 | )
|Write-down of investment
        in El Callao (Note 12)      |      | (493,702    | )    |   |            |  
|Loss on sale and write-down
        of                       |      |             |      |   |             |  
|marketable
        securities                                |      |            |      |   | (136,276    | )
|                                                             |      |             |      |   |             |  
|                                                             |      | (31,402,004 | )    |   | (20,975,022 | )
|                                                             |      |             |      |   |             |  
|LOSS FROM CONTINUING OPERATIONS                              |      |             |      |   |             |  
|BEFORE
        MINORITY INTEREST                             |      | (60,415,116 | )    |   | (58,517,414 | )
|Minority Interest                                            |      | 111,053     |      |   |            |  
|                                                             |      |             |      |   |             |  
|LOSS FROM CONTINUING OPERATIONS                              |      | (60,304,063 | )    |   | (58,517,414 | )
|LOSS FROM DISCONTINUED                                       |      |             |      |   |             |  
|OPERATIONS (Note 17)                                         |      | (350,000    | )    |   | (2,969,088  | )
|                                                             |      |             |      |   |             |  
|NET LOSS FOR THE YEAR                                        | $    | (60,654,063 | )    | $ | (61,486,502 | )
|                                                             |      |             |      |   |             |  
|BASIC AND DILUTED NET LOSS PER SHARE                         |      |             |      |   |             |  
|Continuing operations                                        | $    | (0.35       | )    | $ | (0.49       | )
|Discontinued operations                                      |      | (0.00       | )    |   | (0.03       | )
|                                                             |      |             |      |   |             |  
|                                                             | $    | (0.35       | )    | $ | (0.52       | )
|                                                             |      |             |      |   |             |  
|BASIC AND DILUTED WEIGHTED AVERAGE                           |      |             |      |   |             |  
|NUMBER OF SHARES OUTSTANDING                                 |      | 172,234,551 |      |   | 118,309,198 |  
|                                                             |      |             |      |   |             |  

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


Page 2 of 42

---



CRYSTALLEX INTERNATIONAL
CORPORATIONConsolidated Statements of Cash FlowsYears ended December 31
(Expressed in United States dollars  See Note 3)

|                                             |                                                     |                                               |                                                      | 2004        |              | 2003       |             | 2002        |            
|-------------------------------------------- | --------------------------------------------------- | --------------------------------------------- | ---------------------------------------------------- | ----------- | ------------ | ---------- | ----------- | ----------- | -----------
|                                             |                                                     |                                               |                                                      |             |              |            |             |             |            
|CASH FLOWS FROM CONTINUING                   |                                                     |                                               |                                                      |             |              |           
|                                             | OPERATING ACTIVITIES                                |                                               |                                                      |             |              |            |            
|                                             |                                                     | Loss
    for the year - continuing operations | $                                                    | (60,304,063 | )            | $          | (58,517,414 | )           | $          
|                                             |                                                     | Adjustments to reconcile loss to net cash     |                                                      |             |              |            |             |             |            
|                                             |                                                     | used
    in operating activities:             |                                                      |             |              |            |             |             |            
|                                             |                                                     |                                               | Amortization and depletion                           |             | 6,189,016    |            |             | 3,331,250   |            
|                                             |                                                     |                                               | Unrealized foreign exchange gain                     |             | (71,279      | )          |             | 493,576     |            
|                                             |                                                     |                                               | Directors
       fees                               |             | 100,000      |            |             | 57,000      |            
|                                             |                                                     |                                               | Minority interest in loss of subsidiary              |             | (111,053     | )          |             |            |            
|                                             |                                                     |                                               | Interest
    on long-term debt                       |             | 79,249       |            |             |            |            
|                                             |                                                     |                                               | Management and consulting fees                       |             |             |            |             | 1,378,175   |            
|                                             |                                                     |                                               | Unrealized commodity contract (gain) loss            |             | (18,127,999  | )          |             | 13,808,154  |            
|                                             |                                                     |                                               | Stock based compensation                             |             | 5,296,977    |            |             |            |            
|                                             |                                                     |                                               | Extension of warrants                                |             | 225,178      |            |             |            |            
|                                             |                                                     |                                               | Loss on sale and write-down of marketable securities |             |             |            |             | 136,276     |            
|                                             |                                                     |                                               | Write-down of investment in El Callao                |             | 493,702      |            |             |            |            
|                                             |                                                     |                                               | Write-down of mineral properties                     |             | 32,003,253   |            |             | 17,506,337  |            
|                                             | Changes in other operating assets and liabilities   |                                               |                                                      |             |              |            |             |             |            
|                                             | (net
    of effects from purchase of subsidiaries): |                                               |                                                      |             |              |            |             |             |            
|                                             |                                                     |                                               | Decrease (increase) in accounts receivable           |             | 330,994      |            |             | (1,993,392  | )          
|                                             |                                                     |                                               | Increase in production inventories                   |             | (33,085      | )          |             | (1,160,650  | )          
|                                             |                                                     |                                               | (Increase) decrease in prepaid expenses and other    |             | (1,752,719   | )          |             | (745,147    | )          
|                                             |                                                     |                                               | Decrease (increase) in due from related parties      |             |             |            |             | 68,221      |            
|                                             |                                                     |                                               | (Decrease) increase in accounts payable and          |             |              |            |             |             |            
|                                             |                                                     |                                               | accrued liabilities                                  |             | (323,269     | )          |             | (710,761    | )          
|                                             |                                                     |                                               | (Decrease) increase in due to related parties        |             |             |            |             | (190,297    | )          
|                                             |                                                     |                                               | Increase in commodity contract obligation            |             |             |            |             |            |            
|                                             |                                                     |                                               |                                                      |             |              |            |             |             |            
|                                             |                                                     |                                               |                                                      |             | (36,005,098  | )          |             | (26,538,672 | )          
|                                             |                                                     |                                               |                                                      |             |              |            |             |             |            
|CASH FLOWS FROM INVESTING ACTIVITIES         |                                                     |                                               |                                                      |             |              |            |             |             |            
|                                             | Investment in property, plant and equipment         |                                               | (50,900,524                                          | )           |              | (9,032,425 | )           |             | (27,031,579
|                                             | Increase in restricted cash                         |                                               | (98,005,636                                          | )           |              |           |             |             |           
|                                             | Increase in short-term investments                  |                                               | (30,277,280                                          | )           |              |           |             |             |           
|                                             | Sale (purchase) of marketable securities            |                                               |                                                     |             |              | 365,912    |             |             | (40,960    
|                                             |                                                     |                                               |                                                      |             |              |            |             |             |            
|                                             |                                                     |                                               |                                                      |             | (179,183,440 | )          |             | (8,666,513  | )          
|                                             |                                                     |                                               |                                                      |             |              |            |             |             |            
|CASH FLOWS FROM FINANCING ACTIVITIES         |                                                     |                                               |                                                      |             |              |            |             |             |            
|                                             | Issuance of common shares for cash                  |                                               | 115,113,111                                          |             |              | 7,059,199  |             |             | 4,636,185  
|                                             | Special warrants and warrants                       |                                               |                                                     |             |              | 44,765,443 |             |             | 2,915,183  
|                                             | Debt borrowings                                     |                                               | 78,550,000                                           |             |              | 3,136,089  |             |             | 19,224,334 
|                                             | Proceeds from orderly disposition of shares         |                                               | 3,957,285                                            |             |              |           |             |             |           
|                                             | Debt repayments                                     |                                               | (1,029,530                                           | )           |              | (1,584,934 | )           |             | (488,196   
|                                             | Deferred financing fees                             |                                               | (3,489,122                                           | )           |              |           |             |             | (1,269,412 
|                                             |                                                     |                                               |                                                      |             |              |            |             |             |            
|                                             |                                                     |                                               |                                                      |             | 193,101,744  |            |             | 53,375,797  |            
|                                             |                                                     |                                               |                                                      |             |              |            |             |             |            
|CASH FLOWS FROM CONTINUING OPERATIONS        |                                                     | (22,086,794                                   | )                                                    |             | 18,170,612   |            |             | (4,990,685  | )          
|CASH FLOWS FROM DISCONTINUED OPERATIONS      |                                                     | 1,650,000                                     |                                                      |             | 831,476      |            |             | (829,487    | )          
|EFFECT OF FOREIGN EXCHANGE RATE              |                                                     |                                               |                                                      |             |              |            |             |             |            
|CHANGES ON CASH AND CASH EQUIVALENTS         |                                                     |                                              |                                                      |             | 3,595,235    |            |             | 378,452     |            
|                                             |                                                     |                                               |                                                      |             |              |            |             |             |            
|(DECREASE) INCREASE IN CASH                  |                                                     |                                               |                                                      |             |              |            |             |             |            
|AND
    CASH EQUIVALENTS                     |                                                     | (20,436,794                                   | )                                                    |             | 22,597,323   |            |             | (5,441,720  | )          
|CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR |                                                     | 26,203,536                                    |                                                      |             | 3,606,213    |            |             | 9,047,933   |            
|                                             |                                                     |                                               |                                                      |             |              |            |             |             |            
|CASH AND CASH EQUIVALENTS, END OF YEAR       | $                                                   | 5,766,742                                     |                                                      | $           | 26,203,536   |            | $           | 3,606,213   |            
|                                             |                                                     |                                               |                                                      |             |              |            |             |             |            

Supplemental disclosure with respect to cash flows (Note 15)

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

Page 3 of 42

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Back to Contents

CRYSTALLEX INTERNATIONAL
CORPORATIONConsolidatedStatementsofShareholdersEquity
Years endedDecember31
(Expressedin
United States dollars  See Note 2)

|                             |                                                   |                                                          | Number of
Common
    Shares |             |            | Amount     |             | Number of
Special
    Warrants |            |             | Amount      |            | Number of
    Warrants |            |            | Contributed
    Surplus |              |             | Deficit     |            |            | Cumulative
Translation
    Adjustment |           |   | Equity
Component
of Convertible
    Notes |             |             | Total       |  
|---------------------------- | ------------------------------------------------- | -------------------------------------------------------- | --------------------------- | ----------- | ---------- | ---------- | ----------- | ------------------------------ | ---------- | ----------- | ----------- | ---------- | ---------------------- | ---------- | ---------- | ----------------------- | ------------ | ----------- | ----------- | ---------- | ---------- | ------------------------------------- | --------- | - | ----------------------------------------- | ----------- | ----------- | ----------- | -
|                             |                                                   |                                                          |                             |             |            |            |             |                                |            |             |             |            |                        |            |            |                         |              |             |             |            |            |                                       |           |   |                                           |             |             |             |  
|                             |                                                   |                                                          |                             |             |            |            |             |                                |            |             |             |            |                        |            |            |                         |              |             |             |            |            |                                       |           |   |                                           |             |             |             |  
|Balance at December 31, 2001 | 79,347,194                                        |                                                          | $                           | 109,131,000 |            |           |             | $                              |           |             | 10,978,272  |            | $                      | 2,813,369  |            | $                       | (44,437,601  | )           | $           | (3,681,377 | )          | $                                     | 1,012,246 |   | $                                         | 64,837,637  |            
|                             | Shares issued:                                    |                                                          |                             |             |            |            |             |                                |            |             |             |            |                        |            |            |                         |              |             |             |            |            |                                       |           |   |                                           |             |             |            
|                             |                                                   | On exercise of options                                   | 1,104,500                   |             |            | 1,034,016  |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 1,034,016   |  
|                             |                                                   | On conversion of warrants                                | 2,495,125                   |             |            | 3,991,676  |             |                               |            |             |            |            | (2,495,125             | )          |            | (389,507                | )            |             |            |            |            |                                      |           |   |                                          |             |             | 3,602,169   |  
|                             |                                                   | For directors fees                                      | 42,612                      |             |            | 71,011     |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 71,011      |  
|                             |                                                   | For mineral property                                     | 282,554                     |             |            | 554,402    |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 554,402     |  
|                             |                                                   | On settlement of bank loan                               | 677,711                     |             |            | 1,097,350  |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 1,097,350   |  
|                             |                                                   | For finders fee                                          | 35,430                      |             |            | 50,339     |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 50,339      |  
|                             |                                                   | On conversion of notes                                   | 7,737,152                   |             |            | 11,082,411 |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   | (1,012,246                                | )           |             | 10,070,165  |  
|                             |                                                   | Special warrants issued for cash                         |                            |             |            |           |             | 2,252,500                      |            |             | 2,915,183   |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 2,915,183   |  
|                             |                                                   | Warrants
    issued with convertible notes               |                            |             |            |           |             |                               |            |             |            |            | 3,195,023              |            |            | 1,234,040               |              |             |            |            |            |                                      |           |   |                                          |             |             | 1,234,040   |  
|                             |                                                   | Equity
    component of convertible notes                |                            |             |            |           |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   | 2,482,126                                 |             |             | 2,482,126   |  
|                             |                                                   | Change in CTA Balance                                    |                            |             |            |           |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            | 786,660                               |           |   |                                          |             |             | 786,660     |  
|                             |                                                   | Net loss for the year                                    |                            |             |            |           |             |                               |            |             |            |            |                       |            |            |                        |              |             | (36,134,279 | )          |            |                                      |           |   |                                          |             |             | (36,134,279 | )
|                             |                                                   |                                                          |                             |             |            |            |             |                                |            |             |             |            |                        |            |            |                         |              |             |             |            |            |                                       |           |   |                                           |             |             |             |  
|Balance at December 31, 2002 | 91,722,278                                        |                                                          |                             | 127,012,205 |            | 2,252,500  |             |                                | 2,915,183  |             | 11,678,170  |            |                        | 3,657,902  |            |                         | (80,571,880  | )           |             | (2,894,717 | )          |                                       | 2,482,126 |   |                                           | 52,600,819  |            
|                             | Shares issued:                                    |                                                          |                             |             |            |            |             |                                |            |             |             |            |                        |            |            |                         |              |             |             |            |            |                                       |           |   |                                           |             |             |            
|                             |                                                   | On exercise of options                                   | 270,000                     |             |            | 332,500    |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 332,500     |  
|                             |                                                   | On conversion of warrants                                | 4,803,457                   |             |            | 8,185,623  |             |                               |            |             |            |            | (4,803,457             | )          |            | (1,458,924              | )            |             |            |            |            |                                      |           |   |                                          |             |             | 6,726,699   |  
|                             |                                                   | For directors fees                                      | 40,080                      |             |            | 57,000     |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 57,000      |  
|                             |                                                   | In
    settlement of mineral property dispute            | 229,283                     |             |            | 542,766    |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 542,766     |  
|                             |                                                   | For
    settlement of bank loan and bank fees            | 2,348,184                   |             |            | 2,114,811  |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 2,114,811   |  
|                             |                                                   | For financial advisory fees                              | 350,000                     |             |            | 650,590    |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 650,590     |  
|                             |                                                   | For finders fee                                          | 61,695                      |             |            | 109,705    |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 109,705     |  
|                             |                                                   | For legal fees                                           | 1,281,124                   |             |            | 2,179,579  |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 2,179,579   |  
|                             |                                                   | On conversion of notes                                   | 17,036,967                  |             |            | 16,444,612 |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   | (2,482,126                                | )           |             | 13,962,486  |  
|                             | Conversion of special warrants                    | 17,260,455                                               |                             |             | 14,365,200 |            | (17,260,455 | )                              |            | (14,365,200 | )           |           |                        |            |           |                         |              |            |             |            |           |                                       |           |  |                                           |             |            |            
|                             | Special
    warrants and warrants issued for cash |                                                         |                             |             |           |            | 27,807,955  |                                |            | 23,336,598  |             | 13,903,977 |                        |            | 21,428,845 |                         |              |            |             |            |           |                                       |           |  |                                           |             | 44,765,443  |            
|                             | Warrants issued for consulting fee                |                                                         |                             |             |           |            |            |                                |            |            |             | 900,000    |                        |            | 1,027,490  |                         |              |            |             |            |           |                                       |           |  |                                           |             | 1,027,490   |            
|                             | Warrants
    issued with convertible notes        |                                                         |                             |             |           |            |            |                                |            |            |             | 150,000    |                        |            | 197,420    |                         |              |            |             |            |           |                                       |           |  |                                           |             | 197,420     |            
|                             | Warrants
    issued with promissory notes         |                                                         |                             |             |           |            |            |                                |            |            |             | 450,000    |                        |            | 171,157    |                         |              |            |             |            |           |                                       |           |  |                                           |             | 171,157     |            
|                             | Warrants expired during the year                  |                                                         |                             |             |           |            |            |                                |            |            |             | (2,235,918 | )                      |            |           |                         |              |            |             |            |           |                                       |           |  |                                           |             |            |            
|                             | Options issued to non-employees                   |                                                         |                             |             |           |            |            |                                |            |            |             |           |                        |            | 192,104    |                         |              |            |             |            |           |                                       |           |  |                                           |             | 192,104     |            
|                             | Warrants extended during the year                 |                                                         |                             |             |           |            |            |                                |            |            |             |           |                        |            | 592,177    |                         |              | (592,177    | )           |            |           |                                       |           |  |                                           |             |            |            
|                             | Change in CTA Balance                             |                                                         |                             |             |           |            |            |                                |            |            |             |           |                        |            |           |                         |              |            |             |            | 14,853,698 |                                       |           |   |                                           |             | 14,853,698  |            
|                             | Net loss for the year                             |                                                         |                             |             |           |            |            |                                |            |            |             |           |                        |            |           |                         |              | (61,486,502 | )           |            |           |                                       |           |  |                                           |             | (61,486,502 | )          
|                             |                                                   |                                                          |                             |             |            |            |             |                                |            |             |             |            |                        |            |            |                         |              |             |             |            |            |                                       |           |   |                                           |             |             |             |  
|Balance at December 31, 2003 | 135,403,523                                       |                                                          |                             | 171,994,591 |            | 12,800,000 |             |                                | 11,886,581 |             | 20,042,772  |            |                        | 25,808,171 |            |                         | (142,650,559 | )           |             | 11,958,981 |            |                                       |          |   |                                           | 78,997,765  |            
|                             | Adjustment for change in policy                   |                                                          |                             |             |            |            |             |                                |            |             |             |            |                        |            |            |                         |              |             |             |            |            |                                       |           |   |                                           |             |             |            
|                             |                                                   | re stock-based compensation                              |                            |             |            |           |             |                               |            |             |            |            |                       |            |            | 2,956,155               |              |             | (2,956,155  | )          |            |                                      |           |   |                                          |             |             |            |  
|                             | Shares issued:                                    |                                                          |                             |             |            |            |             |                                |            |             |             |            |                        |            |            |                         |              |             |             |            |            |                                       |           |   |                                           |             |             |            
|                             |                                                   | Public equity offering                                   | 28,750,000                  |             |            | 81,935,995 |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 81,935,995  |  
|                             |                                                   | Unit offering                                            | 6,500,000                   |             |            | 20,484,750 |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 20,484,750  |  
|                             |                                                   | Exercise of options                                      | 1,251,000                   |             |            | 1,581,512  |             |                               |            |             |            |            |                       |            |            | (172,624                | )            |             |            |            |            |                                      |           |   |                                          |             |             | 1,408,888   |  
|                             |                                                   | Conversion of warrants                                   | 4,908,046                   |             |            | 13,573,007 |             |                               |            |             |            |            | (4,908,046             | )          |            | (2,289,529              | )            |             |            |            |            |                                      |           |   |                                          |             |             | 11,283,478  |  
|                             |                                                   | Directors fees                                          | 40,976                      |             |            | 100,000    |             |                                |            |             |             |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 100,000     |  
|                             |                                                   | Finders fee                                              | 19,232                      |             |            | 50,000     |             |                                |            |             |             |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 50,000      |  
|                             |                                                   | Conversion of special warrants                           | 12,800,000                  |             |            | 11,886,581 |             | (12,800,000                    | )          |             | (11,886,581 | )          |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             |            |  
|                             |                                                   | Share exchange-El Callao                                 | 163,958                     |             |            | 468,062    |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 468,062     |  
|                             |                                                   | Proceeds
    from orderly disposition of shares (Note 8) |                            |             |            | 3,957,285  |             |                               |            |             |            |            |                       |            |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             | 3,957,285   |  
|                             |                                                   | Options issued to employees                              |                            |             |            |           |             |                               |            |             |            |            |                       |            |            | 5,296,977               |              |             |            |            |            |                                      |           |   |                                          |             |             | 5,296,977   |  
|                             |                                                   | Warrants expired                                         |                            |             |            |           |             |                               |            |             |            |            | (2,126,491             | )          |            |                        |              |             |            |            |            |                                      |           |   |                                          |             |             |            |  
|                             |                                                   | Extension of warrants                                    |                            |             |            |           |             |                               |            |             |            |            |                       |            |            | 225,178                 |              |             |            |            |            |                                      |           |   |                                          |             |             | 225,178     |  
|                             |                                                   | Net loss for the year                                    |                            |             |            |           |             |                               |            |             |            |            |                       |            |            |                        |              |             | (60,654,063 | )          |            |                                      |           |   |                                          |             |             | (60,654,063 | )
|                             |                                                   |                                                          |                             |             |            |            |             |                                |            |             |             |            |                        |            |            |                         |              |             |             |            |            |                                       |           |   |                                           |             |             |             |  
|Balance at December 31, 2004 | 189,836,735                                       |                                                          | $                           | 306,031,783 |            |           |             | $                              |           |             | 13,008,235  |            | $                      | 31,824,328 |            | $                       | (206,260,777 | )           | $           | 11,958,981 |            | $                                     |          |   | $                                         | 143,554,315 |            
|                             |                                                   |                                                          |                             |             |            |            |             |                                |            |             |             |            |                        |            |            |                         |              |             |             |            |            |                                       |           |   |                                           |             |             |             |  

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

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|CRYSTALLEX INTERNATIONAL
            CORPORATION           | 
|---------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements | 
|December 31, 2004, 2003 and
            2002               | 
|(Expressed in United States
    dollars  See Note 2)      | 

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |  | On January 1, 2004,
       the Company changed its functional and reporting currency to the United
       States (U.S.) dollar as a consequence of an increase in the overall proportion
       of the Companys business activities transacted in the U.S. dollar.
       The comparative consolidated financial statements, comprising the consolidated
       balance sheets of Crystallex, as at December 31, 2003 and the related
       statements of operations, shareholders equity and cash flows for
       each of the years in the two year period ended December 31, 2003 were
       recast into United States dollars and re-issued by the Company. The comparative
       figures presented in the financial statements comprise the recast financial
    statements.
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |  | The comparative figures
       presented in these consolidated financial statements have been translated
       to the U.S. dollar using the current rate method. The income statement
       and the cash flow statement items for comparative years were translated
       into the reporting currency using the average rates in effect for the
       period, and assets and liabilities were translated using the exchange
       rate at the end of the year. All resulting exchange differences are reported
       as a separate component of shareholders equity titled cumulative
       translation adjustment.                                                                                                                                                           
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |  | 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 currency
    subsidiaries and foreign currency balances                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |  | The accounts of subsidiaries,
       all of which are considered to be integrated foreign operations, are translated
       from the local currency into U.S. dollars using the temporal method. Under
       this method, monetary assets and liabilities are translated into U.S.
       dollars at the year end exchange rates, and non-monetary assets and liabilities
       are translated into U.S. dollars using historical rates of exchange. Revenues
       and expenses are translated into U.S. dollars at average rates for the
    year. Exchange gains and losses on translation are included in income.                                                                                                                                                              

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. |  | SIGNIFICANT ACCOUNTING POLICIES (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  | Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  | Cash and cash equivalents include
    highly liquid investments with original maturities of three months or less.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  | Short-term investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  | Short-term investments include highly
      liquid investments with original maturities greater than three months and
    less than one year.                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  | 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, 2004 and December
      31,
2003.                                                                                                                                                                                                                                                                                                                                                                       
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  | Property, plant and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  | Property, 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.



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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. |  | SIGNIFICANT ACCOUNTING POLICIES
         (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |  | Asset retirement obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   |  | The Company records a liability
       for its long-term asset retirement obligations, equal to the fair value
       of the obligation for asset retirement, and records a corresponding increase
       to the carrying amount of the related asset. The asset is depreciated
       and charged to depreciation expense over the life of the associated asset.
       Interest on the obligation is accreted over the period of expected cash
       flows with a corresponding charge to operating income. The fair value
    of the obligation for asset retirement is assessed annually.                                                                                                                                                                                                                                                                                                                                                            
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |  | Impairment of long lived assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |  | 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. The amount of the impairment loss is determined
    as the excess of the carrying value of the asset over its fair value.
|  
|   |  | 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 provides a valuation allowance against
       the recorded future income tax asset when it appears more likely than
    not that some or all of the future income tax assets will not be realized.                                                                                                                                                                                                                                                                                                                                                       
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |  | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. |  | SIGNIFICANT ACCOUNTING POLICIES (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   |  | Deferred financing fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   |  | Costs related to the Companys
       debt financings are deferred and amortized over the term of the related
    financing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   |  | Loss per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |  | 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 loss per share is calculated using the treasury stock
    method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   |  | Commodity derivative contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |  | The Company entered into 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 caption commodity
    contract obligations, at estimated current 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 commodity contract obligations and realized gains/losses
       on the commodity contract obligations, are recognized in the Statement
       of Operations in the period of the change or settlement as a commodity
    contract gain/(loss).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   |  | Stock-based compensation plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   |  | Effective January 1, 2004, the
       Company adopted, retroactively without restatement of prior years financial
       statements, the CICA Handbook accounting standard 3870 for Stock-Based
       Compensation and Other Stock-Based Payments. Under this standard, the
       Company now accounts for stock options using the fair value method, whereby
       compensation expense for stock options, granted since January1,
       2002, is measured at the fair value at the grant date using the Black-Scholes
       valuation model and is recognized over the vesting period of the options
    granted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|   |  | 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 asset
       retirement obligations. These estimates each affect
managements evaluation of asset impairment and the recorded balances of
inventories, site closure and asset retirement 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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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. |  | SIGNIFICANT ACCOUNTING POLICIES (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |  | Reclassification                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |  | Certain comparative figures have
       been reclassified to conform with the presentation adopted in the current
    year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3. |  | CHANGES IN ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |  | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |  | Effective January 1, 2004, the
       Company changed its accounting policy for stock-based compensation and
       adopted the fair value method of accounting for all its stock-based compensation.
       Under this method, compensation expense for stock options granted to employees
       is measured at the fair value at the grant date using the Black-Scholes
       valuation model and is recognized over the vesting period of the options
       granted. Previously the Company did not record stock options issued to
       employees as compensation expense and disclosed pro forma information
       on the fair value of stock-based compensation issued during the period
       in the notes to the financial statements. The Company has adopted this
       change retroactively and without any restatement of any previously reported
       amounts. The opening deficit and contributed surplus, as at January 1,
       2004, have been adjusted by $2,956,155 to reflect the cumulative effect
       of this change. (Note
9).                                                                                                                                                                                                                                                                                                                                                         
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |  | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |  | Effective January 1, 2004, the
       Company adopted the standard of the CICA Handbook, Asset Retirement Obligations,
       which requires that the fair value of liabilities for asset retirement
       obligations be recognized in the period in which they are incurred and
       reasonably estimatable. A corresponding increase to the carrying amount
       of the related assets is generally recorded and amortized over the life
       of the asset. The amount of the liability is subject to re-measurement
       at each reporting period. This differs from the prior practice that involved
       expensing reclamation and closure costs through charges to income. The
       Company records a liability for its long-term asset retirement obligations,
       equal to the fair value of the obligation for asset retirement, and records
       a corresponding increase to the carrying amount of the related asset.
       The asset is depreciated and charged to depreciation expense over the
       life of the associated asset. Interest on the obligation is accreted over
       the period of expected cash flows with a corresponding charge to operating
       income. The fair value of the obligation for asset retirement is assessed
       annually. For the year ended December 31, 2004, the Company recorded asset
    retirement obligations of $2,301,181. (Note 11).
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |  | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |  | CICA Handbook section
       3063 establishes standards for the recognition, measurement and disclosure
       of the impairment
       of long-lived assets. This standard is effective for fiscal years commencing
       on or after April 1, 2003, and as such was implemented by Crystallex effective
       January 1, 2004. Under this standard, a two-step process determines impairment
    of long-lived assets held for use. The first step determines whether impairment
       exists, and if so, the second step measures the amount of the impairment.
       Impairment
       exists if the carrying amount of a long-lived asset exceeds the sum of
       the undiscounted cash flows expected to result from its use and eventual
       disposition. The amount of the impairment loss is determined as the amount
    by which the long-lived assets carrying value exceeds its fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |  | The adoption of this
      standard had no material impact on these financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. |  | CHANGES IN ACCOUNTING POLICIES (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  | (iv)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   |  | Effective January 1, 2004, the
       Company adopted CICA 1100, which establishes standards for financial reporting
       in accordance with generally accepted accounting principles. CICA 1100
       describes what constitutes Canadian generally accepted accounting principles
       and its sources. The standard provides guidance on sources to consult
       when selecting accounting principles and determining appropriate disclosure
       when a matter is not dealt with explicitly in the primary sources of generally
       accepted accounting principles. The effect of any change in accounting
       policy made on adopting this section is applied to events and transactions
       occurring after the date of the change and to any outstanding related
       balances existing at the date of the change. No cumulative catch-up adjustment
       is made to such balances. Implementation of this standard had no significant
    impact on the Company.
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|4. |  | PRODUCTION INVENTORIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

| |  |                             | 2004 |           | 2003 |  
| |  | --------------------------- | ---- | --------- | ---- | -
| |  |                             |      |           |      |  
| |  | Gold in doré                | $    | 265,972   |      | $
| |  | Gold in process             |      | 409,986   |      |  
| |  | Stockpiled ore              |      | 4,421     |      |  
| |  | Consumables and spare parts |      | 1,104,409 |      |  
| |  |                             |      |           |      |  
| |  |                             | $    | 1,784,788 |      | $
| |  |                             |      |           |      |  

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. |  | RESTRICTED CASH AND CASH EQUIVALENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |  | As at December 31, 2004 the Company
       had $98,005,636 of restricted cash and cash equivalents. Of this balance,
       $95,505,636 is comprised principally of treasury bills with original maturities
       of three months or less. These funds are being held in escrow under terms
       of an Escrow Agreement whereby funds are restricted for use towards approved
       capital budget expenditures and interest expense on notes payable (Note
       8). The remaining $2,500,000 is held on deposit with a commodity contract
    counterparty.

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|   |  |                                                                                
|-- |  | -------------------------------------------------------------------------------
|6. |  | PROPERTY, PLANT AND EQUIPMENT                                                  
|   |  |                                                                                
|   |  | The components of property, plant and equipment at December 31, are as follows:
|   |  |                                                                                

| |  |                                                          |                                  |                             |                                             |   |                                            | 
| |  | -------------------------------------------------------- | -------------------------------- | --------------------------- | ------------------------------------------- | - | ------------------------------------------ | 
| |  |                                                          |                                  |                             | 2004                                        |   |                                            | 
| |  |                                                          |                                  |                             |                                             |   |                                            | 
| |  |                                                          | Cost, Net
     of
    Write-down |                             | Accumulated 
Amortization
and
    Depletion |   | Net Book
    Value                         | 
| |  |                                                          |                                  |                             |                                             |   |                                            | 
| |  | Plant and equipment                                      | $                                | 8,899,003                   |                                             | $ | 5,642,790                                  | 
| |  | Mineral properties                                       |                                  | 121,358,351                 |                                             |   | 7,653,154                                  | 
| |  | Deferred exploration and development
       expenditures |                                  | 2,459,187                   |                                             |   | 2,091,260                                  | 
| |  |                                                          |                                  |                             |                                             |   |                                            | 
| |  |                                                          | $                                | 132,716,541                 |                                             | $ | 15,387,204                                 | 
| |  |                                                          |                                  |                             |                                             |   |                                            | 
| |  |                                                          |                                  |                             |                                             |   |                                            | 
| |  |                                                          |                                  |                             |                                             |   |                                            | 
| |  |                                                          |                                  |                             |                                             |   | 2003                                       | 
| |  |                                                          |                                  |                             |                                             |   |                                            | 
| |  |                                                          |                                  | Cost, Net
of
    Write-down |                                             |   | Accumulated Amortization
and
    Depletion | 
| |  |                                                          |                                  |                             |                                             |   |                                            | 
| |  | Plant and equipment                                      | $                                | 16,283,213                  |                                             | $ | 4,368,408                                  | 
| |  | Mineral properties                                       |                                  | 90,607,329                  |                                             |   | 4,191,851                                  | 
| |  | Deferred exploration and development
       expenditures |                                  | 4,627,538                   |                                             |   | 683,558                                    | 
| |  |                                                          |                                  |                             |                                             |   |                                            | 
| |  |                                                          | $                                | 111,518,080                 |                                             | $ | 9,243,817                                  | 
| |  |                                                          |                                  |                             |                                             |   |                                            | 

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|   |  |                                                                                 
|-- |  | --------------------------------------------------------------------------------
|6. |  | PROPERTY, PLANT AND EQUIPMENT (continued)                                       
|   |  |                                                                                 
|   |  | The net book values of property, plant and equipment by location are as follows:
|   |  |                                                                                 

| |                              |                        |                         |                        |   |                                                       |  |                                                           |          
| | ---------------------------- | ---------------------- | ----------------------- | ---------------------- | - | ----------------------------------------------------- |  | --------------------------------------------------------- | ---------
| |                              | 2004                   |                        
| |                              |                        |                         |                        |   |                                                       |  |                                                           |          
| |                              | Plant and    Equipment |                         | Mineral
    properties |   | Deferred
exploration and
development
    expenditures |  | Total                                                     |          
| |                              |                        |                         |                        |   |                                                       |  |                                                           |          
| | Las Cristinas Concessions    | $                      |                        |                        | $ | 113,451,761                                           |  | $                                                         |         
| | Tomi Concession              |                       |                         | 253,436                |   | 367,927                                               |  | 621,363                                                   |          
| | Revemin mill                 | 3,041,238              |                         |                       |   |                                                      |  | 3,041,238                                                 |          
| | Corporate                    | 214,975                |                         |                       |   |                                                      |  | 214,975                                                   |          
| |                              |                        |                         |                        |   |                                                       |  |                                                           |          
| | Total                        | $                      | 3,256,213               |                        | $ | 113,705,197                                           |  | $                                                         | 367,927  
| |                              |                        |                         |                        |   |                                                       |  |                                                           |          
| |                              |                        |                         |                        |   |                                                       |  |                                                           |          
| |                              |                        |                         |                        |   |                                                       |  |                                                           |          
| |                              | 2003                   |                        
| |                              |                        |                         |                        |   |                                                       |  |                                                           |          
| |                              |                        | Plant and
    Equipment |                        |   | Mineral
    properties                                |  | Deferred
  exploration and
  development
    expenditures |          
| |                              |                        |                         |                        |   |                                                       |  |                                                           |          
| | Las Cristinas Concessions    | $                      |                        |                        | $ | 72,780,266                                            |  | $                                                         |         
| | Tomi Concession              |                        |                        |                        |   | 2,736,424                                             |  |                                                           | 23,641   
| | Albino Concession            |                        |                        |                        |   | 5,678,438                                             |  |                                                           | 3,920,339
| | Bolivar Goldfield properties |                        |                        |                        |   | 5,220,350                                             |  |                                                           |         
| | Revemin mill                 |                        | 11,835,611              |                        |   |                                                      |  |                                                           |         
| | Corporate                    |                        | 79,194                  |                        |   |                                                      |  |                                                           |         
| |                              |                        |                         |                        |   |                                                       |  |                                                           |          
| | Total                        | $                      | 11,914,805              |                        | $ | 86,415,478                                            |  | $                                                         | 3,943,980
| |                              |                        |                         |                        |   |                                                       |  |                                                           |          
| |                              |                        |                         |                        |   |                                                       |  |                                                           |          

| |  | Deferred exploration and development
          expenditures are not re-characterized as costs of mineral properties
    once production has commenced.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | The Company reviews annually
          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 Revemin mill and the Albino, Tomi, Dividival,
          Belen and Marwani Concessions were in excess of their estimated future
          undiscounted net cash flows. Write downs to the estimated fair market
          value amounting to $32,003,253 (2003 - $17,506,337; 2002 - $1,366,194)
          were
  included within the Statements of Operations.                                                                                                                  
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | Property, plant and equipment summarized
    by property is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | Las Cristinas Concessions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | On September 17, 2002, the Company entered
        into a non-assignable mining agreement (the Agreement) with
        the Corporación Venezolana de Guayana (CVG), acting
        under the authority of the Ministry of Energy and Mines of Venezuela
        (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 properties including the commercialization
        and sale of gold. As a result of entering into the Agreement, the Company
        has discontinued previous legal proceedings to confirm its title rights
    to the Las Cristinas 4 and 6 concessions (Note 18).



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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6. |  | PROPERTY, PLANT AND EQUIPMENT (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  | The aggregate cost incurred by the
      Company to December 31, 2004 to obtain the right to exploit the area is
      $113,451,761, represented by $96,527,615 of payments in cash and $16,924,146
      made through the issuance of common shares of the Company. Costs are comprised
      of property payment and finders fees of $36,170,393 ($24,978,317
      cash; and $11,192,076 through shares) and professional fees and related
      expenses of $77,281,368 ($71,549,298 cash; and $5,732,070 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 (a law firm, a partner of whom
      is a director of the Company - Note 13) of $Nil during the year ended December
      31, 2004 (2003 - $3,014,401; 2002 - $8,322,084) and travel and administrative
      costs of $634,679 during the year ended December 31, 2004 (2003  $323,934;
    2002 - $259,247).
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  | Bolivar Goldfields Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  | The Company owns all of the outstanding
      share capital of Bolivar Goldfields A.V.V. This ownership includes the
      Tomi concession, Revemin mill and related exploration lands in
Venezuela.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  | Albino 1 Concession                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  | The Company, through its subsidiaries,
      owns a 100% interest in the Albino 1 concession in Bolivar State, Venezuela.
      Subsequent to December 31, 2004, the MEM notified the Company that it had
      terminated the Companys Albino concession rights. The Company has
      appealed this decision, however, due to the uncertainty of the outcome
      of this appeal the Company has written down the carrying value of its investment
      in the Albino concession
to $Nil.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|7. |  | DEFERRED FINANCING FEES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |  | Deferred financing fees of $3,639,702,
      net of accumulated amortization of $275,026 (December 31, 2003 - $150,580,
      net of accumulated amortization of $154,089), relate to costs incurred
      in the issuance of senior unsecured notes, and for the bank loan credit
    facility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|8. |  | LONG-TERM DEBT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

| |                                         | 2004 |            | 2003 |  
| | --------------------------------------- | ---- | ---------- | ---- | -
| |                                         |      |            |      |  
| | Bank loan                               | $    | 6,458,470  |      | $
| | Notes payable                           |      | 78,629,249 |      |  
| |                                         |      |            |      |  
| |                                         |      | 85,087,719 |      |  
| | Less: Current portion of long-term debt |      | (4,400,000 | )    |  
| |                                         |      |            |      |  
| |                                         | $    | 80,687,719 |      | $
| |                                         |      |            |      |  

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|8. |  | LONG-TERM DEBT (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   |  | Notes Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |  | In conjunction with a Unit offering
       (Note 9) on December 23, 2004, the Company issued $100,000,000 principal
       amount senior unsecured notes with a coupon rate of 9.375%, due on December
       30, 2011 for net proceeds of $75,015,250, after expenses and equity allocation.
       Interest is payable on a semi-annual basis on January 15 and July 15 of
       each year, beginning July 15, 2005. The Company may redeem the notes,
       in whole or in part, at any time after December 31, 2008 at a redemption
       price of between 100% and 102% of the principal amounts of the notes,
       depending on the redemption date, plus accrued and unpaid interest and
       additional interest, if any, to the date of the redemption. In addition,
       the Company may be required to redeem the notes for cash under certain
       circumstances, such as a change in control in the Company or where the
       Company ceases to beneficially own, directly or indirectly, at least a
       majority interest in the Las Cristinas Project; or the Company may redeem
       the notes, in whole but not in part, for cash at its option under certain
       circumstances, such as a change in the applicable Canadian withholding
    tax legislation.
|  
|   |  | The notes payable were derived
       from a financial instrument that contained both a liability and equity
       component. As a result, the equity component was allocated based on the
       fair value of the shares issued with the Unit offering, calculated at
       $21,450,000, with $78,550,000 being the discounted fair value of the notes.
       The discounted fair value of the notes will be accreted to the face value
       of the notes using the effective interest rate method over its seven year
       term, with the resulting charge recorded to interest expense. During the
       year ended December 31, 2004 accretion of $79,249 was included in interest
    expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   |  | Bank loan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   |  | On August 10, 2000, the Company,
       together with its subsidiary Mineras Bonanza C.A., entered into a Credit
       Agreement with the Standard Bank London Limited (SBL) which
       was subsequently amended by a First Amendment to the Credit Agreement
       in the amount of $8,500,000. This loan, which matures on January 15, 2006,
       is secured by charges against the Venezuelan mining properties of the
       Company (excluding the Lo Increible and Las Cristinas 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   |  | In prior years certain SBL loan
       repayments were made through the issuance of the Companys common
       shares. These common shares were subject to an Orderly Disposition Agreement
       with SBL which specified that any cumulative gain on final disposition
       of the shares issued was for the Companys account. As at December
       31, 2004 all shares subject to the Orderly Disposition Agreement had been
       disposed by SBL for a cumulative gain of $3,957,285. The benefit of this
    gain was applied to share capital.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

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

|   | Bank Loan                                                |   |             | 
|-- | -------------------------------------------------------- | - | ----------- | 
|   |                                                          |   |             | 
|   | Principal payments of long-term debt are as
    follows: |   |             | 
|   |                                                          |   |             | 
|   | 2005                                                     | $ | 4,400,000   | 
|   | 2006                                                     |   | 2,058,470   | 
|   | 2011                                                     |   | 100,000,000 | 
|   |                                                          |   |             | 
|   |                                                          | $ | 106,458,470 | 
|   | Less:  discount
         on notes payable                |   | 21,370,751  | 
|   |                                                          |   |             | 
|   |                                                          | $ | 85,087,719  | 
|   |                                                          |   |             | 
|   |                                                          |   |             | 
|9. | SHARE CAPITAL                                            |   |             | 
|   |                                                          |   |             | 

| |                                                     | 2004 |             | 2003 |  
| | --------------------------------------------------- | ---- | ----------- | ---- | -
| |                                                     |      |             |      |  
| | Authorized                                          |      |             |      |  
| | Unlimited common shares, without par value          |      |             |      |  
| | Unlimited Class A preference shares, no par value |      |             |      |  
| | Unlimited Class B preference shares, no par value |      |             |      |  
| | Issued                                              |      |             |      |  
| | 189,836,735 Common Shares (2003 - 135,403,523)      | $    | 306,031,783 |      | $
| |                                                     |      |             |      |  
| | Warrants                                           

|
|

| | As at December 31, 2004, Common Share purchase
    warrants were outstanding enabling the holders to acquire common shares as
    follows: |  |                      |  |                                                             | 
| | ------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------- |  | ----------------------------------------------------------- | 
| |                                                                                                                                            |  |                      |  |                                                             | 
| | Range of Exercise Price
    - Cdn. $                                                                                                       |  | Number
    of Shares |  | Weighted
  Average Remaining
  Contractual
    Life (Years) | 
| |                                                                                                                                            |  |                      |  |                                                             | 
| |                                                                                                                                            |  |                      |  |                                                             | 
| | $1.60 to $
    2.28                                                                                                                        |  | 3,418,500            |  | 0.65                                                        | 
| | $2.85 to $
    3.58                                                                                                                        |  | 8,947,727            |  | 1.48                                                        | 
| | $3.67 to $ 4.69                                                                                                                            |  | 642,008              |  | 0.71                                                        | 
| |                                                                                                                                            |  |                      |  |                                                             | 
| |                                                                                                                                            |  | 13,008,235           |  |                                                             | 
| |                                                                                                                                            |  |                      |  |                                                             | 

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 9. | SHARE CAPITAL (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    | Warrants (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    | During the year, the Company extended
      by 90 days the terms of certain Common Share purchase warrants, previously
      issued as part of private placement 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 $225,178 was made directly against
      earnings, and contributed surplus was increased by the same amount. The
      value of a warrant extension granted in fiscal 2003 of $592,177 resulted
    in a charge against deficit and contributed surplus in 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. Stock options may vest immediately, or over a one year or
    three year period.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    | As at December 31, 2004 stock options
    were outstanding enabling the holders to acquire common shares as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|

| |                                           |  |                      |  | Outstanding Options                                                          |  |                                                          | 
| | ----------------------------------------- |  | -------------------- |  | ---------------------------------------------------------------------------- |  | -------------------------------------------------------- | 
| |                                           |  |                      |  |                                                                              |  |                                                          | 
| | Range of Exercise Price -
         Cdn. $ |  | Number
    of Shares |  | Weighted
       Average
       Remaining
       Contractual
    Life (Years) |  | Weighted
       Average
       Exercise
    Price - Cdn$ | 
| |                                           |  |                      |  |                                                                              |  |                                                          | 
| | $1.00 to $ 1.50                           |  | 2,102,500            |  | 2.98                                                                         |  | 1.24                                                     | 
| | $1.75 to $
    2.65                       |  | 4,277,500            |  | 5.53                                                                         |  | 2.19                                                     | 
| | $3.00 to $ 4.12                           |  | 4,570,250            |  | 6.97                                                                         |  | 3.27                                                     | 
| |                                           |  |                      |  |                                                                              |  |                                                          | 
| |                                           |  | 10,950,250           |  |                                                                              |  |                                                          | 
| |                                           |  |                      |  |                                                                              |  |                                                          | 

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|   |  |                                                                                                                                               
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------
|9. |  | SHARE CAPITAL (continued)                                                                                                                     
|   |  |                                                                                                                                               
|   |  | Stock Options (continued)                                                                                                                     
|   |  |                                                                                                                                               
|   |  | A summary of the status of the stock
      option plan as at December 31, and changes during each year ended on those
    dates is as follows:
|  

| |                                                                                              | 2004                 |   | 2003                                                  |      | 2002                 |          
| | -------------------------------------------------------------------------------------------- | -------------------- | - | ----------------------------------------------------- | ---- | -------------------- | ---------
| |                                                                                              |                      |   |                                                       |      |                      |          
| |                                                                                              | Number
    of Shares |   | Weighted
     Average
     Exercise
    Price - Cdn $ |      | Number
    of Shares |          
| |                                                                                              |                      |   |                                                       |      |                      |          
| | Outstanding,                                                                                 |                      |   |                                                       |      |                      |          
| | beginning of year                                                                            | 8,966,000            |   | $                                                     | 1.97 |                      | 6,952,500
| | Granted - Employees                                                                          | 3,285,250            |   |                                                       | 3.37 |                      | 2,248,500
| | Granted - Non    Employees                                                                   |                     |   |                                                       |     |                      | 250,000  
| | Exercised                                                                                    | (1,251,000           | ) |                                                       | 1.44 |                      | (270,000 
| | Cancelled                                                                                    | (50,000              | ) |                                                       | 1.50 |                      | (215,000 
| |                                                                                              |                      |   |                                                       |      |                      |          
| |                                                                                              |                      |   |                                                       |      |                      |          
| | Outstanding, end
       
         of year                                                    | 10,950,250           |   | $                                                     | 2.46 |                      | 8,966,000
| |                                                                                              |                      |   |                                                       |      |                      |          
| | Weighted
         average fair
   value of options
   granted during
    the
   year - Cdn $ |                      |   | $                                                     | 2.23 |                      |          
| |                                                                                              |                      |   |                                                       |      |                      |          

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | As at December 31, 2004, there
          were 877,500 options outstanding, with a weighted average exercise
          price of $3.32 that were not fully vested (2003  400,000 options;
    $3.03 weighted average exercise price).                                                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | Supplemental
    information for stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | Effective January 1, 2004, the
        Company adopted, on a retroactive basis without the restatement of prior
        periods, the fair value method of accounting for all stock options granted
        to employees (Note 3). The compensation expense recorded in the year
        ended December 31, 2004 was $5,296,977. The offset is recorded as contributed
        surplus. Any consideration paid by employees on exercise of stock options
    is credited to share capital.
|

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|   |  |                                                                                                                                                                                                                                           
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|9. |  | SHARE CAPITAL (continued)                                                                                                                                                                                                                 
|   |  |                                                                                                                                                                                                                                           
|   |  | Supplemental
    information for stock-based compensation (continued)                                                                                                                                                                     
|   |  |                                                                                                                                                                                                                                           
|   |  | 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:

| |                                                                                                                                                                                                                                                            |            |   |  |            |   |  |            |  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------- | - |  | ---------- | - |  | ---------- | -
| |                                                                                                                                                                                                                                                            | 2004       |   |  | 2003       |   |  | 2002       |  
| |                                                                                                                                                                                                                                                            |            |   |  |            |   |  |            |  
| |                                                                                                                                                                                                                                                            |            |   |  |            |   |  |            |  
| | Risk free interest rate                                                                                                                                                                                                                                    | 4.38       | % |  | 4.04       | % |  | 4.22       | %
| | Expected life                                                                                                                                                                                                                                              | 5.98 years |   |  | 3.95 years |   |  | 3.75 years |  
| | Expected volatility                                                                                                                                                                                                                                        | 75         | % |  | 108        | % |  | 75         | %
| | Expected dividends                                                                                                                                                                                                                                         |           |   |  |           |   |  |           |  
| |                                                                                                                                                                                                                                                            |            |   |  |            |   |  |            |  
| | The following table presents the
      net loss and net loss per share for the years ended December 31 had the
      Company recorded stock options as compensation expense on the date of grant,
      amortized over the vesting periods of the options.

|
|

| |                                            | 2004 |             | 2003 |   | 2002        |  
| | ------------------------------------------ | ---- | ----------- | ---- | - | ----------- | -
| |                                            |      |             |      |   |             |  
| |                                            |      |             |      |   |             |  
| | Net loss                                   | $    | (60,654,063 | )    | $ | (61,486,502 | )
| | Incremental compensation expense           |      |            |      |   | (2,696,968  | )
| |                                            |      |             |      |   |             |  
| | Pro forma net loss                         | $    | (60,654,063 | )    | $ | (64,183,470 | )
| |                                            |      |             |      |   |             |  
| |                                            |      |             |      |   |             |  
| | Pro forma basic and diluted loss per share | $    | (0.35       | )    | $ | (0.54       | )
| |                                            |      |             |      |   |             |  
| |                                            |      |             |      |   |             |  

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Financing Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Fiscal 2004 Activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | On April 5, 2004, the Company
        completed a Cdn. $100 million public equity offering whereby 25,000,000
        common shares were issued at Cdn. $4.00 per common share. The net proceeds
        received by the Company, after considering the
underwriters fee, amounted to $71,694,731. On April 28, 2004, the over-allotment
option granted to the underwriters in connection with this public equity offering
was fully exercised and an additional 3,750,000 common shares were issued at
Cdn. $4.00 per common share. The net proceeds received by the Company, after
considering the underwriters fee, amounted to $10,475,873. Other expenditures
related to this public equity offering and over-allotment amounted to $234,609.
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | On December 23, 2004, the Company
        completed a $100 million offering whereby 100,000 Units of the Company
        were issued at a price of $1,000 per Unit. Each Unit was comprised of
        $1,000 principal amount of senior unsecured notes and 65 common shares
        of the Company. The net proceeds received by the Company, after considering
        the underwriters fee of $4,000,000 and other estimated expenditures
        of $500,000, amounted to $95,500,000. The equity component of this offering
        was allocated based on the fair value of the shares issued, calculated
        at $21,450,000, with $78,550,000 being the discounted fair value of the
    notes (Refer to Note 8).                      
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                        
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|9. |  | SHARE CAPITAL (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                        
|   |  | Financing Transactions (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                        
|   |  | Fiscal 2004 Activities (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                        
|   |  | The net proceeds will be used to
       fund a portion of the costs of developing the Las Cristinas Project, currently
    estimated as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                        
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | construction contracts - $32.5 million;                                                                                                                                                                                                
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | equipment - $30.0 million; and                                                                                                                                                                                                         
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | as to the balance, for additional purchase
      orders and service contracts awarded under the terms of the Engineering,
      Procurement
    and Construction Management
(EPCM) contract and fees payable to SNC-Lavalin (SNCL).
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                        
|   |  | The net proceeds of the offering
      (the Escrowed Funds) were deposited with CIBC Mellon Trust
      Company (the Escrow Agent) under the terms of an escrow agreement
      (the Escrow Agreement) dated December 23, 2004 between the
      Company and the Escrow Agent. The Escrowed Funds are divided into two pools:
      one pool equal to the aggregate amount of the interest payable on the first
      three interest payments dates (the Interest Pool) and the other
    pool equal to the balance of the Escrowed Funds (the Project Pool).                                                                                            
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                        
|   |  | Under the terms of the Escrow Agreement,
      the Escrow Agent will release an amount equal to the interest payment from
      the Interest Pool, when the Company makes each of the first three interest
      payments to the Trustee. If the Company completes one or more offerings
      of common shares or debt securities convertible into common shares and
      receives aggregate net proceeds of $75 million or more, the Escrow Agent
      will release the balance, if any, of the Interest Pool to the
Company.                                                                                                                                  
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                        
|   |  | Under the terms of the Escrow Agreement,
      the Escrow Agent will release funds from the Project Pool to pay Approved
      Capital Budget Expenditures. Approved Capital Budget Expenditures are defined
      in the Escrow Agreement to include capital expenditures that are specifically
      contemplated by the feasibility studies or the project control budget relating
      to the Las Cristinas Project and are permitted under Venezuelan law as
      evidenced by an opinion of Venezuelan counsel to
the Company.                                                                                                                             
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                        
|   |  | Fiscal 2003 Activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                        
|   |  | On March 5, 2003, the Company completed
      a private placement of 2,562,500 special warrants at a price of Cdn. $1.60
      per special warrant for aggregate proceeds of $2.8 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 exercisable
      for one Common Share until March 5, 2005 at a price of Cdn. $2.00 per share.
      The special warrants were deemed to have been exercised in accordance with
    their terms on July 6, 2003.
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                        



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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|9. |  | SHARE CAPITAL (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |  | Financing Transactions (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |  | Fiscal 2003 Activities (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |  | On March 14, 2003, the Company
       arranged a $3.0 million debt financing which closed in three tranches
       on March 14, 2003 ($1.5 million), May 2, 2003 ($1.0 million) and May 15,
       2003 ($0.5 million). Under the terms of the transaction, the Company issued
       $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 exercisable for 300,000 Common Shares until
       May 2, 2005 at an exercise price of $1.32 per share and common share purchase
       warrants exercisable for 150,000 Common Shares until May 15, 2005 at an
       exercise price of $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 exercisable for 150,000 Common
       Shares until August 27, 2005 at an exercise price of $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.
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |  | On May 9, 2003, the Company completed
       a private placement of 2,400,000 special warrants at a price of Cdn. $1.25
       per special warrant for aggregate proceeds of $2.1 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
       exercisable for one Common Share until May 9, 2005 at a price of Cdn.
       $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 Cdn. $1.25
       per special warrant for aggregate proceeds of $5.0 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
       exercisable for one Common Share until June 20, 2005 at a price of Cdn.
       $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 $2.20 per special warrant for aggregate proceeds of $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 exercisable for one Common
       Share until September 16, 2006 at a price of $2.75 per
share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|9. |  | SHARE CAPITAL (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   |  | Financing Transactions (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   |  | Fiscal 2003 Activities (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   |  | 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 $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 exercisable for one Common Share until September8,
       2006 at a price of $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 Cdn. $3.02 for aggregate net proceeds of $0.1 million. 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 Cdn. $2.15 for aggregate net proceeds of $2.8 million, net
       of issuance expenses of $0.2 million. Each special warrant entitles the
       holder to acquire, without payment of any additional consideration, one
    Common Share in the capital of the Company.                                                                                                                                                                                                                               
|  
|   |  | Loss per common share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |  | The following table outlines the
    calculation of the basic loss per common share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

| |                                            | 2004 |             | 2003 |   | 2002        |  
| | ------------------------------------------ | ---- | ----------- | ---- | - | ----------- | -
| |                                            |      |             |      |   |             |  
| | Numerator for basic and diluted loss per   |      |             |      |   |             |  
| | common share:                              |      |             |      |   |             |  
| | Loss from continuing operations            |      |             |      |   |             |  
| | attributable to common shareholders        | $    | (60,304,063 | )    | $ | (58,517,414 | )
| | Benefit conferred to warrant holders       |      |            |      |   | (592,177    | )
| |                                            |      |             |      |   |             |  
| | Loss from continuing operations            |      |             |      |   |             |  
| | attributable to common shareholders        | $    | (60,304,063 | )    | $ | (59,109,591 | )
| |                                            |      |             |      |   |             |  
| |                                            |      |             |      |   |             |  
| | Denominator for basic and diluted loss per |      |             |      |   |             |  
| | common share - adjusted weighted average   |      |             |      |   |             |  
| | number of shares outstanding               |      | 172,234,551 |      |   | 118,309,198 |  
| |                                            |      |             |      |   |             |  
| |                                            |      |             |      |   |             |  

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|9.  |  | SHARE CAPITAL (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|    |  | Financing Transactions (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|    |  | 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 Directors 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.
|   
|    |  | 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. |  | COMMODITY CONTRACT OBLIGATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    |  | At December 31, 2004, the Company
    had fixed forward contracts outstanding as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

| |                                                                                                                                                                                                                                                                                                                                   |   | 2005   |  |   | 2006   |      
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------ |  | - | ------ | -----
| |                                                                                                                                                                                                                                                                                                                                   |   |        |  |   |        |      
| | Ounces                                                                                                                                                                                                                                                                                                                            |   | 42,430 |  |   | 39,996 |      
| | Average price (U.S.$ per oz.)                                                                                                                                                                                                                                                                                                     | $ | 305    |  | $ | 310    |      
| |                                                                                                                                                                                                                                                                                                                                   |   |        |  |   |        |      
| |                                                                                                                                                                                                                                                                                                                                  
| | Written call options are contracts in which
       the writer, for a fee (premium), sells the purchaser the right, but not
    theobligation, to buy on a specific future date a stipulated quantity of
    gold at a predetermined price. At December 31, 2004, the Company had written
    call options outstanding as follows:
| |                                                                                                                                                                                                                                                                                                                                   |   |        |  |   |        |      
| |                                                                                                                                                                                                                                                                                                                                   |   |        |  |   |        |      
| |                                                                                                                                                                                                                                                                                                                                   |   | 2005   |  |   |        | 2006 
| |                                                                                                                                                                                                                                                                                                                                   |   |        |  |   |        |      
| | Ounces                                                                                                                                                                                                                                                                                                                            |   | 79,932 |  |   |        | 2,000
| | Average price (U.S.$ per oz.)                                                                                                                                                                                                                                                                                                     | $ | 307    |  |   | $      | 348  
| |                                                                                                                                                                                                                                                                                                                                   |   |        |  |   |        |      
| |                                                                                                                                                                                                                                                                                                                                   |   |        |  |   |        |      

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|    |  |                                                                                                                                                      
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------
|10. |  | COMMODITY CONTRACT OBLIGATIONS (continued)                                                                                                           
|    |  |                                                                                                                                                      
|    |  | Gold production for the years ended December
       31, 2004 and 2003 was 48,973 and 35,244 ounces, respectively.                                    
|    |  |                                                                                                                                                      
|    |  | A summary of the fair value of these contracts,
       based on a spot price of gold of $436 per ounce as at December 31, 2004,
       is as follows:
|    |  |                                                                                                                                                      

| | 2005 | $ | 16,724,215 | 
| | ---- | - | ---------- | 
| | 2006 |   | 5,855,897  | 
| |      |   |            | 
| |      | $ | 22,580,112 | 
| |      |   |            | 

|   
|---
|   
|   
|   
|   
|11.
|   
|   
|   
|   

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|    |  |                                         
|--- |  | ----------------------------------------
|11. |  | ASSET RETIREMENT OBLIGATIONS (continued)

| |  |                                                                                     
| |  | ------------------------------------------------------------------------------------
| |  | The following table explains
        the change in the asset retirement obligations:

| |                                                         |  |   |           |  |   |      | 
| | ------------------------------------------------------- |  | - | --------- |  | - | ---- | 
| | As at December
          31                             |  |   | 2004      |  |   | 2003 | 
| |                                                         |  |   |           |  |   |      | 
| | Asset retirement obligations,
        beginning of year |  | $ |          |  | $ |     | 
| | Liabilities incurred                                    |  |   | 2,301,181 |  |   |     | 
| | Liabilities settled                                     |  |   |          |  |   |     | 
| | Gain on settlement of liabilities                       |  |   |          |  |   |     | 
| | Accretion expense                                       |  |   |          |  |   |     | 
| | Revisions in estimated cash
        flows               |  |   |          |  |   |     | 
| |                                                         |  |   |           |  |   |      | 
| | Asset retirement obligations,
        end of year       |  | $ | 2,301,181 |  | $ |     | 
| |                                                         |  |   |           |  |   |      | 

|12. |  | ACQUISITION OF EL CALLAO MINORITY INTEREST
|--- |  | ------------------------------------------

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Effective August 19, 2004, the
        Company acquired under a plan of arrangement all of the outstanding shares
        of El Callao Mining Corporation (ECM) not previously owned.
        As a result of this transaction 0702259 B.C. Ltd., a successor company
        to ECM under the plan of arrangement and a subsequent amalgamation, is
        now a wholly-owned subsidiary of Crystallex. As consideration, shareholders
        of ECM (other than Crystallex) received 0.01818 of a Crystallex common
        share for each of their ECM shares representing a total obligation to
        issue 172,975 Crystallex common shares. The value associated with acquiring
        these shares was $493,702. As at
        December 31, 2004, the Company had issued 163,958 common shares against
        this obligation. This investment was subsequently written down to nil.

|    |  |                           
|--- |  | --------------------------
|13. |  | RELATED PARTY TRANSACTIONS
|    |  |                           

| |  | During the year, the Company
        entered into the following transactions with related parties:
| |  | --------------------------------------------------------------------------------------------------
| |  |                                                                                                   
| |  | a)                                                                                                
| |  |                                                                                                   

| |  | b) | Paid or accrued legal fees of $1,232,816  (2003-
        $3,125,471; 2002  $8,428,026) to a law firm, a partner of whom
        is a director 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.

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|    |  |             
|--- |  | ------------
|14. |  | INCOME TAXES

| |  |                                                                                                                                                                                                                                         
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Company did not record a provision or benefit for income taxes for the periods ended December 31, 2004, 2003 and 2002, due to the availability of net operating loss carry forwards and the uncertainty of their future realization.

| |  |                                                                                                                                                                                                             
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The provision for income taxes reported differs from the amounts computed by applying the cumulative Canadian federal and provincial income tax rates to the loss before tax provision due to the following:

| |                                   |  |   |             |   |   |             |   |   |             |  
| | --------------------------------- |  | - | ----------- | - | - | ----------- | - | - | ----------- | -
| |                                   |  |   | 2004        |   |   | 2003        |   |   | 2002        |  
| |                                   |  |   |             |   |   |             |   |   |             |  
| |                                   |  |   |             |   |   |             |   |   |             |  
| | Statutory tax rate                |  |   | 36.12       | % |   | 36.70       | % |   | 40.10       | %
| |                                   |  |   |             |   |   |             |   |   |             |  
| | Loss before income taxes          |  | $ | (60,654,063 | ) | $ | (61,486,502 | ) | $ | (36,134,279 | )
| |                                   |  |   |             |   |   |             |   |   |             |  
| |                                   |  |   |             |   |   |             |   |   |             |  
| | Expected income taxes recoverable |  | $ | (21,908,248 | ) | $ | (22,565,546 | ) | $ | (14,489,846 | )
| | Difference in foreign tax rates   |  |   | 817,901     |   |   | 460,582     |   |   | 648,525     |  
| | Change in valuation allowance     |  |   | 21,090,347  |   |   | 22,104,964  |   |   | 13,841,321  |  
| |                                   |  |   |             |   |   |             |   |   |             |  
| | Actual income taxes               |  | $ |            |   | $ |            |   | $ |            |  
| |                                   |  |   |             |   |   |             |   |   |             |  

| |  | The tax effects of temporary differences that would give rise to significant portions of the future tax assets and future tax liabilities at December 31, are as follows:
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                              |  |   |             |   |   |             |  
| | -------------------------------------------- |  | - | ----------- | - | - | ----------- | -
| |                                              |  |   | 2004        |   |   | 2003        |  
| |                                              |  |   |             |   |   |             |  
| | Future income taxes                          |  |   |             |   |   |             |  
| | Net operating losses carried forward         |  | $ | 45,392,015  |   | $ | 25,755,777  |  
| | Foreign exploration and development expenses |  |   | 16,208,824  |   |   | 14,754,715  |  
| |                                              |  |   |             |   |   |             |  
| |                                              |  |   | 61,600,839  |   |   | 40,510,492  |  
| | Less:  Valuation allowance                   |  |   | (61,600,839 | ) |   | (40,510,492 | )
| |                                              |  |   |             |   |   |             |  
| | Net future income tax asset                  |  | $ |            |   | $ |            |  
| |                                              |  |   |             |   |   |             |  
| |                                              |  |   |             |   |   |             |  

| |  | Utilization of the net operating losses carried forward and the foreign exploration and development expenses are subject to limitations.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|    |  |                         
|--- |  | ------------------------
|14. |  | INCOME TAXES (continued)

| |  |                                                                                                 
| |  | ------------------------------------------------------------------------------------------------
| |  | At December 31, 2004 the Company has the following unused tax losses available for tax purposes:

| |                |  | Country |           
| | -------------- |  | ------- | ----------
| |                |  |         |           
| | Year of Expiry |  |         | Canada    
| |                |  |         |           
| | 2005           |  | $       | 2,573,536 
| | 2006           |  | $       | 623,781   
| | 2007           |  | $       |          
| | 2008           |  | $       | 1,196,739 
| | 2009           |  | $       | 28,922,557
| | 2010           |  | $       | 27,472,249
| | 2011           |  | $       | 14,996,744

|    |                                                         |  |   |         |  |   |         |  |   |        
|--- | ------------------------------------------------------- |  | - | ------- |  | - | ------- |  | - | -------
|15. | SUPPLEMENTAL
    DISCLOSURES WITH RESPECT TO CASH FLOWS
|    |                                                         |  |   |         |  |   |         |  |   |        
|    |                                                         |  |   | 2004    |  |   | 2003    |  |   | 2002   
|    |                                                         |  |   |         |  |   |         |  |   |        
|    |                                                         |  |   |         |  |   |         |  |   |        
|    | Cash paid during the year for interest                  |  | $ | 251,617 |  | $ | 702,852 |  | $ | 771,341
|    |                                                         |  |   |         |  |   |         |  |   |        
|    |                                                         |  |   |         |  |   |         |  |   |        
|    | Cash paid during the year for income taxes              |  | $ |        |  | $ |        |  | $ |       
|    |                                                         |  |   |         |  |   |         |  |   |        
|    |                                                         |  |   |         |  |   |         |  |   |        

| |  | Significant non-cash transactions for the year ended December 31, 2004 included:
| |  | --------------------------------------------------------------------------------

| |  |    |                                                                                        
| |  | -- | ---------------------------------------------------------------------------------------
| |  | i) | The Company issued 40,976 common shares, with a value of $100,000, for directors fees.
| |  |    |                                                                                        

| |  | ii) | The Company issued 19,232 common shares, with a value of $50,000, for a finders fee.
| |  | --- | ------------------------------------------------------------------------------------
| |  |     |                                                                                     

| |  | iii) | The Company issued 12,800,000 common shares, with a value of $11,886,581, on conversion of special warrants.
| |  | ---- | ------------------------------------------------------------------------------------------------------------
| |  |      |                                                                                                             

| |  | iv) | The Company issued 163,958 common shares, with a value of $468,062, in exchange for El Callao common shares.
| |  | --- | ------------------------------------------------------------------------------------------------------------

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

| |  |    |                                                                                       
| |  | -- | --------------------------------------------------------------------------------------
| |  | i) | The Company issued 40,080 common shares, with a value of $57,000, for directors fees.
| |  |    |                                                                                       

| |  | ii) | The Company issued 229,283 common shares, with a value of $542,766, for the El Callao mineral property dispute settlement.
| |  | --- | --------------------------------------------------------------------------------------------------------------------------
| |  |     |                                                                                                                           

| |  | iii) | The Company issued 350,000 common shares, with a value of $650,590, for financial advisory fees.
| |  | ---- | ------------------------------------------------------------------------------------------------

| |  |     |                                                                                      
| |  | --- | -------------------------------------------------------------------------------------
| |  | iv) | The Company issued 61,695 common shares, with a value of $109,705, for a finders fee.

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|    |  |                                                                     |                                                                                                         
|--- |  | ------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------
|15. |  | SUPPLEMENTAL DISCLOSURES
    WITH RESPECT TO CASH FLOWS (continued)
|    |  |                                                                     |                                                                                                         
|    |  | v)                                                                  | The Company issued 2,348,184 common shares, with a value of $2,114,811, for loan payments and bank fees.

| |  |     |                                                                                        
| |  | --- | ---------------------------------------------------------------------------------------
| |  | vi) | The Company issued 1,281,124 common shares, with a value of $2,179,579, 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 $16,444,612.

| |  |       |                                                                                                             
| |  | ----- | ------------------------------------------------------------------------------------------------------------
| |  | viii) | The Company issued 17,260,455 common shares upon conversion of special warrants with a value of $14,365,200.

| |  |     |                                                                                                                                              
| |  | --- | ---------------------------------------------------------------------------------------------------------------------------------------------
| |  | ix) | The Company applied $1,424,439 of deferred financing fees against share capital upon conversion of the above 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 $71,011, for directors fees.

| |  |     |                                                                                                    
| |  | --- | ---------------------------------------------------------------------------------------------------
| |  | ii) | The Company issued 282,554 common shares, with a value of $554,402, for a mineral property payment.

| |  |      |                                                                                          
| |  | ---- | -----------------------------------------------------------------------------------------
| |  | iii) | The Company issued 677,711 common shares, with a value of $1,097,350, for a loan payment.

| |  |     |                                                                                     
| |  | --- | ------------------------------------------------------------------------------------
| |  | iv) | The Company issued 35,430 common shares, with a value of $50,339, 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 $11,082,411.

| |  |     |                                                                                                                                            
| |  | --- | -------------------------------------------------------------------------------------------------------------------------------------------
| |  | vi) | The Company applied $788,196 of deferred financing fees against share capital upon conversion of the above loan and notes to common shares.

|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|16. |  | 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 operating 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
    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 gain/loss and other items are not allocated to the individual operating segments when determining profit or loss, but rather are attributed to the corporate office.

Page 27 of 42

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

16.      SEGMENTED INFORMATION (continued)

|                                 |  |   |             |   |   | Bolivar/    |   |   |             |   |   |             |  |   | Discontinued |   |   | Intersegment |   |   |             |  
|-------------------------------- |  | - | ----------- | - | - | ----------- | - | - | ----------- | - | - | ----------- |  | - | ------------ | - | - | ------------ | - | - | ----------- | -
|                                 |  |   | Corporate   |   |   | Albino      |   |   | El Callao   |   |   | Cristinas   |  |   | Operations   |   |   | Eliminations |   |   | Total       |  
|                                 |  |   |             |   |   |             |   |   |             |   |   |             |  |   |              |   |   |              |   |   |             |  
|                                 |  |   |             |   |   |             |   |   |             |   |   |             |  |   |              |   |   |              |   |   |             |  
|2004                             |  |   |             |   |   |             |   |   |             |   |   |             |  |   |              |   |   |              |   |   |             |  
|Mining revenue                   |  | $ |            |   | $ | 19,291,018  |   | $ | 954,672     |   | $ |            |  | $ |             |   | $ |             |   | $ | 20,245,690  |  
|Mining revenue  intersegment    |  | $ |            |   | $ | 1,433,285   |   |   |             |   | $ |            |  | $ |             |   | $ | (1,433,285   | ) | $ |            |  
|Operating costs                  |  | $ |            |   | $ | (15,592,489 | ) | $ | (2,445,279  | ) | $ |            |  | $ |             |   | $ |             |   | $ | (18,037,768 | )
|Operating costs  intersegment   |  | $ |            |   | $ |            |   | $ | (1,433,285  | ) | $ |            |  | $ |             |   | $ | 1,433,285    |   | $ |            |  
|Interest and other income        |  | $ | 697,638     |   | $ |            |   | $ |            |   | $ |            |  | $ |             |   | $ |             |   | $ | 697,638     |  
|Interest expense                 |  | $ | (321,706    | ) | $ | (226,425    | ) | $ |            |   | $ |            |  | $ |             |   | $ |             |   | $ | (548,131    | )
|Depletion and amortization       |  | $ | (158,969    | ) | $ | (6,030,047  | ) | $ |            |   | $ |            |  | $ |             |   | $ |             |   | $ | (6,189,016  | )
|Write-down of mineral properties |  | $ |            |   | $ | 32,003,253  |   | $ |            |   | $ |            |  | $ |             |   | $ |             |   | $ | 32,003,253  |  
|Segment loss                     |  | $ | (22,073,816 | ) | $ | (36,705,843 | ) | $ | (1,524,404  | ) | $ |            |  | $ | (350,000     | ) | $ |             |   | $ | (60,654,063 | )
|Segment assets                   |  | $ | 139,289,973 |   | $ | 7,213,907   |   | $ | 163,015     |   | $ | 113,451,761 |  | $ |             |   | $ |             |   | $ | 260,118,656 |  
|Capital expenditures             |  | $ | 289,312     |   | $ | 9,939,717   |   | $ |            |   | $ | 40,671,495  |  | $ |             |   | $ |             |   | $ | 50,900,524  |  
|                                 |  |   |             |   |   |             |   |   |             |   |   |             |  |   |              |   |   |              |   |   |             |  
|2003                             |  |   |             |   |   |             |   |   |             |   |   |             |  |   |              |   |   |              |   |   |             |  
|Mining revenue                   |  | $ |            |   | $ | 9,412,553   |   | $ | 1,916,854   |   | $ |            |  | $ |             |   | $ |             |   | $ | 11,329,407  |  
|Mining revenue  intersegment    |  | $ |            |   | $ | 2,821,291   |   | $ |            |   | $ |            |  | $ |             |   | $ | (2,821,291   | ) | $ |            |  
|Operating costs                  |  | $ |            |   | $ | (9,396,466  | ) | $ | (2,386,719  | ) | $ |            |  | $ |             |   | $ |             |   | $ | (11,783,185 | )
|Operating costs  intersegment   |  | $ |            |   | $ |            |   | $ | (2,821,291  | ) | $ |            |  | $ |             |   | $ | 2,821,291    |   | $ |            |  
|Interest and other income        |  | $ | 176,187     |   | $ | 19,805      |   | $ |            |   | $ |            |  | $ |             |   | $ |             |   | $ | 195,992     |  
|Interest expense                 |  | $ | (526,932    | ) | $ | (379,402    | ) | $ | (156        | ) | $ |            |  | $ |             |   | $ |             |   | $ | (906,490    | )
|Depletion and amortization       |  | $ | (276,722    | ) | $ | (2,920,688  | ) | $ | (133,840    | ) | $ |            |  | $ |             |   | $ |             |   | $ | (3,331,250  | )
|Write-down of mineral properties |  | $ | (3,181,171  | ) | $ |            |   | $ | (14,325,166 | ) | $ |            |  | $ |             |   | $ |             |   | $ | (17,506,337 | )
|Segment profit/(loss)            |  | $ | (54,655,200 | ) | $ | (436,375    | ) | $ | (3,425,839  | ) | $ |            |  | $ | (2,969,088   | ) | $ |             |   | $ | (61,486,502 | )
|Segment assets                   |  | $ | 34,063,016  |   | $ | 27,273,441  |   | $ | 156,807     |   | $ | 72,780,264  |  | $ |             |   | $ |             |   | $ | 134,273,528 |  
|Capital expenditures             |  | $ | 53,503      |   | $ | 1,476,173   |   | $ | 246,181     |   | $ | 7,256,568   |  | $ |             |   | $ |             |   | $ | 9,032,425   |  
|                                 |  |   |             |   |   |             |   |   |             |   |   |             |  |   |              |   |   |              |   |   |             |  
|2002                             |  |   |             |   |   |             |   |   |             |   |   |             |  |   |              |   |   |              |   |   |             |  
|Mining revenue                   |  | $ |            |   | $ | 1,607,541   |   | $ | 6,915,863   |   | $ |            |  | $ |             |   | $ |             |   | $ | 8,523,404   |  
|Mining revenue  intersegment    |  | $ |            |   | $ | 7,496,646   |   | $ |            |   | $ |            |  | $ |             |   | $ | (7,496,646   | ) | $ |            |  
|Operating costs                  |  | $ |            |   | $ | (7,111,510  | ) | $ | (2,611,126  | ) | $ |            |  | $ |             |   | $ |             |   | $ | (9,722,636  | )
|Operating costs  intersegment   |  | $ |            |   | $ |            |   | $ | (7,496,646  | ) | $ |            |  | $ |             |   | $ | 7,496,646    |   | $ |            |  
|Interest and other income        |  | $ | 43,906      |   | $ | 5,700       |   | $ |            |   | $ |            |  | $ |             |   | $ |             |   | $ | 49,606      |  
|Interest expense                 |  | $ | (996,754    | ) | $ | (378,256    | ) | $ |            |   | $ |            |  | $ |             |   | $ |             |   | $ | (1,375,010  | )
|Depletion and amortization       |  | $ | (210,744    | ) | $ | (1,462,494  | ) | $ | (601,370    | ) | $ |            |  | $ |             |   | $ |             |   | $ | (2,274,608  | )
|Write-down of mineral properties |  | $ | (1,366,194  | ) | $ |            |   | $ |            |   | $ |            |  | $ |             |   | $ |             |   | $ | (1,366,194  | )
|Segment loss                     |  | $ | (28,628,394 | ) | $ | (1,030,998  | ) | $ | (4,082,669  | ) | $ |            |  | $ | (2,392,218   | ) | $ |             |   | $ | (36,134,279 | )
|Segment assets                   |  | $ | 18,294,110  |   | $ | 20,537,216  |   | $ | 11,887,472  |   | $ | 51,283,793  |  | $ | 13,454,580   |   | $ |             |   | $ | 115,457,171 |  
|Capital expenditures             |  | $ | 67,738      |   | $ | 2,356,954   |   | $ | 692,483     |   | $ | 23,914,404  |  | $ |             |   | $ |             |   | $ | 27,031,579  |  
|                                 |  |   |             |   |   |             |   |   |             |   |   |             |  |   |              |   |   |              |   |   |             |  
|                                 |  |   |             |   |   |             |   |   |             |   |   |             |  |   |              |   |   |              |   |   |             |  

Page 28 of 42

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

16.      SEGMENTED INFORMATION (continued)

| |  | Geographic information:
| |  | -----------------------

|                        |  | Mining Revenue |            | Property, Plant and Equipment |  
|----------------------- |  | -------------- | ---------- | ----------------------------- | -
|                        |  |                |            |                               |  
|                        |  |                | 2004       |                               |  
|                        |  |                |            |                               |  
|                        |  |                |            |                               |  
|Venezuela               |  | $              | 20,245,690 |                               | $
|Discontinued operations |  |                |           |                               |  
|                        |  |                |            |                               |  
|Total Foreign           |  |                | 20,245,690 |                               |  
|Canada                  |  |                |           |                               |  
|                        |  |                |            |                               |  
|Total                   |  | $              | 20,245,690 |                               | $
|                        |  |                |            |                               |  
|                        |  |                |            |                               |  

17.      DISCONTINUED OPERATIONS

|    |  | On October 27, 2003, the Company finalized 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 was required to pay the Company cash consideration of $2,000,000 payable in two equal installments.   The first payment of $1,000,000 was received in April 2004.  On October 18, 2004 UME filed a reduction notice against the second instalment claiming there were undisclosed liabilities which occurred prior to October 1, 2003.  Payment of $650,000 was received from UME as final settlement against the second instalment.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|18. |  | COMMITMENTS AND
    CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |  | Fair value of financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The balance sheet carrying amounts for cash and cash equivalents, short-term investments, accounts receivable and accounts payable and accrued liabilities approximate fair value due to their short-term nature.  The carrying value for the notes payable approximates fair value as its issuance date is near the balance sheet date. The carrying value of the bank loan approximates fair value primarily due to the floating rate nature of the debt instrument.

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Fair values of certain 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 caption commodity contract obligation.

Page 29 of 42

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 
|                                                              | 

|18. |  | COMMITMENTS AND CONTINGENCIES (continued)
|--- |  | -----------------------------------------

Lease agreements


| |  | The Company has entered into various operating lease agreements which expire over a period of five years.  Total rent expense charged to operations under these agreements was $176,181 (2003  $124,224; 2002  $112,042).
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Minimum lease payments under operating leases in effect through 2009 are as follows:


|2005 | $ | 160,950
|---- | - | -------
|2006 |   | 153,210
|2007 |   | 122,260
|2008 |   | 106,780
|2009 |   | 35,730 
|     |   |        
|     | $ | 578,930
|     |   |        



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 agreement does not transfer any property ownership rights to Crystallex 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.
| | -- | -------------------------------------------------------------------------------

Page 30 of 42

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 
|                                                              | 

18.      COMMITMENTS AND CONTINGENCIES (continued)

| | Las Cristinas Properties (continued)
| | ------------------------------------
| |                                     

| | The Company submitted the feasibility study inclusive of an investment and financing plan, referred to in (b) above, within the prescribed timeframe and the CVG approved the feasibility study. The Company is awaiting receipt of the Permit to Impact Natural Resources.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company has made certain commitments to date approximating $85 million, and will be required to make additional commitments approximating $180 million, in order to complete construction of the Las Cristinas project.  Management remains confident that it will be able to obtain the necessary financing through project debt, other forms of public market debt, or equity financing.  In the event that such efforts are not successful, the carrying value of Las Cristinas could be subject to material adjustment.

| |                
| | ---------------
| | Tax Assessments

| |                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company is currently appealing tax assessments in Venezuela for the years ended December 31, 1997, 1998 and 1999.  The potential exposure relating to the tax assessments for these years is not determinable at this time.  A provision for any obligation relating to the outcome of this appeal will be recorded once the outcome is likely and measurable.

| |                                 
| | --------------------------------
| | Vengroup Arbitration Proceedings

| |                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Corporation is a party to the Vengroup arbitration proceedings and at this time cannot predict the outcome of these proceedings (including whether any arbitration award could have a material adverse affect on the Corporation).

19.      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.

Page 31 of 42

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 
|                                                              | 

19.      RISK MANAGEMENT (continued)

| | 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, 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 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 the accounts receivable are due from one customer, the Venezuelan Central Bank.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.

| |           
| | ----------
| | 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 any 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.

Page 32 of 42

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 
|                                                              | 

|20. | 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.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |               
| | --------------
| | Balance Sheets

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

|                               |   | 2004        
|------------------------------ | - | ------------
|                               |   |             
|                               |   | CanadianGAAP
|                              
|                               |   |             
|Current assets                 | $ | 43,643,981  
|Restricted cash                |   | 95,505,636  
|Property, plant and equipment  |   | 117,329,337 
|Deferred financing fees        |   | 3,639,702   
|                               |   |             
|                               | $ | 260,118,656 
|                               |   |             
|                               |   |             
|Current liabilities            | $ | 27,719,544  
|Asset retirement obligations   |   | 2,301,181   
|Long-term debt                 |   | 80,687,719  
|Commodity contract obligations |   | 5,855,897   
|Shareholders equity           |   | 143,554,315 
|                               |   |             
|                               | $ | 260,118,656 
|                               |   |             

Page 33 of 42

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 
|                                                              | 

|20. | DIFFERENCES BETWEEN CANADIAN
          AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)
|--- | -------------------------------------------------------------------------------------------------------------

| |                           
| | --------------------------
| | Balance Sheets (continued)
| |                           

| |                                |  | 2003 |                  
| | ------------------------------ |  | ---- | -----------------
| |                                |  |      |                  
| |                                |  |      | Canadian
    GAAP
| |                                |  |      |                  
| |                                |  |      |                  
| | Current assets                 |  | $    | 31,848,685       
| | Property, plant and equipment  |  |      | 102,274,263      
| | Deferred financing fees        |  |      | 150,580          
| |                                |  |      |                  
| |                                |  | $    | 134,273,528      
| |                                |  |      |                  
| |                                |  |      |                  
| | Current liabilities            |  | $    | 28,208,702       
| | Long-term debt                 |  |      | 6,458,000        
| | Commodity contract obligations |  |      | 20,498,008       
| | Minority interest              |  |      | 111,053          
| | Shareholders' equity           |  |      | 78,997,765       
| |                                |  |      |                  
| |                                |  | $    | 134,273,528      
| |                                |  |      |                  

| |     |                                                                                                                                                                                                                                                                                 
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) | U.S. GAAP requires segregation of accrued liabilities from accounts payable on the combined balance sheets.  Under Canadian GAAP, there is no similar reporting requirement.  As at December 31, 2004, $2,867,430 (2003  $2,920,574) would be presented as accrued liabilities.
| |     |                                                                                                                                                                                                                                                                                 

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

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 
|                                                              | 

|20. | 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:
| |                                                                                                                      

| |  |                                              |     |  |   | 2004        |   |  |   | 2003        |   |  |   | 2002        |  
| |  | -------------------------------------------- | --- |  | - | ----------- | - |  | - | ----------- | - |  | - | ----------- | -
| |  |                                              |     |  |   |             |   |  |   |             |   |  |   |             |  
| |  | Net loss for the year                        |     |  |   |             |   |  |   |             |   |  |   |             |  
| |  | per Canadian GAAP                            |     |  | $ | (60,654,063 | ) |  | $ | (61,486,502 | ) |  | $ | (36,134,279 | )
| |  | Adjustments to mineral properties            | (a) |  |   | 5,172,791   |   |  |   | (2,708,117  | ) |  |   | (26,069,850 | )
| |  | Accretion of interest on                     |     |  |   |             |   |  |   |             |   |  |   |             |  
| |  | convertible notes                            | (c) |  |   |            |   |  |   | (3,291,319  | ) |  |   | (1,501,521  | )
| |  | Fair value of employee stock                 |     |  |   |             |   |  |   |             |   |  |   |             |  
| |  | options granted                              | (d) |  |   |            |   |  |   | (2,696,968  | ) |  |   | (259,187    | )
| |  | Unrealized (loss) gain on trading securities | (b) |  |   |            |   |  |   | (11,604     | ) |  |   | 11,604      |  
| |  |                                              |     |  |   |             |   |  |   |             |   |  |   |             |  
| |  | Net loss for the year per U.S. GAAP          |     |  | $ | (55,481,272 | ) |  | $ | (70,194,510 | ) |  | $ | (63,953,233 | )
| |  |                                              |     |  |   |             |   |  |   |             |   |  |   |             |  
| |  | Net loss per share  basic                   |     |  | $ | (0.32       | ) |  | $ | (0.59       | ) |  | $ | (0.76       | )
| |  |                                              |     |  |   |             |   |  |   |             |   |  |   |             |  

| |                                     
| | ------------------------------------
| | Statement of Operations Presentation

| |                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | For U.S. GAAP purposes, the measures Loss before other items and Commodity contract loss are not recognized terms and would therefore not be presented.  In addition, the Operating loss measure included within the Canadian GAAP statement of operations is not comparable to Operating loss under U.S. GAAP.  The following table reconciles Net loss for the year per U.S. GAAP to Loss from operations for U.S. GAAP.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                       

| |                                                |   | 2004        |   |  |   | 2003        |   |  |   | 2002        |  
| | ---------------------------------------------- | - | ----------- | - |  | - | ----------- | - |  | - | ----------- | -
| |                                                |   |             |   |  |   |             |   |  |   |             |  
| | Net loss for the year per U.S. GAAP            | $ | (55,481,272 | ) |  | $ | (70,194,510 | ) |  | $ | (63,953,233 | )
| |                                                |   |             |   |  |   |             |   |  |   |             |  
| |                                                |   |             |   |  |   |             |   |  |   |             |  
| | Non-operating loss components                  |   |             |   |  |   |             |   |  |   |             |  
| | Under Canadian GAAP:                           |   |             |   |  |   |             |   |  |   |             |  
| | Interest on long-term debt                     | $ | 548,131     |   |  | $ | 906,490     |   |  | $ | 1,375,010   |  
| | Commodity contract loss                        |   | 963,717     |   |  |   | 16,475,340  |   |  |   | 22,278,461  |  
| | Foreign
    exchange (gain) loss               |   | (397,313    | ) |  |   | 3,528,401   |   |  |   | (587,570    | )
| | Interest and other income                      |   | (697,638    | ) |  |   | (195,992    | ) |  |   | (49,606     | )
| | Write-down of marketable securities            |   |            |   |  |   | 136,276     |   |  |   | 134,766     |  
| | Write-down
    of investment in  El
    Callao |   | 493,702     |   |  |   |            |   |  |   |            |  
| | Minority interest                              |   | (111,053    | ) |  |   |            |   |  |   |            |  
| | U.S. GAAP reconciling items:                   |   |             |   |  |   |             |   |  |   |             |  
| | Accretion of interest on                       |   |             |   |  |   |             |   |  |   |             |  
| | convertible notes                              |   |            |   |  |   | 3,291,319   |   |  |   | 1,501,521   |  
| | Unrealized loss (gain) on trading securities   |   |            |   |  |   | 11,604      |   |  |   | (11,604     | )
| |                                                |   |             |   |  |   |             |   |  |   |             |  
| | Non-operating loss per U.S. GAAP               |   | 799,546     |   |  |   | 24,153,438  |   |  |   | 24,640,978  |  
| |                                                |   |             |   |  |   |             |   |  |   |             |  
| | Loss from operations per U.S. GAAP             | $ | (54,681,726 | ) |  | $ | (46,041,072 | ) |  | $ | (39,312,255 | )
| |                                                |   |             |   |  |   |             |   |  |   |             |  

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 
|                                                              | 

|20. | 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:
| |                                                                                                                                      

| |                                               |   | 2004         |   |  |   | 2003        |   |  |   | 2002        |  
| | --------------------------------------------- | - | ------------ | - |  | - | ----------- | - |  | - | ----------- | -
| |                                               |   |              |   |  |   |             |   |  |   |             |  
| |                                               |   |              |   |  |   |             |   |  |   |             |  
| | Cash flows(used in) provided by operating     |   |              |   |  |   |             |   |  |   |             |  
| | activities, Canadian GAAP                     | $ | (36,005,098  | ) |  | $ | (26,538,672 | ) |  | $ | (2,936,240  | )
| | Adjustments to mineral properties             |   | (2,709,655   | ) |  |   | (6,509,464  | ) |  |   | (23,789,031 | )
| |                                               |   |              |   |  |   |             |   |  |   |             |  
| | Cash flows used in operating activities,      |   |              |   |  |   |             |   |  |   |             |  
| | U.S. GAAP                                     |   | (38,714,753  | ) |  |   | (33,048,136 | ) |  |   | (26,725,271 | )
| |                                               |   |              |   |  |   |             |   |  |   |             |  
| |                                               |   |              |   |  |   |             |   |  |   |             |  
| | Cash flows used in investing activities,      |   |              |   |  |   |             |   |  |   |             |  
| | Canadian GAAP                                 |   | (179,183,440 | ) |  |   | (8,666,513  | ) |  |   | (27,072,539 | )
| | Adjustments to mineral properties             |   | 2,709,655    |   |  |   | 6,509,464   |   |  |   | 23,789,031  |  
| |                                               |   |              |   |  |   |             |   |  |   |             |  
| | Cash flows used in investing activities,      |   |              |   |  |   |             |   |  |   |             |  
| | U.S. GAAP                                     |   | (176,473,785 | ) |  |   | (2,157,049  | ) |  |   | (3,283,508  | )
| |                                               |   |              |   |  |   |             |   |  |   |             |  
| |                                               |   |              |   |  |   |             |   |  |   |             |  
| | Cash flows provided by financing activities,  |   |              |   |  |   |             |   |  |   |             |  
| | Canadian and U.S. GAAP                        |   | 193,101,744  |   |  |   | 53,375,797  |   |  |   | 25,018,094  |  
| |                                               |   |              |   |  |   |             |   |  |   |             |  
| | Cash flows (used in) provided by continuing   |   |              |   |  |   |             |   |  |   |             |  
| | operations, Canadian and U.S.  GAAP           |   | (22,086,794  | ) |  |   | 18,170,612  |   |  |   | (4,990,685  | )
| | Cash flows provided by (used in) discontinued |   |              |   |  |   |             |   |  |   |             |  
| | operations, Canadian and U.S.  GAAP           |   | 1,650,000    |   |  |   | 831,476     |   |  |   | (829,487    | )
| | Effect of foreign exchange rate               |   |              |   |  |   |             |   |  |   |             |  
| | difference on cash and cash equivalents       |   |             |   |  |   | 3,595,235   |   |  |   | 378,452     |  
| |                                               |   |              |   |  |   |             |   |  |   |             |  
| | Net (decrease) increase in cash and cash      |   |              |   |  |   |             |   |  |   |             |  
| | equivalents during the year                   |   | (20,436,794  | ) |  |   | 22,597,323  |   |  |   | (5,441,720  | )
| |                                               |   |              |   |  |   |             |   |  |   |             |  
| | Cash and cash equivalents, beginning of year  |   | 26,203,536   |   |  |   | 3,606,213   |   |  |   | 9,047,933   |  
| |                                               |   |              |   |  |   |             |   |  |   |             |  
| | Cash and cash equivalents, end of year        | $ | 5,766,742    |   |  | $ | 26,203,536  |   |  | $ | 3,606,213   |  
| |                                               |   |              |   |  |   |             |   |  |   |             |  

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 
|                                                              | 

|20. | DIFFERENCES BETWEEN CANADIAN
          AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)
|--- | -------------------------------------------------------------------------------------------------------------

|    |                                                         
|--- | --------------------------------------------------------
|(a) | Mineral Properties and Exploration and Development Costs

| |                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Under Canadian GAAP, mineral properties, including exploration, development and acquisition costs, are carried at cost until the properties to which they relate are placed into production, sold or where management has determined 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.

| |                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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, 2004, 2003, and 2002 are expenses of $251,324, $323,934 and $321,448 respectively, related thereto.

| |                              
| | -----------------------------
| | Property, Plant and Equipment
| |                              

| |                                   |   | 2004        |   |   | 2003        |  
| | --------------------------------- | - | ----------- | - | - | ----------- | -
| |                                   |   |             |   |   |             |  
| | Net book value under              |   |             |   |   |             |  
| | Canadian GAAP                     | $ | 117,329,337 |   | $ | 102,274,263 |  
| |                                   |   |             |   |   |             |  
| | Adjustments to mineral properties |   |             |   |   |             |  
| | and deferred exploration and      |   |             |   |   |             |  
| | developmental expenditures        |   |             |   |   |             |  
| | Las Cristinas Concessions         |   | (75,489,919 | ) |   | (72,780,264 | )
| | Tomi Concession                   |   |            |   |   | (3,151,433  | )
| | Albino 1 Concession               |   |            |   |   | (4,731,013  | )
| |                                   |   |             |   |   |             |  
| | Total adjustments                 |   | (75,489,919 | ) |   | (80,662,710 | )
| |                                   |   |             |   |   |             |  
| | Net book value under U.S. GAAP    | $ | 41,839,418  |   | $ | 21,611,553  |  
| |                                   |   |             |   |   |             |  

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 
|                                                              | 

|20. | DIFFERENCES BETWEEN CANADIAN
          AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)
|--- | -------------------------------------------------------------------------------------------------------------

| | 
| | 

| | (b) | 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.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

| | (c) | Convertible Notes
| | --- | -----------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Under Canadian GAAP, upon issuance of 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, 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, 2004, an additional interest
expense (including accretion) of $ Nil (2003  $3,291,319;  2002  $1,501,521) has been recorded.

Page 38 of 42

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 
|                                                              | 

|20. | DIFFERENCES BETWEEN CANADIAN
          AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)
|--- | -------------------------------------------------------------------------------------------------------------

| | 
| | 

| | (d) | Stock-based Compensation
| | --- | ------------------------

| |                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In accordance with Canadian GAAP, prior to January 1, 2004, the Company did not record any expense with respect to stock options granted to employees, but rather included 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:

| |                         |            |  |            |  |            | 
| | ----------------------- | ---------- |  | ---------- |  | ---------- | 
| |                         | 2004       |  | 2003       |  | 2002       | 
| |                         |            |  |            |  |            | 
| |                         |            |  |            |  |            | 
| | Risk free interest rate | 4.38%      |  | 4.04%      |  | 4.22%      | 
| | Expected life           | 5.98 years |  | 3.95 years |  | 3.75 years | 
| | Expected volatility     | 75%        |  | 108%       |  | 75%        | 
| | Expected dividends      | __         |  | __         |  | ___        | 

| | 
| | 

| |                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | For the year ended December 31, 2004, an expense of $5,296,977, (2003  $2,696,968; 2002    $259,187) has been recorded with respect to the stock options granted in the year.
| |                                                                                                                                                                                

| | (e) | Comprehensive Income (loss)
| | --- | ---------------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 (loss) be reported in the financial statements.  For the Company, the only components of comprehensive loss are the net loss for the period, the change in cumulative translation adjustment and the unrealized gains and losses on the available-for-sale securities.  This information is presented below.

Page 39 of 42

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 
|                                                              | 

|20. | DIFFERENCES BETWEEN CANADIAN
          AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)
|--- | -------------------------------------------------------------------------------------------------------------

| | 
| | 

| | (b) | 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.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

| | (c) | Convertible Notes
| | --- | -----------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Under Canadian GAAP, upon issuance of 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, 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, 2004, an additional interest
expense (including accretion) of $ Nil (2003  $3,291,319;  2002  $1,501,521) has been recorded.

Page 38 of 42

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 
|                                                              | 

|20. | DIFFERENCES BETWEEN CANADIAN
          AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)
|--- | -------------------------------------------------------------------------------------------------------------

| | 
| | 

| | (d) | Stock-based Compensation
| | --- | ------------------------

| |                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In accordance with Canadian GAAP, prior to January 1, 2004, the Company did not record any expense with respect to stock options granted to employees, but rather included 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:

| | 
| | 

| |                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | For the year ended December 31, 2004, an expense of $5,296,977, (2003  $2,696,968; 2002    $259,187) has been recorded with respect to the stock options granted in the year.
| |                                                                                                                                                                                

| | (e) | Comprehensive Income (loss)
| | --- | ---------------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 (loss) be reported in the financial statements.  For the Company, the only components of comprehensive loss are the net loss for the period, the change in cumulative translation adjustment and the unrealized gains and losses on the available-for-sale securities.  This information is presented below.

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 
|                                                              | 

|20. | DIFFERENCES BETWEEN CANADIAN
          AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES  (continued)
|--- | --------------------------------------------------------------------------------------------------------------
|    |                                                                                                               

| | Accumulated Other Comprehensive Loss                                                   
| | ---------------------------------------------------------------------------------------
| |                                                                                        
| | For U.S. GAAP, the accumulated other comprehensive loss would be calculated as follows:
| |                                                                                        

| |                                         |   | 2004     |   |  |   | 2003       |   |  |   | 2002       |  
| | --------------------------------------- | - | -------- | - |  | - | ---------- | - |  | - | ---------- | -
| |                                         |   |          |   |  |   |            |   |  |   |            |  
| | Accumulated other comprehensive         |   |          |   |  |   |            |   |  |   |            |  
| | loss                                    |   |          |   |  |   |            |   |  |   |            |  
| | Accumulated other comprehensive loss,   |   |          |   |  |   |            |   |  |   |            |  
| | beginning of year                       | $ | (695,329 | ) |  | $ | (1,122,324 | ) |  | $ | (1,981,573 | )
| | Change in market value of               |   |          |   |  |   |            |   |  |   |            |  
| | available-for-sale securities           |   |         |   |  |   |           |   |  |   | 111,426    |  
| | Change in cumulative translation        |   |          |   |  |   |            |   |  |   |            |  
| | adjustment for the year                 |   |         |   |  |   | 538,421    |   |  |   | 747,823    |  
| | Reclassification adjustment for amounts |   |          |   |  |   |            |   |  |   |            |  
| | included in net income                  |   |         |   |  |   | (111,426   | ) |  |   |           |  
| |                                         |   |          |   |  |   |            |   |  |   |            |  
| | Accumulated other comprehensive         |   |          |   |  |   |            |   |  |   |            |  
| | loss, end of year                       | $ | (695,329 | ) |  | $ | (695,329   | ) |  | $ | (1,122,324 | )
| |                                         |   |          |   |  |   |            |   |  |   |            |  
| |                                         |   |          |   |  |   |            |   |  |   |            |  
| |                                         |   | 2004     |   |  |   | 2003       |   |  |   | 2002       |  
| |                                         |   |          |   |  |   |            |   |  |   |            |  
| | Accumulated other comprehensive         |   |          |   |  |   |            |   |  |   |            |  
| | loss, end of year, comprises:           |   |          |   |  |   |            |   |  |   |            |  
| | Change in market value of               |   |          |   |  |   |            |   |  |   |            |  
| | available-for-sale securities           | $ |         |   |  | $ |           |   |  | $ | 111,426    |  
| | Cumulative translation adjustment       |   | (695,329 | ) |  |   | (695,329   | ) |  |   | (1,233,750 | )
| |                                         |   |          |   |  |   |            |   |  |   |            |  
| |                                         | $ | (695,329 | ) |  | $ | (695,329   | ) |  | $ | (1,122,324 | )
| |                                         |   |          |   |  |   |            |   |  |   |            |  

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|    |                                                             
|--- | ------------------------------------------------------------
|20. | DIFFERENCES BETWEEN CANADIAN
    AND UNITED STATES GENERALLY
|    | ACCEPTED ACCOUNTING PRINCIPLES
    (continued)              

| |                   
| | ------------------
| | Comprehensive Loss

| |                                                                      
| | ---------------------------------------------------------------------
| | For U.S. GAAP, the comprehensive loss would be calculated as follows:



|                                 |   | 2004        |   |  |   | 2003        |   |  |   | 2002        |  
|-------------------------------- | - | ----------- | - |  | - | ----------- | - |  | - | ----------- | -
|                                 |   |             |   |  |   |             |   |  |   |             |  
|Comprehensive loss comprises     |   |             |   |  |   |             |   |  |   |             |  
|Net loss for the year            | $ | (55,481,272 | ) |  | $ | (70,194,510 | ) |  | $ | (63,953,233 | )
|Change in market value of        |   |             |   |  |   |             |   |  |   |             |  
|available-for-sale securities    |   |            |   |  |   |            |   |  |   | 111,426     |  
|Change in cumulative translation |   |             |   |  |   |             |   |  |   |             |  
|adjustment                       |   |            |   |  |   | 538,421     |   |  |   | 747,823     |  
|Reclassification adjustment for  |   |             |   |  |   |             |   |  |   |             |  
|amounts included in net income   |   |            |   |  |   | (111,426    | ) |  |   |            |  
|                                 |   |             |   |  |   |             |   |  |   |             |  
|Comprehensive loss for the year  | $ | (55,481,272 | ) |  | $ | (69,767,515 | ) |  | $ | (63,093,984 | )
|                                 |   |             |   |  |   |             |   |  |   |             |  
|                                 |   |             |   |  |   |             |   |  |   |             |  

| | (f) | Recent Accounting Pronouncements
| | --- | --------------------------------

| |                                    
| | -----------------------------------
| | SFAS 123R, Stock-based compensation

| | In December 2004, the Financial Accounting Standards Board ("FASB")
issued FASB Statement No. 123 (revised 2004),Share-Based Payment(SFAS
123R). SFAS 123R is applicable for all interim or annual reporting periods beginning
after June 15, 2005 and requires that compensation cost relating to share-based
payment transactions be measured based on the fair value of the equity or liability
instruments issued and recognized in financial statements. Management is analyzing
the requirements of this new statement and believes the
adoption
of
this
policy will not have a material impact on the Companys financial statements.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                          
| | -----------------------------------------
| | SFAS 153, Exchange of Non-Monetary Assets

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets an amendment of APB No. 29.  This Statement amends Opinion 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance.  The Statement specifies that a nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange.  This Statement is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005.  Earlier application is permitted for nonmonetary asset exchanges occurring in fiscal
periods beginning after the date this Statement is issued.  Retroactive application is not permitted.  Management is analyzing the requirements of this new Statement and believes that its adoption will not have any significant impact on the Companys financial position, results of operations or cash flows.

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|CRYSTALLEX INTERNATIONAL
            CORPORATION              | 
|------------------------------------------------------------- | 
|Notes to the Consolidated
            Financial Statements    | 
|December 31, 2004, 2003 and
            2002                  | 
|(Expressed in United States
            dollars  See Note 2) | 

|    |                                                             
|--- | ------------------------------------------------------------
|20. | DIFFERENCES BETWEEN CANADIAN
    AND UNITED STATES GENERALLY
|    | ACCEPTED ACCOUNTING PRINCIPLES (continued)                  

| |     |                                             
| | --- | --------------------------------------------
| | (f) | Recent Accounting Pronouncements (continued)

| |                          
| | -------------------------
| | SFAS 151, Inventory Costs

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In November 2004, the FASB issued SFAS No. 151, Inventory Costs an amendment of ARB No. 43, Chapter 4, which amends Chapter 4 of ARB No. 43 that deals with inventory pricing.  The Statement clarifies the accounting for abnormal amounts of idle facility expenses, freight, handling costs, and spoilage.  Under previous guidance, paragraph 5 of ARB No. 43, chapter 4, items such as idle facility expense, excessive spoilage, double freight, and rehandling costs might be considered to be so abnormal, under certain circumstances, as to require treatment as current period charges.  This Statement eliminates the criterion of so abnormal and requires that those items be recognized as current period charges.  Also, this
Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities.  This Statement is effective for inventory costs incurred during fiscal years beginning after June 15, 2005, although earlier application is permitted for fiscal years beginning after the date of issuance of this Statement.  Retroactive application is not permitted.  Management is analyzing the requirements of this new Statement and believes that its adoption will not have any significant impact on the Companys financial position, results of operations or cash flows.

| |                                            
| | -------------------------------------------
| | Consolidation of Variable Interest Entities

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In 2004, the CICA issued Accounting
    Guideline AcG-15, Consolidation of Variable Interest Entities,
    to provide guidance for applying the principles in Handbook Section 1590, Subsidiaries,
    to certain entities. AcG-15 is effective for the Companys 2005 fiscal
    year and harmonizes Canadian GAAP with U.S. GAAP accounting for variable
    interest entities. The adoption of this new guideline will not have a material
    impact on the Companys financial statements.

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ANNEX BMANAGEMENT’S DISCUSSION AND ANALYSISOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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CRYSTALLEX INTERNATIONAL CORPORATION

Managements Discussion and Analysis
    For the Year Ended December 31, 2004(All dollar amounts in US dollars, unless otherwise stated)

The following Managements Discussion and Analysis (MD&A)
    of the audited financial condition and results of the operations of Crystallex
    International Corporation (Crystallex or the Company) for the year ended
    December 31, 2004 should be read in conjunction with the Companys annual
    audited consolidated financial statements and the notes relating thereto.
    The audited consolidated financial statements have been prepared in accordance
    with Canadian generally accepted accounting principles (GAAP). Effective
    January 1, 2004, the Company prepares and files its audited consolidated
    financial statements and MD&A in United States dollars. Except where
    noted, this MD&A has been prepared as of March 28, 2005.

Highlights

| | Gold reserves at Las Cristinas
        increased to 12.8 million ounces by the end of 2004. Further drilling
        commenced early 2005.                                                                                                                                                      
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                 
| | Las Cristinas detailed engineering
        66% completed by year end; plan to substantially complete by the end
        of the first quarter 2005.                                                                                                                                              
|  |                                                                                                                                                                                                                                                                                                 
| | Raised $182 million in debt and
        equity financings.                                                                                                                                                                                                                                      
|  |                                                                                                                                                                                                                                                                                                 
| | Cash and short investments total
        $134 million.                                                                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                                                                                 
| | Settled gold sales contracts of
        185,667 ounces during the year. Gold sales contracts reduced to 164,358
        ounces at the end the year. Further settlements subsequent to year end
        have reduced the number of outstanding contracts to approximately 111,000
        ounces.
|  |                                                                                                                                                                                                                                                                                                 
| | Net loss for the year of $60.7
        million, or ($0.35) per share, inclusive of a non-cash write-down of
        mineral properties of $32.0 million and a $1.0 million commodity contract
        loss.                                                                                     
|  |                                                                                                                                                                                                                                                                                                 

|Key Statistics                       |  |  |            |   |  |            |   |  |            |  
|------------------------------------ |  |  | ---------- | - |  | ---------- | - |  | ---------- | -
|                                     |  |  |            |   |  |            |   |  |            |  
|                                     |  |  | 2004       |   |  | 2003       |   |  | 2002       |  
|                                     |  |  |            |   |  |            |   |  |            |  
|Operating Statistics                 |  |  |            |   |  |            |   |  |            |  
|Gold Production (ounces)1            |  |  | 48,973     |   |  | 35,244     |   |  | 27,791     |  
|Gold Sold (ounces)                   |  |  | 49,478     |   |  | 30,632     |   |  | 28,088     |  
|Per Ounce Data:                      |  |  |            |   |  |            |   |  |            |  
|Total Cash Cost2                     |  |  | $365       |   |  | $385       |   |  | $346       |  
|Average Realized Gold Price          |  |  | $409       |   |  | $363       |   |  | $310       |  
|Average Spot Gold Price              |  |  | $410       |   |  | $363       |   |  | $310       |  
|Gold Reserves (ounces)               |  |  | 12,939,400 |   |  | 10,584,300 |   |  | 10,465,100 |  
|                                     |  |  |            |   |  |            |   |  |            |  
|Financial Results ($ 000s)          |  |  |            |   |  |            |   |  |            |  
|Revenues                             |  |  | $20,246    |   |  | $11,329    |   |  | $8,523     |  
|Net Loss                             |  |  | ($60,654   | ) |  | ($61,487   | ) |  | ($36,134   | )
|Net Loss per Basic Share             |  |  | ($0.35     | ) |  | ($0.52     | ) |  | ($0.43     | )
|Cash Flow from Operating Activities3 |  |  | ($36,005   | ) |  | ($26,539   | ) |  | ($2,936    | )
|                                     |  |  |            |   |  |            |   |  |            |  
|Financial Position ($ 000s)         |  |  |            |   |  |            |   |  |            |  
|Cash and Equivalents                 |  |  | $5,767     |   |  | $26,204    |   |  | $3,606     |  
|Short-term investments               |  |  | $30,277    |   |  |           |   |  |           |  
|Restricted Cash and Equivalents      |  |  | $98,006    |   |  |           |   |  |           |  
|Total Debt                           |  |  | $85,088    |   |  | $7,488     |   |  | $21,561    |  
|Shareholders Equity                 |  |  | $143,554   |   |  | $78,998    |   |  | $52,601    |  
|Weighted Average Common Shares       |  |  |            |   |  |            |   |  |            |  
|Outstanding - Basic (millions)       |  |  | 172.2      |   |  | 118.3      |   |  | 84.4       |  
|                                     |  |  |            |   |  |            |   |  |            |  
|                                     |  |  |            |   |  |            |   |  |            |  

|1 | Gold production is from continuing operations only, excluding
        production from the San Gregorio mine which was sold in 2003.         
|- | --------------------------------------------------------------------------------------------------------------------------------------------
|2 | For an explanation, refer to the section on Non-GAAP measures.
        The calculation is based on ounces of gold sold, not ounces produced.
|3 | Cash flow after working capital changes and before capital
        expenditures.                                                            



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Financial Results Overview

The Company recorded a net loss of $60.7 million, or $0.35 per
    share in 2004, compared with a net loss of $61.5 million or $0.52 per share
    in 2003. The net loss in 2004 includes mineral property and plant and equipment
    write-downs of $32.0 million, a commodity contract loss of $1.0 million and
    a stock option based compensation charge of $5.3 million. The net loss for
    the prior year included mineral property write-downs of $17.5 million and
    a commodity contract loss of $16.5 million.

Revenue of $20.2 million in 2004 was significantly higher than
    $11.3 million of revenue in 2003. The increase in revenue was attributable
    to a 62% increase in ounces of gold sold and to higher realized gold prices.
    In 2004, the Company sold 49,478 ounces of gold at an average realized price
    of $409 per ounce, while in 2003, 30,632 ounces of gold were sold at an average
    realized price of $363 per ounce. The average spot gold price in 2004 was
    $410 per ounce, compared with $363 per ounce in 2003.

Operating cash flow was a deficit of $36.0 million in 2004,
    compared with a deficit of $26.5 million in 2003. In 2004, mine site operating
    cash flow of $2.2 million was offset by expenditures of $19.1 million to
    financially settle gold sales contracts and by $18.2 million of general and
    administrative expenses, which were $1.8 million higher than 2003. Capital
    expenditures increased by $41.9 million to $50.9 million, principally due
    to increased spending on Las Cristinas. The Company raised approximately
    $182 million in debt and equity financings during 2004. At year end 2004,
    the unrestricted cash and short-term investments balance was $36.0 million
    and the Company had restricted cash of $98.0 million.

Development Projects

Las Cristinas

Overview

In September 2002, the Company signed a Mining Operation Agreement
    (Agreement) with the Corporacion Venezolana de Guayana (CVG) which granted
    Crystallex exclusive rights to develop and exploit the gold deposits on the
    Las Cristinas property. A positive Feasibility Study was completed by SNC
    Lavalin Engineers and Constructors Inc. (SNCL) in September 2003. The study
    was approved by the CVG in March, 2004. An Engineering, Procurement and Construction
    Management (EPCM) contract to provide services for the development of Las
    Cristinas was awarded to SNCL in March 2004.

An Environmental Impact Study (EIS) was submitted to the Ministry
    of the Environment and Natural Resources (MARN) in April 2004 to initiate
    the project permitting process. In September 2004, a SocioEconomic Impact
    Assessment was completed by Proconsult C.A., of Venezuela and, also in September,
    SNCL completed a construction phase Environmental Supervision Plan. Both
    reports were submitted to the MARN. The process for obtaining the Permit
    to Impact Natural Resources (Permit) is continuing and the Company
    is presently addressing normal course business technical and environmental
    clarifications requested by the MARN. The Companys efforts to obtain
    a speedy resolution to the permitting process have been publicly supported
    by senior political officials. Based upon public representations by Venezuelan
    officials, it is presently expected that the Permit will be issued by the
    end of the second quarter of 2005.

2004 Progress and Ongoing Work

| | Capital expenditures of $40.7 million on Las
        Cristinas, inclusive of approximately $19 million of costs directly related
        to project development.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                 
| | Resource and Reserve Update                                                                                                                                     

Resource and reserve estimates for Las Cristinas were updated
    in 2004 to reflect the results of drilling completed by Crystallex in 2003
    (2,199 metres) and 2004 (7,120 metres). At a $350 per ounce gold price, reserves
    at Las Cristinas are now estimated at 333 million tonnes grading 1.2 grams
    per tonne, containing 12.8 million ounces of gold. The increase in reserves
    was due to including the results of the 2003 and 2004 infill drilling as
    well as using a gold price of $350 per ounce for the new estimate as



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opposed to $325 per ounce in the prior estimate. Of the 2.6
    million ounce increase, approximately 71% is attributable to the infill drilling
    and 29% is due to using the higher gold price. At a $400 per ounce gold price, reserves increase to 387 million tonnes grading 1.2 grams
    per tonne, containing 13.94 million ounces of gold. The Company is currently
    undertaking another infill drill program of approximately 5,000 metres at
    Las Cristinas.

| | Control Budget Estimate and Improved Project Economics
| | ------------------------------------------------------

During the first three months of the EPCM contract, Crystallex
    and SNCL undertook a comprehensive review of the Las Cristinas capital costs
    to produce a project Control Budget. The review resulted in a modest increase
    in capital costs, from $242 million to $265 million of which approximately
    $11 million related to discretionary investment items that reduced the projects
    operating costs and improved the projects IRR. The principal positive
     impact on operating costs and overall project economics was achieved by
    switching
    from contract mining to owner operated mining
    for saprolite ores. The balance of some $12 million reflected cost increases
     equating to a 5% increase on the $242 million feasibility study capital
    cost.
	After incorporating the new reserve estimate
    of 12.8 million ounces and the results of the Control Budget exercise, the
    projects pre-tax, unleveraged IRR is 17.7% using a $350 per ounce gold
    price. Cash costs, including royalties, are forecast to average $125 per
    ounce for the first five years and $206 per ounce for the life of the project.

| |   | EPCM Progress                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | Procurement of equipment and awarding of service
        contracts is ongoing. At year end, 100 of a total of 168 purchase orders
        and construction and service contracts had been awarded. By the end of
        2004, commitments related to purchase orders and contracts under the
        $265 million Control Budget totalled $85 million, while actual expenditures
        were approximately $19 million. Purchasing of certain bulk materials
        and supplies has been delayed until receipt of the Permit.
| |  | Engineering design was 66% completed by year
        end. By the end of February 2005, engineering design had progressed to
        82% completion, on target for 90% completion by the end of March, 2005.                                                                                                                                                                                                                                                                                                                      
| |  | The Project Schedule will be updated upon receipt
        of the final Permit. It is currently expected that the development and
        construction period will be approximately 16 months from the date of
        the issue of the Permit until the start of gold production.                                                                                                                                                                                                                                                
|
| |   | Site Construction Activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | SODEXHO, the camp operator and caterer, recently
        completed the rehabilitation of the existing construction camp. Upgrading
        of the dining hall continues.                                                                                                                                                                                                                                                                                                                                                         
| |  | The site administration offices were completed
        and SNCL and Crystallex staff are set up in the offices.                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | Work continued on extending the existing airstrip
        at site from 545 metres to 1,000 metres.                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | Upgrading of the 19 kilometre site access road
        started in January 2005 and is expected to be completed during the second
        quarter.                                                                                                                                                                                                                                                                                                                                                                                
| |  | The earthworks contractor for the access road
        and river diversion channel commenced limited activities including surveying,
        upgrading the access road and mobilization of some equipment. Full mobilization
        will commence upon receipt of the Permit.                                                                                                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |   | Project Recruiting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

By year end, most senior positions were filled, including Manager
    Mining, Manager Process, Controller, Environmental Superintendent and Community
    and Government Relations Manager. In addition, the Electrical and Instrumentation
    and Mine Maintenance Superintendents have been recruited. A procurement office
    was opened in Houston, Texas for procurement and freight forwarding of supplies
    and equipment.



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| | Additional Technical Studies
| | ----------------------------

A comprehensive field investigation program was undertaken by
    SNCL during 2004 and reports were completed by the end of the year. The program
    comprised three components: (i) geotechnical work, which included drilling
    and test pitting, was undertaken to establish subsurface conditions and design
    parameters for detailed engineering and construction of the project and focused
    in particular on the tailings management facility and the process plant site,
    (ii) environmental and hydrogeological work, which included environmental
    drilling to collect baseline groundwater quality information from deep wells
    and hydrogeological drilling to assist in determining and monitoring groundwater
    flows and allow for design pumping rates during mining, and (iii) review
    of open pit slopes and waste dump stability.

| | Social Development Program
| | --------------------------

The Company is continuing with its program of developing a long-term
    partnership with the local communities. The Companys social development
    program is dedicated to supporting the communities near Las Cristinas with
    long-term employment training, economic development, local infrastructure
    and health care.

On-going programs include providing medicines to the local medical
    clinic, funding a scholarship program, providing technical assistance to
    small-scale miners and providing regular maintenance services for the local
    medical centre. In addition, Crystallex is continuing with community infrastructure
    programs. In 2004, four programs were completed: i) 30 houses were constructed
    in the community of Santo Domingo, ii) water treatment plants were installed
    and integrated for the benefit of eight communities, iii) a sewer network
    was constructed in two communities and iv) the local road was upgraded and
    paved from KM 85 through Nuevas Claritas and Santo Domingo. The cost of the
    four infrastructure projects was approximately $1.3 million. In 2005, Crystallex
    will commission two sewage treatment plants and connect them to the new sewerage
    grid. The Company has also committed to a significant upgrading of the Las
    Claritas Medical Centre. The budget for these two projects is approximately
    $825,000.

The Company is presently developing a Community Relations program.
    A Venezuelan firm, Plan Urbe, has been engaged to carryout the design of
    a long term program for providing assistance to the local communities. Plan
    Urbe will work from a local office to implement the social development plan.

Albino

On February 25, 2005, the Company announced that the Ministry
    of Energy and Mines (MEM) had terminated the Companys Albino rights.
    The decision was based upon a review by the MEM of properties that are perceived
    to be inactive or non-compliant. The decision has been appealed by Crystallex
	to the Ministry of Basic Industries and Mining (MIBM), which was created
	when the MEM was split into two new ministries, the MIBM and Ministry of
	Energy and Petroleum.
    However, due to the uncertainty of the outcome of the appeal, the Company
    has written down the carrying value of its investment in the Albino concession
    to nil. The Company has decided not to report any reserves or resources for
    Albino. The decision to write down the value of Albino has also impacted
    the carrying value of the Revemin mill since the initial ore produced from
    Albino was planned to be processed at Revemin.

Between 1994 and 1998, Crystallex operated a small open pit
    mine on the Albino concession. Approximately 40,000 ounces were produced
    over the four year period. Operations were suspended in 1998 due to a depletion
    of the open pit ore reserves. A Feasibility Study completed in 2001, estimated
    reserves of approximately 100,000 ounces and demonstrated the viability of
    developing a small underground mine at Albino. In late 2004, Crystallex began
    development of the underground mine and in mid February 2005 the Company
    received the Permit to Impact Natural Resources for open pit mining which
    was required for Crystallex to sink the decline through the Saprolite zone.
    An application is in process for a similar permit for underground mining
    in order to continue the decline into bedrock. Sinking of the decline through
    the Saprolite zone has been suspended pending the outcome of the appeal process.
	The Special Commission of the Permanent Commission of Energy and Mines
	in the National Assembly of Venezuela has issued a report recommending that
	MIBM reconsider the termination of Crystallexs Albino concession.



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Operations Review

Production

|                                  |  |  |         |   |  |         |   |  |         |  
|--------------------------------- |  |  | ------- | - |  | ------- | - |  | ------- | -
|Gold Production (ounces)          |  |  | 2004    |   |  | 2003    |   |  | 2002    |  
|                                  |  |  |         |   |  |         |   |  |         |  
|Tomi Open Pits                    |  |  | 35,961  |   |  | 24,360  |   |  | 2,347   |  
|Tomi Underground                  |  |  | 5,891   |   |  | 2,753   |   |  | 0       |  
|La Victoria                       |  |  | 2,412   |   |  | 5,564   |   |  | 22,548  |  
|Purchased Material                |  |  | 4,709   |   |  | 2,567   |   |  | 2,896   |  
|                                  |  |  |         |   |  |         |   |  |         |  
|Total Gold Production (ounces)    |  |  | 48,973  |   |  | 35,244  |   |  | 27,791  |  
|                                  |  |  |         |   |  |         |   |  |         |  
|Total Ore Processed1(tonnes)      |  |  | 443,504 |   |  | 370,276 |   |  | 366,909 |  
|Head Grade of Ore Processed (g/t) |  |  | 3.7     |   |  | 3.5     |   |  | 3.0     |  
|Total Recovery Rate (%)           |  |  | 93      | % |  | 84      | % |  | 79      | %
|Total Recovered (ounces)          |  |  | 48,973  |   |  | 35,244  |   |  | 27,791  |  
|                                  |  |  |         |   |  |         |   |  |         |  
|Total Cash Cost Per Ounce Sold    |  |  | $365    |   |  | $385    |   |  | $346    |  
|                                  |  |  |         |   |  |         |   |  |         |  
|Mine Operating Cashflow ($,000)   |  |  | $2,208  |   |  | ($454   | ) |  | ($1,199 | )
|Capital Expenditures ($,000)      |  |  | $9,900  |   |  | $1,722  |   |  | $3,049  |  
|                                  |  |  |         |   |  |         |   |  |         |  

|1 | Ore from Tomi, La Victoria and purchased material is processed
        at the Companys Revemin mill.
|- | -----------------------------------------------------------------------------------------------------

The Company achieved record gold production of almost 49,000
    ounces from its Venezuelan operations in 2004. Production in 2004 was 39%
    higher than the 35,000 ounces produced in 2003. Almost all gold production
    in 2004 was from the Tomi concession.

The production gains in 2004 are attributable to capital investment
    programs that commenced in the last quarter of 2003 and continued throughout
    2004. Capital funding was directed towards improving mine equipment availability
    and utilization, a mill modernization program and re-stocking the warehouse
    of critical spare parts. The capital investment programs allowed for a steady
    supply of ore to the Revemin mill and improved mill availability from 85%
    in 2003 to 94% in 2004. Revemin processed twenty percent more ore in 2004
    than in 2003. Gold production was also higher in 2004, as a result of higher
    gold grades and recoveries. Gold recovery in particular was almost 10% higher
    in 2004, averaging 93% for the year compared with 84% in the previous year.
    The grade and recovery improvements are due to processing ore almost entirely
    from the Tomi concession in 2004. Tomi ore is higher grade and does not have
    the refractory characteristics of the La Victoria ore. La Victoria accounted
    for over one third of the ore processed in the first nine months of 2003
    and, on average, the La Victoria ore grade was 2.84 g/t and gold recovery
    was 68%.

The mining operations generated cash flow of approximately $2.2
    million in 2004, compared to a deficit of $454,000 in 2003. After capital
    expenditures, mine site cash flow was a deficit of $7.7 million in 2004 and
    a deficit of $2.2 million in 2003.

The Tomi and Lo Increible properties (where the La Victoria
    deposit is located) have considerable exploration potential. Since the Company
    acquired the properties in 2000 and 2001 respectively, very little exploration
    has been undertaken. The Company has commenced a
    concerted exploration program at both properties in 2005. At Tomi, potential exists
    along the down plunge extension of the existing underground mine and below
    the existing pits. On Lo Increible, a string of gold showings have been identified.
    Metallurgical testwork has commenced on samples to assist in prioritizing
    drill targets and a drill program is planned for the second half of 2005.

The Company is currently assessing the viability of maintaining
    gold production at the Revemin mill during the comprehensive exploration
    program, which will continue throughout 2006. In particular, a review has
    commenced of operating the Revemin mill at a reduced rate in 2006 when ore
    will likely only be available from the Tomi underground mine. Proven and
    probable reserves at the Tomi underground only support a mine life of approximately
    two years although the mineralized system is known to extend well beyond
    these limits. Although Crystallex expects that the Tomi underground mine
    will, as is typical of most such mines, continue to replace reserves for
    years to come, the carrying value of the Revemin mill has been written down
    by $13.8 million to a carrying value that reflects its conservatively estimated
    two year useful life.



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|Tomi                                 |  |           |   |         |   |        |  
|------------------------------------ |  | --------- | - | ------- | - | ------ | -
|                                     |  |           |   |         |   |        |  
|100% Basis                           |  | 2004      |   | 2003    |   | 2002   |  
|                                     |  |           |   |         |   |        |  
|Tomi Open Pits (100% Crystallex)     |  |           |   |         |   |        |  
|Tonnes Ore Mined                     |  | 334,289   |   | 268,169 |   | 25,644 |  
|Tonnes Waste Mined                   |  | 2,751,124 |   | 919,137 |   | 2,908  |  
|Tonnes Ore Processed                 |  | 350,008   |   | 247,644 |   | 27,998 |  
|Average Grade of Ore Processed (g/t) |  | 3.46      |   | 3.48    |   | 3.01   |  
|Recovery Rate (%)                    |  | 92        | % | 88      | % | 87     | %
|                                     |  |           |   |         |   |        |  
|Production (ounces)                  |  | 35,961    |   | 24,360  |   | 2,347  |  
|                                     |  |           |   |         |   |        |  
|Tomi Underground (100% Crystallex)   |  |           |   |         |   |        |  
|Tonnes Ore Mined                     |  | 26,966    |   | 12,698  |   | 0      |  
|Tonnes Ore Processed                 |  | 28,454    |   | 11,070  |   | 0      |  
|Average Grade of Ore Processed (g/t) |  | 6.89      |   | 8.31    |   | 0      |  
|Recovery Rate (%)                    |  | 94        | % | 93      | % | 0      |  
|                                     |  |           |   |         |   |        |  
|Production (ounces)                  |  | 5,891     |   | 2,753   |   | 0      |  
|                                     |  |           |   |         |   |        |  

The Tomi concession accounted for 41,852 ounces, or 85%, of
    total gold production in 2004. Of this, approximately 36,000 ounces were
    from the two open pit mines and the balance from the underground mine. Open
    pit production was 48% higher in 2004, compared with 2003, as the Company
    did not move all open pit production to Tomi until the end of the third quarter
    of 2003 when operations were suspended at the La Victoria mine. Ore reserves
    at the open pit operations are expected to be depleted by the end of 2005.
    As a result the carrying value of Tomi has been written down by $3.6 million
    reflecting these limited reserves. An exploration drilling program is planned
    for 2005 to test for mineralization below the pit floors.

The Tomi underground mine produced 5,891 ounces in 2004, compared
    with 2,753 ounces in 2003. Full production of approximately 200 tonnes of
    ore per day is forecast by the third quarter of 2005.

|La Victoria                          |  |         |   |         |   |         |  
|------------------------------------ |  | ------- | - | ------- | - | ------- | -
|                                     |  |         |   |         |   |         |  
|100% Basis                           |  | 2004    |   | 2003    |   | 2002    |  
|                                     |  |         |   |         |   |         |  
|La Victoria (51% Crystallex)1        |  |         |   |         |   |         |  
|Tonnes Ore Mined                     |  | 36,012  |   | 86,078  |   | 333,857 |  
|Tonnes Waste Mined                   |  | 481,210 |   | 461,163 |   | 937,949 |  
|Tonnes Ore Processed                 |  | 25,974  |   | 89,025  |   | 326,572 |  
|Average Grade of Ore Processed (g/t) |  | 3.18    |   | 2.8     |   | 2.8     |  
|Recovery Rate (%)                    |  | 91      | % | 68      | % | 76      | %
|                                     |  |         |   |         |   |         |  
|Production (ounces)                  |  | 2,412   |   | 5,564   |   | 22,548  |  
|                                     |  |         |   |         |   |         |  

|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1 | Crystallex owns 100% of 0702259 B.C. Ltd. which in turn
        has an indirect 51% equity interest in Lo Increible (including the La
        Victoria deposit) through the Venezuelan holding company, Osmin Holdings
        Limited. Crystallex has a 75% share of the cashflow until the total debt
        from Osmin due indirectly to Crystallex is fully repaid and a 51% share
        thereafter. Presently, there is no distributable cashflow, and Crystallex
        reports all production and reserves for its account.

In February 2005, Micon International completed a Pre-Feasibility
    Study of the La Victoria deposit based on construction of a Bio-Oxidation
    (BIOX) plant at the Companys Revemin mill to treat refractory ore at
    La Victoria. Goldfields, Hatch Associates and John Goode and Associates undertook
    the metallurgy and processing sections of the Pre-Feasibility Study. A BIOX
    pilot plant was operated at Goldfields in South Africa which confirmed the
    amenability of the refractory La Victoria ore to the BIOX process and indicated
    that gold recovery from the refractory ore can be improved from approximately
    60% using conventional cyanidation to 88% when pre-treated with the BIOX
    process. The Company also completed approximately 8,600 meters of drilling
    at La Victoria in 2004 and Mine Development Associates updated the La Victoria
    resource model.

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Although the pilot plant demonstrated that the BIOX process
    was technically feasible, the Pre-Feasibility Study determined that it was
    not economic to construct a BIOX plant for treating the La Victoria ore.
    There is insufficient mineralized material to recover the required capital
    investment of $18.6 million for the BIOX plant and approximately $4 million for the Yuruari River
    diversion and pre-production waste stripping. Incorporating the results from
    the 2004 drill program, MDA estimated an indicated resource of 2.5 million
    tonnes grading 4.4 grams per tonne containing 359,000 ounces, of which 176,000 ounces
	was estimated by MDA as being extractable given the BIOX operating cost forecasts.
	This amount of extractable ounces could not economically support the capital and
	operating costs associated with the BIOX process assessed. As the BIOX
    project was uneconomic no reserves are reported. A smaller (500 tpd) BIOX
    plant was considered, which reduced the plant capital to approximately $12
    million. However, the project was still not economically viable.

The Company is currently evaluating an alternative processing
    option for the La Victoria sulphide material which contemplates a flotation
    plant followed by sale of a concentrate to either a smelter or another plant
    that requires sulphide concentrate. A report evaluating this alternative
    is expected to be completed during the second quarter of 2005. In addition,
    exploration is being conducted for a possible extension of the La Victoria
    orebody that has been potentially displaced by faulting.

Income Statement

Revenue

Revenue in 2004 was $20.2 million, compared with $11.3 million
    in 2003. The increase in revenue in 2004 was attributable to selling over
    60% more gold than the prior year and realizing a higher average price on
    gold sales. Gold sales in 2004 were 49,478 ounces, compared with 30,632 in
    2003. The increase in ounces sold was due to higher gold production as described
    in the Operations Review section of this MD&A. The Company realized an
    average gold sales price of $409 per ounce in 2004 and $363 per ounce in
    2003. Spot gold prices averaged $410 per ounce in 2004 and $363 per ounce
    in 2003. Crystallex presently sells all its gold to the Venezuelan Central
    Bank and receives the prevailing spot gold price. Gold sales proceeds are
    received in local currency and are used to fund ongoing operations and capital
    projects in Venezuela.

Operating Expenses

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

The Companys costs of sales for 2004 were $18.0 million,
    compared with $11.8 million in 2003, as more ounces of gold were produced
    and sold in 2004 than in 2003. Gold sales were 49,478 ounces in 2004, compared
    with 30,632 ounces in 2003.

Operating costs in 2004 are higher than 2003 due to a substantial
    increase in mining and processing activity as described in the Operations
    Review section of this MD&A. A total of 3.6 million tonnes of material
    (waste and ore) was mined in 2004 and 444,000 tonnes of ore were processed,
    compared with 1.7 million tonnes of material mined and 370,000 tonnes of
    ore processed in 2003.

On a unit cost basis, total cash costs were $365 per ounce of
    gold sold in 2004, compared with $385 per ounce in 2003. Although unit costs
    decreased in 2004 as a result of productivity improvements and higher ore
    grades and gold recovery, the cost per ounce remained high as a result of
    the significant amount of waste rock mined. The strip ratio (the ratio of
    waste mined to ore mined) at the Tomi open pits averaged 8.2 : 1.0 in 2004,
    compared with 3.4 : 1.0 in 2003. Also, at La Victoria, only 2,414 ounces
    of gold were produced as mining was concentrated on waste stripping, which
    continued while the Bio-Oxidation Pre-Feasibility Study was undertaken. Excluding
    La Victoria, the Companys operating costs were approximately $331 per
    ounce.



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General and Administrative Expenses

General and Administrative expenses were $18.2 million in 2004,
    compared with $16.4 million in 2003. Adjusting for one-time charges of approximately
    $2.1 million in 2004 and $5.0 million in 2003, the year-over-year increase
    in general and administrative expenses was $3.9 million. Expenses in 2004
    reflect an increase in corporate activity related to the ongoing development
    of the Las Cristinas property. Compensation, professional fees and travel
    were approximately $3.0 million higher in 2004 than in 2003.

Included in the 2004 total are one-time charges of $2.1 million
    related to the settlement of prior years taxes and related penalties
    in Venezuela. Costs in 2003 included one-time bonus payments of approximately
    $2.4 million.

Forward Sales and Written Call Options

Crystallex made considerable progress during 2004 towards its
    objective of eliminating existing gold sales commitments. By December 31,
    2004, the Company reduced its gold contracts by over 50%, or 185,667 ounces.
    At year end, 164,358 ounces remained committed under forward sales and call
    option contracts. During 2004, the Company expended cash of $19.1 million
    to financially settle gold contracts at an average price of $399 per ounce.

At December 31, 2004, the Companys gold contract position
    totalled 164,358 ounces, comprising 82,426 ounces of fixed forward contracts
    and 81,932 ounces of call options. The average contract price is US$307 per
    ounce.

|                                   |  |  |         |  |  |        |  |  |         | 
|---------------------------------- |  |  | ------- |  |  | ------ |  |  | ------- | 
|                                   |  |  | 2005    |  |  | 2006   |  |  | Total   | 
|                                   |  |  |         |  |  |        |  |  |         | 
|Fixed Forward Gold Sales (ounces)  |  |  | 42,430  |  |  | 39,996 |  |  | 82,426  | 
|Average Price (US$/ounce)          |  |  | $305    |  |  | $310   |  |  | $307    | 
|Written Gold Call Options (ounces) |  |  | 79,932  |  |  | 2,000  |  |  | 81,932  | 
|Average Exercise Price (US$/ounce) |  |  | $307    |  |  | $348   |  |  | $308    | 
|Total (ounces)                     |  |  | 122,362 |  |  | 41,996 |  |  | 164,358 | 
|Average Price (US $/ounce)         |  |  | $306    |  |  | $312   |  |  | $307    | 
|                                   |  |  |         |  |  |        |  |  |         | 

In January 2005, the Company settled financially 53,440 contract
    ounces maturing in 2005 at a cost of $6.8 million. After these settlements,
    the Companys gold contract position was reduced to 110,918 ounces.

Accounting for Derivative Instruments

The Company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. The Companys metal
    trading contracts are recorded on the Balance Sheet at their mark-to-market
    value. Crystallex has no off-balance sheet gold contracts. Changes in the
    mark-to-market value of derivatives are recorded on the Balance Sheet and
    are recorded in earnings as an unrealized commodity contract gain (loss)
    in the Statement of Operations. The gains and losses occur as a result of
    changes in commodity prices and interest rates.

The variation in the mark-to-market value of options and forwards
    from period to period can cause significant volatility in earnings. The commodity
    contract loss in 2004 was $1.0 million. This included an unrealized gain
    of $18.1 million offset by a realized loss of $19.1 million. The unrealized
    gain represents the reduction in the mark-to-market value of the Companys
    gold contract obligations since December 31, 2003, while the realized loss
    reflects the cash cost during the year of financially settling 185,667 ounces
    of gold contract obligations.

Mark-to-Market

At December 31, 2004, the unrealized mark-to-market value of
    the Companys gold forward sales and call options, calculated at the
    year end spot price of US$436 per ounce was negative $22.6 million. This
    mark-to-market value is recorded on the Balance Sheet as a liability (Commodity
    Contract Obligations) and represents the replacement value of these contracts
    based upon the spot gold price at December 31,



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2004 and does not represent an obligation for payment. The Company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 the Company is unable to meet the obligations
    under the fixed forward sales or call options, the Company 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 the Company were to purchase gold in the market or settle financially
    the contracts, it would result in a reduction of the Companys cash.
    The table below illustrates the cash requirement if the Company had to financially
    settle all contract positions in excess of planned production. Future production
    from Las Cristinas is excluded. The analysis assumes the Company is unable
    to roll existing contracts to future periods and all positions in excess
    of planned production are required to be settled financially at December
    31, 2004 using the spot gold price on that day of US$436 per ounce.

|                                         |  |  |         |  |  |        |  |  |         | 
|---------------------------------------- |  |  | ------- |  |  | ------ |  |  | ------- | 
|US$ millions                             |  |  | 2005    |  |  | 2006   |  |  | Total   | 
|                                         |  |  |         |  |  |        |  | 
|Total ounces Committed                   |  |  | 122,362 |  |  | 41,996 |  |  | 164,358 | 
|Planned Production1                      |  |  | 53,000  |  |  | 29,000 |  |  | 82,000  | 
|Excess Committed Ounces                  |  |  | 69,362  |  |  | 12,996 |  |  | 82,358  | 
|Average Committed Price (US$/oz)         |  |  | $306    |  |  | $312   |  |  | $307    | 
|Average Assumed Spot Price (US$/oz)      |  |  | $436    |  |  | $436   |  |  | $436    | 
|Cash Required to Settle Excess Positions |  |  | $9.0    |  |  | $1.6   |  |  | $10.6   | 
|                                         |  |  |         |  |  |        |  |  |         | 

|  |                                                                                                                                        
|- | ---------------------------------------------------------------------------------------------------------------------------------------
|1 | Production forecast excludes Las
        Cristinas and assumes no gold production from La Victoria and Albino
        in 2005 and 2006.

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

Write-down of Property, Plant and Equipment

The Company 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 2004, Crystallex incurred write-downs of mineral properties
    and plant and equipment of $32.0 million. Of this amount, $13.8 million,
    was attributed to writing down the carrying value of the Revemin mill to
    reflect the two year estimated life of reserves to be processed at the mill.

Mineral property write-downs included the Albino concession
    ($10.4 million) Tomi Concession ($3.6 million) and three exploration properties
    ($4.1 million). See Operations Review.

Liquidity and Capital Resources

Crystallexs principal sources of liquidity have been equity
    and debt financings. The Company does not expect to generate positive operating
    cashflow (after corporate general and administrative expenses) until the
    Las Cristinas project is operating at full capacity. Crystallex forecasts
    cash requirements in excess of $300 million through 2006 to build Las Cristinas,
    fund the Companys operating deficit, fund capital expenditures at the
    El Callao operations and for debt service. Crystallex intends to fund this
    overall requirement with existing cash and restricted cash balances and from
    a combination of limited recourse project debt financing, other forms of
    public market debt financing and equity.

Cash and Equivalents

Cash and short-term investments were $36.0 million at December
    31, 2004. In addition, the Company had restricted cash and cash equivalents
    of $98.0 million at year end 2004. The restricted funds are comprised of
    the following: i) $2.5 million held on deposit with Mitsui & Co. Precious
    Metals Inc. as margin for gold call option contracts and ii) $95.5 million
    net proceeds of a senior unsecured note financing held in escrow under the
    terms of the Escrow Agreement (see Financing Activities). The proceeds are



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released to pay for approved capital expenditures for the development
    of Las Cristinas ($81.4 million) and for interest payments on the senior
    unsecured notes ($14.1 million).

The timing of cash expenditures is, in part, dependent upon
    receipt of the Permit for Las Cristinas. Assuming receipt of the Permit for
    Las Cristinas by the end of the second quarter, restricted cash balances
    of $81.4 million at December 31, 2004 are forecast to provide sufficient
    funding for Las Cristinas until the third quarter of 2005. Any delay in receiving
    the Permit will delay planned expenditures.

The change in the cash balance during 2004 is reconciled as follows:

|                                                                                |                                             | $ millions |       
|------------------------------------------------------------------------------- | ------------------------------------------- | ---------- | ------
|                                                                                |                                             |            |       
|Cash at December 31, 2003                                                       | $                                           | 26.2       |       
|                                                                                |                                             |            |       
|                                                                                | Common Share Financing Activities           |            | $98.2 
|                                                                                | 9.375% Note Financing Net Proceeds          |            | 95.5  
|                                                                                | Proceeds from the sale of San Gregorio      |            | 1.6   
|                                                                                | Proceeds from orderly disposition of shares |            | 3.9   
|                                                                                |                                             |            |       
|                                                                                | Total Sources of Cash                       |            | $199.2
|                                                                                |                                             |            |       
|                                                                                | Operating Cash Flow Deficit                 |            | ($36.0
|                                                                                | Capital Expenditures  Las Cristinas        |            | (40.7 
|                                                                                | Capital Expenditures  Other Operations     |            | (10.2 
|                                                                                | Debt Service                                |            | (1.0  
|                                                                                | Financing Fees                              |            | (3.5  
|                                                                                |                                             |            |       
|                                                                                | Total Uses of Cash                          |            | ($91.4
|                                                                                |                                             |            |       
|Net Addition to Cash, Short-term Investments
        and Restricted Cash        | $                                           | 107.8      |       
|                                                                                |                                             |            |       
|Cash, Short-term Investments and Restricted
          Cash at December 31, 2004 | $                                           | 134.0      |       
|                                                                                |                                             |            |       
|                                                                                |                                             |            |       

Cash Flow from Operations

Cash flow from operations (before capital expenditures) is principally
    affected by general and administrative expenditures, cash expenditures on
    reducing the Companys gold sales commitments, the level of gold sales,
    realized gold prices, cash operating costs, and movements in non-cash working
    capital. Cash flow from operations was a deficit of $36.0 million in 2004,
    compared with a deficit of $26.5 million the year earlier. Positive mine
    operating cash flow of $2.2 million in 2004 was offset principally by cash
    used for general and administrative expenses ($18.2 million) and for settling
    gold contract positions ($19.1 million).

Investing Activities

Capital expenditures totalled $50.9 million in 2004, compared
    with $9.0 million in 2003. The increase is attributable to higher spending
    on Las Cristinas and, to a lesser extent, on the Tomi underground mine and
    the Revemin mill. Capital expenditures for Las Cristinas totalled $40.7 million
    in 2004 and included expenditures for project development under the EPCM
    contract and also for general site costs, site security, environmental work,
    including geotechnical drilling, and legal and professional fees associated
    with tax structuring and project financing.

Capital expenditures for 2004 and 2003 are summarized as follows:

|              |  |       |  |  |      | 
|------------- |  | ----- |  |  | ---- | 
|($ millions)  |  | 2004  |  |  | 2003 | 
|              |  |       |  |  |      | 
|Las Cristinas |  | $40.7 |  |  | $7.3 | 
|Revemin       |  | 5.3   |  |  | 1.0  | 
|Tomi          |  | 3.8   |  |  | 0.4  | 
|Albino        |  | 0.8   |  |  |     | 
|La Victoria   |  |      |  |  | 0.3  | 
|Corporate     |  | 0.3   |  |  |     | 
|              |  |       |  |  |      | 
|Total         |  | $50.9 |  |  | $9.0 | 
|              |  |       |  |  |      | 



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Assuming a receipt of the Permit during the second quarter,
    capital expenditures at Las Cristinas are forecast to be approximately $175
    million in 2005 of which $85 million has been committed as at December 31,
    2004. As noted, any delay in receiving the Permit will delay planned expenditures.

Financing Activities

On December 23, 2004, the Company completed a $100 million unit
    offering. Each unit was priced at $1,000 and comprised a $1,000 principal
    amount, seven year, 9.375% senior unsecured note and 65 common shares of
    the Company. The net proceeds received by the Company were $95.5 million.
    The net proceeds were deposited with an Escrow Agent and were divided into
    two pools: the Interest Pool and the Project Pool. The Interest Pool contains
    proceeds equal to the first three interest payments on the notes ($14.1 million).
    Funds will be released from the Interest Pool as the Company makes each of
    the first three interest payments. Funds from the Project Pool ($81.4 million)
    will be released to pay for approved capital expenditures contemplated in
    the Las Cristinas Control Budget of $265 million.

On April 5, 2004, the Company closed an equity financing of
    25 million common shares at C$4.00 per share raising net proceeds of $71.7
    million. The common share financing had an over-allotment option of 3.75
    million shares at C$4.00 per share, which closed on April 28, 2004 and raised
    additional net proceeds of $10.5 million. Total net proceeds amounted to
    $82.2 million.

Contractual Obligations and Commitments

The Companys contractual obligations and commitments,
    as a December 31, 2004, are tabled below:

|                             |  |                          |  |                      |  |             |  |                         |  |                      | 
|---------------------------- |  | ------------------------ |  | -------------------- |  | ----------- |  | ----------------------- |  | -------------------- | 
|US$ millions                 |  | Less than
      One Year |  | 1 - 3 Years          |  | 4 - 5 Years |  | More Than
      5 Years |  | Total                | 
|                             |  |                          |  |                      |  |             |  |                         |  |                      | 
|Long Term Debt Repayments    |  | $4.4                     |  | $2.1                 |  |            |  | $100.0                  |  | $106.5               | 
|                             |  |                          |  |                      |  |             |  |                         |  |                      | 
|Equipment and Construction   |  |                          |  |                      |  |             |  |                         |  |                      | 
|Purchase Contracts           |  | $85.0                    |  |                     |  |            |  |                        |  | $85.0                | 
|                             |  |                          |  |                      |  |             |  |                         |  |                      | 
|Asset Retirement Obligations |  | $0.5                     |  | $1.0                 |  | $0.8        |  |                         |  | $2.3                 | 
|                             |  |                          |  |                      |  |             |  |                         |  |                      | 
|Operating Lease Obligations  |  | $0.16                    |  | $0.38                |  | $0.04       |  |                        |  | $0.58                | 
|                             |  |                          |  |                      |  |             |  |                         |  |                      | 
|Precious Metal Contracts:    |  |                          |  |                      |  |             |  |                         |  |                      | 
|                             |  |                          |  |                      |  |             |  |                         |  |                      | 
|Fixed Forward Contracts      |  | 42,430oz                 |  | 39,996oz             |  |            |  |                        |  | 82,426oz             | 
|                             |  | @ an                     |  | @ an                 |  |             |  |                         |  | @ an                 | 
|                             |  | average of               |  | average of           |  |             |  |                         |  | average of           | 
|                             |  | US$305/oz                |  | US$310/oz            |  |             |  |                         |  | US$307/oz            | 
|                             |  |                          |  |                      |  |             |  |                         |  |                      | 
|Call Options Sold            |  | 79,932oz                 |  | 2,000oz              |  |            |  |                        |  | 81,932oz             | 
|                             |  | @ an                     |  | @ an                 |  |             |  |                         |  | @ an                 | 
|                             |  | average of US$307/oz     |  | average of US$348/oz |  |             |  |                         |  | average of US$308/oz | 
|                             |  |                          |  |                      |  |             |  |                         |  |                      | 

In addition, the Company has royalty commitments that are only
    payable if gold is produced. There is no obligation to make payments if gold
    is not produced. Currently, the Company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.

Related Party Transactions

During 2004, Crystallex entered into the following material
    transactions with related parties:

Legal Fees

| | McMillan Binch LLP: McMillan Binch LLP provides
        legal services to the Company. David Matheson is counsel to McMillan
        Binch LLP and a member of the Board of Directors of Crystallex. During
        2004, McMillan Binch LLP was paid $1.2 million for providing corporate
        legal services to Crystallex.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Management and Consulting Fees

| | Orion Securities Inc.: Orion Securities Inc.
        is an investment dealer that provided underwriting services to the Company
        in connection with the 2004 issuances of equity and debt underwriting.
        Mr. Robert Fung is an employee of Orion Securities Inc. and is Chairman
        of the Board of Directors of Crystallex. During 2004, Orion was paid
        $2.8 million for these services, none of which was to the benefit of
        Mr. Fung.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Osprey Capital Partners: During 2004, Crystallex
        paid $148,000 to Osprey Capital Partners, a partnership in which Robert
        Fung is a minority partner. The payments to Osprey Capital Partners by
        Crystallex were for investment banking counselling provided by other
        partners of Osprey Capital Partners and Mr. Fung. This advice was unrelated
        to Mr. Fungs role as Chairman of Crystallex.                                    
| | Riccio Consulting: Dr. Luca Riccio is the former
        Vice President, Exploration and the principal of Riccio Consulting. During
        2004, Crystallex paid $220,500 to Riccio Consulting for providing consulting
        services to the Company.                                                                                                                                                                                                                 
| | Capital Markets Advisory Inc.: Michael Brown
        is the principal of Capital Markets Advisory Inc. and a member of the
        Board of Directors of Crystallex. During 2004, Crystallex paid $32,800
        to Capital Markets Advisory Inc. for providing investor relations and
        other corporate advisory services to the Company.                                                                                                                         

Outstanding Share Data

At March 1, 2005, 190,853,437 common shares of Crystallex were
    issued and outstanding. In addition, at March 1, 2005 options to purchase
    10,555,050 common shares of Crystallex were outstanding under the Companys
    stock option plan and warrants to purchase 12,983,235 common shares of Crystallex
    were issued and outstanding.

Quarterly Data

|                  |  |         |   |        |   |       |   |        |   |         |   |         |   |        |   |       | 
|----------------- |  | ------- | - | ------ | - | ----- | - | ------ | - | ------- | - | ------- | - | ------ | - | ----- | 
|                  |  | 2004    |   | 2003   |  
|                  |  | Q4      |   | Q3     |   | Q2(1) |   | Q1     |   | Q4      |   | Q3      |   | Q2     |   | Q1    | 
|Revenue           |  | 5,037   |   | 5,632  |   | 5,634 |   | 3,943  |   | 4,655   |   | 2,809   |   | 2,508  |   | 1,357 | 
|Net Income (Loss) |  | (44,115 | ) | (9,441 | ) | (447  | ) | (6,651 | ) | (38,071 | ) | (24,322 | ) | (3,537 | ) | 4,443 | 
|                  |  |         |   |        |   |       |   |        |   |         |   |         |   |        |   |       | 

|    |                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Reflects adjustment of $3.96 million
        relating to revised accounting treatment of gain derived from Standard
    Bank orderly disposition agreement.

Revenue for the fourth quarter of 2004 was positively impacted
      by higher gold production and higher gold prices. Net income in the fourth
      quarter of 2004 reflects the impact of a $32.0 million write-down of mineral
      properties and property plant and equipment in 2004 compared with a write-down
      of $17.5 million in the corresponding period in 2003.

The quarterly trends are consistent with the explanations of
    the annual trends set out in this MD&A.

Critical Accounting Policies and Estimates

Critical accounting estimates are those estimates that have
    a high degree of uncertainty and for which changes in those estimates could
    materially impact the Companys results. Critical accounting estimates
    for the Company include property evaluations, capitalization of exploration
    and development costs and commodity derivative contracts.

Use of Estimates

The preparation of financial statements in conformity with accounting
    principals 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



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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 these and
    other estimates used in preparing these financial statements and such differences
    could be material.

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 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),
    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 discounted 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.

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 sheet under
    the captions Commodity Contract Obligations 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 commodity contract loss/gain.

Accounting Changes

Change in Functional and Reporting Currency Effective
    January 1, 2004, the Company changed its functional currency from the Canadian
    to US dollar. Concurrent with this change, the Company adopted the US dollar
    as its reporting currency. Refer to Note 2 of Notes to the Audited Consolidated
    Financial Statements.

Asset Retirement Obligations On
    January 1, 2004, the Company adopted CICA Handbook Section 3110 and changed
    its accounting policy recognizing the fair value of liabilities for asset
    retirement obligations in the period incurred. There was no material impact
    in 2004 as a result of this change. Refer to Note 3 of Notes to the Audited
    Consolidated Financial Statements.

Stock Based Compensation Effective
    January 1, 2004, the Company changed its accounting policy for stock-based
    compensation and adopted the fair value method of accounting for all its
    stock-based compensation. Refer to Note 3 of the Notes to the Audited Consolidated
    Financial Statements. Total expenses in 2004 were $5.3 million.



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Impairment of Long Lived Assets Effective
    January 1, 2004, the Company adopted the new recommendations with respect
    to impairment of long lived assets. There was no material impact on the consolidated
    financial statements. Refer to Note 3 of the Notes to the Audited Consolidated
    Financial Statements.

Risk Factors

Arbitration Proceedings

The Corporation is a party to or is interested in two arbitration
    proceedings. See Legal Proceedings in the Corporations
    2004 AIF filed concurrently on SEDAR and EDGAR for a detailed description
    of the arbitration proceedings.

The Corporation is not a party to the Vannessa arbitration proceedings
    and cannot predict the outcome of these proceedings (including whether any
    arbitration award could have a material adverse effect on the Corporations
    rights under the Agreement). See Legal Proceedings in the Corporations
    2004 AIF.

The Corporation is a party to the Vengroup arbitration proceedings
    and cannot predict the outcome of these proceedings (including whether any
    arbitration award could have a material adverse affect on the Corporation).
    See Legal Proceedings in the Corporations 2004 AIF.

Lack of Ownership Rights

Under Venezuelan law, all mineral resources belong to the Republic
    of Venezuela. In accordance with the VML, the Government of Venezuela has
    reserved for itself the right to directly explore and exploit the Las Cristinas
    Deposits and has elected to do so through the CVG. See Las Cristinas
    Project  Mine Operation Agreement. The Mine Operation Agreement
    is an operation agreement and does not transfer any property ownership rights
    to the Corporation. Rather, the Corporation has been authorized to exploit
    the Las Cristinas Deposits for the CVG in accordance with to the Mine Operation
    Agreement. The interests of the Corporation in the Las Cristinas Deposits
    are contingent upon the Corporation continuing to satisfy its obligations
    under the Mine Operation Agreement. Failure to do so could result in the
    CVG having the right to terminate the Mine Operation Agreement.

Lack of Copper Rights

In addition to gold, the Las Cristinas Deposits contain copper.
    Under the Mine Operation Agreement, the Corporation is only entitled to exploit
    the gold contained in the Las Cristinas Deposits. Based on the feasibility
    studies carried out by the Corporation and following discussions with the
    CVG, the Corporation has determined that exploiting the copper contained
    in the Las Cristinas Deposits would detract from the economics of the Las
    Cristinas Project. The Corporation does not need the right to exploit the
    copper contained in the Las Cristinas Deposits in order to exploit the gold
    and does not currently intend to negotiate with the CVG for the right to
    exploit the copper contained in the Las Cristinas Deposits.

Although the Corporation does not believe that the MIBM
    would do so, the MIBM retains the right to grant exploitation and other rights
    with respect to the copper
    contained in the Las Cristinas Deposits to the CVG or a third party. The
    Corporation has been advised by its Venezuelan counsel that:

|(a) | if the MIBM grants the right to exploit the
        copper contained in the Las Cristinas Deposits to the CVG, subject to
        fulfilling all necessary requirements of Venezuelan law (including the
        additional grant by the MIBM to the CVG of the right to negotiate the
        exploitation of the copper with third parties), the CVG has agreed under
        the terms of the Mine Operation Agreement to negotiate the exploitation
        of the copper with the Corporation; and
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(b) | if the MIBM grants the right to exploit the
        copper contained in the Las Cristinas Deposits to a third party, the
        Corporations right under the Mine Operation Agreement to exploit
        the gold contained in the Las Cristinas Deposits would, as a matter of
        Venezuelan law, take precedence over the third partys right to
        exploit the copper.                                                                                                                  

If the MIBM grants the right to exploit the copper contained
    in the Las Cristinas Deposits to the CVG, there can be no assurance that
    the MIBM will grant to the CVG the additional right to negotiate the exploitation
    of the copper with third parties or that the Corporation will be able to
    negotiate an agreement

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with respect to the exploitation of the copper with the CVG.
    Also, if the MIBM grants the right to exploit the copper contained in the
    Las Cristinas Deposits to a third party, or if the MIBM grants the right
    to exploit the copper contained in the Las Cristinas Deposits to the CVG
    and the CVG grants the right to exploit the copper to a third party, there
    can be no assurance that the Corporation will be successful under Venezuelan
    law in asserting that its right to exploit the gold contained in the Las
    Cristinas Deposits takes precedence over the third partys right to
    exploit the copper.

Additional Funding Requirements

Under the terms of the Mine Operation Agreement, the Corporation
    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 Mine Operation Agreement. In
    order to carry out the Las Cristinas Project and its other mining projects,
    the Corporation will need to raise substantial additional financing which
    may include one or more of non-recourse project debt, other forms of public
    market debt and equity.

The Corporation currently has limited financial resources and
    there can be no assurance that sufficient additional financing will be available
    to the Corporation on acceptable terms or at all. Failure to obtain such
    additional financing could result in a delay or the indefinite postponement
    of the Las Cristinas Project and other mining projects of the Corporation
    and could also result in the Corporation defaulting in the performance of

    its obligations under the Mine Operation Agreement.

Reserves and Resource Estimates

The Corporations reported mineral reserves and resources
    are estimates only. As a result, there can be no assurance that they will
    be recovered at the rates estimated or at all. Mineral reserve and resource
    estimates are based on limited sampling and are uncertain because the samples
    may not be representative. Mineral reserve and resource estimates may require
    revision (either up or down) based on actual production experience. Market
    fluctuations in the price of metals, increased production costs or reduced
    recovery rates may render estimated mineral reserves and resources uneconomic
    and may ultimately result in a restatement of mineral reserves and resources.
    In addition, short-term operating factors, such as the need for sequential
    development of ore bodies and the processing of new or different ore grades,
    may adversely affect the Corporations profitability in any particular
    accounting period. If its mineral reserve and resource estimates are incorrect,
    the Corporation will not correctly allocate its financial resources, causing
    it either to spend too much on what could be a less than economic deposit
    or to fail to mine what could be a significant deposit.

Title to Mineral Properties

Acquisition of title to mineral properties is a very detailed
    and time-consuming process. Title to, and the area of, mineral properties
    may be disputed or impugned. Although the Corporation has investigated its
    title to the mineral properties for which it holds concessions or mineral
    leases or licenses, there can be no assurance that the Corporation has valid
    title to such mineral properties or that its title thereto will not be challenged
    or impugned. For example, mineral properties sometimes contain claims or
    transfer histories that examiners cannot verify; and transfers under foreign
    law often are complex. The Corporation does not carry title insurance with
    respect to its mineral properties. A successful claim that the Corporation
    does not have title to a mineral property could cause the Corporation to
    lose its rights to mine that property, perhaps without compensation for its
    prior expenditures relating to the property. Furthermore, as noted above
    under Lack of Ownership Rights, the Mine Operation Agreement
    does not transfer any property ownership rights to the Corporation.

Gold Price Volatility May Affect Profitability

The gold price can fluctuate widely and is affected by numerous
    factors beyond the Corporation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 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. The gold price is also subject to rapid short-term changes due to
    speculative activities. During the period 1998 to 2004, the gold price fluctuated
    between a low of U.S.$253 and a high of U.S.$454. On December 31, 2004, the
    p.m. fixing price of gold sold in the London Bullion Market was U.S.$436.



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The Corporations revenues, cash flow and profitability
    are significantly affected by changes in the gold price. If the gold price
    declines below the cost of production at any of the Corporations operations
    for a significant period, the Corporation may be required to suspend or terminate
    production at the affected operation. In addition, the Corporation may be
    required to restate its mineral reserves and resources, write down its investment
    and increase or accelerate reclamation and closure charges at the affected
    operation. Any of these developments could negatively affect the Corporations
    profitability, cash flows and financial position. Accordingly, even if the
    Corporation discovers and produces gold, there can be no assurance that the
    gold price will be high enough to enable the Corporation to sell the gold
    produced by it profitably.

The market price of the common shares of the Corporation is
    also affected by fluctuations in the gold price.

Gold Hedging Activities

The Corporation has entered into forward contracts and written
    call options to sell a significant portion of the gold that it anticipates
    it will produce at its existing operations. These contracts obligate the
    Corporation to sell specified quantities of gold at a prices set when it
    enters into the contracts, regardless of the price when the Corporation actually
    mines the gold. Accordingly, there is a risk that the price of gold will
    be higher at the time the Corporation mines the gold than when it entered
    into the contracts, with the result that the Corporation must sell the gold
    at a lower price than it would have received had it not entered into the
    contracts. In addition, if the Corporation is not able to produce the specified
    quantities of gold, it will be required to buy gold at market prices to satisfy
    its contract obligations. These market prices may be higher than the contract
    prices or higher than the Corporations own cost of production. In addition,
    the entity contracting to buy gold from the Corporation under the forward
    contracts could default and, if the contract price were higher than the market
    price at the time of default, the Corporation would not likely be able to
    resell the contracted gold at the higher contract price.

Mineral Exploration and Exploitation

Mineral exploration and exploitation 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, labour disruptions, flooding, explosions, tailings impoundment failures,
    cave-ins, landslides and the inability to obtain adequate machinery, equipment
    or labour are some of the risks involved in mineral exploration and exploitation
    activities. The Corporation has relied on and may continue to rely on consultants
    and others for mineral exploration and exploitation expertise. Substantial
    expenditures are required to establish mineral reserves and resources 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. There can be
    no assurance that the Corporation will discover mineral reserves and resources
    in sufficient quantities to justify exploitation or that the funds required
    to exploit any mineral reserves and resources discovered by the Corporation
    will be obtained on a timely basis or at all. The economics of exploiting
    mineral reserves and resources discovered by the Corporation are affected
    by many factors, many outside the control of the Corporation, including the
    cost of operations, variations in the grade of ore mined and metals recovered,
    price fluctuations in the 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.
    There can be no assurance that the Corporations mineral exploration
    and exploitation activities will be successful.

The Corporations operations may also be affected by the
    presence of illegal miners: something that is not uncommon in the gold mining
    areas of the Guyana Shield area of Venezuela. Although the Corporation, in
    conjunction with the local authorities, employs strategies to control the
    presence of illegal miners, there can be no assurance that these strategies
    will be successful or that the Corporations operations will not be
    adversely affected by the presence of illegal miners.



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Country Risk

The Corporations mineral exploration and exploitation
    activities may be adversely affected by political instability and legal and
    economic uncertainty in the countries where the Corporation has operations.
    The risks associated with the Corporations foreign operations may include
    political unrest, labour disputes, invalidation of governmental orders and
    permits, corruption, war, civil disturbances and terrorist actions, arbitrary
    changes in laws, regulations and policies, taxation, price controls, exchange
    controls, delays in obtaining or the inability to obtain necessary permits,
    opposition to mining from environmental or other non-governmental organizations,
    limitations on foreign ownership, limitations on the repatriation of earnings,
    limitations on mineral exports and increased financing costs. These risks
    may limit or disrupt the Corporations projects or operations, restrict
    the movement of funds or result in the deprivation of contractual rights
    or the taking of property by nationalization, expropriation or other means
    without fair compensation.

The Corporations principal mineral properties are located
    in Venezuela. Venezuela currently has exchange controls that affect the ability
    of companies doing business in Venezuela to convert Venezuelan source income
    into foreign currency. There can be no assurance that exchange controls will
    not continue and, if they do, that they will not adversely affect the Corporations
    operations, including its ability to satisfy its foreign currency obligations.

Uninsurable Risks

Mineral exploration and exploitation activities involve numerous
    risks, including unexpected or unusual geological operating conditions, rock
    bursts, cave-ins, fires, floods, earthquakes and other environmental occurrences
    and political and social instability. It is not always possible to obtain
    insurance against all such risks and the Corporation may decide not to insure
    against certain risks as a result of high premiums or other reasons. Should
    such liabilities arise, they could negatively affect the Corporations
    profitability and financial position and the value of the common shares of
    the Corporation. The Corporation does not maintain insurance against environmental
    risks.

Competition

The competition to discover and acquire mineral properties considered
    to have commercial potential is intense. The Corporation competes with other
    mining companies, many of which have greater financial resources than the
    Corporation, with respect to the discovery and acquisition of interests in
    mineral properties and the recruitment and retention of qualified employees
    and other personnel to carry on its mineral exploration and exploitation
    activities. There can be no assurance that the Corporation will be able to
    successfully compete against such companies.

Limited Mining Operations

The Corporations Tomi operations and Revemin mill currently
    account for substantially all of the Corporations mineral production
    and revenues. Any adverse development affecting these operations would have
    a material adverse effect on the Corporations financial performance
    and results of operations.

Production Risks

The Corporation prepares estimates of future production at its
    operations. Failure to meet these estimates could adversely affect the corporations
    profitability, cash flows and financial position. There can be no assurance
    that the Corporation will achieve its production estimates.

The Corporations actual production may vary from its estimates
    for a variety of reasons, including actual ore mined varying from estimates
    of grade, tonnage, dilution and metallurgical and other characteristics;
    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; labour shortages
    or strikes; civil disobedience and protests; and restrictions or regulations
    imposed by governmental or regulatory authorities or other changes in the
    regulatory environments. Such occurrences could result in

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damage to mineral properties, interruptions in production, injury
    or death to persons, damage to property of the Corporation 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 the
    Corporation to cease production. These factors also apply to the Corporations
    future operations. For example, it is not unusual for new mining and processing
    operations to experience unexpected problems during the startup phase.

Environmental Regulation and Liability

The Corporations activities are subject to laws and regulations
    controlling not only mineral exploration and exploitation activities themselves
    but also the possible effects of such activities upon the environment. Environmental
    legislation may change and make the mining and processing of ore uneconomic
    or result in significant environmental or reclamation costs. Environmental
    legislation provides for restrictions and prohibitions on spills, releases
    or emissions of various substances produced in association with certain mineral
    exploitation activities, such as seepage from tailings disposal areas that
    could result in environmental pollution. A breach of environmental legislation
    may result in the imposition of fines and penalties or the suspension or
    closure of operations. In addition, certain types of operations require the
    submission of environmental impact statements and approval thereof by government
    authorities. Environmental legislation is 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 directors,
    officers and employees. Permits from a variety of regulatory authorities
    are required for many aspects of mineral exploitation activities, including
    closure and reclamation. Future environmental legislation could cause additional
    expense, capital expenditures, restrictions, liabilities and delays in the
    development of the Corporations properties, the extent of which cannot
    be predicted. In the context of environmental permits, including the approval
    of closure and reclamation plans, the Corporation must comply with standards
    and 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. The Corporation does not maintain
    environmental liability insurance.

The Las Cristinas Deposits are located within the Imataca Forest
    Reserve. Presidential Decree 3.110, which establishes an ordinance plan and
    regulations for the use of the Reserve, permits mining activities in the
    Reserve and establishes the legal framework for such activities. Presidential
    Decree 3.110 replaced a previous Presidential decree that was the subject
    of a legal challenge before the Venezuelan Supreme Court. It is possible
    that Presidential Decree 3.110 could be similarly challenged and that such
    challenge, if ultimately successful, could prevent the Corporation from exploiting
    or fully exploiting the Las Cristinas Deposits.

Regulations and Permits

The Corporations activities are subject to wide variety
    of 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. The Corporation is required to have a wide variety
    of permits from governmental and regulatory authorities to carry out its
    activities. These permits relate to virtually every aspect of the Corporations
    exploration and exploitation activities. Changes in these laws and regulations
    or changes in their enforcement or interpretation could result in changes
    in legal requirements or in the terms of the Corporations permits that
    could have a significant adverse impact on the Corporations existing
    or future operations or projects. Obtaining permits can be a complex, time-consuming
    process. There can be no assurance that the Corporation will be able to obtain
    the necessary permits on acceptable terms, in a timely manner or at all.
    The costs and delays associated with obtaining permits and complying with
    these permits and applicable laws and regulations could stop or materially
    delay or restrict the Corporation from continuing or proceeding with existing
    or future operations or projects. Any failure to comply with permits and
    applicable laws and regulations, even if inadvertent, could result in the
    interruption or closure of operations or material fines, penalties or other
    liabilities.

Currency Fluctuations

Currency fluctuations may affect costs at the Corporations
    operations. Gold is sold throughout the world based principally on a U.S.
    dollar price, but a portion of the Corporations operating expenses
    is in non-



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U.S. dollar currencies. The appreciation of these non-U.S. dollar
    currencies against the U.S. dollar could negatively affect the Corporations
    profitability, cash flows and financial position.

Recent Losses and Write-downs

The Corporation incurred net losses in 2004 and 2003 and after
    the restatement of its audited consolidated financial statements for 2002
    incurred net losses in each of 2002 and 2001. The Corporations profitability
    depends, among other things, on the gold price, gold production and cash
    operating costs at its operations and other factors discussed in this section
    of the Annual Information Form. Substantially all of these factors are beyond
    the control of the Corporation. There can be no assurance that the Corporation
    will return to profitability in the near future.

Credit Agreement Restrictions

The Corporation and an indirect, wholly-owned subsidiary of
    the Corporation are parties to a credit agreement that, among other things,
    requires the Corporation to maintain specific financial ratios and satisfy
    specific financial condition tests. Events beyond the control of the Corporation,
    including changes in general economic and business conditions, may affect
    the Corporations ability to satisfy these ratios and tests. Failure
    to do so could result in a default under the credit agreement. If an event
    of default occurs under the credit agreement, the lender could elect to declare
    all principal amounts outstanding thereunder, together with accrued interest,
    to be immediately due and payable and to enforce its security over substantially
    all of the Tomi operations and the Revemin mill.

Dependence on Key Employees

The Corporations business and operations are dependent
    on retaining the services of a small number of key employees. The success
    of the Corporation is, and will continue to be, to a significant extent,
    dependent on the expertise and experience of these employees. The loss of
    one or more of these employees could have a materially adverse effect on
    the Corporation. The Corporation does not maintain insurance on any of its
    key employees.

Potential Dilution

As at December 31, 2004, the Corporation has outstanding options
    to purchase approximately 10.6 million common shares of the Corporation and
    warrants to purchase approximately 13.0 million common shares of the Corporation.
    The Corporation may also issue additional option and warrants or additional
    common shares from time to time in the future. If it does so, the ownership
    interest of the Corporations then current shareholders could also be
    diluted.

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



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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 assess
    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 may be reconciled to our Statement
    of Operations as follows:

|                                          |  |         |  |         | 
|----------------------------------------- |  | ------- |  | ------- | 
|$,000s                                   |  | 2004    |  | 2003    | 
|                                          |  |         |  |         | 
|Operating Costs per Financial Statements  |  | $18,038 |  | $11,783 | 
|By-Product Credits                        |  |        |  |        | 
|Reclamation and Closure Costs             |  |        |  |        | 
|Operating Costs for Per Ounce Calculation |  | $18,038 |  | $11,783 | 
|                                          |  |         |  |         | 
|Gold Ounces Sold                          |  | $49,478 |  | 30,632  | 
|Total Cash Cost Per Ounce US$             |  | $365    |  | $385    | 
|                                          |  |         |  |         | 

Additional information relating to Crystallex, including the
    2004 Annual Report, is available on SEDAR or EDGAR.



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ANNEX CGLOSSARY OF DEFINED TERMS AND TECHNICAL MINING TERMS AND ABBREVIATIONS

|Defined Terms                       
|------------------------------------
|                                    
|20,000 TPD Feasibility Study        
|                                    
|40,000 TPD Feasibility Study        
|                                    
|Consolidated Financial Statements   
|                                    
|Corporation                         
|                                    
|Crystallex                          
|                                    
|CVG                                 
|                                    
|EIA                                 
|                                    
|Las Cristinas Deposits              
|                                    
|Management’s Discussion and Analysis
|                                    
|MARN                                
|                                    
|MDA                                 
|                                    
|MDA Report                          
|                                    
|MIBM                                
|                                    
|Mine Operation Agreement            
|                                    
|NI 43-101                           
|                                    
|Qualified Person                    
|                                    

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|                                
|--------------------------------
|                                
|SNCL                            
|                                
|VAT                             
|                                
|VML                             
|                                
|Technical Mining
          Terms
|                                
|alluvial                        
|                                
|assay                           
|                                
|ball mill                       
|                                
|belt                            
|                                
|bleb                            
|                                
|breccia                         
|                                
|carbon-in-leach (CIL)           
|                                
|cathode                         
|                                
|chalcopyrite                    
|                                
|concentrate                     
|                                
|cut-off grade                   
|                                
|deposit                         
|                                
|development                     
|                                
|diamond drill                   
|                                
|dissemination                   
|                                
|dyke                            
|                                
|extraction                      



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|                   
|-------------------
|fault              
|                   
|feasibility study  
|                   
|flotation          
|                   
|geophysical surveys
|                   
|geophysics         
|                   
|gold doré          
|                   
|grade              
|                   
|hectare            
|                   
|host               
|                   
|intrusive          
|                   
|mill               
|                   
|mine               
|                   
|mineral reserve(1) 
|                   
|                   
|                   
|                   

_____________Note:

(1) As defined in NI 43-101.

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|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|mineral resource(1) | Mineral Resource:A concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.                                                                                                                                                                                                                                              
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                    | Measured Mineral Resource:That part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                    | Indicated Mineral Resource:That part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.                      
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                    | Inferred Mineral Resource:That part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.                                                                                                                                                                                                                                                       
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|mineralization      | The natural process by which sometimes valuable minerals are aggregated, resulting in a potential ore deposit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|ore                 | A natural aggregate of one or more minerals which, at a specified time and place, may be mined and sold at a profit, or from which some part may be profitably separated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|oxidation           | A chemical reaction caused by exposure to oxygen that results in a change in the chemical composition of a mineral.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|oxide               | An adjective applied to a rock, mineral resource or mineral reserve indicating that it has been subjected to oxidation through weathering and exposure to the surface elements or ground water.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|plunge              | The vertical angle between a horizontal plane and the line of maximum elongation of an orebody.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|pulp                | A mixture of ground ore and water capable of flowing through suitably graded channels as a fluid.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|pyrite              | A mineral, the composition of which is iron sulfide.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|quartz              | A mineral composed of silicon dioxide.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

_________________

Note:

(1) As defined in NI 43-101.

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|reclamation      | The process by which lands disturbed as a result of mining activity are brought back to beneficial land use. Reclamation activity includes the removal of buildings, equipment, machinery and other physical remnants of mining, closure of tailings impoundments, leach pads and other mine features and contouring, covering and revegetation of waste rock piles and other disturbed areas.
|---------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|recovery         | A term used in process metallurgy to indicate the proportion of valuable material obtained in the processing of an ore. It is generally stated as a percentage of valuable metal in the ore that is recovered compared to the total valuable metal present in the ore.                                                                                                                        
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|recovery rate    | The percentage of a particular metal contained in ore that is recovered during processing.                                                                                                                                                                                                                                                                                                    
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|refining         | The final stage of metal production in which impurities are removed from the molten metal.                                                                                                                                                                                                                                                                                                    
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|refractory ore   | Gold mineralized material in which the gold is not amenable to recovery by conventional cyanide methods without any pre-treatment.  The refractory nature can be either silica or sulphide encapsulation of the gold or the presence of naturally occurring carbons which reduce gold recovery.                                                                                               
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|royalty interest | Generally, a percentage interest that is tied to some production unit such as tonne of concentrate or ounce of gold produced.  A common form of royalty interest is a net smelter return.                                                                                                                                                                                                     
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|sample           | Small amount of material that is supposed to be typical or representative of the object being sampled.                                                                                                                                                                                                                                                                                        
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|sedimentary      | A rock formed from cemented or compacted sediments deposited in horizontal strata.                                                                                                                                                                                                                                                                                                            
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|sediments        | The debris resulting from the weathering and breakup of pre-existing rocks.                                                                                                                                                                                                                                                                                                                   
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|shoot            | A body of ore, usually in elongated form, extending downward or upward in a vein.                                                                                                                                                                                                                                                                                                             
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|smelter          | A plant where concentrates are processed into an upgraded product.                                                                                                                                                                                                                                                                                                                            
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|smelting         | A pyro-metallurgical operation in which metal is separated from impurities by a process that includes fusion.                                                                                                                                                                                                                                                                                 
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|strike           | A geological term that refers to the compass direction on a map that layered rock units or faults run.                                                                                                                                                                                                                                                                                        
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|stripping ratio  | The ratio of waste removed to ore processed.                                                                                                                                                                                                                                                                                                                                                  
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|sulphides        | Minerals that are compounds of sulphur together with one or more other elements (such as iron, copper, lead, zinc and arsenic).                                                                                                                                                                                                                                                               
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|tailings         | The material that remains after all metals considered economic have been removed from ore during milling.                                                                                                                                                                                                                                                                                     
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|tuff             | A finer grained pyroclastic rock made up mostly of volcanic ash.                                                                                                                                                                                                                                                                                                                              
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|vein             | An epigenetic mineral filling of a fault or other fracture, in tabular or sheetlike form, often with associated replacement of the host rock.                                                                                                                                                                                                                                                 
|                 |                                                                                                                                                                                                                                                                                                                                                                                               
|waste            | Barren rock in a mine, or mineralized material that is too low in grade to be mined and milled at a profit.                                                                                                                                                                                                                                                                                   
|                

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|             
|-------------
|Abbreviations
|             
|g/t          
|oz           
|t            
|ton          
|tonne        
|tpa          
|             

METRIC/IMPERIAL CONVERSION
TABLE

The following table sets out the imperial equivalents of the metric units of measurement used in this Annual Information Form:

|Metric Unit | Imperial Equivalent
|----------- | -------------------
|            |                    
|Gram        | 0.03215 troy ounces
|Hectare     | 2.4711 acres       
|Kilogram    | 2.20462 pounds     
|Kilometre   | 0.62139 miles      
|Metre       | 3.2808 feet        
|Tonne       | 1.1023 short tons  

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ANNEX D
  MINE OPERATION AGREEMENT AND RELATED DOCUMENTS

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The undersigned, MARIELA CÉSPEDES
    MORENO, a Venezuelan, a single, of legal age, domiciled in Caracas, bearer
    of Identity Card No. 6.560.009, a Public Interpreter of the Republic of Venezuela
    in the English language, as evidenced from title published in the Official
    Gazette of the Bolivarian Republic of Venezuela No. 37.119 dated January
    15, 2001, recorded at the Main Office of Public Registry of the Federal District
    on September 23, 1999, under No. 80, onto page 80, Volume 17° and subsequently
    registered in the Second Court of First Instance in Civil, Mercantile and
    Transit Matters of the Judicial Circumscription of the Metropolitan Area
    of Caracas on October 18, 2000, hereby CERTIFIES: That the attached document
    written in Spanish, which has been presented to her for its translation,
    textually reads in English as follows:

MINISTRY OF THE INTERIOR AND JUSTICE
BOLIVARIAN REPUBLIC OF VENEZUELA
General Department of Registries and Notary Publics Offices
FOURTH NOTARY PUBLICS OFFICE OF PUERTO ORDAZ
Centro Comercial Cristal  1 er piso  Locales 110 y 111
Telephone number: (0286) 962.40.57
Alta Vista  Puerto Ordaz Estado Bolivar

Executing parties: Francisco José
Rangel Gómez and Marc J. Oppenheimer. 
Volume 86.

CRISTINA 4, CRISTINA 5, CRISTINA
    6 AND CRISTINA 7MINING OPERATION CONTRACT

The CORPORACION VENEZOLANA
      DE GUAYANA, an Autonomous Institute created by Decree No. 430, dated December
      29, 1960, published in Official Gazette of the Republic of Venezuela No.
      26.445 dated December 30, 1960, amended by Decree No. 1.531, dated November
      7, 2001, published in Official Gazette of the Bolivarian Republic of Venezuela
      No. 5-553, dated November 12, 2001, which has the

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2

prerogatives and privileges granted
    by the Law of the  Republic and is exempt from payment of all taxes, duties
    and contributions, as determined by
Articles 24 and 25 of said Decree-Law, represented in this act by its President,

FRANCISCO JOSE RANGEL GOMEZ, a Venezuelan, legally competent, bearer
of Identity Card No. 2.520.281, of this domicile, the designation of whom is

evidenced from Decree No. 1.034 dated October 10, 2000, published in Official
Gazette of  the Bolivarian Republic of Venezuela No. 37.054, dated October 10,
2000, hereinafter
 and for the purposes hereof referred to as THE CORPORATION, in compliance with
what was approved in the Board of Directors, as per Resolution No.
8.700 and Resolution DIR-No. 8.705 dated September 2, 2002 and September
    16,
2002, respectively, on the one hand; and on the other, CRYSTALLEX INTERNATIONAL
CORPORATION, a company domiciled in the Province of British Columbia of Canada,
the duration of which was extended under the Commercial Corporation Law of Canada,
as Corporation No. 345631-5, through Certificate dated January 23, 1998, represented
in this act by its President, MARC J. OPPENHEIMER, a citizen of the United States
of America, bearer of Passport No. 152092004, duly authorized for this act as
per Resolution of the Board of Directors dated September 16, 2002, hereinafter
referred to as CRYSTALLEX, each of them individually referred to as the Party
or collectively as the Parties, have agreed to enter into, as they
hereby do, this mining operation contract for Las Cristinas 4, 5, 6, and 7, which
is based
on
 the following:

WHEREAS

l.-   The CORPORACION
    VENEZOLANA DE GUAYANA is an Autonomous Institute with its own legal capacity
    and a patrimony
    separate
from and independent of that of the Republic and which is ascribed to the Ministry
    of the
Secretarys Office of the Presidency. The purpose of the
CORPORACION VENEZOLANA DE GUAYANA is to promote the balanced development of the

Guayana Region, perform the exploration, prospecting, and exploitation
works of the mines or deposits to that end granted by the Ministry
of Energy and Mines.

2.-   On May 16, 2002,
    the MINISTRY OF ENERGY AND MINES and the CORPORACION VENEZOLANA DE GUAYANA
    entered into
    a contract whereby the
Ministry authorizes the Corporation to execute the works of exploitation, recovery
    and sale of the Gold mineral that is in the deposits located within the areas
    of
the concessions called Cristina 4, Cristina 5, Cristina 6, Cristina 7, in the
    Sifontes
Municipality of the State of Bolívar, called PROYECTO LAS CRISTINAS 4,
5, 6 y 7
and hereinafter referred to as the Project.

3.-   The MINISTRY
    OF ENERGY AND MINES, through said Contract, authorized the CORPORACION VENEZOLANA
    DE GUAYANA
    to use the property
committed to said concessions that was transferred to the Republic according
    to  Resolution No. 035 dated March 6, 2002, published in Official Gazette
    of the
Bolívarian Republic of Venezuela No. 37.400, dated March 8, 2002.

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3

4.-   For purposes of the appropriate
    performance of  said Contract, the CORPORACION VENEZOLANA DE GUAYANA may
    enter into DESIGN, CONSTRUCTION,
AND OPERATION contracts WITH THIRD PARTIES, after informing the Ministry of Energy
    and Mines in writing.

5.-   Prior to commencing the operative
    activities of  the project, all of the corresponding environmental permits
    must have been obtained
and complied with.

CLAUSE FIRSTINTERPRETATION

1.1   Definitions. In
    this Contract, unless otherwise expressly established, the following words
    and phrases shall have the meaning established below:

Contract means this mining
    operation contract and its Exhibits and written amendments made by the Parties.

Effective Date means
    the date of execution of this Contract by the parties before a Notary Public.

Material Breach means
    any act or omission of any of the Parties that causes an essential damage
    to: (i) the business,
 the result of the operation, or the financial conditions of the other
 Party; (ii) the other Partys ability to timely and fully perform its
 obligations herein prescribed, according to the terms herein established;
 (iii) the validity or legal effectiveness of the Contract or of the rights of
 the  other Party.

Law of Mines means the
    Decree with  the Status and Force of Law of Mines, published in Official

Gazette No. 5.382, dated September 28, 1999, as well as its Regulations,
decrees, resolutions, and other applicable laws.

MEM means the Ministry
    of Energy
and Mines,

Parties, in the plural,
    means both parties executing this Contract, that is, the Corporación
    Venezolana de Guayana and
CRYSTALLEX and, in the singular (Party), means each of them.

Environmental Permits means the Permit to
Affect Resources for Exploitation of gold, copper, and other minerals granted by
the Ministry of the Environment and Natural Resources, as well as any other
environmental permit or authorization that may be required by said Ministry or
any other competent authority or by the law for the performance of the
activities in Las Cristinas.

Small Miners means groups
    of small miners organized and identified as: Nuevas Claritas, Siete estrellas,
    Los
    Rojas, and la Bolivariana, established in delimited areas within the Las
    Cristinas project.

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4

Annual Production Plan refers
    to the document annually submitted by CRYSTALLEX to the consideration and
    approval of THE CORPORATION, the
 content of which comprises an estimate of the following points:  Investments,  production
  volume,  processing capacity,  operating costs,  logistics  number
  of  workers,  gold production,  gold price  income for sales,
  and  any other elements related to the project development and execution.

Monthly Gold Price means
    the average monthly  gold price, which shall be calculated by dividing the
    sum of all London Bullion Market
Association P.M. BID Gold Fix prices (which fixes the closing price of
said mineral per  refined gold Troy ounce on that day) reported for the corresponding
month by the number
of days for which said prices were established.

Production refers to the quantity of gold mineral
processed per day, expressed in tons per day (t/d)

Tenor means the content
    of gold in the gold material of the deposit, measured at the entry of the
    mill of the processing plant,
expressed in grams per dry tons (gr/t).

CLAUSE SECONDPurpose of the Contract

2.1   THE CORPORATION,
    according to  authorization issued by the MEM, through Contract dated May
    16, 2002, authenticated before the
Second Notary Publics Office of Puerto Ordaz, Caroní Municipality,
State of Bolívar, recorded in the Authentication Books under No. 08, Volume
82,
dated
June 13, 2002 and the First
Notary Publics Office of the Municipality of Baruta of the State of Miranda,
 recorded under No. 28, Volume 40 of the Authentication Books, on June 19, 2002,
hereinafter referred
to as the CVG-MEM Contract, which is attached hereto and an indivisible part
hereof, authorizes  CRYSTALLEX, and the latter so accepts, to make all necessary
investments and works to
reactivate and execute in full the mining project of CRISTINA 4, CRISTINA 5,
CRISTINA 6, and CRISTINA 7, design, construct the plant, operate the same and
process  the gold material for its subsequent commercialization and sale, and
transfer the mine and
its facilities to THE CORPORATION upon the end of the Contract, in accordance
with  the provision of Article 102 of the Law of Mines. The Las Cristinas 4,
5, 6, and 7 project
is located in the Municipality of Sifontes of the State of Bolívar, in
the Bolivarian Republic of Venezuela. Its location is described in the Plan attached
hereto
as Exhibit A, which
has been signed by CRYSTALLEX and THE CORPORATION and is a part hereof. According
to said  plan, THE CORPORATION authorizes CRYSTALLEX to exploit and recover gold
mineral present
in the area of Las Cristinas 4, 5, 6, and 7, within the following boundaries
that are defined in said Plan by a closed traverse line and by vertices expressed
in U.T.M. coordinates
(Universal Transversal de Mercator):

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AREA CALLED CRISTINA 4. Total area
one thousand hectares (1,000 Ha.).

|POINT   | NORTH (m)  | EAST (m)  
|------- | ---------- | ----------
|BOT  1 | 683,208.00 | 666,284.00
|BOT  2 | 685,208.00 | 666,284.00
|BOT  3 | 685,208.00 | 671,284.00
|BOT  4 | 683,208.00 | 671,284.00

AREA
    CALLED CRISTINA 5. Total area nine hundred thirty-nine hectares and four
ares (939.4 Ha.).

|POINT   | NORTH (m)  | EAST (m)  
|------- | ---------- | ----------
|BOT  1 | 685,208.00 | 671,284.00
|BOT  2 | 685,208.00 | 668,340.00
|BOT  3 | 687,070.00 | 668,340.00
|BOT  4 | 687,070.00 | 673,340.00
|BOT  5 | 685,208.00 | 673,340.00

AREA CALLED CRISTINA 6. Total area
nine hundred forty-four hectares and two ares (944.2 Ha.).

|POINT   | NORTH (m)  | EAST (m)  
|------- | ---------- | ----------
|BOT  1 | 685,208.00 | 668,340.00
|BOT  2 | 685,208.00 | 663,340.00
|BOT  3 | 687,070.00 | 663,340.00
|BOT  4 | 687,070.00 | 668,340.00

AREA
    CALLED CRISTINA 7. Total area one thousand two hectares
(1,002 Ha.).

|POINT   | NORTH (m)  | EAST (m)  
|------- | ---------- | ----------
|BOT  1 | 687,070.00 | 663,340.00
|BOT  2 | 689,070.00 | 663,340.00
|BOT  3 | 689,070.00 | 668,340.00
|BOT  4 | 687,070.00 | 668,340.00

The works to be performed by CRYSTALLEX
    for the design,  construction, start-up, and exploitation of the mine subject-matter
    of the Las Cristinas 4,
5, 6, and 7 Project comprise the geological-mining planning and the supply
of all  materials, labor, machinery, equipment, spare parts, and other resources
materials or
elements that are necessary for the development, exploitation, processing, commercialization,

and sale of the gold mineral present in said mine, according to the terms hereof.

2.2   FEASIBILITY STUDY

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2.2.1   CRYSTALLEX binds itself to submit to THE CORPORATION
the Technical, Economic, Financial Feasibility Study within a term not exceeding one (1) year as
from the date of execution hereof, in order for it to be analyzed, considered and approved before
commencement of the works. During said period, CRYSTALLEX must maintain a minimum of field activity
allowing for the generation of jobs in the communities adjacent to the Project area.

2.2.2.   The Feasibility
    Study must conform  to the guidelines established in this contract and be
    for the benefit of both parties.
The approval of said Feasibility Study must be evidenced in writing and shall
    be attached
hereto as Exhibit B, which shall be an indivisible part hereof.

CLAUSE THIRDINVESTMENT PROGRAM

CRYSTALLEX binds itself to make all
    necessary investments for the reactivation
and execution of the Las Cristinas 4, 5, 6, and 7 mining Project,
as estimated according  to the Feasibility Study approved by THE CORPORATION.
To that end, CRYSTALLEX
must submit to THE CORPORATION, at the same time and as a part of the Feasibility
Study  referred to in the foregoing clause, a program and/or schedule of investment
disbursement
and performance, as well as the financing sources and their conditions.
This investment program and/or schedule shall be approved and signed by
CRYSTALLEX and THE CORPORATION in a document attached hereto as Exhibit C,
which shall be an integral part hereof.

CLAUSE FOURTHEXPLOITATION PLANS

1.-   CRYSTALLEX must submit to THE
    CORPORATION the Exploitation Plans for the Life of the Project and the detailed
    Annual Exploitation Plans. The Exploitation Plan for the Life of the Project,
    as well as the annual plans, must be accepted in writing by THE CORPORATION
for their implementation.

Said Investment Programs and the
    Exploitation Plans must contain the necessary technical information, at the
    request of THE CORPORATION which may request at any time additional information
    from CRYSTALLEX or may propose modifications or adjustments that it deems
    to be reasonably necessary.

2.-   CRYSTALLEX must specify in said
    Plans the mineral excavation volumes and barren volumes, waste disposal,
    handling of effluents, environmental protection, industrial safety, and any
    other aspect that THE CORPORATION deems pertinent, which aspects shall be
    informed to CRYSTALLEX sufficiently in advance, depending on the technical
    characteristics of the information required.

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CLAUSE FIFTHPRODUCTION VOLUME

I.-   CRYSTALLEX binds itself to put
    the Las
Cristinas 4, 5, 6, and 7 mining Project into production within the period
of time  established in clause Ninth of the CVG-MEM Contract entered into on
May 16, 2002.

2.-   CRYSTALLEX binds itself to annually
    recover
from the mine subject-matter of the Las Cristinas 4, 5, 6, and 7 Project
an  average daily production volume of present gold mineral, as indicated in
the
Annual Production Plan agreed by the parties, which shall be attached hereto
 as Exhibit D and an integral part hereof.

3.-   CRYSTALLEX binds
    itself to process the gold mineral volume specified in the Annual Production
    Plan at the
    plant to be installed by it
in accordance with the Project, incorporating the greatest quantity of added
    value.

4.-   CRYSTALLEX shall exploit and recover
    the barren  material that cannot be stored in the mine and put it in a place
    therefor fitted out, in
agreement with the environmental legislation.

CLAUSE SIXTHECONOMIC COMPENSATION

1.-   CRYSTALLEX shall make the following
    mandatory payments to
THE CORPORATION:

| |  | Initial Payment: The amount of
    FIFTEEN MILLION DOLLARS OF THE UNITED STATES OF AMERICA (US$ 15,000,000.00)
    corresponding to eight percent (8%) of the value of the investments made
    within the Project, such as: reports, digitized information, camp,
    drilling, which payment shall be made by CRYSTALLEX within five (5) bank
    working days following execution hereof, after the instructions of THE CORPORATION.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Minimum monthly payment on account of royalty calculated on the commercial value of the monthly gross production in percentage terms, which is to be paid once the construction stage is completed:
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | GOLD:
| |  | -----

| |  | US$ Price/Troy ounce
       %
| |  | -----------------------------

| |  | Less than 280 $/ounce | 1.00
| |  | --------------------- | ----

| |  |                                                                |     
| |  | -------------------------------------------------------------- | ----
| |  | Equal to or more than 280 $/ounce
    and less than 350$/ounce | 1.50

| |  |                                                                |     
| |  | -------------------------------------------------------------- | ----
| |  | Equal to or more than 350 $/ounce
    and less than 400$/ounce | 2.00

| |  |                       |     
| |  | --------------------- | ----
| |  | More than 400 $/ounce | 3.00

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These royalties are different from the Exploitation Tax
established in the Law of Mines that CRYSTALLEX shall pay to THE REPUBLIC and are subject to
revision in accordance with the laws ruling the matter.

CLAUSE SEVENTHSPECIAL
ADVANTAGES

CRYSTALLEX binds itself to comply with the following
Employment Plan and Social Community Development Program:

FOR YEAR 2002:

| |  | To generate 50 jobs and bear the costs of maintenance of the facilities and of the 24 people currently working
| | - | --------------------------------------------------------------------------------------------------------------

| |  | To continue with the technical assistance to the five (5) Small Miners Associations operating in the Project Small Miners area.
| | - | -------------------------------------------------------------------------------------------------------------------------------

| |  | To bear the costs of maintenance, supplies, and other operation expenses
 of the Centro Medico Asistencial Las Claritas, which shall provide services to
 the Project personnel and to the community, and transforming the same from
 Ambulatory Rural Type II to Ambulatory Urban Type I.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

FOR YEAR 2003:

| | To generate 50 additional jobs
        during the twelve (12) months of the year
|- | --------------------------------------------------------------------------------
| | To build at least 30 houses in
    the local Community of Santo Domingo.        

| | To train personnel in the
    Community to handle the necessary machinery and equipment for mining operations.
|- | --------------------------------------------------------------------------------------------------------------

| | To develop Social Programs
    for the benefit of the Community
|- | ---------------------------------------------------------------

| | 1. | Installation and integration
    of clean water treatment plants:
| | -- | -----------------------------------------------------------------
| |    |                                                                 
| |    |                                                                 
| | 2. | Construction of sewerage systems:                                

| |  |  | Las Claritas  Nuevas Claritas  Santo Domingo
| |  | - | ----------------------------------------------

| | 3. | Improvement and Paving of the existing
    road between Kilometer 85 and Las Cristinas
| | -- | --------------------------------------------------------------------------------------

FOR THE FOLLOWING YEARS OF THE TERM OF THIS CONTRACT,
    CRYSTALLEX shall continue to: provide technical assistance to the small miners
    associations operating in the small miners area of the Project, bear the
    costs of maintenance, supplies and other operation expenses of the Centro
    Medico Asistencial Las Claritas, maintain the scholarship and internship
    programs for students, and the training of personnel, perform the activities
    of maintenance of the road to which the paragraph corresponding to year 2003
refers.

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9

CLAUSE EIGHTH
  CRYSTALLEXS
OBLIGATIONS

1.-   CRYSTALLEX warrants that the
    operations of the mine subject-matter of Las Cristinas 4, 5,
    6, and 7 Project shall be carried out by competent personnel
    with expertise in the gold mining area. To that end, it shall establish Training
    Programs for the personnel. According to Article 27 of the Organic Labor
    Law, during performance of this contract, at least ninety percent (90%) of
    the employees and of the workers are to be Venezuelans, except as established
    in Article 28 of said Law. Likewise, as from the date of execution hereof,
    CRYSTALLEX takes on the administrative personnel and workers that work at
    the operation and maintenance facilities of the Camp committed to Las
    Cristinas 4, 5, 6, and 7 Project, according to the payroll provided
by THE CORPORATION and identified by letter E.

2.-   CRYSTALLEX shall
    use the most advanced technologies in order to achieve international standards
    and competitive
    cost. Likewise, it covenants that the gold mineral shall be recovered according
    to the best mining techniques in order to achieve an optimal recovery of
    the resource, making efforts to preserve the deposit and the environment
    in the performance of the exploitation works. CRYSTALLEX shall adapt to the
provisions established in the Annual Production Plan approved by THE CORPORATION.

3.-   CRYSTALLEX is bound to meet the
    commitment of production and tenor of the gold mineral recovered, in accordance
with the Annual Production Plan. Therefore, it binds itself to:

3.1   Adopt
    the necessary precautions and measures to prevent and avoid occupational
    accidents and place special
    interest in the compliance with the provisions of the Ministry of Labor about
industrial health and safety, in pursuance of the applicable legislation.

3.2   Supply
    the equipment, consumable materials, and related services, such as drainage,
    dams, electrical control and distribution facilities, compressed
    air, ventilation system, pumping systems, drinking water treatment facilities,
    sewage facilities, communication and transport internal and external routes,
dining areas and, in general, all facilities operated by it in the mine area.

3.3   CRYSTALLEX
    is the sole employer of the personnel assigned to the performance of the
    works subject-matter
    of this contract. Therefore, it must bear the payment of all obligations
    derived from their employment relationship and strictly comply with the provisions
of any applicable laws.

CRYSTALLEX expressly accepts to release
    THE CORPORATION from any joint and several liability as established in the
Organic Labor Law. By virtue of the foregoing,

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CRYSTALLEX binds itself to reimburse all expenses
    or payments that THE CORPORATION may be bound to make by reason of labor
    actions filed against the same by virtue of the joint and several liability
established in the aforesaid legal provisions.

3.4   CRYSTALLEX
    must provide THE CORPORATION
    with the technical documentation for the obtainment of the environmental
    permits necessary for the operation of the mine subject-matter of Las Cristinas
4, 5, 6, and 7 Project. CRYSTALLEX must strictly comply with the applicable
    environmental legislation in the performance of the works subject-matter
of this contract.

3.5   CRYSTALLEX
    shall handle together with THE CORPORATION the obtainment of all permits
    for use of explosives and others
stipulated by the Venezuelan laws and regulations in this connection.

3.6   CRYSTALLEX,
    with the support of THE CORPORATION, must obtain the municipal, state or
    national permits or authorizations required
for its legal operation, if applicable.

3.7   CRYSTALLEX
    binds itself to engage, according to its operating requirements, Venezuelan
    service companies, preferably local
    and regional companies, and to purchase Venezuelan consumable supplies and
materials to be used in this project, in accordance with the provisions of Presidential
    Decree No. 1.892 dated July 25, 2002, published in Official Gazette of the
Bolivarian Republic of Venezuela No. 37.494, dated July 30, 2042.

3.8   CRYSTALLEX
    binds itself to deliver to THE CORPORATION, under inventory, at the end of
    the term hereof, all facilities
    and equipment existing on such date and in proper operating conditions, normal
wear and tear excepted, which must coincide with the inventory or list of equipment
    or facilities notified by CRYSTALLEX to THE CORPORATION at the time of their
    acquisition or construction, as the case may be, during the term of this
    contract. To that end, CRYSTALLEX binds itself to deliver to THE CORPORATION
    the list of equipment to be imported with its characteristics and specifications,
including its commercial value.

3.9   CRYSTALLEX
      shall deliver to THE CORPORATION, through the liaison Manager, within the
      first
    seven (7)
    days of each month, a report of the activities performed (technical studies
made, including field and production information), as well as any other information
required from it, for purposes of following up the project development.

3.10   CRYSTALLEX
    binds itself to desist from any judicial claim or action that it may have
    against THE CORPORATION
and THE CORPORATION binds itself to accept.

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11

CLAUSE NINTH
  THE CORPORATIONS
OBLIGATIONS

1.-   THE CORPORATION
    binds itself to deliver to CRYSTALLEX the existing technical studies
    performed about the area to be contracted, in order for CRYSTALLEX to make
    the Certification
of the same and afterwards prepare the Feasibility Study.

2.-   THE CORPORATION may propose to
    CRYSTALLEX such specialized technical personnel as THE CORPORATION
    considers fit for the development of this project and CRYSTALLEX is free
to hire said suggested personnel.

3.-   THE CORPORATION
    shall deliver to CRYSTALLEX, through an inventory attached hereto as Exhibit
    F, at the beginning of the tern hereof, the current facilities of the nine
    subject-matter of the Las Cristinas 4, 5, 6, and 7 Project, for the purposes
of this contract.

4.-   THE CORPORATION
    shall take the necessary steps for the obtainment of the environmental and
    mining permits
    required for the execution of this Project. In any case, the periods of
    time established in this contract shall not begin to elapse until the obtainment
of said authorizations or permits.

5.-   All notifications
    to the MEM
hereunder shall be from THE CORPORATION.

CLAUSE TENTH
Bonds or Guaranties

1.-   CRYSTALLEX must present within
    the first sixty (60) days following execution of the contract and every year
    a faithful performance bond issuedby a bank, for the performance
    of the contract, corresponding to five percent (5%) of the production value
    of the time that the construction lasts, which bond is to be released with
    the Certificate of Commencement (Acta de Inicio) of commercial production
    issued by THE CORPORATION. Likewise, CRYSTALLEX must keep an
    insurance policy for the equipment and facilities in order to cover damages,
    such as robbery, theft, fire and floods. Also, it must present a labor bond
to guaranty the labor liabilities to be accrued each year.

2.   CRYSTALLEX, before
    commencing construction and exploitation, shall present the environmental
    bonds in favor
    of the Ministry of the Environment and Natural Resources that guaranty the
    remedy of the environmental damages that may becaused by the construction
    and exploitation prescribed in the Project, in order to proceed
in accordance with Article 59 of the Law of Mines.

CLAUSE ELEVENTH
  Technical
Supervision

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1.-   THE CORPORATION
    shall create a Liaison Technical Management (Gerencia Técnica de
    Enlace)
    composed of a team
    of professionals who shall be in charge of supervising the proper progress
    of the works. Such team shall be under the responsibility of a Link Manager
    who may be freely designated and removed by THE CORPORATION. THE CORPORATION
    shall deliver to CRYSTALLEX in writing, as a result of the supervision, the
    comments or recommendations that it deems convenient and CRYSTALLEX must
    give consideration to the same in the terms indicated, unless CRYSTALLEX
    has different criteria with respect to the issues stated, which criteria
    must be informed to THE CORPORATION in a reasoned manner for the corresponding
    discussion to reach an agreement to the satisfaction of the parties. Likewise,
    CRYSTALLEX must bear the expenses of the remuneration of said Technical Management
    personnel and shall provide the necessary logistic support: it shall make
    physical space with its corresponding office furniture and computers available,
    provide transportation, board and lodging and shall allow free access to
    the Project area by the Technical Management personnel.

CLAUSE TWELFTH
Small Miners

CRYSTALLEX binds itself to provide
    technical assistance under the guidance of THE CORPORATION to
    groups of Small Miners organized and identified as Nuevas
    Claritas, Siete estrellas, Los Rojas, and La Bolivariana, established in
    delimited areas within the Las Cristinas project, and any other group that
    may be organized and that is approved by CRYSTALLEX, in order to guaranty
sound operating practices and a lesser environmental impact,

CLAUSE THIRTEENTH
Notices

All notices to be given hereunder
    shall be in writing, in the Spanish language, and personally delivered. The
notices shall be sent to the following addresses:

CORPORATION VENEZOLANA
  DE GUAYANA
Edificio CVG  Alta Vista
Puerto
    Ordaz, Estado Bolivar.
  REPUBLICA BOLIVARIANA DE VENEZUELA
  Attention: Gral
    (Div) Francisco José Rangel Gómez
  Presidente de la Corporación Venezolana
de Guayana.
Telephone: 0286 9681474  9681475
Telefax: 0286 9624805

CRYSTALLEXs
  NAME
  Address: Torre Forum, piso 12, Avenida Principal de Las Mercedes con calle
  Guaicaipuro, Urbanizaci6n El Rosal, Municipio Chacao.
  Attention: Ing. Luis Felipe
  Cottin

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Title: Presidente de Crystallex de
Venezuela, C.A.
Telephone: 0212 9526061
Telefax: 0212 9525011

Any of the parties may, by written
    notice, designate another officer as the addressee of the notices, as well
    as a new address for sending the corresponding notices. All notices shall
    be deemed to be given at the time when they are received by the corresponding
addressee.

CLAUSE FOURTEENTH
Breach

l.-   If during the performance of
    the works herein prescribed, in a period of one year, CRYSTALLEX is not able
    to meet the average daily production or tenor of the mineral recovered established
    in the Annual Production Plan, CRYSTALLEX shall provide an economic compensation
to THE CORPORATION in proportion to the benefits not received.

In order to quantify this effect
    of breach, the one-year period shall be counted as from the first day of
    work prescribed in the Annual Production Plan and, the total production of
    the year divided by three hundred and sixty-five days (365) shall be used
as the daily average.

The suspensions of operations due
    to force majeure are excepted from being considered as breach, in accordance
with Clause Fifteenth hereof.

2.-   Likewise, the
    causes described in Article 98 of the Law
    of Mines
shall be deemed to be breaches.

3.-   Also, the breach
    of the environmental conditions issued by the Ministry of the Environment
    and Natural Resources
(MARN) shall be penalized.

4.-   The causes defined as Material
Breach in Clause First of this contract.

CLAUSE FIFTEENTH
Force Majeure

None
      of the parties shall be liable for any breach of the obligations
      undertaken hereunder, when such breach results from force majeure, which
      shall consist in any circumstance
      beyond the control of any of the parties that has not been reasonably
      foreseen and overcome and that may impede or excessively delay the performance
      of any obligation established in the contract. Such circumstances include,
      but are not limited to, events of nature such as floods, earthquakes, strong
      winds, as well as wars, sedition, epidemic, fire or any other of the same
  magnitude, and they also include new

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laws, decrees, regulations, ordinances
    or administrative acts of the government at its different levels or branches
    of State Power (Power Publico), issued by any legally competent public authority
    of the corresponding matter, provided that when such events occurs the affected
    party exercises the due care and diligence to reasonably control, avoid or
    prevent the event and the damaging consequences of the same. Any of the parties
    shall notify the other in writing, as soon as possible, if such party is
    not able to perform any of its obligations due to force majeure, as well
    as the reason for said non­compliance and must resume performance, if
    such were the case, within a reasonable period after disappearance of the
    force majeure. But in no case and for no reason shall the term of this contract
be extended beyond the period hereinafter established.

CLAUSE
SIXTEENTH
Termination of the Contract

1.-   THE CORPORATION and CRYSTALLEX
    may agree upon the termination hereof by mutual agreement when it is considered
    convenient due to the circumstances. After a period of time has been agreed
    by the parties for the termination of the contract, they both bind themselves
to fully perform the obligations undertaken hereunder.

2.-   In the event
    of any of the parties breach, according to clause Sixteenth, the affected
    party shall have the right to terminate this contract immediately after the
    elapsing
    of ninety (90) days asfrom the date on which one of the parties
    gives written notice to the other attributing to it in a reasoned manner
    the breach of any of the obligations undertaken hereunder, provided
    that said breach has not been remedied within such period
    of time. If the party that invokes the breach considers that it may be remedied
    before the aforesaid ninety (90) days, it must expressly indicate in the
    notice to the other party the reasonable period of time within which such
    breach is to be remedied, expressly stating the reasons on which said period
    of time is based. If the breach is remedied in a period of time longer than
    that reasonably stated by the affected party or than that accepted by such
    affected party upon the proposal of the other party, provided that such period
    of time does not exceed the maximum limit of ninety (90) days, the breaching
    party shall pay to the other party the corresponding damages caused by the
delay.

The stipulations of this number shall
    be applied in all cases of breach of this contract, except in the cases in
    which the clause establishes the form and time for rescission due to breach,
and except as prescribed in Clause Twenty-fourth hereof

CLAUSE SEVENTEENTH
Environmental Legislation

1.-   CRYSTALLEX shall be responsible
    for compliance with the provisions in force regarding environmental conservation,
defense, and improvement, specially those

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referred to the control of environmental
    impact of mining activities and correction, recovery, and improvement of
the affected areas.

2.-   The mining
    activities developed in the parcels must be performed in a rational and scientific
    manner, in
    accordance with the sustainable development principle, environment conservation,
and land use planning, according to articles 5 and 15 of the Law of Mines.

3.-   CRYSTALLEX is
    entitled to the rational use and utilization of public domain waters, provided
    that it observes
    the environmental provisions, respectively. Likewise, if necessary, it may
    use private domain waters, either through the establishment ofeasements
    or via expropriation, provided that the requirements established in the applicable
legislation are met.

4.-   CRYSTALLEX must prepare the Environmental
    Handling Program and THE CORPORATION shall review and validate the same and
    be in charge of the steps to be taken before the Ministry of the Environment
and Natural Resources.

CLAUSE
EIGHTEENTH
TERM OF THE CONTRACT

1.-   This contract
    shall be inforce
    as from the date of its execution for a period of twenty (20) years, extendible
    for one (1) or two (2) periods of ten (10) years, with the previous written
    agreement of the parties. Said extension must be notified before the term
of the contract.

2.-   CRYSTALLEXbindsitself
    to define and establish, by mutual agreement with THE CORPORATION and within
    one (1) year before the end of this contract, a plan for the transfer of
    the assets of the Las Cristinas 4, 5, 6, and 7 mine and its operations to
THE CORPORATION.

CLAUS NINETEENTH
Settlement of Conflicts

Any doubts and controversies of any
    nature whatsoever that may arise out of the performance of this contract
    and which may not be amicably settled by the parties shall be decided by
    the competent courts of the Bolivarian Republic of Venezuela, in accordance
    with its laws, and in no case and for no reason may they give rise to claims
before foreign courts.

CLAUSE TWENTIETH
  Assignment
of Contract

CRYSTALLEX may not assign, directly
    or indirectly, in whole or in part, its rights and/or delegate its obligations
hereunder to another natural or legal person. Any

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assignment and/or delegation made
    in violation of this clause shall be null and without effect, except for
the legal penalties derived from such assignment or delegation.

CLAUSE
  TWENTY-FIRST
  Representations

1.-   The parties,
    being aware of the impossibility of foreseeing all contingencies that may
    arise during performance
    of this contract, agree that their intention is to agree between them on
    the basis of equity and without damaging the interests of both of them. If
    during
    performance hereof, any inequality, damage or injustice arises against any
    of them, they shall by mutual agreement endeavor to take the necessary actions
to eliminate or remedy such inequality or damage.

2.-   The Ministry
    of Energy and Mines has granted to THE CORPORATION, by means of a contract
    entered into on May
    16, 2002, in accordance with the provisions of Decree No. 1.757 of the President
    of the Republic dated April 29, 2002, published in Official Gazette of the
    Bolivarian Republic of Venezuela No. 37.437, dated May 7, 2002, the areas
    called Cristinas 4, 5, 6, and 7 located in the Sifontes Municipality of the
    State of Bolivar for the exploration, recovery and sale of the gold mineral
    present in deposits located in said areas. Likewise, it has been authorized
    to use the property committed to said areas that was transferred to the Republic
    in accordance with resolution No. 035 dated March 6, 2002, published in Official
    Gazette of the Bolivarian Republic of Venezuela No. 37.400 dated March 8,
    2002. Therefore, no property rights are transferred to CRYSTALLEX by virtue
of this contract or its Exhibits.

3.-   This contract
        is materially and
    legally complemented and supported, in addition to the stipulations herein,
    by its Exhibits mentioned in the text of this contract, which Exhibits are
an integral and indivisible part hereof.

4.-   For purposes hereof, it shall
    be understood that for the technical, geological and legal knowledge of the
    Las Cristinas Project that CRYSTALLEX has, it is willing, for its own risk
    and account, to invest its human, technical, and financial resources in
    the exploitation of the deposit, without having anything to claim now and
    in the future on account of the results obtained in the exercise of said
    activities, since as a professional specialized in training activities it
    took precautions, made the pertinent studies, and was able to foresee the
    existing situations with respect to geology, production, historical production
    figures, mineralogical formation, potential and estimates of the results
    obtained and to be obtained. According to Article 34 of the Law of Mines,
    the existence of the mineral and that the same is industrially and economically
    exploitable are presumed, until provento the contrary, but
    THE CORPORATION undertakes no responsibility with the execution of the contract
    for the truth of such facts. To such end, THE CORPORATION and CRYSTALLEX
    must verify the existing technical information to be delivered by THE CORPORATION
    within a term of ninety (90) days as from execution hereof, which shall be
certified in Minutes issued for such purposes.

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17

CLAUSE TWENTY-SECOND
  Complementary
Provisions

1.-   The parties shall prepare and
    sign, within a term of thirty (30) working days as from execution of this
    contract, a detailed inventory of the facilities, property and equipment
    owned by the Republic that exist in the area of Las Cristinas 4, 5, 6, and
    7 at the time when said inventory is signed, in accordance with number 3
    of Clause Ninth hereof, which inventory shall be an integral part of this
contract.

2.-   Should the MEM grant THE CORPORATION
    an authorization for the exploration, exploitation, commercialization, and
    sale of the copper mineral existing in the Las Cristinas 4, 5, 6, and 7 area,
    THE CORPORATION binds itself to enter into the corresponding addendum with
    CRYSTALLEX, complementary to this contract, in order to fix the conditions
in which said activities shall be performed by CRYSTALLEX.

3.-   This contract may be amended
    by mutual agreement of the parties, by means of an addendum therefor entered
    into, without changing the spirit, purpose and reason that led them to enter
into it.

CLAUSE TWENTY-THIRD
Applicable Law

The contracting parties expressly
    declare that this contract and its exhibits shall be governed by the laws
of the Bolivarian Republic of Venezuela.

CLAUSE TWENTY-FOURTH
  Rescission of
Contract

This contract may be unilaterally
    rescinded by THE CORPORATION, with no indemnification whatsoever for CRYSTALLEX,
    in the event of delay in commencement, suspension of any of the activities,
    or breach of contract for a period of one (1) year without a duly justified
reason.

CLAUSE TWENTY-FIFTH
Domicile

Without prejudice to the jurisdiction
    corresponding to the Political-Administrative Chamber of the Supreme Court
    of Justice to take cognizance of the controversies relating to administrative
    contracts, the city of Ciudad Guayana, Caroni Municipality of the State of
    Bolivar, is chosen as the special domicile and the controversies shall be
submitted to the courts of said city.

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18

This contract is made in three (3) counterparts with the same content and effects, in Ciudad Guayana, on the seventeenth day of the month of September of year 2002.

|By THE CORPORATION |  | By CRYSTALLEX     
|------------------ |  | ------------------
|(Sgd.) (Illegible) |  | (Sgd.) (Illegible)

BOLIVARIAN REPUBLIC OF VENEZUELA.
    Dr. PEDRO E. ALFARO. NOTARY PUBLIC OF THE FOURTH NOTARY PUBLICS OFFICE
    OF PUERTO ORDAZ, AUTONOMOUS MNICIPALITY OF CARONI OF THE STATE OF BOLIVAR.
    Puerto
    Ordaz, September 17, Two Thousand and Two. 192° and 143°. The foregoing
    document drawn up by lawyer FIRELY C. NAVARRO, registered in the Inpreabogado  under
    N° 11121 was presented to be authenticated and returned, as per
    form N° 38890, dated 09-17-2002. The parties executing the document being
    present, they stated that their names were FRANCISCO JOSE RANGEL GOMEZ
    AND MARC J. OPPENHEIMER, of legal age, domiciled in Puerto Ordaz, State of
    Bolivar, a citizen of Venezuela and a citizen of the United States of America,
    both
    married, holders of Identity Card No. 2.520.281 and Passport No. 152092004.
    The original having been read to them and compared to its copies and such
    original and copies having been signed before the
    Notary, the executing parties stated: ITS CONTENT IS TRUE AND OURS
    THE SIGNATURES THAT APPEAR AT THE BOTTOM THEREOF. The Notary, by virtue
    whereof, declares it authenticated in the presence of witnesses YANNINA GUILLEN
    and GABRIELA
    RODRIGUEZ, holders of Identity Cards Nos. 11.995.595 and 11.636.896. The
    document was recorded under N° 16,
Volume 86 of the Books of Authentication kept by this Notary Publics Office.
The undersigned Notary Public certifies that in this act Article 78, Number 2
of the Decree with the Force of Law on Public Registry and Notary Publics
Offices was complied with. Likewise, he certifies that he saw: 1) Decree No.
430 of the
CORPORATION VENEZOLANA DE GUAYANA, dated 12-29-1960, published in Official
Gazette
of the Republic of Venezuela No. 26.445 dated 12-30-1960, the last amendment
to which having been made through Decree of Law No. 1.531 dated 11-07-2001,
published in Official Gazette of the Bolivarian Republic of Venezuela No. 5.553
dated 11-12-2001, which has the prerogatives and privileges that the National
Treasury grants in the Preliminary Title of the Organic Law on National Public
Finance and is exempt from the payment of all taxes, duties, and contributions
as determined by articles 24 and 25 of said Decree, represented by its President,
Francisco Rangel Gómez, according to designation made by the President
of the Republic through Presidential Decree No. 1.034, published in Official
Gazette of the Bolivarian Republic of Venezuela No. 37.054, on 10-10-2000, sufficiently
authorized for this act according to articles 36 and 37 of said Decree Law. 2)
Resolution No. 8.700 and Resolution DIR-No. 8.705 dated: 09-02-2002 and 09-16-2002,
respectively. 3) Resolution of the Board of Directors of CRYSTALLEX INTERNATIONAL
CORPORATION dated 09-16-2002. 4) The Notarys Office was convened at the
office of C.V.G., Alta Vista, Puerto Ordaz, today, at 11:00 a,m., upon the request
from
the interested party.

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19

The Notary Public (Sgd.)
    (Illegible). Dr. Pedro E. Alfaro. Fourth Notary Public of Puerto Ordaz. The
    Witnesses. (Sgd.) (Illegible) Yannina Guillen. (Sgd.) (Illegible) Gabriela
    Rodriguez. The executing Parties (Sgd.) (Illegible) Francisco J. Rangel Gómez.
    (Sgd.) (Illegible) Marc J. Oppenheimer.

The undersigned Notary Public does
    hereby certify thathe saw By-Laws No.1, By-laws referred to, in
    general, to the performance of the businesses and affairs of CRYSTALLEX
    INTERNATIONAL CORPORATION, dated 01-23-1998.

THE NOTARY PUBLIC. Dr. Pedro E. Alfaro
M. Fourth Notary Public of Puerto Ordaz.

(There is a linear seal that reads: Attorney Firely C. Navarro. I.P.S.A. No. 11121. VPC Legal
    Affairs and there is an illegible signature on the same. There is a linear
    seal that reads: Fourth Notary Publics Office of Puerto Ordaz. Form No.
    38890. Fees: n/e. Execution: 09-17-02. There are several round seals that
    read: Bolivarian Republic of Venezuela. Ministry of the Interior and Justice.
    Fourth Notary Publics Office. Autonomous Municipality of Caroni. Pto Ordaz,
    with the Coat of Arms of the Bolivarian Republic of Venezuela in the center.
There are initials on the pages).

The foregoing is a true and exact
    translation of the attached document written in Spanish, rendered upon the
    request from an interested party, IN WITNESS WHEREOF, I affix my signature
    and stamp my official seal in Caracas, on this eighteenth day in the month
of January, year Two Thousand and Five.



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|Decree N° 1.757 | April 29, 2002
|--------------- | --------------

HUGO CHAVEZ
FRIAS
President of the Republic

In compliance of article 23 of the Decree with
Rank and Force of Law of Mines, in Council of Ministers in Government.

WHEREAS

It is a priority for the Republic, the reactivation
    of the mining activity to the effects of increasing its contribution to the
National Product and to the generation of employment,

WHEREAS

That the Activities of Mining are of relevant
importance for the Region of Guayana,

WHEREAS

That the deposits located in the area of the expired
    and extinguished gold concessions Cristina 4, Cristina 5, Cristina 6 y Cristina
7, constitute an important reservoir of this mineral,

DRECREES

Article 1°. Shall be reserved
    to the National Executive, through the Ministry of Energy and Mines, the
    direct exercise of the exploration and exploitation of the gold mineral located
    at the deposit in the area of the expired and extinguished concessions of
    gold Cristina 4, Cristina 5, Cristina 6 and Cristina 7, located in the Municipality
    of Sifontes of the State of Bolivar.

Article 2°. The area denominated
    Cristina 4 has a total surface of approximately ONE THOUSAND HECTARES (1000
    Ha), defined by a closed polygonal and vertex expressed in the coordinates
    U.T.M. (Universal Transversal of Mercator) Huso 20, Datum La Canoa and Datum
Sirgas-Regven
Datum La Canoa.

|Datum La Canoa | Datum Sirgas-Regven
|-------------- | -------------------

| | 
| | 

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|POINT   | NORTH (m)  | EAST (m)   | NORTH (m)  | EAST (m)  
|------- | ---------- | ---------- | ---------- | ----------
|BOT  1 | 683,208.00 | 666,284.00 | 682,850.76 | 666,093.52
|BOT  2 | 685,208.00 | 666,284.00 | 684,850.76 | 666,093.52
|BOT  3 | 685,208.00 | 671,284.00 | 684,850.76 | 671,093.50
|BOT  4 | 683,208.00 | 671,284.00 | 682,850.78 | 671,093.50

Article 3°. The area denominated
    Cristina 5 has an approximated total surface of NINE HUNDRED THIRTY NINE
    WITH FOUR HECTARES (939,4 Ha), defined by a closed polygonal and vertex expressed
    in the coordinates U.T.M. (Universal Transversal of Mercator) Huso 20, Datum
    La Canoa. And Datum Sirgas-Regven

|Datum La Canoa
          Datum | Datum Sirgas-Regven
|------------------------------ | -------------------

|POINT   | NORTH (m)  | EAST (m)   | NORTH (m)  | EAST (m)  
|------- | ---------- | ---------- | ---------- | ----------
|BOT  1 | 685,208.00 | 671,284.00 | 684,850.77 | 671,093.50
|BOT  2 | 685,208.00 | 668,340.00 | 684,850.77 | 668,149.50
|BOT  3 | 687,070.00 | 668,340.00 | 686,712.76 | 668,149.50
|BOT  4 | 687,070.00 | 673,340.00 | 686,712.78 | 673,149.49
|BOT  5 | 685,208.00 | 673,340.00 | 684,850.77 | 673,149.49

Article 4°. The area denominated
    Cristina 6 has an approximated total surface of NINE HUNDRED FORTY FOUR AND
    TWO HECTARES (944,02 Ha), defined by a closed polygonal and vertex expressed
    in the coordinates U.T.M. (Universal Transversal of Mercator) Huso 20, Datum
    La Canoa. And Datum Sirgas-Regven

|Datum La Canova | Datum Sirgas-Regven
|--------------- | -------------------

|POINT   | NORTH (m)  | EAST (m)   | NORTH (m)  | EAST (m)  
|------- | ---------- | ---------- | ---------- | ----------
|BOT  1 | 685,208.00 | 668,340.00 | 684,850.77 | 668,149.50
|BOT  2 | 685,208.00 | 663,340.00 | 684,850.75 | 663,149.52
|BOT  3 | 687,070.00 | 663,340.00 | 686,712.74 | 663,149.52
|BOT  4 | 687,070.00 | 668,340.00 | 686,712.76 | 668,149.50

Article 5°. The area denominated
    Cristina 7 has an approximated total surface of ONE THOUSAND TWO HECTARES
    (1002 Ha), defined by a closed polygonal and vertex expressed in the coordinates
    U.T.M. (Universal Transversal of Mercator) Huso 20, Datum La Canoa and Datum
    Sirgas-Regven.

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|Datum La Canoa | Datum Sirgas-Regven
|-------------- | -------------------

|POINT   | NORTH (m)  | EAST (m)   | NORTH (m)  | EAST (m)  
|------- | ---------- | ---------- | ---------- | ----------
|BOT  1 | 887,070.00 | 563,340.00 | 686,712.74 | 663,149.52
|BOT  2 | 689,070.00 | 663,340.00 | 688,712.73 | 663,149.51
|BOT  3 | 689,070.00 | 668,340.00 | 688,712.75 | 668,149.50
|BOT  4 | 687,070.00 | 668,340.00 | 686,712.73 | 668,149.50

Article 6°. In exercise
    of the right of exploration and exploitation referred in Article 1 of this
    Decree, the Minister of Energy and Mines has the faculty to contract with
    the Corporación Venezolana de Guayana or with any other entity of
    the exclusive property of the Republic, the activities required to carry
    out said exploration
    and exploitation, in the technical and economical terms more convenient for
    the rational exploitation of the mentioned deposits.

Article 7°. The present
    Decree will enter in force and effect from its publication in the Official
    Gazette of the Bolivarian Republic of Venezuela.

Article 8°. The Secretaries
    of Energy and Mines and of the Secretary of the Presidency of the Republic
    are in charge of the execution of this Decree.

In Caracas, April 20, 2002. Year
    192° of the Independency and 143° of the Federation.

Be Executed.

HUGO CHAVEZ FRIAS

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Bolivarian Republic of Venezuela
  Ministry
    of Energy and Mines
  Office of the Minister

The Bolivarian Republic of Venezuela,
    through the Ministry of Energy and Mines, represented in this act by its
    Minister, Dr. Alvaro Silva Calderón, a Venezuelan, of legal age, of
    this domicile, and bearer of Identity Card V-928.729, authorized by designation
    conferred through Decree No. 1.153, dated December 28, 2000, published in
    Official Gazette of the Bolivarian Republic of Venezuela No. 37.108 dated
    December 28, 2000, hereinafter referred to as THE MINISTRY,on
    the one hand; and on the other, the Corporación Venezolana de Guayana, an
    Autonomous Institute assigned to the Ministry of the Secretary of the Presidency,
    created by Decree No. 430, dated December 29, 1960, published in Official
    Gazette of the Republic of Venezuela No. 26.445, dated December 30, 1960,
    amended by Decree No. 1.531 with the Force of Law of Partial Amendment to
    the Organic Statute of Development of Guayana, dated November 7, 2001, published
    in Official Gazette of the Bolivarian Republic of Venezuela No. 5.553, Extraordinary,
    dated November 12, 2001, represented in this act by its President, Major
    General (Army), Francisco José Rangel Gómez, a Venezuelan, of legal
    age, domiciled in Ciudad Bolívar, bearer of Identity Card No. V-2.520.281,
    which designation is evidenced from Decree No. 1.034, published in Official
    Gazette of the Bolivarian Republic of Venezuela No. 37.054, dated October
    10, 2000, and in accordance with the provision of article 36 and number 10
    of article 37 of the aforesaid Decree-Law No. 1.531, hereinafter referred
    to as THE CORPORATION, have agreed, in accordance with number
    8 of article 4 of the above-mentioned Decree No. 1.531 dated November 7,
    2001, to enter into this Contract in the terms and conditions specified in
the following clauses:

FIRST: THE MINISTRY authorizes THE
    CORPORATION for the execution of the works of exploration, exploitation,
    and sale of the gold mineral that is in the deposits located in the areas
    of the concessions called Cristina 4, Cristina 5, Cristina 6 and Cristina
    7, in the Municipality of Sifontes of the State of Bolivar, all in accordance
with the plans attached hereto as Annex A that
      are an integral part hereof. Likewise, it authorizes THE CORPORATION for
      the use of the property committed to said concessions that was transferred
      to the Republic according to Resolution No. 035, dated March 6, 2002, published
      in Official Gazette of the Bolivarian Republic of Venezuela No. 37.400,
      dated March 08, 2002, and Minutes dated May 10, 2002.

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2

The area and coordinates of said concessions are
the following:

a.       The area called
    Cristina 4 has an approximate total area of ONE THOUSAND HECTARES (1,000
    Ha.), defined by a closed traverse line and vertices expressed in U.T.M.
    (Universal Transversal Mercator) coordinates, Zone (Huso) 20, Datum La Canoa
and Datum Sirgas-Regven

|Datum La Canoa | Datum Sirgas-Regven
|-------------- | -------------------

|POINT   | NORTH (m)  | EAST (m)   | NORTH (m)  | EAST (m)  
|------- | ---------- | ---------- | ---------- | ----------
|BOT  1 | 683,208.00 | 666,284.40 | 682,850.76 | 666,093.52
|BOT  2 | 685,208.00 | 666,284.00 | 684,850.76 | 666,093.52
|BOT  3 | 685,208.00 | 671,284.00 | 684,850.76 | 671,093.50
|BOT  4 | 683,208.00 | 671,284.00 | 682,850.78 | 671,093.50

b.       The
    area called Cristina 5 has an approximate total area of NINE HUNDRED THIRTY-NINE
    HECTARES AND FOUR ARES (939.4 Ha), defined by a closed traverse line and
    vertices expressed in U.T.M. (Universal Transversal Mercator) coordinates,
Zone (Huso) 20, Datum La Canoa and Datum Sirgas-Regven

|Datum La Canoa | Datum Sirgas-Regven
|-------------- | -------------------

| | 
| | 

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3

|POINT   | NORTH (m)  | EAST (m)   | NORTH (m)  | EAST (m)  
|------- | ---------- | ---------- | ---------- | ----------
|BOT  1 | 685,208.00 | 671,284.00 | 684,850.77 | 671,093.50
|BOT  2 | 685,208.00 | 668,340.00 | 684,850.77 | 668,149.50
|BOT  3 | 687,070.00 | 668,340.00 | 686,712.76 | 668,149.50
|BOT  4 | 687,070.00 | 673,340.00 | 686,712.78 | 673,149.49
|BOT  5 | 685,208.00 | 673,340.00 | 684,850.77 | 673,149.49

c.       The
    area called Cristina 6 has an approximate total area of NINE HUNDRED FORTY-FOUR
    HECTARES AND TWO ARES (944.2 Ha.), defined by a closed traverse line and
    vertices expressed in U.T.M. (Universal Transversal Mercator) coordinates,
    Zone (Huso) 20, Datum La Canoa and Datum Sirgas-Regven

|Datum La Canoa | Datum Sirgas-Regven
|-------------- | -------------------

|POINT   | NORTH (m)  | EAST (m)   | NORTH (m)  | EAST (m)  
|------- | ---------- | ---------- | ---------- | ----------
|BOT  1 | 685,208.00 | 668,340.00 | 684,850.77 | 668,149.50
|BOT  2 | 685,208.00 | 663,340.00 | 684,850.75 | 663,149.52
|BOT  3 | 687,070.00 | 663,340.00 | 686,712.74 | 663,149.52
|BOT  4 | 687,070.00 | 668,340.00 | 686,712.76 | 668,149.50

d.       The
    area called Cristina 7 has an approximate total area of ONE THOUSAND TWO
    HECTARES (1,002 Ha.), defined by a closed traverse line and vertices expressed
    in U.T.M. (Universal Transversal Mercator) coordinates, Zone (Huso) 20, Datum
    La Canoa and Datum Sirgas-Regven.

|Datum La Canoa | Datum Sirgas-Regven
|-------------- | -------------------

|POINT   | NORTH (m)  | EAST (m)   | NORTH (m)  | EAST (m)  
|------- | ---------- | ---------- | ---------- | ----------
|BOT  1 | 687,070.00 | 663,340.00 | 686,712.74 | 663,149.52
|BOT  2 | 689,070.00 | 663,340.00 | 688,712.73 | 663,149.51
|BOT  3 | 689,070.00 | 668,340.00 | 688,712.75 | 668,149.49
|BOT  4 | 687,070.00 | 668,340.00 | 686,712.73 | 668,149.50

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4

SECOND: For purposes of an adequate
      performance of this Contract, THE CORPORATION may enter into
      operation agreements with third parties, after informing the Ministry of
      Energy and Mines in writing within a period of time not shorter than ten
(10) business days.

THIRD: THE CORPORATION covenants
      that the exploitation of the gold mineral shall be made in accordance with
      the best mining techniques in order to achieve an optimal recovery of the
      resource, making efforts to conserve the deposit and preserve the environment.
      For the execution of the exploitation works, THE CORPORATION shall
      adjust to the provisions established in the plans of exploration, exploitation
      and other activities to that end made by it, which plans must be previously
approved by the THE MINISTRY and other entities related to the matter.

For purposes of this Clause, compliance
      with the provisions in force regarding environmental conservation, defense,
      and improvement, specially those referred to the control of environmental
      impact of mining activities and the correction, recovery, and improvement
      of the affected areas, shall be of the exclusive responsibility of THE
CORPORATION.

FOURTH: THE CORPORATIONs
      failure to comply with the plans prescribed in Clause THIRD shall be a
cause for rescission of this Contract.

FIFTH: Of the gross income generated
      by the exploitation and sale of the gold mineral, THE CORPORATION binds
      itself to deliver on a quarterly basis to the National Treasury (Fisco Nacional)three
      percent (3%) of the commercial value in Caracas of the mineral
sold.

SIXTH: THE CORPORATION shall deduct
      from the gross income generated by the exploitation and sale of the gold
      mineral all the expenses accrued or paid, as the case may be, which are
normal and necessary, made in the country with the purpose of producing the benefits,
    such as: salaries and wages, interest of principal received from loans and
      invested in production; taxes paid by reason of economic activities or
      of property that generates income, indemnification corresponding to the
      workers by virtue of the work, determined according to the Law or to employment
      contracts, a reasonable amount to meet the depreciation of permanent assets
      and the amortization of the cost of other elements invested in production;
      the expenses of administration and conservation of real property given
      in lease, the expenses of ordinary repairs of property intended for production,
      and research and development expenses, among others. From the result obtained,
      THE CORPORATION binds itself to deliver to
the National Treasury (Fisco Nacional) an amount of thirty-four
percent (34%).

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5

SEVENTH: If THE CORPORATION executes
      the exploitation o£ the deposits referred to in this Contract by
itself, Clause SIXTH hereof shall not be applied.

EIGHTH: THE CORPORATION, in addition
      to observing the Decree with the Status and Force of Law of Mines dated
      September 5, 1999, published in Official Gazette of the Republic of Venezuela
      No. 5.382, Extraordinary, dated September 28, 1999, to the extent possible,
      must provide the officials of the Ministry of Energy and Mines with the
      information required and the facilities that its employees may require
for a better performance of their functions.

NINTH: THE CORPORATION must
      begin the works of exploitation of the gold mineral of the deposits of
      concessions Cristina 4, Cristina 5, Cristina 6, and Cristina 7, within
      two (2) years after the date when this Contract is entered into. Failure
      to perform this obligation, as well as the interruption of the exploitation
      for a period of two (2) years, shallbe
a cause for rescission of this Contract.

TENTH: THE CORPORATION binds itself
      to use preferably Venezuelan workers and employees and, if possible, of
      the region. To that end, it shall establish, to the extent possible, personnel
training programs. Likewise, it shall give preference to regional companies for
    the purchase of goods, materials, equipment or machinery, specialized services,
    and execution
      of infrastructure works and various supporting tasks, always provided that
      both the personnel and the companies are qualified therefor.

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6

ELEVENTH:
      Failure to perform or delay in performance of any of the obligations of
      this Contract shall not be considered as non-performance, violation or
      breach of the same, if such failure or delay is due to act of God or force
      majeure.Labor conflicts, strikes, any order or requirement from a
      legitimate authority, explosions, wars and blockades, sabotages, mutinies,
      fire, floods, lightning, or other acts of nature shall be considered as
      such, provided that at the time of occurrence of such events the affected
      Party exercises due care and diligence to reasonably control, avoid, or
      prevent the event and its damaging consequences. Either Party, as soon
      as possible, shall notify the other Party in writing the cause for the
      failure to perform any of its obligations due to force majeure, and shall
      resume performance, if such were the case, within a reasonable period of
      time after the force majeure that gave rise to the failure to perform has
      disappeared. But in no case and for no cause shall the duration of this
      Contract be extended beyond the period of time established in Clause Thirteenth.

TWELFTH: The doubts and controversies of any nature whatsoever that may arise by reason of the performance of this Contract and which cannot be amicably settled by the Parties shall be decided by the competent courts of the Bolivarian Republic of Venezuela, in accordance with its laws, and for no reason or cause shall they give rise to foreign claims.

THIRTEENTH: This Contract shall be
    in effect from the date of its execution for up to a period of twenty (20)
    years, extendable for two (2) periods of ten (10) years each, with the prior
    written agreement of the Parties.

FOURTEENTH: For purposes of this
    Contract, its effects and consequences, the city of Caracas is chosen as
    special domicile, and the Parties declare to submit themselves to the jurisdiction
    of the competent Courts of said city. This Contract is made in three (3)
    counterparts with
    the same content and effects. In Caracas, on the 16th day of the
    month of
May of 2002.

|(Sgd.) (Illegible) |  | (Sgd.) (Illegible)   
|------------------ |  | ---------------------
|                   |  |                      
|By the Ministry of |  | By the Corporación   
|Energy and Mines   |  | Venezolana de Guayana
|                   |  |                      

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7

BOLIVARIAN REPUBLIC OF VENEZUELA,
    MINISTRY OF THE INTERIOR AND JUSTICE. SECOND NOTARY PUBLICS OFFICE
    OF PUERTO ORDAZ. AUTONOMOUS MUNICIPALITY OF CARONI OF THE STATE OF BOLIVAR,
    Puerto Ordaz. June 13, 2002. 192° and
      143°. The foregoing document, drawn up by lawyer Firely C. Navarro
      A., duly registered in the Bar Association under Diploma No. (blank), in
      Association (Blank) and registered in the Inpeabogadounder No.
      11.121, Legal Fee Form No. 175528, dated 06-13-2002 was paid, under the
      Law on Legal Fees currently in force, only with respect to the signature
      of FRANCISCO JOSE RANGEL GOMEZ, of legal age, domiciled in Ciudad Guayana,
      a Venezuelan, married, bearer of Identity Card No. 2.520.281. The document
      having read, the executing party stated: Its content is true and
      mine the signature that appears at the bottom of the instrument. The
      Notary, by virtue whereof, certifies this document and the copies with
      original signatures that will form the Principal Volume and the Duplicate,
      the document being registered under No. 08, Volume 82 of the Authentication
      Books. Witnesses were María de Lanser and Noravis Alcalá, bearers of Identity
      Cards Nos. 6.022.083 and 9.903.288, officers of this Notarys Office
      designated for this act. The Notary Public certifies that he saw: 1) One
      counterpart
      of Official Gazette of the Republic of Venezuela No. 26.445 dated November
      30, 1960. 2) One counterpart of Official Gazette of the Bolivarian Republic
      of Vnezuela No. 5.553 (Extraordinary) dated November 12, 2001 and 3) One
      counterpart of Official Gazette of the Republic of Venezuela No. 37.054
dated

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8

BOLIVARIAN REPUBLIC OF VENEZUELA,
      MINISTRY OF THE INTERIOR AND JUSTICE. Dr. YOLANDA MENDOZA F. PROVISIONAL
      FIRST NOTARY PUBLIC OF THE AUTONOMOUS MUNICIPALITY OF BARUTA OF THE STATE
      OF MIRANDA. June 19, 2002. 192° and 143°. The foregoing document,
      drawn up by lawyer Firely C. Navarro A., registered in the Inpreabogadounder
      No. 11.121, was presented to be authenticated and returned as per Form
      No. 99.486, dated 06-17-2002. The executing party being present, he stated
      that his name was Alvaro Silva Calderón, of legal age, domiciled
      in Caracas, a Venezuelan, married, bearer of Identity Card No. 928.729.
      The document
      having read and compared with its photocopies and the photocopies and the
      original having been
signed, he stated: Its content is true and mine the signature that appears
at the bottom of the instrument. The
Notary, by virtue whereof, declares it authenticated in the presence of witnesses
Cristobal Bravo and Jaime Andreu bearers of Identity Cards Nos. 12.357.090 and
14.157.533, the document being recorded under No. 28, Volume 40, of the Authentication
Books kept by this Notary Publics Office. The undersigned Notary certifies
that she saw Decree No. 1.153 dated December 28, 2000, published in Official
Gazette
of the Bolivarian Republic of Venezuela No. 37.108, dated December 28, 2000.
Likewise, the undersigned Notary certifies that the Notarys Office was
convened at TORRE OESTE, PISO 14, PARQUE CENTRAL, today at 7:00 p.m. upon the
request
from an interested party. Officer authorized for this act: Virgilio Suares, Identiy
Card No. 2.070.097. Signature: (Sgd.) (Illegiblle). The Provisional Notary Public.
(Sgd.) (Illegiblle). Dra. Yolanda Espinoza Foucault. Provisional First Notary
Public of the Municipality of Baruta, Miranda State. Witnesses (Sgd.) (Illegiblle).
(Sgd.) (Illegiblle). The Executing Party (Sgd.) (Illegiblle).

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