UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                   FORM 40-F

          [ ] REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                                       or

          [X] ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2006   Commission File Number 001-14620
                            ________________________

                      Crystallex International Corporation
             (Exact Name of Registrant as Specified in its Charter)

      Canada                        1040                      98-1052628
(Province or other       (Primary Standard Industrial      (I.R.S. Employer
Jurisdiction of          Classification Code Number)       Identification No.)
Incorporation or
Organization)

                        Suite 1210, 18 King Street East
                                Toronto, Ontario
                                 Canada M5C 1C4
                                 (416) 203-2448
   (Address and telephone number of Registrant's principal executive offices)

                          Corporation Service Company
                      1090 Vermont Avenue, N.W., Suite 430
                             Washington, D.C. 20005
                                 (888) 690-2882
 (Name, address and telephone number of agent for service in the United States)
                             _____________________

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

                                                 Name of each exchange
         Title of each class                      on which registered
         -------------------                      -------------------

    Common Shares, no par value                    American Stock Exchange
                                                   Toronto Stock Exchange


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

                                      None

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act:

                                      None

For annual reports, indicate by check mark the information filed with this Form:

   [X]  Annual Information Form        [X]  Audited Annual Financial Statements

         Indicate the number of outstanding shares of each of the Registrant's
classes of capital or common stock as of the close of the period covered by
this annual report:

The Registrant had 245,424,494 Common Shares outstanding as at December 31, 2006

         Indicate by check mark whether the Registrant by filing the
information contained in this Form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of 1934 (the "Exchange Act"). If "Yes" is marked, indicate the file number
assigned to the Registrant in connection with such Rule.

                   Yes          82-                     No     X
                       -------      --------                ---------

<PAGE>

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

                   Yes    X                         No
                       -------                          ------

<PAGE>


                    DOCUMENTS FILED UNDER COVER OF THIS FORM
                    ----------------------------------------

Document No. 1:   Annual Information Form for the year ended December 31, 2006.

Document No. 2:   Audited Consolidated Financial Statements for the year ended
                  December 31, 2006, prepared in accordance with Canadian
                  generally accepted accounting principles, together with a
                  reconciliation to United States generally accepted accounting
                  principles.

Document No. 3:   Management's Discussion and Analysis for the Year Ended
                  December 31, 2006.

<PAGE>





                         [CRYSTALLEX GRAPHIC OMITTED]

                      CRYSTALLEX INTERNATIONAL CORPORATION


                             ANNUAL INFORMATION FORM

                      FOR THE YEAR ENDED DECEMBER 31, 2006


                                 March 30, 2007


<PAGE>
<TABLE>

                                TABLE OF CONTENTS

<CAPTION>

<S>                                                <C>    <S>                                               <C>

DOCUMENTS INCORPORATED BY REFERENCE.................1           Regional Geology.............................15
                                                                Local Geology................................15
FOREIGN CURRENCY AND ACCOUNTING PRINCIPLES..........1           Mineralization...............................16
                                                             DRILLING, SAMPLING AND DATA VERIFICATION........17
GLOSSARY AND METRIC/IMPERIAL CONVERSION TABLE.......1        MINERAL RESERVES................................18
                                                             ADDITIONAL MINERAL RESOURCES....................18
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS...2        20,000 TPD FEASIBILITY STUDY AND 2005
                                                             DEVELOPMENT PLAN (UPDATE TO THE 20,000 TPD
NATIONAL INSTRUMENT 43-101 - STANDARDS OF                    FEASIBILITY STUDY)..............................19
DISCLOSURE FOR MINERAL PROJECTS.....................2        ENGINEERING, PROCUREMENT AND CONSTRUCTION
                                                             MANAGEMENT......................................20
CRYSTALLEX..........................................3        PERMITS.........................................21

   OVERVIEW.........................................3     OTHER ASSETS.......................................21
   CORPORATE CHART..................................5
                                                             TOMI OPERATIONS.................................22
MINERAL RESERVES AND RESOURCES......................6           Overview.....................................22
                                                                Location and Property Description............23
INFORMATION WITH RESPECT TO THE GOLD INDUSTRY.......7           Physiography, Climate and Local Resources
                                                                and Infrastructure...........................23
MINING IN VENEZUELA.................................7           History......................................23
                                                                Geology and Mineralization...................23
   VENEZUELA........................................8           Drilling, Sampling and Data Verification.....23
   MINING LAW.......................................8           Mine Production..............................24
      Introduction..................................8           Mineral Reserves.............................24
      Mineral Concessions...........................8           Mineral Resources............................24
      Direct Exploitation...........................9           Environmental Liabilities....................24
   ENVIRONMENTAL LAWS...............................9        LO INCREIBLE PROPERTIES.........................25
      General.......................................9           Background...................................25
      Environmental Impact Assessment...............9           Location and Property Description............25
      Mine Closure and Remediation.................10           Accessibility, Physiography, Climate and
   TAXATION........................................10           Local Resources and Infrastructure...........25
      Corporate Income Tax.........................10           History......................................26
      Dividends and Branch Profits Tax.............10           Geology and Mineralization...................27
      VAT and Import Duties........................10           Drilling.....................................27
      Science and Technology Contribution..........11           Mine Production..............................27
      Tax Treaties.................................11           Mineral Resources............................28
   EXCHANGE CONTROLS...............................11           Environmental Liabilities....................28
                                                                Current Activities...........................28
LAS CRISTINAS PROJECT..............................11        REVEMIN MILL....................................28
                                                                Overview.....................................28
   LOCATION AND PROPERTY DESCRIPTION...............11           Environmental Liabilities....................28
   MINE OPERATION AGREEMENT........................12           Production...................................28
   ACCESSIBILITY, PHYSIOGRAPHY AND CLIMATE AND               ALBINO PROJECT..................................29
   LOCAL RESOURCES AND INFRASTRUCTURE..............13     DESCRIPTION OF SHARE CAPITAL AND RELATED
      Accessibility................................13     INFORMATION........................................29
      Physiography and Climate.....................14        AUTHORIZED CAPITAL..............................29
      Local Resources and Infrastructure...........14        COMMON SHARES...................................29
   HISTORY.........................................14        CLASS "A" PREFERENCE SHARES AND CLASS "B"
   GEOLOGY AND MINERALIZATION......................15        PREFERENCE SHARES...............................29
                                                             SHAREHOLDER RIGHTS PLAN.........................29
                                                             PRICE RANGE AND TRADING VOLUME OF THE COMMON
                                                             SHARES..........................................30
                                                             DIVIDEND POLICY.................................30
</TABLE>

<PAGE>

<TABLE>
<S>                                                <C>    <S>                                               <C>
   CAPITALIZATION..................................31        CORPORATE GOVERNANCE STATEMENT..................44

LEGAL PROCEEDINGS..................................31     TRANSFER AGENT AND REGISTRAR.......................44

   WITHDRAWAL OF MINCA LITIGATION..................31     MATERIAL CONTRACTS.................................44
      MINCA Litigation.............................31
      Vannessa Arbitration.........................32     INTEREST OF EXPERTS................................44

RISK FACTORS.......................................32     ADDITIONAL INFORMATION.............................44

   RISKS ASSOCIATED WITH OPERATING IN DEVELOPING          SCHEDULE "A" CONSOLIDATED FINANCIAL STATEMENTS
   COUNTRIES.......................................32     (AS ATTACHED).......................................1
   RISKS SPECIFIC TO OPERATIONS IN VENEZUELA.......33
      Political and Economic Instability...........33     SCHEDULE "B" MANAGEMENT'S DISCUSSION AND ANALYSIS
      Environmental Permit Still Required..........33     OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS....1
      Exchange Controls............................33
   MINE OPERATION AGREEMENT........................33     SCHEDULE "C" GLOSSARY OF DEFINED TERMS AND
      Lack of Ownership Rights.....................33     TECHNICAL MINING TERMS AND ABBREVIATIONS............1
      Lack of Copper Rights........................33
   PROPOSED AMENDMENTS TO MINING LAWS..............34     SCHEDULE "D" MINE OPERATION AGREEMENT AND RELATED
   ARBITRATION PROCEEDINGS.........................34     DOCUMENTS...........................................1
      Sale of Gold.................................34
      Unauthorized Miners..........................35     SCHEDULE "E" AUDIT COMMITTEE CHARTER................1
      Imataca Forest Reserve.......................35
   GENERAL RISK FACTORS............................35     SCHEDULE "F" POLICY ON INDEPENDENCE OF DIRECTORS....1
      Title to Mineral Properties..................35
      Environmental Regulation and Liability.......35
      Additional Funding Requirements..............36
      Reserve and Resource Estimates...............36
      Mineral Exploration and Exploitation.........37
      Uninsurable Risks............................37
      Competition..................................37
      Dependence on Limited Mining Operations
      and Properties...............................37
      Production Risks.............................37
      Regulations and Permits......................38
      Gold Price Volatility........................38
      Currency Fluctuations........................39
      Credit and Market Risks......................39
      Recent Losses and Write-downs................39
      Operating Losses are Expected to Continue In
      the Near Future..............................39
      Dependence on Key Employees..................39
      Compliance with Sarbanes-Oxley Act of 2002...40
      Common Share Price Volatility................40
      Potential Dilution...........................40
      Enforcement by Investors of Civil
      Liabilities..................................40
      Future Hedging Activities....................41
      No Payment of Cash Dividends in the Near
      Future.......................................41

DIRECTORS AND SENIOR OFFICERS......................41

   AUDIT COMMITTEE.................................43
      Composition..................................43
      Charter......................................43
      Policy on the Provision of Services by
      External Auditors............................43
      External Auditors Service Fees...............43
</TABLE>


<PAGE>


                      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, 2006 and 2005, 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,
          2006, 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, 2006 ("Management's Discussion and Analysis");

     (c)  the executive summary of a feasibility study completed by
          SNC-Lavalin Engineers & Constructors Inc. ("SNC-Lavalin") 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 (the "20,000 TPD Feasibility
          Study");

     (d)  the development plan (update to the 20,000 TPD Feasibility Study)
          completed by SNC-Lavalin and other independent consultants in August
          2005 (the "2005 Development Plan").

     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 Schedule "A" and Schedule "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$" are to Canadian dollars and all references to "US$" 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,
                                              2006         2005         2004
  Rate at end of year...................     C$1.1653   C$1.1659     C$1.2036
  Average rate for year.................      C$1.134   C$1.2116     C$1.3015

     The Consolidated Financial Statements have been prepared in accordance
with Canadian generally accepted accounting principles and, except as
described in note 19 to the Consolidated Financial Statements, conform in all
material respects with accounting principles generally accepted in the United
States.

                                      1
<PAGE>

                 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 Schedule
"C" to this Annual Information Form.

               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," "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, 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
and dependence on key employees. See "Risk Factors" and "Risk Factors" in
Management's Discussion and Analysis. Due to risks and uncertainties,
including the risks and uncertainties identified above and elsewhere in this
Annual Information Form, actual events may differ materially from current
expectations. 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.


   NATIONAL INSTRUMENT 43-101 - STANDARDS OF DISCLOSURE FOR MINERAL PROJECTS

     National Instrument 43-101 - Standards of Disclosure for Mineral Projects
("NI 43-101") issued by the Canadian Securities Administrators (the "CSA")
requires, among other things, that issuers ensure that all written disclosure
of a scientific or technical nature, including disclosure of a mineral
resource or mineral reserve, concerning a mineral project on a property
material to the issuer must be based on material provided by a qualified
person or under their supervision (a "Qualified Person"). A Qualified Person
for purposes of NI 43-101 means an individual who is an engineer or
geoscientist with at least five years of experience in mineral exploration,
mine development or operation and/or mineral project assessment, has
experience relevant to the subject matter of the disclosure and is a member in
good standing of a specified professional association. The issuer must
disclose the name and the relationship to the issuer of the Qualified Person
who prepared or supervised the preparation of the information that forms the
basis for the written disclosure.

                                      2
<PAGE>

                                  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, the "Crystallex
Group") 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 Increible properties (which include the La
Victoria deposit), and the Revemin mill, all of which are located in Bolivar
State, Venezuela.

     The primary focus of the Corporation over the past five years has been
the development of the Las Cristinas project, including:

     o    entering into a mine operation agreement dated September 17, 2002,
          with Corporacion Venezolana de Guayana (the "CVG");

     o    supervising the preparation of the 20,000 TPD Feasibility Study;

     o    completing financing transactions (including a C$115 million Common
          Share offering in April 2004, a US$100 million debt offering in
          December 2004, a C$10 million short term note financing in September
          2005 in conjunction with the establishment of a C$60 million equity
          draw down facility, a US$31 million private placement in February
          2006, the receipt of C$21.6 million and C$5 million pursuant to draw
          downs under the equity draw down facility in the fourth quarter of
          2005 and January 2006, respectively, and a C$32.4 million offering
          of units in August 2006), and an early exercise of certain Common
          Share purchase warrants for proceeds of US$6.04 million;

     o    closing of the Corporation's outstanding commodity contract
          obligations of US$14,000,000 million as part of the restructuring
          (including arranging a new debt facility for the hedge settlement
          amount and amending an existing debt facility) of its outstanding
          obligations with Standard Bank PLC ("SB"). In May 2006 the
          Corporation issued 3.8 million common shares to SB as settlement of
          the $7.5 million exchangeable portion of the bank loan.;

     o    working to acquire the necessary permits (including the submission
          of an environmental impact study);

     o    entering into an Engineering, Procurement and Construction
          Management Contract (the "EPCM Contract") with SNC-Lavalin and
          supervising the engineering and procurement process;

     o    supervising the preparation of a NI 43-101 compliant Technical
          Report, which represented an update to the 20,000 TPD Feasibility
          Study (the "2005 Development Plan") completed in August 2005 by
          SNC-Lavalin, MDA and other independent consultants.;

     o    98% completion of detailed engineering and design work and
          purchasing all long lead time equipment; and

     o    securing the Ministry of Basic Industries and Mining ("MIBAM")
          approval of the technical, commercial and contractual compliances
          aspects of the Las Cristinas project in March 2006.

     The Corporation produced approximately 47,000 ounces of gold in 2006 from
its operations in Venezuela, including the Tomi open-pit and underground
mines, the La Victoria open-pit mine and ore purchased from third parties. All
the ore from these sources is processed at the Corporation's Revemin mill. The
Corporation continues to conduct exploration on the Tomi properties with the
aim of finding sufficient open-pit ore to supply the Revemin mill after the
depletion of the existing Tomi pits during 2008.

                                      3
<PAGE>


     The Corporation conducted a diamond drill program at Las Cristinas from
October 2006 to February 2007 and it is anticipated that an updated resource
and reserve estimate will be completed by the end of June, 2007. The drilling
program focused on three areas of the Las Cristinas property: (1) the western
margin of the planned Conductora pit where mineralization is open at depth
down-dip; (2) the extreme southwest of the planned Conductora pit where a
sheet of relatively shallow ore was discovered in the hanging wall of the main
Conductora ore zone in previous drilling; and (3) the Morrocoy zone which lies
in the northern part of the property. Known mineralization in the Morrocoy
zone has similar characteristics to that of the Conductora area which contains
the bulk of the known mineral ore reserves at Las Cristinas. Previous drilling
of the Morrocoy zone was relatively wide-spaced to the extent that known
mineralization there is classified as an inferred mineral resource. Crystallex
believes that there is sufficient continuity of mineralization at Morrocoy to
warrant denser drilling with the objective of upgrading the inferred mineral
resources to the measured and indicated category. If this objective is
achieved, the Morrocoy zone could contribute to an increase in the overall
mineral reserves at Las Cristinas.

     The diagram below shows the relative locations of the Corporation's
current projects in the Bolivar State, Venezuela.

                      [GRAPHIC AS INDICATED ABOVE OMITTED]


                                      4
<PAGE>


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.

<TABLE>
<CAPTION>
<S>                                    <C>                           <C>

                                      -------------------           ------------------------
                                     |    CRYSTALLEX     |         |     CRYSTALLEX         |
                                     |   INTERNATIONAL   |_________|     INTERNATIONAL      |
                                     |    CORPORATION    |         |     CORPORATION        |
                                     |   (Canada) (1)    |         | (Venezuelan Branch)(1) |
                                      --------------------          -------------------------
                                               |
                                               |
            ___________________________________|__________________________________________
           |                                   |                                          |
           |                                   |                                          |
           |                                   |                                          |
  --------------------                --------------------                       --------------------
 |    CRYSTALLEX      |              |      0702259       |                     |      BOLIVAR       |
 | de URUGUAY, S.A.   |              |      B.C. LTD.     |                     |  GOLDFIELDS A.V.V. |
 |      (BVI)         |              | (British Columbia) |                     |      (Aruba)       |
  --------------------                --------------------                       --------------------
           |                                   |                                                           |
           |                                   |                                          |
           |                                   |                                          |
  --------------------                --------------------                       --------------------
 |    CRYSTALLEX      |              |        ECM         |                     |      ORINOQUIA     |
 | de VENEZUELA, C.A. |              |    (VENCO) LTD.    |                     |    MINING A.V.V.   |
 |  (Venezuela)       |              |     (Bermuda)      |                     |       (Aruba)      |
  --------------------                --------------------                       --------------------
           |                                   |                                          |
           |                                   |                                          |
           |                                   |                                          |             93%
  --------------------                --------------------                      __________|_________________
 |    CORPORACION     |              |   OSMIN HOLDINGS   |                    |                            |
 |    SUAYCA, C.A.    |              |     LIMITED (3)    |                    |                            |
 |    (Venezuela)     |              |     (Bermuda)      |           --------------------      --------------------
  --------------------                --------------------           |      MINERAS       |    |                    |
                                               |                     |  BONANZA, C.A.(2)  |    |   REVEMIN II, C.A. |
                                               |                     |    (Venezuela)     |    |    (Venezuela)     |
                                               |                      --------------------      --------------------
                                      -------------------
                                     |     AURIFEROS     |
                                     |  EL CALLAO, C.A.  |
                                     |   (Venezuela)     |
                                      -------------------
                                               |
                                               |
                                               |
                                      --------------------
                                     | CORPORACION MINERA |
                                     |  LAS MERCEDES EL   |
                                     |    CARAPO, C.A.    |
                                     |   (Venezuela)      |
                                      --------------------
</TABLE>

______________________

Notes:

(1)  The Corporation holds its interest in the Las Cristinas project directly
     through its Venezuelan Branch. 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 - Mine
     Production."

(3)  The Corporation holds its interest in the Lo Increible operations
     indirectly through Osmin Holdings Limited. See "Other Assets -Lo
     Increible Properties - Background."

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


                                      5
<PAGE>


                        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
concessions and leases as at December 31, 2006. The mineral reserve and
resource estimates have been prepared in accordance with the standards of the
Canadian Institute of Mining, Metallurgy and Petroleum and 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. Richard Spencer, P. Geo., a Qualified
Person and VP Exploration of Crystallex International Corporation.

     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 Schedule "C" for detailed definitions of mineral reserve,
proven mineral reserve, probable mineral reserve, mineral resource, measured
mineral resource, indicated mineral resource, inferred mineral resource, and
cut-off grade.

<TABLE>
                                                     RESERVES
                              PROVEN                    PROBABLE                    TOTAL
                    -------------------------   ------------------------   ---------------------------
                                    Contained                  Contained                     Contained
                    Tonnes    Grade   Gold      Tonnes   Grade   Gold      Tonnes    Grade     Gold
                    -------   ------  ----      ------- ------- ------     -------  -------    -----
                              (g/t)   (oz)               (g/t)   (oz)                (g/t)      (oz)
                                           (tonnes and ounces in thousands)
<S>                 <C>       <C>   <C>         <C>      <C>    <C>         <C>      <C>      <C>
Las Cristinas
Project(1)....      50,613    1.25    2,031    327,833    1.14    11,975    378,446    1.15    14,006


                                                        RESOURCES(4)
                                MEASURED                 INDICATED                    TOTAL
                            -------------------------   ------------------------   ---------------------------
                                           Contained                  Contained                     Contained
                            Tonnes    Grade   Gold      Tonnes   Grade   Gold      Tonnes    Grade     Gold
                            -------   ------  ----      ------- ------- ------     -------  -------    -----
                                      (g/t)   (oz)               (g/t)   (oz)                (g/t)      (oz)
                                           (tonnes and ounces in thousands)

Las Cristinas
Project(1)...........       15,411    1.09     541      106,830    0.91  3,114     122,241     0.93    3,655
Tomi operations(2)...           --      --      --           13    18.3      8          13     18.3        8
La Victoria
operations(3)........           --      --      --        2,422     4.5    349       2,422      4.5      349
Total................       15,411    1.09     541      109,265    0.99  3,501     124,676     1.00    4,012
                            =======   ====     ===      =======    ====  =====     =======     ====    =====
</TABLE>


                                               RESOURCES(4)
                                             ----------------
                                                 INFERRED
                                             ----------------
                                                            Contained
                                      Tonnes      Grade       Gold
                                     --------    --------   --------
                                                   (g/t)      (oz)
                                     (tonnes and ounces in thousands)

Las Cristinas project(5)......        163,046       0.87       4,537

_________________

Notes:

(1)  The mineral reserves and resources with respect to the Las Cristinas
     project are based on estimates prepared by MDA (Steve Ristorcelli, P.
     Geo. and Scott Hardy, P. Eng., of MDA were the Qualified Persons) as of
     December 31, 2006. The mineral reserves estimated by MDA are based on a
     US$450 per ounce gold price and cut-off grades ranging from 0.4 grams of
     gold per tonne to 0.6 grams of gold per


                                      6
<PAGE>


     tonne depending on the mineral type. The mineral resources estimated by
     MDA 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 resources with respect to the Tomi operations represent the
     underground only. The mineral resource estimate has been estimated by the
     Corporation under the direction of, and verified by, Dr. Richard Spencer,
     P. Geo, VP Exploration, Crystallex International Corporation. The mineral
     resources estimated by the Corporation are based on cut-off grades
     ranging from 1.0 gram of gold per tonne to 1.5 grams of gold per tonne.
     See "Other Assets - Tomi Operations - Mineral Reserves" and " - Mineral
     Resources."

(3)  The mineral resource with respect to the La Victoria operation has been
     estimated by Dr. Richard Spencer, P. Geo, VP Exploration, Crystallex
     International Corporation. The mineral resources are based on a cut-off
     grade of 2.0 grams of gold per tonne. See "Other Assets - Lo Increible
     Properties - Mineral Resources."

(4)  Mineral resources are in addition to and do not include mineral reserves.

(5)  The inferred resources with respect to the Las Cristinas project are
     based on a cut-off grade of 0.5 grams of gold per tonne.


                 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 jewellery. Other
end uses include official coins, electronics, miscellaneous industrial
(including a role in jet engines and space craft) 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 historical locations are depleted.

     The cost of gold production expressed in U.S. dollars is rising globally
primarily due to U.S. dollar weakness, higher costs in raw materials, notably
sodium cyanide and steel grinding media, 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 and increased demand. In 2006, the
price of gold ranged from $525 per ounce to $725 per ounce and averaged $604
per ounce for the year. Since 2000, there has been a strong inverse
correlation between the trade-weighted U.S. dollar exchange rate and the gold
price. Other principal factors affecting the gold price have been an increase
in the demand for gold for investment purposes, primarily attributed to the
markets in India and elsewhere in Asia and underpinned by jewellery demand,
the increase of gold reserves by several nations, de-hedging by gold
producers, negative real U.S. treasury bill yields, the second Washington
Accord, which has limited central bank gold sales, global reflationary
pressures and a general increase in global geopolitical tensions.

     The table below shows the average daily morning gold price fixing on the
London Bullion Market from 1990 to 2006.

                                                     Average Gold Price
                                                     ------------------
                                                        (US$/oz)
             1996....................................      388
             1997....................................      331
             1998....................................      294
             1999....................................      279
             2000....................................      279
             2001....................................      271
             2002....................................      311
             2003....................................      363
             2004....................................      410
             2005....................................      445
             2006....................................      604

The gold price can fluctuate widely and is affected by numerous factors beyond
the Corporation's control. The Corporation's revenues, cash flow and
profitability are significantly affected by changes in gold prices.
Consequently, a sustained downward trend in gold prices could negatively
affect the future of the Corporation's operations. See "Risk Factors - General
Risk Factors - Gold Price Volatility".


                                      7
<PAGE>


                              MINING IN VENEZUELA

     The Las Cristinas project and the Corporation's mining concessions and
leases 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 Chavez Frias, the leader of the Movimiento Quinta
Republica (MVR). Mr. Chavez was elected to his first six-year term as
President in 2000. He defeated a recall referendum organized by opposition
political parties in 2004. In early December, 2006, President Chavez was
elected for another six year term which commenced in February, 2007.

     Venezuela's natural resources sector is dominated by the hydrocarbon
sector. In 2006, oil and natural gas production represented approximately 30%
of Venezuela's gross domestic product and approximately 90% 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 south-eastern Venezuela, an area that is rich in
minerals and covers approximately one-half of Venezuela, is one of the areas
included in Venezuela's efforts to diversify its economy away from petroleum
and natural gas. The CVG is a decentralized autonomous public administrative
institution created in 1960 pursuant to the Law for the Development of Guayana
and 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 Petroleos 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). MIBAM (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 exploration and exploitation by private parties
pursuant to mineral concessions granted by the MIBAM and direct exploration
and exploitation by the Government of Venezuela.

     Mineral Concessions

     Regulatory Title Process

     At the end of May 2006, MIBAM submitted a draft mining law (the "Mining
Bill") to the Venezuelan National Assembly that represented the outcome of the
announcement originally made in September 2005 by the Government to the effect
that the Government intended to amend the mining law to enable the Government
to exercise better control over the nation's mineral rights. The Government
further stated that the amendments to the mining law would specifically target
properties that were idle due to the title-holders' failure to comply with the
terms and conditions of the underlying title. A mining sub-commission, chaired
by Deputy Jose Ramon Rivero, was

                                      8
<PAGE>


mandated to manage the legislative process for the Mining Bill. At a public
function held in Tumeremo, Bolivar State on July 31, 2006 to address the
mining community, as represented by both small scale miners and large
commercial mining representatives, Deputy Rivero reiterated that the Mining
Bill was not aimed at active gold properties but rather at those properties
that had been inactive or abandoned for the past several years. He noted that
the only CVG contracts that would be terminated were those granted up to 1999
by the CVG and which should have been active. In particular, Deputy Rivero
noted that the Government does not consider the Las Cristinas project to be
abandoned or idle since it has remained an active project, being advanced
towards production. Deputy Rivero went on to publicly state that active mining
contracts of such projects will remain in effect.

     Mineral Concession Taxes

     Holders of gold mineral concessions are required, from the fourth year of
the concession, to pay a surface tax according to a sliding scale, from a
minimum of 0.14 tax units per hectare (one tax unit equals approximately
US$15.30) for years four to six and for concessions of up to 513 Ha, to a
maximum of 0.38 tax units for years seventeen and over and for concessions
over 11,286 Ha. Once production begins, concession holders are required to pay
exploitation tax of, in the case of gold, 3% of the Caracas commercial value
of the refined metal produced. Surface tax is reduced by the amount of
exploitation tax paid, and is therefore nil once the exploitation tax paid
equals or exceeds the surface tax due.

     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 MIBAM.

     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 State itself through the MIBAM or by other public
entities such as the CVG. The effect of such a reservation is to prohibit the
grant of mineral concessions over these areas to private parties.

     Operation Agreements

     If the Government of Venezuela has reserved direct exploration and
exploitation of minerals for itself, the MIBAM 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 a land use permit and an authorization to
impact the natural resources, both of which are issued by the MARN. The
granting of the permit to impact natural resources is dependent on approval of
an environmental and social impact assessment ("EIA") by the MARN. The EIA
process includes the filing of a

                                      9
<PAGE>


comprehensive environmental, socio-economic and cultural impact study by the
developer of the mining project. In addition, approval of the feasibility
study by MIBAM is required before MARN will issue the environmental
authorization.

     Mine Closure and Remediation

     All developers of mining projects have a general obligation to reclaim
the environment to a productive 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 (i.e., 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.

     In determining taxable income, 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 line with inflation
since acquisition and pay a one-time tax of 3% of the amount of the
revaluation 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 operating losses and one
year in the case of inflation adjustment 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 withholding 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 dividend withholding or branch profits tax.


     VAT and Import Duties

     Venezuelan corporations and branches are required to pay value added tax
("VAT") of 11% (reduced from 14% on March 1, 2007 and to be further reduced to
9% on July 1, 2007) 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.


                                      10
<PAGE>


     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 exoneration from the VAT and import duties applicable to
machinery and equipment imported by it into Venezuela for the project. The
Corporation has applied for an exoneration of VAT during the construction
phase of Las Cristinas.

     Science and Technology Contribution

     Venezuelan mining operations must invest or contribute to in science and
technology projects an amount equal to 1% of gross income during each taxable
year. The amount to be invested or contributed is based upon the previous year
gross income. Any amount not invested or contributed during the taxable year
must be paid to the Ministry of Science and Technology.

     Tax Treaties

     Venezuela has entered into tax treaties with a number of countries
including Canada.

Exchange Controls

     Venezuela reintroduced exchange controls in February 2003.

     Access to foreign currency is subject to a process of application and
approval. 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.

                             LAS CRISTINAS PROJECT

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

          o    the 20,000 TPD Feasibility Study; and

          o    the 2005 Development Plan.

     A copy of the 20,000 TPD Feasibility Study and the 2005 Development Plan
are available for review on the SEDAR website at www.sedar.com.

     The 20,000 TPD Feasibility Study and the 2005 Development Plan (updating
the 20,000 TPD Feasibility Study) are the Corporation's current base case and
the 2005 Development Plan is the current technical report for purposes of NI
43-101.

     The 20,000 TPD Feasibility Study and the 2005 Development Plan 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 test work.

Location and Property Description

     The Las Cristinas project is located in Sifontes Municipality in Bolivar
State, Venezuela, approximately 6 km west of the village of Las Claritas and
approximately 360 km south of Puerto Ordaz and 670 km southeast of Caracas.

     The Las Cristinas project encompasses three principal zones of
mineralization including the Conductora - Cuatro Muertos (termed "Conductora"
for simplicity), Mesones - Sofia ("Mesones") and Cordova areas, which together
constitute the Las Cristinas Deposits. At this time, the Cordova area is
sub-economic and mineralization



                                      11
<PAGE>


there is included in the Las Cristinas resource, but does not contribute to
the reserve. The Las Cristinas Deposits are located on four contiguous areas,
Las Cristinas 4, 5, 6 and 7, that total 3,885.6 Ha in extent.

         The relative locations of the Las Cristinas Deposits are shown in the
following map.

                      [GRAPHIC AS INDICATED ABOVE OMITTED]

Mine Operation Agreement

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

     o    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 ore 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;

     o    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 ore located in the Las
          Cristinas Deposits and to enter into operation agreements with third
          parties for such purposes; and

     o    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 Schedule "D."

     The principal provisions of the Mine Operation Agreement are summarized
     below.

     o    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.

     o    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:

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


                                      12
<PAGE>


Commercial Value                                                       Royalty

less than US$280 per ounce .........................................    1.0%
equal to or more than US$ 280 per ounce and
  less than US$350 per ounce........................................    1.5%
equal to or more than US$350 per ounce and
  less than US$400 per ounce........................................    2.0%
more than US$400 per ounce .........................................    3.0%


          (b)  the Venezuelan exploitation tax payable by the CVG equal to 3%
               of the commercial value of the refined 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 thereof.

     o    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 informal 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.

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

     o    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.

     o    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.

     o    Governing Law. The Mine Operation Agreement is governed by the laws
          of Venezuela.

Accessibility, Physiography and Climate and Local Resources and Infrastructure

     Accessibility

     The Las Cristinas project is accessed by road, and is approximately five
hours' drive southeast from Puerto Ordaz. The Troncal 10 route consists of a
four-lane highway for approximately 55 km and continues for approximately 280
km thereafter as a well-maintained two-lane paved road to the camp-site
turn-off at Kilometre 84. From there, the Project is accessed via a
19-kilometre all-weather, unsealed road, the upgrading of which was completed
by the Corporation in November 2005. The route of the unsealed road was
designed to bypass local villages.

     Puerto Ordaz is a port city located on the Orinoco River with access to
the Atlantic Ocean 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 100 km
north of the camp-site towards Puerto Ordaz. A charter flight from Puerto
Ordaz to El Dorado takes approximately one hour. An airstrip at Las Cristinas
allows for the landing of small aircraft.


                                      13
<PAGE>


     Physiography and Climate

     The Las Cristinas project is located in a flat area with scattered,
rounded hills that reach a maximum height of 30 m. The average elevation is
130 m above sea level. Four streams including the Amarilla, Las Claritas,
Sofia and Morrocoy, flow through the property. These streams are sinuous due
to the low topographic gradient across the Project area and flood their banks
at times during the wet season. About 900 Ha of the Project area has been
deforested during mining by itinerant miners. Hydraulic mining has led to
flooding of pits and the accumulation of poorly consolidated tailings material
which complicates access to the eastern part of the Project area where
mineralization is located closest to the surface.

     The climate is tropical and humid. Temperatures typically range from
22(degree)C to 36(degree)C and operations can be conducted year around.
Average annual rainfall is approximately 3.3 m, most of which falls in
hour-long cloudbursts during the day. Average annual evaporation is
approximately 1.8 m. The rainy season extends from May to October with a short
rainy season in December. Rainfall in the relatively dry season 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 m above
the ground. The forest floor is relatively open. Secondary vegetation, which
has now invaded the mined or otherwise disturbed areas, consists of smaller
trees, shrubs, creeping vines and various grasses. This secondary growth tends
to be denser than the primary vegetation.

     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. It is expected that the Corporation will
employ approximately 400 individuals at the height of production. All salaried
supervisory and technical labour, other than a few expatriate positions, are
expected to be Venezuelan nationals. It is expected that over time, Venezuelan
personnel will occupy all of the positions initially staffed with expatriates.
There is ample water and land surface for mining, plant sites and tailings
disposal.

     An existing construction camp has been refurbished. The administration
offices and dining facilities are fully functioning.

     Power requirements will increase from an average of about 10 MW at the
commencement of construction to about 30 MW when the plant is in full
production. A 400 KVA power line (with a capacity of 300 MW and a current
demand of approximately 100 MW) runs within 6 km of the Las Cristinas 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. Power to the site will be carried via a new overhead power
line, a distance of approximately 6 km, and will terminate at a new substation
located on 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, informal 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 Las Cristinas project site is covered with tailings from this early
mining.

     After extensive exploration and development, Placer Dome Inc. (PDI)
announced commencement of construction of the Las Cristinas mine on August 2,
1997. The inauguration took place at the site with officials of PDI, CVG, and
representatives of the Venezuelan government present. On January 20, 1998, PDI
announced that its operating company in Venezuela, Minera Las Cristinas C.A.
had decided to suspend construction. Construction resumed in May 1999, but was
again suspended on July 15, 1999, due to uncertainty with respect to gold
prices and title. Up until that time, PDI had reportedly spent US$118 million
on the project.

     See also "Legal Proceedings - Withdrawal of MINCA Litigation."


                                      14
<PAGE>

Geology and Mineralization

     Regional Geology

     The Las Cristinas project is located in the granite-greenstone terrain of
the Guyana Shield. The Guyana Shield underlies the eastern part of Venezuela,
Guyana, Surinam, French Guiana and parts of northern Brazil and was contiguous
with parts of West Africa prior to the opening of the Atlantic Ocean in the
Jurassic period. 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 Early Proterozoic age which have
undergone compressional tectonism and metamorphism and were 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 m thick) overlying a thin mottled clay zone
(averaging 2 m thick), which in turn overlies a saprolite zone, which is
generally 20 m to 60 m thick and locally over 90 m thick. The saprolite is
subdivided into an upper oxide saprolite horizon, which is practically devoid
of copper, and a lower sulphide bearing saprolite horizon that is enriched in
copper. The oxide saprolite is red ochre in colour while the sulphide
saprolite has a greenish hue. The oxide and sulphide saprolite is sharp in
some areas of the deposit, while in others is separated by a transitional
zone, called mixed saprolite, which contains both metal oxide and sulphide
minerals. The saprolite typically overlies saprock; material in which the
texture of the original rock is evident, but which is soft due to the
abundance of clay minerals generated by weathering. The saprock layer ranges
in thickness from a few metres to a few tens of metres in extreme cases. The
upper 50 m of bedrock is characterized by centimetre-sized vugs and voids
derived from the weathering of carbonate veins and carbonate matrix. This zone
is termed carbonate-leached bedrock.

     Structure

     Two major fabric orientations are evident throughout the Las Cristinas
Deposits. The older foliation (S1) consists of a moderately to intensely
developed cleavage that is sub-parallel to bedding. The S1 foliation strikes
north-south and dips at about 40(degree) to the west in the Conductora area.
This foliation rotates in the Cordova and Mesones areas to a north-northwest
strike and a steeper dip of about 70(degree) to the southwest. The S1
foliation contains a strong stretching lineation that plunges to the southwest
and probably relates to fabric development in a major, regional shear zone.

     The S2 fabric is a spaced foliation that is axial planar to kink-folds.
It strikes east-west and dips gently (about 20(degree)) to the north.

     A northeast-striking post mineral fault separates the Conductora - Cuarto
Muertos - Sofia area from the Mesones - Cordova zone. The fault zone is
intruded by steep, southeast - dipping post-mineral diorite-gabbro dykes.

     The Las Cristinas Deposits are cut by a system of post-mineral dioritic
dykes that dip shallowly to the east and are arranged in an upward-stepping en
echelon pattern.

     Alteration

     Various alteration assemblages are evident in the Las Cristinas Deposits.
     These include:

     o    Widespread albite development in veins and as replacements of other
          minerals;

     o    Potassic alteration occurs as K-feldspar replacements and veins.
          However a pervasive secondary biotite - magnetite assemblage is the
          dominant expression of K-silicate alteration throughout the Las
          Cristinas Deposits. Calcite is associated with the biotite-magnetite
          assemblage;

                                      15
<PAGE>


     o    Quartz-tourmaline assemblages with minor topaz;

     o    Quartz-muscovite-pyrite constitutes phyllic alteration and;

     o    Ubiquitous iron-rich chlorite, epidote and calcite which are
          superimposed on the alteration assemblages described above. This
          superimposition is evident in the common partial replacement of
          secondary biotite and tourmaline by chlorite.

     Alteration minerals in the Las Cristinas Deposits have a roughly
concentric distribution. The exception is albite, which is widespread and
appears to predate the majority of the other alteration assemblages.
Quartz-tourmaline alteration is most strongly developed in near-vertical
breccia pipes in the Mesones - Sofia area where it occurs with traces of
topaz. Tourmaline decreases in abundance in all directions away from the
Mesones - Sofia centres. K-silicate alteration extends from Mesones - Sofia to
the footwall of the mineralized zone in the east, to the southern margin of
the Conductora area in the south and to the western part of the Cordova area
in the west. K-silicate alteration is represented by the ubiquitous secondary
biotite - magnetite assemblage, whereas K-feldspar is concentrated in the
Mesones - Sofia area. The chlorite-calcite-epidote assemblage is located
outboard of, and superimposed on, the K-silicate zone. Phyllic alteration is
most strongly developed in the upper parts of the Mesones - Sofia breccia
pipes.

     Mineralization

     Primary mineralization in hard-rock

     Sulphide content in the Las Cristinas Deposits is highest in the Mesones
deposit where the quartz-tourmaline breccias contain up to 30% total
sulphides. Sulphide content decreases southward into the Conductora deposit
where the maximum sulphide content is 5%. This change in sulphide content is
accompanied by a change in sulphide species: pyrite-chalcopyrite in the
Mesones area is associated with minor molybdenite, whereas the content of
chalcopyrite and molybdenite decrease southwards in the Conductora deposit and
westwards into the Cordova area. The sulphide assemblage in the southern part
of the Conductora deposit and to the west in the Cordova zone is strongly
dominated by pyrite with minor chalcopyrite and no molybdenite.

     On a microscopic scale, gold can be found as free grains in quartz and as
blebs and fracture fillings in pyrite and/or chalcopyrite. In the Conductora
deposit, gold grade is crudely proportional to sulphide content to the extent
that gold grade can be roughly estimated from the sulphide content of the
interval. However, this relationship breaks down in the Mesones deposit where
significantly higher sulphide content does not coincide with significantly
higher gold grades: in fact, the average grade of Mesones is very similar to
that of the Conductora deposit (1.1 g/t gold in Mesones versus 1.2 g/t gold in
Conductora). 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.

     Chalcopyrite is essentially the only copper mineral in the hard rock
beneath the saprolite; hence copper grades correlate directly with
chalcopyrite content in the Las Cristinas Deposits. In contrast to the average
gold grade of the Mesones and Conductora deposits being similar, the average
copper grade of the Mesones deposit is approximately double that of Conductora
(0.12% in Conductora versus 0.27% in Mesones). The average grade of copper in
the Las Cristinas Deposits is 0.13%.

     Sulphides occur as replacements, disseminations, clots, blebs, sulphide
veinlets and also in veinlets with quartz and other alteration minerals
throughout the Las Cristinas Deposits. The higher sulphide content in the
Mesones deposit is evident in more extensive replacements and denser
disseminations than are evident in the Conductora or Cordova areas. Many
sulphide grains and stringers lie within the plane of the foliation while many
disseminations and blebs cut across the S1 foliation. Areas of intense
cleavage development are characterised by sulphide blebs that are flattened
into the plane of the S1 foliation. The majority of quartz-carbonate-sulphide
veinlets lie in the plane of the foliation. Veinlets that cross-cut the
foliation show successive rotation into the plane of the foliation in areas of
stronger fabric development. These features are interpreted to indicate that
sulphide mineralization, and therefore copper and gold mineralization,
occurred during and partially post-dated, S1 cleavage development. Sulphide
accumulations are clearly folded by, and hence predate, the S2 foliation.


                                      16
<PAGE>


     Mineralization occurs in sub-parallel units that dip to the west at about
40(degree) parallel to bedding and to the S1 foliation. Well mineralized zones
coincide with moderate to intense cleavage development and fragmental
metavolcanic units and the poorest mineralization is in competent metavolcanic
units such as basaltic lava flows in which cleavage is typically poorly
developed. The important role that stratigraphy plays in hosting
mineralization dictates that the deposit is stratiform, consisting of well
mineralized zones separated by poorly mineralized units typically composed of
impermeable basalt lava flows. Intrusive stocks, which cross-cut stratigraphy,
are similarly poor hosts for mineralization due to their mechanical competence
and related poor permeability.

     Down-dip continuity of mineralized zones has proved to be excellent in
deep drilling. The overall true thickness of the gold mineralization envelope
throughout the Conductora deposit reaches a maximum width of 500 m. Some
individual higher-grade gold zones (>1g/t) exceed 100 m in thickness. Please
see Figures 1.7.1 and 1.7.2 of the 2005 Development Plan for a graphic
depiction of the distribution of gold mineral zones on cross section.

     Saprolite

     The copper content of the upper part of the saprolite is minimal due to
natural oxidation and subsequent leaching of copper minerals in the oxide
saprolite. The dissolved copper precipitates as secondary minerals in the
sulphide saprolite, forming a "copper blanket;" a layer that is enriched in
copper and which consists mainly of secondary copper minerals. The Las Cristinas
Deposits contain a poorly developed copper blanket that is typically 5-20 m
thick and which contains chalcopyrite, chalcocite and covellite in addition to
pyrite.

     Gold mineralization is largely unaffected by oxidation and its grade and
distribution throughout the saprolite is similar to that of the original hard
rock prior to weathering. Hence, alternating zones of good and poor gold grade
as described above, can be traced through the saprolite from the hard-rock
below.

Drilling, Sampling and Data Verification

     The most detailed exploration 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:

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

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

     o    drilling of 1,174 drill holes totalling over 110,000 m;

     o    geophysics (ground and airborne-magnetic programs, as well as
          induced polarization, radiometric and transient electromagnetic
          surveys); and

     o    tailings evaluation.

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

     Under the Mine Operation Agreement, the Corporation obtained an
electronic database that included results of drilling, as well as topographic,
geologic and engineering data derived from previous work completed by PDI. The
database included geological information on 160,600 m of drilling and
trenching, 162,806 gold assays, 145,547 copper assays, 60,655 cyanide-soluble
copper assays and 145,221 silver assays. 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 and photographs of core that
supported the method of work that Placer reported to have been used in the
exploration and evaluation of the Las Cristinas Deposits. In addition, MDA
took independent samples of core, pulps and coarse rejects as part of the
verification process. MDA concluded that Placer's exploration and sampling
procedures conformed to, or exceeded, industry standards.


                                      17
<PAGE>


     In 2003, the Corporation completed a six-week, 2,199 m 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 from
which 1,016 half-core samples were taken for analysis. 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. Independent laboratories conducted sample preparation and
assaying. MDA also took independent core samples to verify the work completed
by the Corporation and requested that existing drill hole collars be surveyed
by an independent contractor. 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.

     The Corporation completed an 18-hole, 7,102 m drill program in 2004 and a
further 5,524 m in 14 bore holes in 2005. Drilling in these two programs was
focussed in the western and southern parts of the modeled Conductora pit
shell. The objective of these programs was to infill drill sparsely drilled
areas to upgrade resource classification and ultimately increase the reserve.
See "Geology" in the 2005 Development Plan for a detailed description of the
sampling, analysis, data verification and security measures used in the
pre-2003, 2003, 2004 and 2005 drill programs.

     The Corporation commenced a 13,500 m drill program on November 1st, 2006.
Twenty-seven diamond drill holes (6,583 m) of this program had been completed
by December 31st, 2006 and the program was concluded in February 2007. Results
from this drill program will be released once the sample results have been
received from the assay laboratory and have passed the quality assurance and
quality control (QAQC) measures implemented for the program. The Corporation
contracted an independent consultant, Mr Trevor Nicholson of Comox, B.C., a
qualified assay chemist, to audit the Corporation's proposed QAQC procedure
prior to start-up of the drill program. Mr Nicholson was on site at Las
Cristinas for approximately 40% of the duration of the drill program. All assay
results from this drill program are sent to Mr Nicholson directly by the assay
laboratory, SGS in Lima, Peru, for QAQC review. Mr Nicholson has the
Corporation's authorization to request reassay of sample sequences which fail
QAQC. Only once samples have passed QAQC are the results deemed acceptable by
the Corporation.

     Mine Development Associates (MDA) has been contracted to undertake a
resource estimation update which takes into account the results of the recent
drilling. Mr Steve Ristorcelli of MDA, who will complete the resource
estimation, undertook an on-site audit of the drill program in January 2007.
It is estimated that the resource estimation and subsequent calculation of
reserves will be completed by the end of the second quarter of 2007.

Mineral Reserves

     The estimated mineral reserves at the Las Cristinas project as at
December 31, 2006, were as follows:


                        Mineral Reserves(1)  Average Grade      Contained Gold
                          (tonnes - 000's)       (g/t)         (ounces - 000's)
                        ------------------ ------------------ ------------------
   Proven..............       50,613              1.25              2,031
   Probable............      327,833              1.14             11,975
                        --------------------------------------------------------
Total..................      378,446              1.15             14,006


________________

Notes:

(1)  Ore reserves for the Las Cristinas project were developed by applying
     relevant economic and engineering criteria to MDA's estimated Measured
     and Indicated resources in order to define the economically extractable
     portions, or Proven and Probable reserves. The mineral reserves estimates
     are based on a US$450 per ounce gold price, (however it conservatively
     maintains the pit shell designed using a US$350 per ounce gold price),
     and cut-off grades ranging from 0.4 grams of gold per tonne to 0.6 grams
     of gold per tonne depending on the mineral type. The reserve estimates
     reflect operating costs as set out in the 2005 Development Plan.


                                      18
<PAGE>


Additional Mineral Resources

     The estimated additional mineral resources at the Las Cristinas project
at December 31, 2006, were as follows:

                                           Average                 Contained
                                             Grade                   Gold
                      Mineral Resources(1)(2)
                          (tonnes - 000's)       (g/t)         (ounces - 000's)
                        ------------------ ------------------ ------------------

    Measured............         15,411            1.09                541
    Indicated...........        106,830            0.91              3,114
Total Measured and
   Indicated............        122,241            0.93              3,655

Total Inferred..........        163,046            0.87              4,537

_______________

Notes:

(1)  The mineral resource estimates were derived using data from all drilling
     done after the 2003 modelling. The new data include 12 twin core holes
     from 2003, 18 deep core holes from 2004 and 14 core holes from 2005, none
     of which were used in the 2003 modelling. The resources are estimated to
     the standard and requirements stipulated in NI 43-101 and meet Canadian
     Institute of Mining classifications. 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.

20,000 TPD Feasibility Study and 2005 Development Plan (update to the 20,000
TPD Feasibility Study)

     In September 2003, SNC-Lavalin 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.

     In August 2005, SNC-Lavalin and other independent consultants (including
MDA) completed the 2005 Development Plan, a comprehensive update of the 20,000
TPD Feasibility Study. The 2005 Development Plan was commissioned to
incorporate a number of design enhancements and to include a review of capital
and operating cost estimates. The revised capital estimate is US$293 million,
an increase in approximately 10% from a revised estimate released in June
2004. The updated estimates incorporate several factors, including:

     o    A 14-hole, 5,524 m drill program that was completed by the
          Corporation in 2005, results of which were press released on June
          22nd, 2005, that resulted in an increase in reserves.

     o    Estimates for operating costs increased from US$6.46/tonne of ore to
          US$7.66/tonne of ore, largely due to an increase in the costs for
          cyanide, steel and labour. As a result of this updated operating
          cost, MDA calculated revised reserves resulting from the consequent
          change in cut-off grades.

     o    Operating cost estimates were not significantly affected by the
          near-global climb in energy costs, a reflection of Venezuela's
          extremely low, stable prices for fuel and electricity.

     The 20,000 TPD Feasibility Study, as updated by the 2005 Development
Plan, serves as the Corporation's current technical report. The conclusions,
estimates and findings of the 20,000 TPD Feasibility Study and the 2005
Development Plan are set out below.

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

          The mine production schedule contemplated under the 2005 Development
          Plan provides for processing 20,000 tonnes of ore per day (7.3
          million tonnes annually), an overall stripping ratio of 1.57:1 and
          an expected mine life of 41 years.


                                      19
<PAGE>


     o    Processing and Recovery. Processing will consist of crushing,
          semi-autogenous 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
          dore. Pilot-plant metallurgical testing conducted under the
          supervision of an independent consultant during the feasibility
          study resulted in an overall recovery rate of 88.7% for the planned
          ore blend.

          The average annual gold production contemplated under the 2005
          Development Plan is 270,000 ounces for the life of mine and 304,000
          ounces for the first five years.

          Subsequent to year-end 2006, MDA calculated the reserves at Las
          Cristinas using a US$450 per ounce gold price. The pit design and
          other physical parameters and costs that were used in the 2005
          Development Plan did not change. The Corporation is reporting their
          2006 year-end reserve calculations based on the updated US$450 per
          ounce gold price. At US$450 per ounce, proven and probable reserves
          at Las Cristinas are 378 million tonnes grading 1.15 g/t containing
          14.0 million ounces of gold. The strip ratio was reduced to 1.0:1.

     o    Environmental Matters. The 2005 Development Plan concludes that
          environmental impacts from the development of Las Cristinas project
          can be minimized through the implementation of best management
          practices, responsible design, operations and monitoring. It is of
          particular importance that the project is operated to protect the
          environmental quality of the Imataca Forest Reserve. This will be
          achieved by protecting water quality; minimizing erosion and
          geomorphological processes, protecting air quality, limiting
          clearing, controlling noise and dust, and ensuring the site is
          closed responsibly once mining is completed, including re-vegetation
          and reforestation.

          A socio-economic assessment for the Las Cristinas project was
          conducted by Venezuelan firm ProConsult C.A. (ProConsult). Overall,
          ProConsult expects that the project will result in many positive
          benefits at the national, regional and local levels, such as
          generation of a dynamic effect on the economy, creation of jobs,
          improvement of infrastructure and implementation of social
          strengthening and job plans, and improvement in health conditions
          and quality of life. However, negative impacts are also expected as
          a result of introducing a large-scale industrial project into a
          rural community such as: accelerated migration, drastic changes in
          labour market and local economy, risk of social conflicts, impacts
          to cultural traditions and cultural landscapes, and impact on the
          demand for public and social services.

          Additional mitigation measures will be implemented over the course
          of the construction and operations period to minimize bio-physical
          environmental effects and socio-economic impacts, details of which
          are contained in the 2005 Development Plan. Concurrent reclamation
          will be carried out on disturbed land as this land is taken out of
          any future requirements for mining, storage, or access. Capital
          costs necessary for closure are expected to range from US$1,500,000
          to US$6,500,000 at the time of closure.

     o    Capital Costs. The estimated capital costs of the Las Cristinas
          project under the 2005 Development Plan are approximately US$293.0
          million. In addition, sustaining capital totalling US$284 million
          over the 41 years of the mine will be required.

     o    Cash Operating Costs. The estimated average total cash operating
          costs of the Las Cristinas project under the 2005 Development Plan
          are approximately US$221 per ounce (including royalties at US$350
          per ounce) for the life of mine and approximately US$154 per ounce
          (including royalties at US$350 per ounce) for the first five years.
          At a US$450 per ounce gold price the total average operating cash
          costs increase due to higher royalty payments. Total cash costs,
          including royalties, at US$450 per ounce, average US$163 per ounce
          for the first five years and US$231 per ounce over the life of the
          mine.

                                      20
<PAGE>


     The Corporation plans to update capital and operating costs for Las
Cristinas following receipt of the Permit.

Engineering, Procurement and Construction Management

     On March 25, 2004, following completion of a competitive bidding process,
the Corporation entered into the Engineering, Procurement and Construction
Management Contract (the "EPCM Contract") with SNC-Lavalin relating to the
development of the Las Cristinas project.

     As of December 31, 2006, detailed engineering and design for the Las
Cristinas project was 98% complete and the Company had spent approximately
$115 million for equipment, including all long lead time items such as the
mining fleet, crushers and grinding mills, as well as for engineering services
and certain owner's costs administered by the EPCM contract. Additional
amounts, (approximately $66 million to December 31, 2006) have been spent
since the inception of the EPCM contract by the Corporation for owner's costs
not governed by the EPCM contract, including amounts for site security, legal
and consulting fees, social and community development programs and
environmental work.

     The value of equipment in storage at the end of 2006 was approximately
$61 million. The mining fleet is ready and in storage on the docks in Houston,
USA and Antwerp, Belgium and all the other major equipment items are on
schedule in terms of fabrication and delivery. The remaining purchasing of
supplies and awarding of service contracts will be undertaken following
receipt of the Permit. Project development slowed during 2006 while the
Corporation continues to wait for the Permit.

     Upon receipt of the Permit to Impact Natural Resources (the "Permit") from
MARN, the Corporation will commence construction of the base case 20,000 TPD
operation. Assuming receipt of the Permit during the second quarter of 2007 and
immediate availability of construction contractors, initial production should
commence by mid 2009 at an average level of approximately 300,000 ounces of gold
annually over the first five years. With 14.0 million ounces of proven and
probable gold reserves at a gold price of US$450 per ounce, in excess of 17.7
million ounces of measured and indicated gold resources and an additional 4.5
million ounces of inferred gold resources, the Corporation plans to assess
opportunities to double the scale of operations to 40,000 TPD based on a 40,000
TPD expansion pre-feasibility study completed in October 2005 which would see
annual gold production average approximately 500,000 ounces.

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, including the Permit, by submitting an environmental
and social impact study (the "EIS") to the CVG and the MARN. The EIS was
prepared simultaneously with the feasibility stage of design for the Las
Cristinas project. It has taken more time than expected to conclude the
permitting process, however various recent events have reinforced the
Corporation's confidence in the commitment of the Government of Venezuela (the
"Government") to support the Corporation's operating agreement. Among these
events are the following developments

     o    The commission established by the National Assembly of Venezuela to
          investigate the situation in the Las Claritas area of Bolivar State
          publicly concluded that the respective permits should be granted to
          the CVG.

     o    In February 2006, the Corporation was granted the rights to explore
          and develop an aggregate quarry by the Mining Institute of Bolivar
          State (IAMIB). Aggregate is required for the construction of the Las
          Cristinas project and the proposed quarry is located approximately 1
          km from the Las Cristinas project site.

     o    In March 2006, MIBAM formally approved the legal, technical,
          economic, financial and social aspects of the 20,000 TPD Feasibility
          Study and 2005 Development Plan for the Las Cristinas gold
          exploitation project. The official approval of the project by MIBAM
          is based on the original terms and conditions of the underlying Mine
          Operation Agreement. Through the MIBAM approval, the


                                      21
<PAGE>


          Government of Venezuela has officially sanctioned the Las Cristinas
          gold project from the technical, economic, financial and social
          perspective.

     The Corporation continues to meet with senior government officials and is
of the opinion that the Government recognizes and values its contractual
commitments and working relationships with international companies that have
demonstrated both compliance and good corporate citizenship in their dealings
with government. The Las Cristinas project has the published support of the
National Assembly, the senior Ministers involved in the permitting process and
the senior levels of State and Municipal government. Consequently the
Corporation has continued to advance the development of the Las Cristinas
project.

     The Corporation remains unaffected by the Government's announced
intention to change the regulatory title process for the mining industry from
a combination of concession and operating contracts based one to one where all
future mining rights will be granted through joint ventures or operating
contract agreements, since the Mining Operation Agreement is consistent with
the government's public references both to the type of operating contract that
it intends to implement for the mining industry and to the validity of
existing title that is in good legal standing.


                                 OTHER ASSETS

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

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

     o    La Victoria/Lo Increible operations - mines ore from the La Victoria
          open-pit mine, which is delivered to the Revemin mill for
          processing. Waste rock from La Victoria is currently being used as a
          source of aggregate supply for Las Cristinas.

     o    Revemin mill - processes ore from the Tomi and Lo Increible
          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 comprise approximately 500 Ha 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 Fosforito) and one underground mine (Charlie Richards). Open pit mining
ceased at the Milagrito open pit mine at the end of the first quarter of 2006.
Open pit and underground mining is conducted by mining contractors. The
relative locations of the Tomi mines are shown in the diagram below.


                                      22
<PAGE>

                      [GRAPHIC AS INDICATED ABOVE OMITTED]


     With production of 41,638 ounces in 2006, the Tomi mines accounted for
88% of the Corporation's total gold production. The gold produced at Tomi was
sourced 53% from the open pit mines and 47% from the underground mine. Gold
production from Tomi in 2006 was 17% lower than 2005 principally as a result of
processing one third less ore from the open pit operations. Ore production
declined as more waste was required to be mined from the pits. Total material
(waste and ore) mined from the pits increased by 10% in 2006, however, the strip
ratio, (the ratio of waste to ore) increased from 6.3:1.0 in 2005 to 10.0:1.0 in
2006. It is expected that the existing Tomi open pits will be depleted during
2008. Declining open pit production was partially offset by underground
production, which increased by approximately 2,400 ounces from 2005 to 2006.

     The Corporation is developing a regional exploration program targeting
Tomi and adjoining concessions in an effort to extend the life of the El
Callao operations beyond 2008. A total of 6,214 m of diamond and reverse
circulation drilling was completed in 75 bore holes in the exploration of 5
target areas in the Tomi property in 2006. An additional 4,177 m of
underground diamond drilling was completed in exploration of the down-plunge
extension of mineralization in the Tomi Underground Mine in 2006. An updated
resource estimate will be completed for the underground mine in 2007.

     Location and Property Description

     The Tomi concession is located approximately 16 km northeast of the town
of El Callao in the El Callao District, Bolivar State, Venezuela. El Callao is
a three-hour drive south from Puerto Ordaz, the largest city in Bolivar State.
The Tomi property is accessible via an all-weather, northbound dirt road that
exits from Highway 10 about 10 km from El Callao. Ore from Tomi is trucked
approximately 21 km to the Revemin mill for processing. See "Revemin Mill"
below.

     Physiography, Climate and Local Resources and Infrastructure

     The project area lies in open grassland and savannah from which dense
vegetation (low tropical forest) has been stripped historically for farming
purposes. Densely treed areas remain along watercourses and in some of the
less accessible areas. The topography consists of gently rolling hills and
shallow valleys between the elevations of 140 m and 200 m above sea level. The
climate is tropical with average temperatures of 24(degree)C. Annual
precipitation averages 1,200 mm, and mainly falls as tropical downpours during
May to September with a second wet season in December-January.

     All necessary infrastructure exists at the Tomi concession since the
open-pit mines have been in operation since March 2001.


                                      23
<PAGE>

     History

     The Corporation acquired the Tomi operations from Bolivar Goldfields Ltd.
in August 2000. An extensive exploration program had been implemented in 1993,
prior to the Corporation taking ownership of the Tomi operations. The work
included soil and rock sampling, geological mapping, geophysics, trenching,
and diamond and reverse circulation drilling. The exploration work culminated
in a feasibility study (the "Kilborn Report") by Kilborn Inc. of Toronto,
Canada in 1996.

     Geology and Mineralization

     The Tomi operations are located in the eastern limb of the "Y"-shaped El
Callao greenstone belt. Stratigraphy in the greenstone belt generally consists
of a basal mafic and ultramafic volcanic pile overlain by intermediate to
felsic metavolcanic rocks, metavolcanoclastic rocks and metasediments. This
sequence has been subjected to greenschist facies metamorphism. Most of the
economic gold mineralization at Tomi is hosted by gabbro sills that were
emplaced near the unconformable contact between the Yuruari Formation and the
overlying Caballape Formation. The Yuruari Formation consists of phyllites and
chlorite and sericite schists, while the Caballape is composed of mainly of
clastic rocks such as metagreywackes and fragmental metavolcanics of
intermediate composition.

     The gabbro bodies in the Tomi area show asymmetric folding with
near-vertical northern limbs and moderately dipping southern limbs which
define steep, southward-dipping axial planes. Fold axes plunge to the
east-southeast at about 40(degree). Gold mineralization is spatially
associated with southeast-striking shear zones and the most consistent gold
grades are located where these structures cut folded gabbro bodies. Gold
mineralization is located in the planar shear zones, but also extends outwards
into the limbs of the folded gabbro.

     Alteration assemblages distal to mineralization are dominated by chlorite
and calcite. These give way to muscovite-calcite alteration with leucoxene and
finally to pervasive K-feldspar masses most proximal to mineralization. Gold
mineralization has a strong association with pyrite and is concentrated in the
muscovite-pyrite selvages adjacent to quartz-calcite veins. Black tourmaline
is ubiquitous although no clear relationship with gold mineralization has yet
been recognized.

     Drilling, Sampling and Data Verification

     A drilling program was conducted on the Tomi underground mine in 2001 and
consisted of 111 holes, 64 of which were core and 47 were reverse circulation
holes. Drill spacing throughout the entire deposit was close to 30 m, while
the deeper mineralization was defined on centers closer to 35 m. The 2001
database contained 8,853 gold assays from 9,960 sample intervals.

     The Corporation has subsequently undertaken 27,555 m of drilling in six
campaigns on the Tomi property as follows:

     o    A 33-hole program totalling 4,464 m on the Charlie Richards deposit
          in the year 2000;

     o    A further 30-hole program totalling 1,444 m at Charlie Richards in
          2002;

     o    A 45-hole program of 3,682 m at the Milagrito deposit in 2003;

     o    In 2004, an 11-hole program totalling 805 m at the Milagrito
          deposit, as well as a 28-hole campaign for 2,194 m at the Fosforito
          deposit;

     o    Drilling was undertaken on three deposits at Tomi in 2005: 1,033 m
          in 21 bore holes at Fosfoirto, 2,163 m in 30 bore holes at
          Mackenzie, and 1,380 m in 21 bore holes on the Milagrito deposit.

     o    A total of 6,214 m of diamond and reverse circulation drilling was
          completed in 75 bore holes on 5 targets in the Tomi property in
          2006. An additional 4,177 m of underground diamond drilling was
          completed in 60 bore holes in the Tomi Underground Mine in 2006.


                                      24
<PAGE>


     Mine Production

     The annual production from the Tomi operations for the three years ended
December 31, 2006 is set out below.

                                            2006             2005       2004
                                          --------        ---------  ---------
Open-pit mines
     Ore mined (tonnes)..................  227,845       313,599       334,289
     Waste mined (tonnes)................2,287,217     1,971,402     2,751,124
     Ore processed (tonnes)..............  211,936       319,287       350,008
     Average ore grade (g/t).............      3.1           3.2          3.46
     Recovery rate (%)...................      91%           93%           92%
     Production (ounces).................   19,428        30,290        35,961

Underground mine
     Ore mined (tonnes)..................   89,689        72,177        26,966
     Ore processed (tonnes)..............   88,183        63,319        28,454
     Average ore grade (g/t).............      8.4          10.2          6.89
     Recovery rate (%)...................      93%           95%           94%
     Production (ounces).................   22,210        19,811         5,891


     Mineral Reserves

     There are no NI 43-101 compliant mineral reserves to report for the Tomi
operations.

     Mineral Resources

     The estimated mineral resources at the Tomi operations mines at December
31, 2006 are as follows:


                       Mineral Resources (1)(2) Average Grade    Contained Gold
                         (tonnes - 000's)          (g/t)        (ounces - 000's)
                       ------------------       -------------   ----------------

Underground Mine
    Indicated...........      13                    18.3               8

__________________
Notes:

(1)  The mineral resources have been estimated by the Corporation under the
     direction of, and verified by, Dr. Richard Spencer, 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.

     Environmental Liabilities

     As at December 31, 2006, the Corporation estimates that the cost of
maintaining the Tomi operations in compliance with existing regulatory
environmental protection measures will amount to US$1.3 million.

Lo Increible Properties

     Background

     The Lo Increible Properties formed part of a land package that totalled
10,017 Ha prior to the Vengroup Transaction described below. These properties
were 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." In December
2005 the Corporation acquired, through an indirect, wholly-owned subsidiary,
the minority shareholder interests in Lo Increible and now owns 100% of Osmin
(having previously owned 51%). The Corporation further acquired the 30%
outstanding interest in Tamanaco Holdings Limited, a corporation that controls
the Lo Increible Mining Company de Venezuela, (C.A.), (the "Vengroup
Transaction"). In August 2006, Tamanco amalgamated with Osmin.

     The Vengroup Transaction resulted in the Corporation acquiring the Lo
Increible 2, Lo Increible 4C and Lo Increible 4D parcelas and La Victoria
concession and relinquishing the Lo Increible 4A and Lo Increible 4B
"parcelas." "Parcelas" are concessions that are held by CVG on which CVG
entered into operating agreements with


                                      25
<PAGE>


third parties. As a result of the Vengroup Transaction, the Corporation's Lo
Increible Properties total 7,800 Ha in extent. The resources at the La
Victoria mine are located on the Lo Increible 4D parcela and the La Victoria
concession. The Lo Increible 2, 4C and 4D properties are governed by contracts
with the CVG, whereas the La Victoria property is a concession.

               [GRAPHIC SHOWING LO INCREIBLE PROPERTIES OMITTED]

     Location and Property Description

     The Lo Increible properties are located in the 15-km long Lo Increible
Belt - a northeast trending zone of scattered gold mineralization located
immediately north of the town of El Callao in the El Callao District, Bolivar
State, Venezuela. Ore from the La Victoria mine, located on the Lo Increible
property, is delivered to the Revemin mill for processing. See "Revemin Mill"
below.

     Accessibility, Physiography, Climate and Local Resources and
Infrastructure

     The Lo Increible properties, are located between El Callao and Guasipati,
towns that are located on the principal two-lane paved highway that links
Puerto Ordaz with Brazil. Puerto Ordaz is a major industrialized city and port
on the Orinoco River, and lies 190 km by road to the north of El Callao. This
highway is suitable for the transportation of major project components. A
power line crosses the property, with a substation located immediately
north-east of the La Victoria prospect. Access to the various deposits within
the Lo Increible land package is provided by a network of dirt roads branching
off the paved interstate highway. Water is abundant and fuel costs in
Venezuela are exceptionally low (US$0.05 per litre for gasoline).

     The project area lies partly in savannah and partly in low tropical
forest at elevations ranging from 150 m to 300 m. The climate is tropical with
average temperatures of 24(degree)C. Annual precipitation averages 1,200 mm,
and mainly falls as tropical downpours during the May to September rainy
season.

     Open pit mining at La Victoria is conducted by a mining contractor. The
diagram below shows the location of the open pit, waste dumps and crusher at
La Victoria.

                                      26
<PAGE>

    [GRAPHIC SHOWING LOCATION, WASTE DUMPS AND CRUSHER AT VICTORIA OMITTED]

     History

     Despite the El Callao district's impressive production history and Lo
Increible's numerous surface workings, little modern exploration had taken
place until Bema Gold Corp. began work in the Lo Increible district in late
1993. Bema Gold Corp.'s exploration program began with panel sampling and
geologic mapping of all the significant old workings on the Lo Increible belt,
together with 15 km of dozer and backhoe trenching of areas of interest. These
two programs generated approximately 9,000 sample assays. Accessible areas of
the Increible 4 and 2 concessions, some 6,000 Ha in all, were covered by soil
geochemistry on a 200 m by 25 m grid, resulting in the generation of a
database containing 11,128 sample assays. A low-level airborne geophysical
(magnetics and radiometrics) survey was also flown over the Lo Increible 2 and
Lo Increible 4 areas.

     Areas of interest resulting from the trenching and panel sampling were
followed up in 1994 by a Phase I Reverse Circulation drill program comprising
72 drill holes totalling 10,413 m. The targets generated by this drilling were
subsequently followed up by additional reverse circulation and diamond
drilling which, by the end of 1997, totalled 49,377 m in 302 drill holes.
Nineteen additional diamond holes totalling 1,925 m were drilled in 1999.

     Geology and Mineralization

     The Lo Increible Belt is a northeast to east-northeast trending shear zone,
which has a strike length of at least 15 km. Representative rock types within
the belt include greenschist facies massive and pillowed basalts, intermediate
to felsic metavolcanics and metavolcaniclastics, meta-epiclastic sedimentary
rocks, as well as mafic and felsic intrusives. Tropical weathering has led to
the development of a saprolite layer that is locally up to 40 m thick depending
on the nature of the underlying protolith and the local penetration of water
along fractures and faults.

     The supracrustal sequences are complexly folded into concentric to
isoclinal double-plunging folds which plunge to the east or west at shallow
angles (20(degree) to 40(degree)). Superimposed on the folded lithologies are
zones of more intense brittle-ductile deformation that are best developed in
more competent lithologies and along lithological competency contacts. The Lo
Increible shear itself is a complex zone of splays and bifurcating faults
along which gold mineralizing fluids were focused.

                                      27
<PAGE>


     Gold mineralization occurs in shear-vein systems, associated with intense
hydraulic brecciation, silica injection and flooding, carbonation (calcite,
ankerite and ferroan dolomite), sericitization, and the deposition of
sulphides, mainly pyrite and subordinate arsenopyrite. Most of the gold occurs
as microscopic grains on micro-fractures within the pyrite. Some coarser
visible gold can occasionally be observed within discrete quartz veins.

     Drilling

La Victoria

     Exploration drilling on the project was carried out by Bema Gold Corp. in
several phases between 1994 and 1999 resulting in 39,024 m of diamond drilling
(HQ- and NQ-diameter) in 230 holes and 8,731 m of reverse circulation drilling
in 71 holes. The bulk of the drilling was carried out at La Victoria (142
holes totalling 19,751 m) and La Cruz (76 holes totalling 14,642 m).

     All diamond drill holes were geo-technically logged by local technicians
who measured core recovery and RQD. The holes were geologically logged by a
number of different geologists and with a variety of formats until 1997 when
all the drill information was coded according to lithology, structure,
alteration and mineralization.

     The Corporation subsequently carried out three diamond drilling campaigns
at La Victoria. These include:

     o    A 35-hole, 2,885 m program in 2001 to provide detailed information
          for the phase 2-pit design;

     o    A 10-hole, 874 m program in 2002 to delineate mineralization in the
          northern part of the deposit;

     o    A 61-hole, 8,594 m program in 2004 to delineate mineralization
          beneath the Yuruari river and to increase the density of intercepts
          in areas of relatively sparse drilling. The greater density of drill
          intercepts was required for resource estimation purposes.

Lo Increible 2 concession

     A 3,131 m (27-hole) reverse circulation drill program was completed on an
exploration target in the Lo Increible 2 concession in 2006. The potential of
the low-grade gold mineralization intersected is dependent on the
metallurgical tests which are underway.

     Mine Production

     The information presented below and under the heading "Mineral Resources"
represents 100% of the production and mineral resources with respect to the Lo
Increible properties. The annual production from the La Victoria mine for the
three years ended December 31, 2006 is set out below.


                                      2006               2005             2004
                                    --------           --------         --------
La Victoria mine
   Ore mined (tonnes)................ 64,222            24,892          36,012
   Waste mined (tonnes)..............353,052           126,704         481,210
   Ore processed (tonnes)............ 51,424            25,649          25,974
   Average ore grade (g/t)...........    2.3               2.0             3.2
   Recovery rate (%).................    86%               89%             91%
   Production (ounces)...............  3,260             1,491           2,412

     Mineral Resources

     The mineral resources at the La Victoria mine at December 31, 2006 were
as follows:

                            Mineral
                          Resources(1)        Average Grade      Contained Gold
                        (tonnes - 000's)          (g/t)         (ounces - 000's)
                        -------------------  ----------------   ----------------
Indicated..............     2,422                  4.5                349

____________________

Notes:

(1)  The mineral resource with respect to the La Victoria operation has been
     estimated by Dr. Richard Spencer, P. Geo, VP Exploration, Crystallex
     International Corporation. The resource estimates are based on a cut-off
     grade of 2.0 grams of gold per tonne.


                                      28
<PAGE>


     Environmental Liabilities

     As at December 31, 2006, the Corporation estimates that the costs of
environmental protection requirements at the La Victoria mine will be US$0.3
million.

     Current Activities

     The Corporation acquired its interest in the Lo Increible properties in
February 2001 and commenced mining operations at La Victoria in April 2001.
The La Victoria mine has been the only source of the production from the Lo
Increible properties. During the fourth quarter of 2003, the Corporation
reduced activities at La Victoria as a result of lower recovery rates due to
the presence of refractory ore.

     During 2005, the Corporation reviewed alternative methods for processing
of refractory sulphide ore at La Victoria. However, at present, modifying the
Revemin mill is not economically attractive as there is insufficient
mineralized material to recover capital for mill modifications, diverting the
Yuruari River and pre-production waste stripping. Work continues on
researching alternative treatment processes for the refractory ore at La
Victoria.

     During 2007, the Company plans to mine approximately 10,000 tonnes per
month of ore at La Victoria. A crusher at La Victoria is currently being used
to crush waste rock, which is trucked to Las Cristinas for use as construction
aggregate.

Revemin Mill

     Overview

     The Revemin mill is located approximately 3 km southeast 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 and has 177 full time
employees. The Revemin mill processes ore from the Tomi and Lo Increible
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.

     Environmental Liabilities

     As at December 31, 2006, the Corporation estimates that the costs of
environmental protection requirements at the Revemin mill will be US$0.1
million.

     Production

     The annual production from the Revemin mill for the three years ended
December 31, 2006 is set out below.

                                             2006         2005          2004
---------------------------------------- ------------ ------------- ------------
Revemin Mill
Tomi Open-Pit Ore Processed (tonnes)....   211,936      319,287       350,008
Tomi Underground Ore Processed (tonnes).    88,183       63,319        28,454
La Victoria Ore Processed (tonnes)......    51,424       25,649        25,974
Purchased Ore Processed (tonnes)........    16,124       10,159        39,068
     Total Ore Processed (tonnes)....... -----------  ------------  -----------
                                           367,667      418,414       443,504
                                         ===========  ============  ============
Head Grade of Ore Processed (g/t).......       4.4          4.2           3.7
Total Recovery Rate (%).................       92%          94%           93%
Total Gold Recovered (ounces)...........    47,344       53,178        48,973



                                      29
<PAGE>


             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, 2006,
there were 245,424,494 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

     A new shareholder rights plan (the "Rights Plan") was adopted by the
board of directors on June 22, 2006 replacing the original shareholder rights
plan of the Corporation dated March 10, 1997 (the "Original Rights Plan"),
which expired at the termination of the Corporation's 2006 general and special
meeting of shareholders held on the same date. The Rights Plan was confirmed
at a special meeting of the Corporation's shareholders held on October 30,
2006. The Rights Plan is subject to reconfirmation at every third annual
meeting of shareholders until its expiry on June 22, 2016. If the shareholders
do not reconfirm the Rights Plan, the Rights Plan will terminate and cease to
be effective at that time.

     Pursuant to the Rights 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
June 22, 2006 and authorized the issuance of one Right for each Common Share
issued thereafter and before the earlier of the Separation Time (described
below) and the expiration of the Rights in accordance with the Rights Plan.
The Rights will separate from the Common Shares in accordance with the terms
of the Rights 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
take-over bid having certain attributes including the following: the offer
must be made to all shareholders (other than the offeror) in compliance with
the Rights 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.


                                      30
<PAGE>


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 2006 are set forth in the following table.

                               TSX                                     AMEX
               ----------------------------------- -----------------------------
                 High         Low       Volume      High       Low        Volume
               ---------  -----------  ----------- -------  ----------  --------
                 (C$)        (C$)                  (US$)      (US$)

January ........$3.45       $2.55     28,353,800   $2.94     $2.21    60,450,100
February .......$3.55       $2.77     18,015,100   $3.09     $2.39    34,824,900
March...........$4.77       $3.21     23,258,700   $4.11     $2.82    41,321,500
April ..........$6.92       $5.03     42,907,500   $6.07     $4.33   210,546,700
May.............$6.38       $4.34     25,606,600   $5.73     $3.85   108,766,700
June ...........$4.80       $3.10     26,191,800   $4.26     $2.75    80,403,400
July ...........$3.71       $3.02      8,630,000   $3.34     $2.65    33,583,600
August..........$3.13       $2.84     12,522,800   $2.78     $2.50    29,550,400
September ......$3.80       $3.10     19,506,100   $3.43     $2.78    64,215,400
October.........$3.26       $2.97     11,077,100   $2.98     $2.64    41,358,700
November........$4.28       $3.15     19,997,100   $3.72     $2.76    64,175,700
December........$4.56       $4.04     19,953,100   $4.04     $3.54    61,439,700


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 2007. 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 the Crystallex
Group and other relevant factors.

Capitalization

     The following table sets forth the consolidated cash and cash
equivalents, short term investments and capitalization of the Corporation as
at December 31, 2006.


                                                                  US$
                                                              (millions)
                                                            -------------------
Cash and cash equivalents
     Unrestricted...........................................     28.6
                                                            -------------------
Total cash and cash equivalents.............................     28.6
                                                            ===================

Long-term debt
     Bank indebtedness(1)  .................................      3.2
     Exchangeable promissory notes(2)  .....................      1.8
     Notes due December 23, 2011(2) ........................     82.7
                                                            -------------------
Total long-term debt .......................................     87.7
                                                            ===================

Shareholders' equity
     Common shares (authorized - unlimited;
        issued 245,424,494)(3) .............................    448.1
     Contributed surplus....................................     23.1
     Cumulative translation adjustment .....................     12.0
     Deficit................................................  (287.2)
                                                            -------------------
Total shareholders' equity..................................    196.0
                                                            -------------------
Total capitalization........................................    283.7

________________

Notes:

(1)  Includes current portion of $1.6 million. See Note 7 to the Consolidated
     Financial Statements.
(2)  See Note 7 to the Consolidated Financial Statements.
(3)  See Note 9 to the Consolidated Financial Statements.

                                      31
<PAGE>

Bought Deal Financing

     On March 29, 2007, the Corporation announced a bought deal offering (the
"Offering") of 12,500,000 Common Shares at a price of $4.25 per Common Share for
gross proceeds of $53,125,000. The syndicate led by Orion Securities Inc. and
including, Haywood Securities Inc. and Wellington West Capital Markets Inc. will
also be granted an over-allotment option to purchase an additional 1,875,000
Common Shares exercisable at any time until the 30th day following the closing
of the Offering. The Corporation expects to file a preliminary short form
prospectus on April 4th, 2007 to qualify the Common Shares for distribution
under the Offering. The Corporation plans to use the net proceeds from the
Offering to develop the Las Cristinas project, to repay a portion of existing
indebtedness and for general corporate purposes. The Offering is subject to
certain conditions including, but not limited to, the receipt of all necessary
approvals, including the approval of the TSX and the AMEX. The Offering is
expected to close on or about April 24th, 2007.

     As part of the C$60 million equity draw down facility with Azimuth
Opportunity, Ltd. ("Azimuth"), the Corporation granted Azimuth the option to
purchase up to 1,411,765 Common Shares with an aggregate purchase price of
approximately $6.0 million on the terms and conditions contemplated in the
Offering.

                               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 ore 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, PDI and the CVG agreed that PDI 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, PDI 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 MIBAM 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
MIBAM the direct exploration and exploitation of the gold mineral located in
the Las Cristinas Deposits and granted to the MIBAM the right to contract with
the CVG the activities required to carry out such exploration and
exploitation. In May 2002, the MIBAM and the CVG entered into an agreement
pursuant to which the MIBAM 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.

                                      32
<PAGE>

     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:

     (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 a 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 Las Cristinas project will be complete before
          the arbitration is completed.


                                 RISK FACTORS

     The business and operations of the Crystallex Group are subject to risks.
In addition to considering the other information in the Annual Information
Form, you should carefully consider the following factors. Any of the
following risks could have a material adverse effect on the Corporation, its
business and future prospects.

Risks Associated with Operating in Developing Countries

     The Corporation's mineral exploration and mining operations are located
in Venezuela and may be adversely affected by whatever political instability
and legal and economic uncertainty that might exist in such country. The risks
associated with the Corporation's foreign operations may include political
unrest, labour disputes, invalidation of governmental orders, permits,
agreements or property rights, risk of corruption including violations under
U.S. and Canadian foreign corrupt practices statutes, military repression,
war, civil disturbances, criminal 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, high rates of inflation 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.

Risks Specific to Operations in Venezuela

     Political and Economic Instability

     The Corporation's principal mineral properties are located in Venezuela
and as such the Corporation may be affected by political or economic
instabilities there. The risks associated with carrying on business in
Venezuela, in addition to those highlighted above, include, but are not
limited to violent crime, which is prevalent throughout the country and
includes kidnapping, smuggling and drug trafficking especially in remote
areas. Changes in resource development or investment policies or shifts in
political attitudes in Venezuela may adversely affect the Corporation's
business. Operations may be affected in varying degrees by government
regulations with respect to restrictions in production, price controls, export
controls, exchange controls, income taxes, expropriation of property,
maintenance of claims, environmental legislation, land use, unauthorized
mining activities, land claims of local people, water use and mine safety. The
effect of these factors cannot be accurately predicted.

                                      33
<PAGE>

     Environmental Permit Still Required

     MIBAM completed its overall approval process of Las Cristinas on March
26, 2006. However, the Corporation has experienced delays in acquiring the
environmental permit necessary to allow commencement of construction of the
mine. The Corporation continues to await the issuance of the Permit, the
initial application of which was submitted in April 2004. Continued
development and the ultimate commencement of commercial production are
dependent upon receipt of the Permit, which will allow the Corporation to
proceed to put in place financing to fund construction. As the Las Cristinas
project is the Corporation's primary development project, the failure to
obtain the Permit or to obtain the Permit in a timely manner could have a
material adverse affect on the future of the Corporation's business. There can
be no assurance as to when or if the Permit will be granted.

     Exchange Controls

     Venezuela currently has exchange controls that affect the ability of
companies doing business in Venezuela to convert Venezuelan source income into
foreign currency. The Central Bank of Venezuela enacted such exchange control
measures in 2003 in order to protect international reserves. The exchange
rate, originally fixed at approximately 1,600 Bolivars /US$, has since been
adjusted twice upwards and presently stands fixed at 2,150 Bolivars/US$. 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.

Mine Operation Agreement

     Lack of Ownership Rights

     Under the Venezuelan Mining Law of 1999 ("VML"), 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 or title rights to the gold produced 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 also contain very low
levels of copper, 0.13% on average. 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 MIBAM would do so, the
MIBAM 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 MIBAM 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 MIBAM 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 MIBAM 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.


                                      34
<PAGE>


     If the MIBAM grants the right to exploit the copper contained in the Las
Cristinas Deposits to the CVG, there can be no assurance that the MIBAM 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 MIBAM grants the right to exploit the copper contained in the Las Cristinas
Deposits to a third party, or if the MIBAM 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.

Proposed Amendments to Mining Laws

     In 2005, the Government of Venezuela announced that it would be changing
the mining title regime from a system where title was granted in the form of
either concessions or operating contracts to a system where all "new" economic
interests would be granted in the form of joint ventures or operating contracts.
In order to effect this change, the Government of Venezuela, advised that it
would need to create a national mining company which would be the nation's
contracting party covering the entire country of Venezuela. The Government of
Venezuela also indicated that, given this change in title regime, it would also
be appropriate to review all existing mining companies in a single comprehensive
exercise to ensure that only companies found to be in compliance with their
existing title terms and conditions would continue to qualify under the new
regime on the same terms and conditions. The Government of Venezuela further
stated that all those companies found not to be in compliance would have their
operations turned over to small mining cooperatives supported by the Government
of Venezuela via the national mining company. MIBAM issued its formal approval
of the Las Cristinas project on March 26, 2006.

Arbitration Proceedings

     The Corporation is a party interested in, but not a party to, an ongoing
arbitration. See "Legal Proceedings - Withdrawal of MINCA Litigation - Vannessa
Arbitration."

     Sale of Gold

     For the past several years the Corporation sold all of its Venezuelan gold
production to the Central Bank of Venezuela. In June 2006, the Central Bank of
Venezuela informed the Corporation it was suspending purchase of gold from the
Corporation. During June and July, the Corporation sold gold to accredited third
parties within Venezuela and in August 2006 the Central Bank resumed purchasing
gold from the Corporation. The Corporation is updating the registration of its
export licence which will also allow it to export and sell gold outside of
Venezuela. Pending the update of the Corporation's export licence, should the
Corporation be unable to sell gold within Venezuela, it could have an adverse
effect on the Corporation's revenues, cash flow and profitability in the
short-term.

     Unauthorized Miners

     The Corporation's operations may also be affected by the presence of
unauthorized miners which is not uncommon in the gold mining areas of the Guyana
Shield area of northern South America, including Venezuela. The methods used by
unauthorized miners to extract gold are typically harmful to the environment and
may be disruptive of authorized mining operations. Although the Corporation, in
conjunction with the local authorities, employs strategies to control the
presence of unauthorized 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 unauthorized miners.

     Imataca Forest Reserve

     In addition to the general risks associated with environmental regulation
and liability (see "Risk Factors - General Risk Factors - Environmental
Regulation and Liability"), the Las Cristinas Deposits are located within the
Imataca Forest Reserve (the "Reserve"). On September 22, 2004 Presidential
Decree 3110, which establishes an ordinance plan and regulations for the use of
the Reserve, permits various activities (including mining) in up to 13% of the
Reserve and establishes the legal framework for such activities, was issued.
Presidential Decree 3110 was issued in response to previous Presidential Decree
1850, the latter of which was issued in May 1997. Decree 1850 reserved an even
larger part of the Reserve for various activities and became subject to a legal
challenge before the Venezuelan Supreme Court. The Venezuelan Supreme Court
issued a prohibition order on November 11, 1997 prohibiting the relevant
government authorities from granting concessions, authorization and any other
acts relating to


                                      35
<PAGE>


various mining activities in the Reserve under Decree 1850 until the
Venezuelan courts ruled on the merits of the nullity action. It is possible
that Presidential Decree 3110 could be similarly challenged and that such
challenge, if ultimately successful, could prevent the Corporation from
exploiting or fully exploiting the Las Cristinas Deposits.

     Venezuelan Decree No. 1257 establishes the environmental assessment
requirements for mining projects. The Corporation was advised that the Las
Cristinas project is not a new project and, accordingly Article 40 of Decree
1257 does not apply since no significant increase in environmental impact is
predicted.

General Risk Factors

     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.

     In 2005 the Government of Venezuela announced that it would be changing the
mining title regime from a system where title was granted in the form of joint
ventures or either concessions or operating contracts to a system where all new
economic interests would be granted in the form of operating contracts. In order
to effect this change, the Government advised that it would need to create a
national mining company which would be the nation's contracting party covering
the entire country of Venezuela. The Government also indicated that, given this
change in title regime, it would also be appropriate to review all existing
mining companies in a single comprehensive exercise to ensure that only
companies found to be in compliance with their existing title terms and
conditions would qualify for the new title. This review was completed as of
December 31, 2005. MIBAM completed its approval process for the Las Cristinas
project at the end of March 2006. However, there is no assurance that the
Government will not issue further decrees or otherwise attempt to modify
existing mining rights.

     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, in particular 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. In accordance with applicable laws, the
Corporation has provided various forms of financial assurances to cover the cost
of reclamation activities. However, there can be no assurance that the
Corporation will not incur reclamation costs that are in excess of such
financial assurances. While the Corporation plans to establish a reserve for
reclamation activities, there can be no assurance that the combination of the
reserve and financial assurances will be sufficient to

                                      36
<PAGE>


meet future reclamation standards, if such standards are materially more
stringent than existing standards. The Corporation does not maintain
environmental liability insurance. The Corporation has adopted high standards
of environmental compliance, however, failure with or unanticipated changes in
Venezuela's laws and regulations pertaining to the protection of the
environment in the future could adversely affect the Corporation.

     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.

     In September 2005, the Corporation issued C$10 million of 5% unsecured
notes due March 13, 2006 to Azimuth and established a C$60 million equity draw
down facility with the same entity. The agreements between Azimuth and the
Corporation stipulated that, until the C$10 million principal value of the
unsecured notes was repaid, 50% of the proceeds of each draw under the equity
draw down facility would be applied to repay the unsecured notes. During the
fourth quarter of 2005 the Corporation received gross proceeds of C$21.6
million under the equity draw down facility, a portion of which was used to
repay the outstanding C$10 million principal value of the unsecured notes. In
January 2006 the Corporation raised additional gross proceeds of C$5.0 million
under the equity draw down facility. In February 2006 the Corporation received
gross proceeds of US$31.3 million under a private placement of units. In July
2006 the Corporation received US$6.04 million from the early exercise of
warrants held by Riverview Group LLC. On August 11, 2006, the Corporation
issued 10,125,000 units, each unit comprised of one common share and one common
share purchase warrant, for an aggregate price of C$32.4 million. Despite these
financings, the Corporation has limited access to 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.

     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 mineral deposits 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.

     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 material processed 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

                                      37
<PAGE>

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 material 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.

     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.

     Dependence on Limited Mining Operations and Properties

     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 could adversely affect the
Corporation's financial performance and results of operations. Furthermore,
future results for the Corporation depend largely on the Las Cristinas
project, which is currently in the development stage and which may never be
developed into a commercially viable mining operation. Any event, or
combination thereof, which adversely affects the Las Cristinas project
(whether the property itself or the Corporation's ability to finance and/or
construct and operate a commercially viable mine on the property), would
adversely impact the Corporation's future performance.

     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.

                                      38
<PAGE>

     In addition to the general production risks outlined above, one of the
most significant physical production issues the Corporation faces in the Las
Cristinas project pertains to the heavy amount of rainfall the area receives
(an average of 3.3 m/year). MDA has accounted for anticipated time lost due to
rainfall in scheduling production and determining equipment requirements,
which is consistent with the range of practice employed by the iron ore and
bauxite mining industry in the same high rainfall region in Venezuela as well
as comparable mining operations in similar or greater rainfall regions of
Guyana, Suriname and Brazil. Regardless, actual mining experience with the
combination of wet saprolite and high rainfall rates may require adjustment of
these estimates.

     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.

     Gold Price Volatility

     The gold price can fluctuate widely and is affected by numerous factors
beyond the Corporation's control, including industrial and jewellery 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 2006, the gold price fluctuated between
a low of US$253 per ounce and a high of US$725.75 per ounce. On December 29,
2006, the a.m. fixing price of gold sold in the London Bullion Market was
US$635.70 per ounce.

     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.

     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. Any 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.

     Credit and Market Risks

     The Corporation enters into financial agreements (financial instruments)
with major international banks, other international financial institutions and
other accredited third parties in order to manage underlying revenue and

                                      39
<PAGE>


future cash flow exposures arising from commodity prices. Financial
instruments, which subject the Corporation to market risk and concentrations
of credit risk, consist primarily of cash and accounts receivable.

     Market risk is the risk that the value of a financial instrument might be
adversely affected by a change in interest rates or currency exchange rates.
The Corporation 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 contract. The Corporation 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 Corporation 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 Corporation is exposed to credit risk in the event of non-performance
by counterparties in connection with metal forward and option contracts. The
Corporation 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 Corporation 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 Corporation continually
monitors the market risk of its activities. The Corporation currently does not
have metal forward and option contracts.

     Recent Losses and Write-downs

     The Corporation incurred net losses in each of 2006, 2005, and 2004. The
Corporation's deficit at December 31, 2006 was US$287.2 million. 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 comparative consolidated
financial statements for the years ended December 31, 2004 and 2003, 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 combined asset write-downs of US$49.5 million in the 2003 and 2004
financial statements.

     Operating Losses are Expected to Continue In the Near Future

     The Corporation has experienced losses from operation for each of the
last three years. The Corporation expects that it will continue to incur
losses, and possibly incur increased losses, until the Las Cristinas mine is
operational. The Corporation expects that this trend will reverse if and when
gold is produced from the future Las Cristinas mine in commercial quantities
at prices equal to or in excess of the prices assumed in the 20,000 TPD
Feasibility Study.

     Dependence on Key Employees

     The Corporation's business and operations are dependent on retaining the
services of a small number of key management personnel. The success of the
Corporation is, and will continue to be, to a significant extent, dependent on
the expertise and experience of the directors and senior management. The loss
of one or more of these people could have a materially adverse effect on the
Corporation. The Corporation does not maintain insurance on any of its key
employees. Due to the length of time in obtaining the Permit the Corporation
has granted retention bonuses to certain members of senior management. Further
delays in obtaining the Permit may make it more difficult for the Corporation
to retain key employees.

     Compliance with Sarbanes-Oxley Act of 2002

     Passed by the U.S. Congress on July 30, 2002, the Sarbanes-Oxley Act of
2002 ("Sarbanes-Oxley") requires companies to, among other things, have
management provide a report on the Corporation's internal controls with
respect to financial reporting. The Corporation has complied with this
particular aspect of Sarbanes-Oxley for its fiscal year ended December 31,
2006. Management's evaluation of, and report on, the Corporation's internal
controls over financial reporting is set out in the Corporation's MD&A for the
fiscal year ended December 31, 2006 under the

                                      40
<PAGE>

heading "Report on Disclosure Controls and Procedures - Internal Controls over
Financial Reporting". There can be no assurance the Corporation's internal
controls over financial reporting will be free of material weaknesses in
future periods. When a material weakness is discovered, the Corporation will
likely incur costs to fix the internal controls for financial reporting as
well as costs incurred to remediate any financial inaccuracies. There is also
a risk that the market will react adversely to such a finding.

     Common Share Price Volatility

     The market price of the common shares of the Corporation could fluctuate
significantly based on a number of factors in addition to those listed in this
Annual Information Form, including:

     o    the Corporation's operating performance and the performance of
          competitors and other similar companies;
     o    the public's reaction to the Corporation's press releases, other
          public announcements and the Corporation's filings with the various
          securities regulatory authorities;
     o    changes in earnings estimates or recommendations by research
          analysts who track the common shares or the shares of other
          companies in the resource sector;
     o    changes in general economic conditions;
     o    the number of the common shares to be publicly traded after this
          offering;
     o    the arrival or departure of key personnel;
     o    acquisitions, strategic alliances or joint ventures involving the
          Corporation or its competitors; and
     o    gold price volatility.

     In addition, the market price of the common shares of the Corporation are
affected by many variables not directly related to the Corporation's success
and are, therefore, not within the Corporation's control, including other
developments that affect the market for all resource sector shares, the
breadth of the public market for the common shares, and the attractiveness of
alternative investments. The effect of these and other factors on the market
price of common shares on the exchanges on which the Corporation trades has
historically made the Corporation's share price volatile and suggests that the
Corporation's share price will continue to be volatile in the future.

     Potential Dilution

     As at December 31, 2006, the Corporation has outstanding options to
purchase approximately 11,394,085 common shares of the Corporation and
warrants to purchase approximately 18,687,500 common shares of the Corporation
(including 12,250,000 warrants that do not become effective until after the
receipt of the Permit). There were a further 868,833 options outstanding with
a weighted average exercise price of C$4.02 that were not fully vested. 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.

     Enforcement by Investors of Civil Liabilities

     The enforcement by investors of civil liabilities under United States
federal securities laws may be adversely affected by the fact that the
Corporation is organized under the laws of Canada, that most of its officers
and directors and most of the experts named in this Annual Information Form
are residents of Canada, and that a substantial portion of the Corporation's
assets and the assets of a majority of the Corporation's directors and
officers and the experts named in this Annual Information Form are located
outside the United States. Furthermore, it may not be possible to enforce
against the Corporation or its directors, officers or experts, judgments
contained in U.S. courts. The Corporation believes that a monetary judgment of
a Canadian court predicated solely on the Canadian civil liability regime
would likely be enforceable in the U.S. if the Canadian court in which the
judgment was obtained had a basis for jurisdiction in the matter that was
recognized by a U.S. court for such purposes. However, the Corporation can
provide no assurances to this effect.

                                      41
<PAGE>


     Future Hedging Activities

     The Corporation has not entered into forward contracts or other
derivative instruments to sell gold that it might produce in the future.
Although the Corporation has no near term plans to enter such transactions, it
may do so in the future if required for project financing. Forward contracts
obligate the holder to sell hedged production at a price set when the holder
enters into the contract, regardless of what the price is when the product is
actually mined. Accordingly, there is a risk that the price of the product is
higher at the time it is mined than when the Corporation entered into the
contracts, so that the product must be sold at a price lower than could have
been received if the contract was not entered. There is also the risk that the
Corporation may have insufficient gold production to deliver into forward
sales positions. The Corporation may enter into option contracts for gold to
mitigate the effects of such hedging.

     No Payment of Cash Dividends in the Near Future

     Given that the Corporation is currently in the development stage for its
principle property, the Las Cristinas project, the Corporation intends to
retain its earning to finance the growth and development of the business
rather than pay dividends to shareholders. The Corporation does not intend to
declare or pay cash dividends in the near future, nor has it done so since its
inception. In the event that the Corporation decides to declare and pay cash
dividends in the future, such a decision will made entirely in the discretion
of the board of directors and shall be dependent on factors such as the
existing earnings, capital requirements, future business opportunities,
financing agreements and market conditions for the Corporation's shares and
the underlying commodities markets.


                         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.


<TABLE>

Name and                                                                                Director        Expiry of
Municipality of Residence   Office            Principal Occupation                      Since           Current Term(6)
-------------------------   ------            -------------------------------------     ---------       ---------------
<S>                         <C>               <C>                                       <C>             <C>
Robert A. Fung (1)          Director,         Employee of Orion Securities, Inc.        December 3,     June 21, 2007
Toronto, Ontario            Chairman of the   (investment bank)                         1996
                            Board

Gordon M. Thompson (1)(4)   Director,         President and Chief Executive Officer,    February 1,     June 21, 2007
Toronto, Ontario            President and     Crystallex International Corporation      2007
                            Chief Executive
                            Officer

Michael J.H. Brown          Director          Principal, Capital Markets Advisory (a    October 10,     June 21, 2007
(1)(3)(4)(5)                                  financial and capital markets advisory    2002
Toronto, Ontario                              firm)

C. William Longden (2)(4)   Director          Vice Chairman, Marshall, Macklin,         July 25, 2000   June 21, 2007
Toronto, Ontario                              Monaghan Limited (an engineering and
                                              construction management company)

Harry J. Near (2)           Director          President, Near Consultants &             May 5, 1997     June 21, 2007
Ottawa, Ontario                               Associates; Principal, The Earnscliffe
                                              Strategy Group (political advisory firm)

Marc J. Oppenheimer (1)(4)  Director          President, Octagon Associates Inc.        February 20,    June 21, 2007
Leonia, New Jersey                                                                      1995

Johan C. van't Hof (1)(2)   Director          President, Tonbridge Corporation          March 12,       June 21, 2007
Toronto, Ontario                              (infrastructure fund manager)             2004

Armando F. Zullo (3)(5)     Director          President, A.F. Zullo & Company Ltd.      December 3,     June 21, 2007
Vancouver, British                            (construction company)                    1996
Columbia

Dan Hamilton(7)             Chief Financial   Chief Financial Officer, Crystallex             -               -
Toronto, Ontario            Officer           International Corporation

Dr. Sadek El-Alfy           Vice President,   Vice President, Operations, Crystallex          -               -
Seattle, Washington         Operations        International Corporation

Robert Crombie(8)           Vice President,   Vice President,                                 -               -
Toronto, Ontario            Corporate         Corporate Development and Planning,
                            Development and   Crystallex International Corporation
                            Planning
</TABLE>


                                      42
<PAGE>


<TABLE>
Name and                                                                          Director        Expiry of
Municipality of Residence   Office            Principal Occupation                Since           Current Term(6)
-------------------------   ------            --------------------                ---------       ---------------
<S>                         <C>               <C>                                 <C>             <C>
Richard Marshall            Vice President,   Vice President,                           -               -
Alpharetta, Georgia         Investor          Investor Relations, Crystallex
                            Relations         International Corporation

Dr. Richard Spencer         Vice President,   Vice President,                           -               -
Richmond Hill, Ontario      Exploration       Exploration, Crystallex
                                              International Corporation
</TABLE>

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 the Corporation and
     to oversee the company's operations. 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 2007 annual meeting of shareholders.

(7)  Dan Hamilton has resigned as Chief Financial Officer of the Corporation
     effective April 1, 2007.

(8)  Appointed Senior Vice-President, Corporate Development effective April 1,
     2007.

     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. Thompson who was
Senior Vice President, Corporate Development of Sentry Select Capital Corp.
from 2004 to 2006 and Senior Vice President, Corporate Development of NCE
Resources Group from 2002 to 2003; Mr. Oppenheimer who was Executive Vice
President of Kenmar Global Investment Management, Inc. and a Managing Director
of Kenmar Nihon Venture Capital LLC from May 2004 to July 2006 and
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. Hamilton who was VP Controller of Crystallex International
Corporation from August 2003 to January 31, 2006 and 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.

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

     o    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;

                                      43
<PAGE>


     o    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

     o    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, 1,476,451 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 (as determined by the
Board in accordance with the Policy on Independence of Directors of the
Corporation, attached hereto as Schedule "F") and financially literate (i.e.,
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 (i.e., 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. The terms of the charter are attached and set out
in Schedule "E."

     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 reviews all requests for proposed and audit or
permitted non-audit services to be provided by the Company's external auditor
under the Policy on Provision of Services by External Auditors developed by
the Audit Committee. Under this Policy, the Audit Committee annually reviews
and pre-approves recurring audit and non-audit services that are identifiable
for the coming year. This Policy requires that the Audit Committee approve any
audit or non-audit services that are proposed during the year.

     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 for the fiscal year ended December 31, 2006
were Deloitte & Touche LLP, Chartered Accountants. Deloitte & Touche LLP has
advised the Corporation that it will not stand for re-appointment as auditors
of the Corporation for the fiscal year ending December 31, 2007. There were no
reservations or Reportable Events (as defined in National Instrument 51-102 -
Continuous Disclosure Obligations) relating to Deloitte & Touche LLP's audit
reports in respect of the audits of the Corporation's three most recently
completed fiscal years. The


                                      44
<PAGE>


Corporation is currently in discussions with several national auditing firms
and will announce confirmation of the appointment of a new auditor at the
appropriate time.

     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 (US$)
                                         ------------------------------
                                           2006                  2005
                                         --------            ----------
Audit-related fees(1)................    $640,363              $859,324
Tax fees(2)..........................     $29,870              $349,208
All other fees(3)....................    $226,315              $288,697
                                         $896,548            $1,497,229

_______________
Notes:

(1)  Fees for audit services include fees associated with annual audit, the
     reviews of the Company's quarterly reports, statutory audits and
     regulatory filings.

(2)  Fees for tax services include tax compliance, tax planning and tax advice
     services.

(3)  All other fees include fees required for regulatory filing requirements
     and review of prospectuses.


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 is a C$60 million equity draw down facility with
Azimuth Opportunity, Ltd. A copy of this document is available at the SEDAR
website at www.sedar.com.

                              INTEREST OF EXPERTS

     MDA, SNC-Lavalin and certain other independent 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 the Crystallex Group.

     Deloitte & Touche LLP is the independent auditor of the Company and is
independent within the meaning of the Rules of Professional Conduct of the
Institute of Chartered Accountants of Ontario.

                            ADDITIONAL INFORMATION

     Additional information with respect to the Crystallex Group 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 21, 2007).

                                      45
<PAGE>


     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 Schedule "A" and Schedule "B,"
respectively.


                                      46
<PAGE>


                                 SCHEDULE "A"
                       CONSOLIDATED FINANCIAL STATEMENTS
                                 (AS ATTACHED)


                                      A-1
<PAGE>


                                 SCHEDULE "B"
                     MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


                                      B-1
<PAGE>


                                 SCHEDULE "C"
    GLOSSARY OF DEFINED TERMS AND TECHNICAL MINING TERMS AND ABBREVIATIONS

                                                  Defined Terms

20,000 TPD Feasibility            The feasibility study Study completed by 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. See "Las
                                  Cristinas Project."

2005 Development Plan             The study  completed by SNCL and other
                                  independent  consultants  (including  MDA) in
                                  August 2005 updating the 20,000 TPD
                                  Feasibility Study.  See "Las Cristinas
                                  Project."

Consolidated Financial            The audited consolidated balance sheets of the
Statements                        Corporation as at December 31, 2006 and 2005,
                                  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, 2006, including
                                  the notes thereto and the auditors report
                                  thereon. A copy of the Consolidated Financial
                                  Statements is attached to this Annual
                                  Information Form as Schedule "A".

Corporation                       Crystallex International Corporation.

Crystallex Group                  The Corporation and its subsidiaries.

CVG                               Corporacion Venezolana de Guayana. See "Mining
                                  in Venezuela - Venezuela."

EIA                               Environmental Impact Assessment.  See "Mining
                                  in Venezuela - Environmental Laws."

Las Cristinas Deposits            The four  areas  referred  to as Las Cristinas
                                  4, 5, 6,  and 7. See "Las  Cristinas Project -
                                  Location and Property Description."

Management's Discussion and       Management's   Discussion  and  Analysis  of
Analysis                          Financial Condition and Results of Operations
                                  of the Corporation for the year  ended
                                  December  31,  2006.  A copy of Management's
                                  Discussion and Analysis is attached to this
                                  Annual Information Form as Schedule "B."

MARN                              The Ministry of the  Environment  and Natural
                                  Resources.  See "Mining in Venezuela -
                                  Environmental Laws."

MDA                               Mine Development Associates.  See "Las
                                  Cristinas project."

MDA Report                        The mineral reserves and resources report
                                  dated April 30, 2003, prepared by MDA with
                                  respect to the Las Cristinas project. See
                                  "Las Cristinas project."

MIBAM                             The Ministry of Basic  Industries  and Mining
                                  (formerly,  the Ministry of Energy and Mines).
                                  See "Mining in Venezuela - Mining Law."

Mine Operation Agreement          The mine operation agreement between the CVG
                                  and the Corporation dated September 17, 2002,
                                  with respect to the Las Cristinas project. See
                                  "Las Cristinas project - Mine Operation
                                  Agreement." A copy of the Mine Operation
                                  Agreement is attached to this Annual
                                  Information Form as Schedule "D".

NI 43-101                         National  Instrument  43-101  (Standards of
                                  Disclosure  for Mineral  Projects) of the
                                  Canadian Securities Administrators.


                                     C-1
<PAGE>

Qualified                         A person who: is an engineer or
Person                            geoscientist with at least five years of
                                  experience in mineral exploration, mine
                                  development or operation or mineral project
                                  assessment or any combination of these; has
                                  experience relevant to the subject matter of
                                  the mineral project and the technical report;
                                  and is a member in good standing of a
                                  professional association.

SNC-Lavalin                       SNC-Lavalin Engineers & Constructors Inc.
                                  See "Las Cristinas project."

VAT                               Value Added Tax.  See "Mining in Venezuela -
                                  Taxation."

VML                               Mining Law of 1999.  See "Mining in Venezuela
                                  - Mining Law."

Technical Mining Terms


Alluvial                          Relating to deposits made by flowing water,
                                  washed away from one place and deposited
                                  in another.

Assay                             An analysis to determine the presence, absence
                                  or concentration of one or more chemical
                                  components.

ball mill                         A large steel cylinder containing steel
                                  balls into which crushed ore is fed. The ball
                                  mill is rotated, causing the balls to cascade
                                  and grind the ore.

Belt                              A specific elongate area defined by unique
                                  geologic characteristics.

Bleb                              A small, usually rounded inclusion of one
                                  material in another.

Breccia                           Rock  consisting of fragments,  more or less
                                  angular,  in a matrix of  finer-grained
                                  material or cementing material.

carbon-in-leach (CIL)             A recovery process in which a slurry of
                                  gold ore, carbon granules and cyanide are
                                  mixed together. The cyanide dissolves the
                                  gold, which is then adsorbed by the carbon.
                                  The loaded carbon is subsequently separated
                                  from the slurry and the gold removed from the
                                  carbon.

Cathode                           A rectangular plate of metal produced by
                                  electrolytic refining. A cathode is typically
                                  the finished product of the copper refining
                                  process.

Chalcopyrite                      A copper mineral, the composition of which is
                                  copper iron sulphide. Concentrate A metal rich
                                  product from a mineral separation process such
                                  as flotation, from which most  of  the  waste
                                  material  in  the  ore  has  been  separated.
                                  The  metals  are "concentrated" from the ore
                                  and the remainder discarded as tailings.

cut-off grade                     The  minimum  metal  grade of which a tonne of
                                  rock can be  processed  on an economic basis.

Deposit                           A mineralized body which has been physically
                                  delineated by sufficient drilling, trenching,
                                  and/or underground work and found to contain a
                                  sufficient average grade of metal or metals to
                                  warrant further exploration and/or development
                                  expenditures. A deposit does not qualify as a
                                  commercially mineable ore body or as
                                  containing mineral reserves, until final
                                  legal, technical and economic factors have
                                  been resolved.

Development                       The preparation of a known commercially
                                  mineable deposit for mining.


                                     C-2
<PAGE>


diamond drill                     A type of  rotary  drill  in  which  the
                                  cutting  is done by  abrasion  rather  than
                                  percussion. The cutting bit is set with
                                  diamonds and is attached to the end of long
                                  hollow rods through which water is pumped to
                                  the cutting face. The drill cuts a core of
                                  rock, which is recovered in long cylindrical
                                  sections, an inch or more in diameter.

Dissemination                     A scattered distribution of generally
                                  fine-grained, metal-bearing minerals
                                  throughout a rock body.

Dyke                              A tabular intrusion, meaning it is sheet or
                                  slab-like, that cuts across or through the
                                  host rocks. Dykes vary from a few centimetres
                                  to many tens of metres in thickness and may
                                  extend for several kilometres.

Extraction                        Removal of ore or waste from the ground.

Fault                             A geological term that refers to a fracture or
                                  zone of fractures in the earth's crust along
                                  which the rock units on each side of the
                                  fracture have moved relative to one another.

feasibility study                 A comprehensive study of a deposit in
                                  which all geological, engineering, operating,
                                  economic and other relevant factors are
                                  considered in sufficient detail such that the
                                  study could reasonably serve as the basis for
                                  a final decision by a financial institution to
                                  finance the development of the deposit for
                                  mineral production.

Flotation                         A milling process by which some mineral
                                  particles are induced to become attached to
                                  bubbles of froth and float, and others to
                                  sink, so that the valuable minerals are
                                  concentrated and separated from the remaining
                                  rock or mineral material.

geophysical surveys               Studies conducted to measure the physical
                                  characteristics of a certain area.

Geophysics                        The study of the earth by quantitative
                                  physical methods.

gold dore                         A bar of gold which contains impurities in
                                  excess of 2% and which will be further refined
                                  to almost pure metal.

Grade                             The concentration or quality of an ore or
                                  metal content.

Hectare                           A square of 100 m on each side, or 2.471
                                  acres. Host The body of rock in which
                                  mineralization of economic interest occurs.

Intrusive                         A body of igneous rock formed by magma
                                  penetrating or intruding into or between other
                                  rocks but solidifying before reaching the
                                  surface; in contrast to lavas or tuffs which
                                  are extruded upon the surface.

Mill                              A plant where ore is ground fine and undergoes
                                  physical or chemical treatment to extract the
                                  valuable metals.

Mine                              An excavation in the earth for the purpose of
                                  extracting minerals. The excavation may be an
                                  open-pit on the surface or underground
                                  workings.

mineral reserve(1)                Mineral Reserve: The economically mineable
                                  part of a Measured Mineral Resource or
                                  Indicated Mineral Resource demonstrated by at
                                  least a preliminary feasibility study (which
                                  must include adequate information on mining,
                                  processing, metallurgical, economic and other
                                  relevant factors that demonstrate, at the time
                                  of reporting, that economic extraction can be
                                  justified). A Mineral Reserve includes
                                  diluting materials and allowances for losses
                                  that may occur when material is mined.


                                     C-4
<PAGE>


                                  Proven Mineral Reserve: The economically
                                  mineable part of a Measured Mineral Resource
                                  demonstrated by at least preliminary
                                  feasibility study.

                                  Probable Mineral Reserve: The economically
                                  mineable part of an Indicated and, in some
                                  circumstances, a Measured Mineral Resource,
                                  demonstrated by at least a preliminary
                                  feasibility study.

__________________
Note:

(1)  As defined in NI 43-101.


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.


                                     C-4
<PAGE>

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
                                  sulphide.

Quartz                            A mineral composed of silicon dioxide.

-----------------
Note:

(1)  As defined in NI 43-101.


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
                                  break-up 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.


                                     C-5
<PAGE>

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 sheet-like 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.

                                 Abbreviations

g/t               Grams per tonne.

m                 Metre.

oz                Ounce(s).

t                 Tonnes.

ton               A dry short ton (2,000 pounds).

tonne             A metric ton (1,000 kilograms or 2,204.62 pounds).

tpa               Tonnes per annum.


                       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


                                     C-6
<PAGE>


                                 SCHEDULE "D"
                MINE OPERATION AGREEMENT AND RELATED DOCUMENTS


                                      D-1
<PAGE>




                                       F-2

                                  SCHEDULE "E"
                             AUDIT COMMITTEE CHARTER

1    General

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

(2)  The composition, responsibilities and authority of the Committee are set
     out in this Charter.

(3)  This Charter and the by-laws of the Corporation and such other
     procedures, not inconsistent therewith, as the Committee may adopt from
     time to time, shall govern the meetings and procedures of the Committee.

2.   Composition

(1)  The Committee shall be composed of at least three directors of the
     Corporation (Members):

     (a)  all of whom are independent (as determined by the Board in
          accordance with the Policy on Independence of Directors of the
          Corporation);

     (b)  all of whom are financially literate (i.e., have 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 the accounting issues
          that can reasonably be expected to be raised by the financial
          statements of the Corporation); and

     (c)  at least one of whom is financially sophisticated (i.e., has past
          employment experience in finance or accounting, requisite
          professional certification in accounting or other comparable
          experience or background that results in his/her financial
          sophistication).

(2)  Members shall be appointed by the Board and shall serve until they
     resign, cease to be a Director or are removed or replaced by the Board.

(3)  The Board shall designate one of the Members as chair of the Committee
     (Chair).

(4)  The Secretary of the Corporation shall be secretary of the Committee
     (Secretary).

3.   Responsibilities

     The Committee shall 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.

     The Committee shall have the responsibilities set out below.

3.1 Managing, on behalf of the Shareholders of the Corporation, the
Relationship between the Corporation and its External Auditors

     The Committee shall be responsible for managing, on behalf of the
shareholders of the Corporation, the relationship between the Corporation and
its external auditors, including:

     (a)  appointing the external auditors, subject to shareholder approval;

     (b)  setting the compensation of the external auditors;


                                     E-1
<PAGE>


     (c)  overseeing the work of the external auditors, including the
          resolution of disagreements between management and the external
          auditors with respect to financial reporting;

     (d)  pre-approving all audit services and permitted non-audit services to
          be provided to the Corporation and its subsidiary entities by the
          external auditors;

     (e)  having the external auditors report to the Committee in a timely
          manner with respect to all required matters, including those set out
          in paragraph 3.2;

     (f)  reviewing and approving the hiring policies of the Corporation with
          respect to present and former partners and employees of the current
          and former external auditors;

     (g)  overseeing the rotation of the audit partner having primary
          responsibility for the external audit of the Corporation, the audit
          partner responsible for reviewing the external audit and the
          external auditors at such intervals as may be required;

     (h)  overseeing any change in the external auditors, including the notice
          of change of auditors required under applicable laws; and

     (i)  reviewing and assessing the performance, independence and objectivity
          of the external auditors.

3.2  Overseeing the External Audit

     The Committee shall be responsible for overseeing the external audit of
the Corporation, including:

     (a)  reviewing and approving the engagement letter and the audit plan,
          including financial risk areas identified by the external auditors
          and management, and facilitating coordination where more than one
          audit firm is involved;

     (b)  reviewing and assessing the accounting and reporting practices and
          principles used by the Corporation in preparing its financial
          statements, including:

          (1)  all significant accounting policies and practices used,
               including any changes from preceding years and any proposed
               changes for future years;

          (2)  all significant financial reporting issues, estimates and
               judgments made;

          (3)  all alternative treatments of financial information discussed
               by the external auditors and management, the results of such
               discussions and the treatments preferred by the external
               auditors;

          (4)  any material issues identified by the external auditors with
               respect to the adequacy of the internal financial control
               structure and any special audit steps adopted in light of
               material deficiencies or weaknesses;

          (5)  the effect of regulatory and accounting initiatives and
               off-balance sheet transactions or structures on the financial
               statements;

          (6)  any errors or omissions in, and any required restatement of,
               the financial statements for preceding years;

          (7)  all significant tax issues;

          (8)  the reporting of all material contingent liabilities and
               related party transactions; and

          (9)  any material written communications between the external
               auditors and management;


                                     E-2
<PAGE>


     (c)  reviewing and assessing the results of the external audit and the
          external auditors' opinion on the financial statements, including:

          (1)  the scope and quality of the external and internal audit work
               performed;

          (2)  the resources required to carry out the audit work performed;

          (3)  the cooperation and any lack of cooperation received by the
               external auditors from employees of the Corporation; and

          (4)  the contents of the audit report;

     (d)  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;

     (e)  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

     (f)  reviewing and discussing with legal counsel and other advisors
          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.

3.3  Reviewing and Approving and Recommending to the Board for Approval the
Financial Statements, MD&A and Interim Reports of the Corporation

     The Committee shall review and approve, and where required recommend to
the Board for approval, the financial statements, management's discussion and
analysis of financial condition and results of operations (MD&A) 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:

     (a)  the quality and appropriateness of accounting and reporting
          practices and principles and any changes thereto;

     (b)  major estimates or judgments, including alternative treatments of
          financial information discussed by management and the external
          auditors, the results of such discussions and the treatments
          preferred by the external auditors;

     (c)  material financial risks;

     (d)  material transactions;

     (e)  material adjustments;

     (f)  compliance with loan agreements;

     (g)  material off-balance sheet transactions and structures;

     (h)  related party transactions;

     (i)  compliance with accounting standards;

     (j)  compliance with legal and regulatory requirements; and

     (k)  disagreements with management.


                                     E-3
<PAGE>


3.4 Overseeing Internal Financial Control Structure and Financial Risk
Management Systems

     The Committee shall be responsible for overseeing the internal financial
control structure and financial risk management systems of the Corporation,
including:

     (a)  reviewing and discussing with management and the external auditors
          the quality and adequacy of the internal control over financial
          reporting structure of the Corporation including any material
          deficiencies or weakness and the steps taken by management to
          rectify these deficiencies or weaknesses;

     (b)  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 financial risk exposures of the
          Corporation and the steps taken by management to monitor and control
          these exposures;

     (c)  reviewing and discussing with management and the external auditors
          the establishment of and compliance with the Code of Business
          Conduct and Ethics of the Corporation; and

     (d)  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.

3.5 Establish and Review Certain Procedures

     The Committee shall establish adequate procedures, or require that
adequate procedures are established, with respect to the following and shall
annually assess the adequacy of these procedures:

     (a)  the review of the public disclosure of financial information
          extracted from the financial statements of the Corporation;

     (b)  the receipt, retention and treatment of complaints received by the
          Corporation with respect to accounting, internal accounting controls
          or auditing matters; and

     (c)  the confidential, anonymous submission by employees of the
          Corporation of concerns regarding questionable accounting or
          auditing matters.

3.6  Other

     The Committee shall:

     (a)  in cooperation with the Board and management, develop a calendar of
          activities and a meeting schedule for each year;

     (b)  review the operating and capital budgets of the Corporation;

     (c)  annually and more frequently if appropriate, review the funding and
          administration of the employee benefit plans of the Corporation; and

     (d)  review and discuss with management and the external auditors any
          material difficulties or problems with regulatory or government
          agencies with respect to financial matters and management's response
          thereto.

3.7  Matters for which the Audit Committee is not Responsible

     The Committee is not responsible for those matters which are the
responsibility of management or the external auditors including:


                                     E-4
<PAGE>


     (a)  planning and conducting the external audit;

     (b)  ensuring that the financial statements of the Corporation have been
          prepared in accordance with generally accepted accounting
          principles;

     (c)  ensuring that the financial statements of the Corporation and the
          other financial information of the Corporation contained in
          regulatory filings and other public disclosure of the Corporation
          fairly present in all material respects the financial condition,
          results of operations and cash flows of the Corporation;

     (d)  ensuring the adequacy of the internal control over financial
          reporting structure and the financial risk management systems of the
          Corporation; and

     (e)  ensuring compliance with applicable laws and regulations or the Code
          of Business Conduct and Ethics of the Corporation.

4.   Authority

(1)  The Committee is authorized to carry out its responsibilities as set out
     in this Charter and to make recommendations to the Board arising
     therefrom.

(2)  The Committee may delegate to the Chair and to the Chief Financial
     Officer of the Corporation (CFO) the authority, within specified limits,
     to authorize in advance all engagements of the external auditors to
     provide pre-approved services to the Corporation and its subsidiary
     entities. The Chair and the CFO shall report all engagements authorized
     by them to the Committee at its next meeting.

(3)  The Committee shall have direct and unrestricted access to the external
     auditors, officers and employees and information and records of the
     Corporation.

(4)  The Committee is authorized to retain, and to set and pay the
     compensation of, independent legal counsel and other advisors if it
     considers this appropriate.

(5)  The Committee is authorized to invite officers and employees of the
     Corporation and outsiders with relevant experience and expertise to
     attend or participate in its meetings and proceedings if it considers
     this appropriate.

(6)  The external auditors shall have direct and unrestricted access to the
     Committee and shall report directly to the Committee.

(7)  The Corporation shall pay directly or reimburse the Committee for the
     expenses incurred by the Committee in carrying out its responsibilities.

5.   Meetings and Proceedings

(1)  The Committee shall meet at least five times each year and not less
     frequently than once each calendar quarter.

(2)  Any Member or the Secretary may call a meeting of the Committee. The
     external auditors or the CFO may ask a Member to call a meeting of the
     Committee.

(3)  The Chair is responsible for the agenda of each meeting of the Committee,
     including input from the officers and employees of the Corporation, the
     external auditors, other Members and other directors of the Corporation
     as appropriate. Meetings will include presentations by management or
     professional advisors and consultants when appropriate and allow
     sufficient time to permit a full and open discussion of agenda items.


                                     E-5
<PAGE>


(4)  Unless waived by all Members, a notice of each meeting of the Committee
     confirming the date, time, place and agenda of the meeting, together with
     any supporting materials, shall be forwarded to each Member at least
     three days before the date of the meeting.

(5)  The quorum for each meeting of the Committee is two Members. In the
     absence of the Chair, the other Members may appoint one of their number
     as chair of a meeting. The chair of a meeting shall not have a second or
     casting vote.

(6)  The Chair or his delegate shall report to the Board following each
     meeting of the Committee.

(7)  The Secretary or his delegate shall keep minutes of all meetings of the
     Committee, including all resolutions passed by the Committee. Minutes of
     all meetings shall be distributed to the Members and the other directors
     of the Corporation after preliminary approval thereof by the Chair.

(8)  An individual who is not a Member may be invited to attend a meeting of
     the Committee for all or part of the meeting. The Chair of the Board, the
     President and Chief Executive Officer of the Corporation, the CFO and the
     engagement partners at the external auditors have a standing invitation
     to attend all meetings of the Committee except those meetings or parts of
     meetings where the Committee meets alone or in private session with
     management, the external auditors or professional advisors and
     consultants.

(9)  The Committee shall meet regularly alone and in private sessions with
     management and the external auditors to facilitate full communication.

6.   Self Assessment

(1)  The Committee and the Board shall annually assess the effectiveness of
     the Committee with a view to ensuring that the performance of the
     Committee accords with best practices.

(2)  The Committee and the Board shall annually review and update this Charter
     as required.


                                     E-6
<PAGE>


                                 SCHEDULE "F"
                      POLICY ON INDEPENDENCE OF DIRECTORS

1. Background

     The board of directors (Board) of Crystallex International Corporation
(Corporation) has developed this Policy after consideration of recent changes
in the corporate governance requirements in Canada and the United States
relating to the independence of directors applicable to the Corporation.

     Certain of these requirements require that a majority of the directors of
the Corporation (Directors), and all the Directors on the audit, compensation
and nominating committees of the Board, are independent.

2.   Purpose

     The purposes of this Policy are:

     (a)  to set out the test that the Board will use to determine whether a
          Director is independent;

     (b)  to identify the criteria that the Board will use to assess whether a
          Director is independent; and

     (c)  to describe the disclosure that the Board will provide to the
          shareholders of the Corporation with respect to its determination of
          the independence of Directors.

3.   Test of Independence

     The test that will be used by the Board to determine whether a Director
is independent is:

          Independent of management or any other direct or indirect material
          business or other relationship with the Corporation and its
          subsidiaries and any other entity that is consolidated with the
          Corporation's financial statements (Crystallex Group) that could
          interfere with the exercise of independent judgment by the Director
          or the ability of the Director to act in the best interests of the
          Corporation.

4.   Assessment Process

     Each Director will provide the Board with information sufficient to
enable the Board to assess whether the Director is independent, including
information with respect to the criteria set out below.

     The Board will assess whether a Director is independent annually and
whenever new information is provided to the Board. The Board will consider all
relevant information in assessing whether a Director is independent.

     Generally, a Director will be considered to be independent if he/she
satisfies all the criteria set out below. A Director may, however, be
considered to be independent even though he/she does not satisfy one or more
of the criteria set out below. For example, the director independence criteria
set out below are in some cases more restrictive than those prescribed under
requirements applicable to the Corporation (Prescribed Requirements). Also,
the Prescribed Requirements for qualification for membership on an audit
committee are more restrictive than those for qualification for membership on
a compensation or nominating committee or a board of directors generally. If a
Director satisfies the Prescribed Requirements, the Board may, in certain
circumstances, determine that a Director is independent.

5.   Criteria used to Assess Independence

     The criteria that the Board will use in assessing whether a Director is
independent are set out below. Defined terms used in connection with one of
the criteria apply to all of the criteria.

(1)  Is not an officer or employee - neither the Director nor an immediate
     family member of the Director is, or within the last three years has
     been, an officer or employee of a member of the Crystallex Group.


                                     F-1
<PAGE>


     An immediate family member of an individual is the individual's spouse,
     parent, child, sibling, mother-in-law, father-in-law, sister-in-law,
     brother-in-law, daughter-in-law, son-in-law and anyone, other than an
     employee, who resides in the individual's home.

     An officer of an entity includes an individual who performs a policy
     making function in respect of the entity or who makes, or participates in
     making, decisions that affect all or a substantial part of the business
     of the entity, whether or not the individual is employed by the entity
     and whether or not the individual does so directly or through another
     entity.

     A Director may be considered to be independent if an immediate family
     member of the Director is only an employee of a member of the Crystallex
     Group.

(2)  Is not a substantial shareholder - the Director is not a substantial
     shareholder of a member of the Crystallex Group or affiliated with a
     substantial shareholder of a member of the Crystallex Group.

     A substantial shareholder of an entity is a person who beneficially owns,
     directly or indirectly, or exercises control or direction over, 10% or
     more of the voting interests of the entity.

     An individual is affiliated with an entity if the individual is a
     director, officer, employee, principal, partner or managing director of,
     or occupies a similar position with, the entity or is a substantial
     shareholder of the entity.

     A Director who is a director of a substantial shareholder of a member of
     the Crystallex Group may be considered to be independent if the Director
     is independent of the substantial shareholder.

(3)  Has no material contractual relationship - the Director does not have any
     material contractual relationship with a member of the Crystallex Group
     other than as a Director.

     The test of whether a contractual relationship is material will be based
     on all the circumstances relevant to the Director.

(4)  Does not receive consulting or other advisory fees or payments - neither
     the Director nor an immediate family member or related entity of the
     Director receives, or within the last three years has received,
     consulting or other advisory fees or payments from the Crystallex Group
     that in any year exceed the lesser of C$75,000 and the Canadian dollar
     equivalent of US$60,000, other than compensation for Board services,
     payments arising from investments in securities of the Corporation or, in
     the case of an immediate family member who is not an officer of a member
     of the Crystallex Group, compensation for services as an employee of a
     member of the Crystallex Group.

     An entity is a related entity of a Director if the Director or an
     immediate family member of the Director is a director, officer, employee,
     principal, partner or managing director of, or occupies a similar
     position with, the entity or is a substantial shareholder of the entity.

(5)  Does not receive incentive compensation - the Director does not
     participate in any share based incentive scheme or performance related
     pay scheme of the Crystallex Group.

     This criterion does not preclude the payment of all or part of a
     Director's compensation for Board services in the form of shares or
     options to receive shares of the Corporation.

(6)  Is not a professional consultant or advisor - neither the Director nor an
     immediate family member of the Director is, or within the last three
     years has been, an auditor or other professional consultant or advisor to
     a member of the Crystallex Group or affiliated with an auditor or other
     professional consultant or advisor to a member of the Crystallex Group.

     A professional consultant or advisor includes an entity that provides
     accounting, actuarial, consulting, legal, investment banking or financial
     advisory services.

                                     F-2
<PAGE>


     A Director may be considered to be independent if an immediate family
     member of the Director is only an employee of an auditor or other
     professional consultant or advisor to a member of the Crystallex Group
     and does not participate in a material way in the provision of services
     to the member of the Crystallex Group by the auditor or other
     professional consultant or advisor.

(7)  Is not a material supplier or customer - neither the Director nor an
     immediate family member of the Director is, or within the last three
     years has been, a material supplier or customer of the Crystallex Group
     or affiliated with a material supplier or customer of the Crystallex
     Group.

     A material supplier or customer of the Crystallex Group is a person to
     which the Crystallex Group made or from which Crystallex Group received
     payments (other than payments arising from investments in securities of
     the Corporation) in any year that exceed the greater of 5% of the
     consolidated gross revenues of the person for the year and the Canadian
     dollar equivalent of US$200,000.

(8)  Has no board remuneration committee connection - neither the Director nor
     an immediate family member of the Director is, or within the last three
     years has been, an officer of any entity, the compensation committee of
     which includes, or within the last three years included, an officer of
     the Corporation.

(9)  Has no other material business relationship - neither the Director nor an
     immediate family member or related entity of the Director has, or within
     the last three years has had, directly or indirectly, any other material
     business relationship with the Crystallex Group.

     The test of whether a business relationship is material will be based on
     the circumstances relevant to the Director.

(10) Has no significant links with other Directors - the Director does not
     hold cross-directorships or have any significant links with any other
     Director (e.g., through involvement in other entities) that would
     materially interfere with the exercise of independent judgment by the
     Director or the ability of the Director to act in the best interests of
     the Crystallex Group.

(11) Has not served too long - the Director has not served on the Board for a
     period that could, or could reasonably be perceived to, materially
     interfere with the Director's ability to act in the best interests of the
     Crystallex Group.

(12) Is independent in character and judgment - the Director is independent in
     character and judgment.

6.   Disclosure

     The Board will provide to the shareholders of the Corporation annually
disclosure with respect to its determination of the independence of the
Directors, including:

     (a)  identifying which Directors are and are not independent and the
          basis of the determination of independence;

     (b)  explaining any determination of independence of a Director who does
          not satisfy all the criteria set out above; and

     (c)  describing all the material relationships of each Director with the
          Crystallex Group (whether or not falling within the criteria set out
          above), including relationships which the Board believes do not
          affect independence but which the Board believes could be perceived
          as interfering with the exercise of independent judgement by the
          Director or the ability of the Director to act in the best interests
          of the Crystallex Group.

The Board will provide to the shareholders of the Corporation as soon as
practicable disclosure with respect to any change in its determination of the
independence of a Director.


                                     F-3

<PAGE>


                                                                 Document No. 2

<PAGE>


Crystallex International Corporation



Consolidated Financial Statements

December 31, 2006 and 2005

(Expressed in United States Dollars)


<PAGE>

REPORT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS

To the Shareholders of
Crystallex International Corporation

We have audited the consolidated balance sheets of Crystallex International
Corporation as at December 31, 2006 and 2005 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, 2006. 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 Crystallex International
Corporation as at December 31, 2006 and 2005 and the results of its operations
and its cash flows for each of the years in the three-year period ended December
31, 2006 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.


/s/ DELOITTE & TOUCHE LLP

Independent Registered Chartered Accountants
Toronto, Ontario

March 27, 2007, except as to Note 17, which
is as at March 29, 2007

<PAGE>

Crystallex International Corporation
Table of Contents
December 31, 2006, 2005 and 2004
================================================================================



                                                                         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 - 43

<PAGE>


<PAGE>
<TABLE>
<CAPTION>

Crystallex International Corporation
Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
============================================================================================================

                                                                          2006                 2005
                                                                     ------------------- -------------------
<S>                                                                       <C>                   <C>
ASSETS

CURRENT
Cash and cash equivalents                                                 $  28,573,142         $ 4,070,019
Restricted cash and cash equivalents (Note 3)                                         -           9,241,851
Accounts receivable                                                             490,090           1,395,394
Production inventories (Note 4)                                               4,867,577           2,566,821
Prepaid expenses and other                                                    4,760,999           2,787,495
------------------------------------------------------------------------------------------------------------
                                                                             38,691,808          20,061,580
RESTRICTED CASH AND CASH EQUIVALENTS (Note 3)                                         -          12,081,312
PROPERTY, PLANT AND EQUIPMENT (Note 5)                                      256,455,027         215,260,043
DEFERRED FINANCING FEES (Note 6)                                              2,595,627           3,237,263
------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                              $ 297,742,462       $ 250,640,198
============================================================================================================

LIABILITIES

CURRENT
Accounts payable and accrued liabilities                                  $  12,791,456        $ 20,145,034
Current portion of debt (Note 7)                                              3,172,559           2,442,350
Current portion of asset retirement obligations (Note 8)                        239,408             126,092
------------------------------------------------------------------------------------------------------------
                                                                             16,203,423          22,713,476
DEBT (Note 7)                                                                84,524,929          94,495,582
ASSET RETIREMENT OBLIGATIONS (Note 8)                                           971,167           1,394,646
------------------------------------------------------------------------------------------------------------
                                                                            101,699,519         118,603,704
------------------------------------------------------------------------------------------------------------

COMMITMENTS AND CONTINGENCIES (Notes 1 & 16)

SHAREHOLDERS' EQUITY

SHARE CAPITAL (Note 9)                                                      448,100,697         336,491,624
CONTRIBUTED SURPLUS                                                          23,135,187          32,489,216
EQUITY COMPONENT OF EXCHANGEABLE BANK LOAN (Note 7)                                   -           2,564,366
CUMULATIVE TRANSLATION ADJUSTMENT                                            11,958,981          11,958,981
DEFICIT                                                                   (287,151,922)       (251,467,693)
------------------------------------------------------------------------------------------------------------
                                                                            196,042,943         132,036,494
------------------------------------------------------------------------------------------------------------
                                                                          $ 297,742,462       $ 250,640,198
============================================================================================================



/s/ Gordon Thompson, Director                                       /s/ Johan van't Hof, Director

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

                                                                                               Page 1 of 43
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
Crystallex International Corporation

Consolidated Statements of Operations
Years ended December 31, 2006, 2005, 2004
(Expressed in United States dollars)
==================================================================================================================
                                                            2006                  2005                 2004
                                                     ------------------     -----------------    -----------------
<S>                                                         <C>                   <C>                  <C>

MINING REVENUE                                           $  28,087,764        $   24,989,681       $   20,245,690
------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
  Operations                                                27,099,113            22,754,642           18,037,768
  Amortization                                                 949,996             2,366,312            1,161,042
  Depletion                                                    833,427               330,472            4,869,005
------------------------------------------------------------------------------------------------------------------
                                                            28,882,536            25,451,426           24,067,815
------------------------------------------------------------------------------------------------------------------
OPERATING LOSS                                               (794,772)              (461,745)          (3,822,125)
------------------------------------------------------------------------------------------------------------------
OTHER EXPENSES
  General and administrative                                20,397,226            19,460,501           18,223,193
  Interest on debt                                          12,945,985            11,809,087              548,131
  Stock based compensation (Note 9)                          2,463,691             3,665,894            5,296,977
  Amortization                                                 701,875             1,048,296              158,969
------------------------------------------------------------------------------------------------------------------
                                                            36,508,777            35,983,778           24,227,270
------------------------------------------------------------------------------------------------------------------
COMMODITY CONTRACT LOSS                                              -            (3,770,835)            (963,717)
------------------------------------------------------------------------------------------------------------------
LOSS BEFORE OTHER ITEMS                                    (37,303,549)          (40,216,358)         (29,013,112)
------------------------------------------------------------------------------------------------------------------
OTHER ITEMS
Interest and other income                                    1,159,586             1,926,425              697,638
Foreign exchange (loss) gain                                   459,734            (1,192,593)             397,313
Write-down of property, plant & equipment (Note 5)                   -                     -          (32,003,253)
Gain on settlement of debt (Note 7)                                  -               875,610                    -
Investment in subsidiaries (Note 10)                                 -            (6,600,000)            (493,702)
------------------------------------------------------------------------------------------------------------------
                                                             1,619,320            (4,990,558)         (31,402,004)
------------------------------------------------------------------------------------------------------------------
LOSS FROM CONTINUING OPERATIONS
    BEFORE NON-CONTROLLING INTEREST                        (35,684,229)          (45,206,916)         (60,415,116)
NON-CONTROLLING INTEREST                                             -                     -              111,053
------------------------------------------------------------------------------------------------------------------
LOSS FROM CONTINUING OPERATIONS                            (35,684,229)          (45,206,916)         (60,304,063)

LOSS FROM DISCONTINUED
OPERATIONS (Note 15)                                                 -                     -             (350,000)
------------------------------------------------------------------------------------------------------------------
NET LOSS FOR THE YEAR                                    $ (35,684,229)       $  (45,206,916)       $ (60,654,063)
==================================================================================================================
NET LOSS PER SHARE - basic and diluted
Continuing operations                                    $       (0.15)       $        (0.23)     $         (0.35)
Discontinued operations                                             -                     -                    -
------------------------------------------------------------------------------------------------------------------
                                                         $       (0.15)       $        (0.23)     $         (0.35)
==================================================================================================================
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING - basic and diluted                  230,229,162           194,729,931          172,234,551
==================================================================================================================

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

                                                                                                     Page 2 of 43
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
Crystallex International Corporation

Consolidated Statements of Cash Flows
Years ended December 31,2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================================================
                                                            2006                  2005                 2004
                                                     ------------------     -----------------    ---------------
<S>                                                     <C>                  <C>                 <C>
CASH FLOWS FROM CONTINUING
OPERATING ACTIVITIES
  Loss for the year - continuing operations             $   (35,684,229)     $   (45,206,916)    $ (60,304,063)
  Adjustments to reconcile loss to net cash
   used in operating activities:
     Amortization and depletion                               2,485,298            2,303,717         6,189,016
     Interest accretion on debt                               2,960,413            2,672,895            79,249
     Stock based compensation                                 2,463,691            3,665,894         5,296,977
     Warrants issued for professional fees                    1,365,839                    -                 -
     Accretion expense on asset retirement obligations          288,376              345,460                 -
     Reductions in asset retirement obligations                (598,539)          (1,095,903)                -
     Director's fees paid in shares                              60,000              190,000           100,000
     Investment in subsidiaries                                       -            6,600,000           493,702
     Gain on settlement of debt                                       -             (875,610)                -
     Write-down of mineral properties                                 -                    -        32,003,253
     Extension of warrants                                            -                    -           225,178
     Non controlling interest in loss of subsidiary                   -                    -          (111,053)
     Unrealized foreign exchange gain                                 -                    -           (71,279)
     Unrealized commodity contract gain                               -           (8,265,111)      (18,127,999)
  Changes in other operating assets and liabilities
   (net of effects from purchase of subsidiaries):
  Decrease (increase) in accounts receivable                    905,304             (865,487)          330,994
  Increase in production inventories                         (2,300,756)            (782,033)          (33,085)
  Increase in prepaid expenses and other                     (1,973,504)              (2,231)       (1,752,719)
  (Decrease) increase in accounts payable and
    accrued liabilities                                      (2,024,678)            6,409,112         (323,269)
---------------------------------------------------------------------------------------------------------------
                                                            (32,052,785)         (32,714,407)      (36,005,098)
---------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Investment in property, plant and equipment              (48,410,744)          (94,369,873)      (50,900,524)
  Decrease (increase) in restricted cash and cash
    equivalents                                             21,323,163            76,682,473       (98,005,636)
  Decrease (increase) in short-term investments                      -            30,277,280       (30,277,280)
---------------------------------------------------------------------------------------------------------------
                                                           (27,087,581)           12,589,880      (179,183,440)
---------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common shares for cash                          82,951,451            15,892,242       115,113,111
  Debt borrowings                                                    -             7,673,793        78,550,000
  Debt repayments                                           (5,202,552)           (4,512,500)       (1,029,530)
  Deferred financing fees                                      (77,479)             (898,657)       (3,489,122)
  Issuance of warrants                                       5,972,069               272,926                 -
  Proceeds from orderly disposition of shares                        -                     -         3,957,285
---------------------------------------------------------------------------------------------------------------
                                                            83,643,489            18,427,804       193,101,744
---------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM CONTINUING OPERATIONS                       24,503,123            (1,696,723)      (22,086,794)
CASH FLOWS FROM DISCONTINUED OPERATIONS                              -                     -         1,650,000
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS            24,503,123            (1,696,723)      (20,436,794)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                 4,070,019             5,766,742        26,203,536
---------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR                  $   28,573,142       $     4,070,019    $    5,766,742
===============================================================================================================
Supplemental disclosure with respect to cash flows (Note 13)
The accompanying notes are an integral part of the consolidated financial statements.



                                                                                                  Page 3 of 43
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

Crystallex International Corporation

Consolidated Statements of Shareholders' Equity
Years ended December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
=================================================================================================================================
                                                  Number of                     Number of
                                                     Common                       Special                          Number of
                                                     Shares          Amount      Warrants           Amount          Warrants
---------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>             <C>            <C>            <C>               <C>
Balance at December 31, 2003                    135,403,523     171,994,591    12,800,000     $ 11,886,581      $ 20,042,772
Adjustment for change in policy
  re stock-based compensation                             -               -             -              -                   -
Shares issued: Public equity offering            28,750,000      81,935,995             -              -                   -
     Unit offering                                6,500,000      20,484,750             -              -                   -
     Exercise of options                          1,251,000       1,581,512             -              -                   -
     Conversion of warrants                       4,908,046      13,573,007             -              -          (4,908,046)
     Directors' fees                                 40,976         100,000                                                -
     Finders fee                                     19,232          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             -              -                   -
     Proceeds from orderly
        disposition of shares                             -       3,957,285             -              -                   -
     Options issued                                       -               -             -              -                   -
Warrants expired during the year                          -               -             -              -          (2,126,491)
Extension of warrants                                     -               -             -              -                   -
Net loss for the year                                     -               -             -              -                   -
---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2004                    189,836,735     306,031,783             -              -          13,008,235
Shares issued: Unit offering                        200,000         466,549             -              -             450,000
     Exercise of options                            775,000       1,196,957             -              -                   -
     Issuance of shares under equity
       drawn down facility                       12,273,236      17,394,493             -              -                   -
     Acquisition of non-controlling interest      1,467,136       3,000,000             -              -                   -
     Conversion of warrants                       3,418,500       8,210,355             -              -          (3,418,500)
     Directors' fees                                 65,186         190,000             -              -                   -
     Share exchange - El Callao                         523           1,487             -              -                   -
Exchangeable debt                                         -               -                            -                   -
Options issued to employees                               -               -             -              -                   -
Warrants expired during the year                          -               -             -              -          (1,042,008)
Net loss for the year                                     -               -             -              -                   -
---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2005                    208,036,316     336,491,624             -              -           8,997,727
Shares issued: Unit offerings                    20,924,000      51,208,985             -              -          17,312,500
     Exercise of options                          1,641,800       5,490,735             -              -                   -
     Issuance of shares under equity
       drawn down facility                        1,661,130       4,317,661             -              -                   -
     Settlement of promissory note                  611,300       1,800,000             -              -                   -
     Settlement of bank loan                      3,765,841       7,641,266             -              -                   -
     Conversion of warrants                       8,764,682      41,089,701             -              -          (8,764,682)
     Directors' fees                                 19,170          60,000             -              -                   -
     Share exchange - El Callao                         255             725             -              -                   -
Options issued to employees                               -               -             -              -                   -
Warrants issued for professional fees                     -               -             -              -             500,000
Warrants issued in exchange for
   early exercise of warrants                             -               -             -              -             875,000
Warrants expired during the year                          -               -             -              -            (233,045)
Net loss for the year                                     -               -             -              -                   -
---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2006                    245,424,494   $ 448,100,697             -              -          18,687,500
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>

[table continued]
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                                                       Equity
                                                                      component
                                                                       Notes/        Cumulative
                                                   Contributed      Exchangeables   Translation
                                                       Surplus           Debt        Adjustment       Deficit              Total
---------------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>                       <C>     <C>             <C>               <C>
Balance at December 31, 2003                     $  25,808,171              -      $ 11,958,981   $(142,650,559)    $ 78,997,765
Adjustment for change in policy
  re stock-based compensation                        2,956,155              -                 -      (2,956,155)    $          -
Shares issued: Public equity offering                        -              -                 -               -     $ 81,935,995
     Unit offering                                           -              -                 -               -     $ 20,484,750
     Exercise of options                              (172,624)             -                 -               -     $  1,408,888
     Conversion of warrants                         (2,289,529)             -                 -               -     $ 11,283,478
     Directors' fees                                         -              -                 -               -     $    100,000
     Finders fee                                             -              -                 -               -     $     50,000
     Conversion of special warrants                          -              -                 -               -     $          -
     Share exchange - El Callao                              -              -                 -               -     $    468,062
     Proceeds from orderly
        disposition of shares                                -              -                 -               -     $  3,957,285
     Options issued                                  5,296,977              -                 -               -     $  5,296,977
Warrants expired during the year                             -              -                 -               -     $          -
Extension of warrants                                  225,178              -                 -               -     $    225,178
Net loss for the year                                        -              -                 -     (60,654,063)    $(60,654,063)
---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2004                        31,824,328              -        11,958,981    (206,260,777)    $143,554,315
Shares issued: Unit offering                           272,926              -                 -               -     $    739,475
     Exercise of options                              (143,934)             -                 -               -     $  1,053,023
     Issuance of shares under equity
       drawn down facility                                   -              -                 -               -     $ 17,394,493
     Acquisition of non-controlling interest                 -              -                 -               -     $  3,000,000
     Conversion of warrants                         (3,129,998)             -                 -               -     $  5,080,357
     Directors' fees                                         -              -                 -               -     $    190,000
     Share exchange - El Callao                              -              -                 -               -     $      1,487
Exchangeable debt                                            -      2,564,366                 -               -     $  2,564,366
Options issued to employees                          3,665,894              -                 -               -     $  3,665,894
Warrants expired during the year                             -              -                 -               -     $          -
Net loss for the year                                        -              -                 -     (45,206,916)    $(45,206,916)
---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2005                        32,489,216      2,564,366        11,958,981    (251,467,693)    $132,036,494
Shares issued: Unit offerings                        5,972,069              -                 -               -     $ 57,181,054
     Exercise of options                            (1,838,981)             -                 -               -     $  3,651,754
     Issuance of shares under equity
       drawn down facility                                   -              -                 -               -     $  4,317,661
     Settlement of promissory note                           -              -                 -               -     $  1,800,000
     Settlement of bank loan                                 -     (2,564,366)                -               -     $  5,076,900
     Conversion of warrants                        (17,316,647)             -                 -               -     $ 23,773,054
     Directors' fees                                         -              -                 -               -     $     60,000
     Share exchange - El Callao                              -              -                 -               -     $        725
Options issued to employees                          2,463,691              -                 -               -     $  2,463,691
Warrants issued for professional fees                1,365,839              -                 -               -     $  1,365,839
Warrants issued in exchange for
   early exercise of warrants                                -              -                 -               -     $          -
Warrants expired during the year                             -              -                 -               -     $          -
Net loss for the year                                        -              -                 -     (35,684,229)    $(35,684,229)
---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2006                     $  23,135,187              -      $ 11,958,981   $(287,151,922)    $196,042,943
---------------------------------------------------------------------------------------------------------------------------------

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



                                                                                                                   Page 4 of 43
</TABLE>
<PAGE>

Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================

1.     NATURE OF OPERATIONS AND CONTINUATION OF BUSINESS

       Crystallex International Corporation ("Crystallex" or the "Company") is
       engaged in the production of gold and related activities including
       exploration, development, mining and processing in Venezuela. As
       reflected in these financial statements, the Company has not generated
       sustainable operating capital from its business activities and has relied
       on debt, equity and other forms of financing to meet its obligations.
       Management is of the opinion that additional financing is available to
       continue its planned activities in the normal course upon completion of
       the permitting process (refer below); however, while the Company has been
       successful in the past, there can be no assurance it will be able to
       raise sufficient funds in the future.

       The Company's principal asset is the Las Cristinas project, currently
       under development in Venezuela. Continued development and the ultimate
       commencement of commercial production are dependent upon receipt of the
       permit to Impact Natural Resources (the "Permit") which will allow
       management to proceed to put in place financing to fund construction.
       These financial statements have been prepared on a going concern basis
       which assumes that the Company will be successful in obtaining the Permit
       and will be able to obtain the necessary financing to complete the Las
       Cristinas project through project debt, other forms of public market
       debt, or equity financing; thereby fulfilling its commitment under its
       Mine Operating Agreement. The Company continues to believe that it will
       be successful in obtaining the Permit and any other government approvals
       that are necessary to complete the mine development and commence
       commercial production, since it received official notice in March 2006
       from the Venezuelan Ministry of Basic Industries and Mines ("MIBAM")
       advising that MIBAM formally approved the technical, economic and
       financial Feasibility Study for the Las Cristinas project.

       The carrying value of the Las Cristinas assets could be subject to
       material adjustment in the event that this Permit or any other permits
       are not received or that financing efforts are not successful, and, in
       addition, other adjustments to amounts and classification of assets and
       liabilities may be necessary to these consolidated financial statements
       should such circumstances impair the Company's ability, in future, to
       continue as a going concern as contemplated under accounting principles
       generally accepted in Canada.

2.     SIGNIFICANT ACCOUNTING POLICIES

       The principal accounting policies followed by the Company, which have
       been consistently applied in the preparation of these consolidated
       financial statements, are summarized as follows. These policies are
       consistent with accounting principles generally accepted in the United
       States in all material respects except as outlined in Note 19.

       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.


                                                                    Page 5 of 43
<PAGE>
Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


2.     SIGNIFICANT ACCOUNTING POLICIES (continued)

       Principles of consolidation

       These consolidated financial statements include the accounts of the
       Company and its majority-owned subsidiaries, all of which are controlled
       through the ownership of a majority voting interest. All inter-company
       balances and transactions have been eliminated.

       Translation of foreign 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 the Statement of
       Operations.

       The Company translates monetary assets and liabilities that are
       denominated in foreign currencies at the rate of exchange in effect at
       the balance sheet date and non-monetary assets and liabilities at
       historical exchange rates. Revenues and expenses are translated at
       average rates in the month except for depreciation and amortization,
       which are translated using the same rates as the related assets. Foreign
       exchange gains and losses on monetary items are recorded on the statement
       of operations as they occur.

       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, 2006 and December 31, 2005.

                                                                    Page 6 of 43
<PAGE>

Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


2.     SIGNIFICANT ACCOUNTING POLICIES (continued)

       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 is being provided for using the straight-line method over
       the following periods, not to exceed the mine's estimated life:

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

       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 amortized and charged to amortization
       expense over the life of the associated asset. The obligation is accreted
       over the period of expected cash flows with a corresponding charge to
       operating expenses. The fair value of the obligation for asset retirement
       is re-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 the value beyond proven and probable which includes those mineral
       resources expected to be converted into mineral reserves), estimated
       future commodity price realization (considering historical and current
       prices, price trends and related factors) and operating costs, future
       capital expenditures, project financing costs and reclamation costs.

                                                                    Page 7 of 43
<PAGE>
Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


2.     SIGNIFICANT ACCOUNTING POLICIES (continued)

       Impairment of long lived assets (continued)

       The amount of the impairment loss is determined as the excess of the
       carrying value of the asset over its fair value, which is measured using
       discounted cash flows.

       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 dore, 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 basis 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 are recognized upon shipment of gold, when
       title has passed to the customer, when persuasive evidence of an
       arrangement exists, and collection of the sale is reasonably assured.

       Deferred financing fees

       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 per share amounts
       are calculated using the treasury stock method. In 2006, 2005 and 2004,
       the potential effect of the outstanding convertible notes, stock options
       and warrants were anti-dilutive.

                                                                    Page 8 of 43
<PAGE>
Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


2.     SIGNIFICANT ACCOUNTING POLICIES (continued)

       Commodity derivative contracts

       The Company has in the past 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 were not designated as hedges for accounting purposes
       and were 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 were 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 were recognized in the Statement of Operations in the year of
       the change or settlement as a commodity contract gain (loss).

       Stock-based compensation plans

       The Company has stock-based compensation plans which are described in
       Note 9. The Company accounts for stock options using the fair value
       method, whereby compensation expense for stock options 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.

       Measurement uncertainty

       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
       include those relating to the timing and receipt of the Permit, 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, income
       taxes 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.

       Fair value of financial instruments

       The balance sheet carrying amounts for cash and cash equivalents,
       restricted cash and cash equivalents, accounts receivable and accounts
       payable and accrued liabilities approximate fair value due to their
       short-term nature. The fair value of debt is disclosed in Note 7.

       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

                                                                    Page 9 of 43
<PAGE>

Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


2.     SIGNIFICANT ACCOUNTING POLICIES (continued)

       Fair value of financial instruments (continued)

       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
       obligations. As at December 31, 2006 and 2005 the Company had no
       obligations outstanding under fixed forward contracts and written call
       options.

3.     RESTRICTED CASH AND CASH EQUIVALENTS

       As at December 31, 2006 the Company no longer had any restricted cash and
       cash equivalents (December 31, 2005 - $21,323,163). Prior to December 31,
       2006, this balance was comprised principally of treasury bills with
       original maturities of three months or less. These funds were held in
       escrow under terms of an Escrow Agreement whereby funds were restricted
       for use towards approved capital budget expenditures for Las Cristinas
       and interest expense on Notes payable (Note 7).

4.     PRODUCTION INVENTORIES

                                                     2006              2005
                                             ---------------    ---------------

       Gold in dore                          $     524,360          $ 406,435
       Gold in process                             563,746            732,074
       Stockpiled ore                              958,271             28,484
       Consumables and spare parts               2,821,200          1,399,828
       -------------------------------------------------------------------------
                                                $4,867,577         $2,566,821
       =========================================================================


                                                                   Page 10 of 43
<PAGE>
Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


5.     PROPERTY, PLANT AND EQUIPMENT

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

<TABLE>
<CAPTION>

                                                                   2006
                                       --------------------------------------------------------------
                                                                Accumulated
                                           Cost, Net           Amortization
                                               of                   and                Net Book
                                          Write-downs            Depletion              Value
                                       -------------------   ------------------   -------------------

<S>                                          <C>                   <C>                  <C>
Plant and equipment                          $113,865,685          $ 9,003,122          $104,862,563
Mineral properties                            159,499,041            7,906,577           151,592,464
Deferred exploration and
development expenditures                        3,658,007            3,658,007                     -
-----------------------------------------------------------------------------------------------------
                                             $277,022,733          $20,567,706          $256,455,027
=====================================================================================================



                                                                   2005
                                       --------------------------------------------------------------
                                                                Accumulated
                                           Cost, Net           Amortization
                                               of                   and                Net Book
                                          Write-downs            Depletion              Value
                                       -------------------   ------------------   -------------------

Plant and equipment                          $ 99,939,283          $ 7,783,659          $ 92,155,624
Mineral properties                            130,177,569            7,877,218           122,300,351
Deferred exploration and
development expenditures                        3,658,007            2,853,939               804,068
-----------------------------------------------------------------------------------------------------
                                             $233,774,859          $18,514,816          $215,260,043
=====================================================================================================
</TABLE>




                                                                   Page 11 of 43
<PAGE>
Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


5.     PROPERTY, PLANT AND EQUIPMENT (continued)

       The net book values of property, plant and equipment by location are as
       follows:

<TABLE>
<CAPTION>

                              --------------------------------------------------------------------------------
                                      2006
                              --------------------------------------------------------------------------------
                                                                          Deferred
                                                                        exploration and
                                   Plant and             Mineral         development
                                   Equipment           properties       expenditures              Total
                              --------------------------------------------------------------------------------
<S>                                  <C>                <C>               <C>                 <C>
Las Cristinas                        $ 104,691,650      $ 151,592,464     $      -            $ 256,284,114
Corporate                                  170,913                 -             -                  170,913
--------------------------------------------------------------------------------------------------------------
Total                                $ 104,862,563      $ 151,592,464     $      -            $ 256,455,027
--------------------------------------------------------------------------------------------------------------


                              --------------------------------------------------------------------------------
                                                                             2005
                              --------------------------------------------------------------------------------
                                                                          Deferred
                                                                        exploration and
                                   Plant and             Mineral         development
                                   Equipment           properties       expenditures              Total
                              --------------------------------------------------------------------------------
Las Cristinas                        $  90,930,549      $ 122,270,993     $      -            $ 213,201,542
Tomi Concession                                -               29,358        804,068                833,426
Revemin mill                               957,455                 -             -                  957,455
Corporate                                  267,620                 -             -                  267,620
--------------------------------------------------------------------------------------------------------------
Total                                $  92,155,624      $ 122,300,351     $  804,068          $ 215,260,043
--------------------------------------------------------------------------------------------------------------
</TABLE>



       Deferred exploration and development expenditures are not re-classified
       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. Write
       downs to the estimated fair market value amounting to $ Nil (2005 - $Nil;
       2004 - $32,003,253) were included within the Statements of Operations.

       Property, plant and equipment summarized by property is as follows:

       Las Cristinas

       On September 17, 2002, the Company entered into a non-assignable mining
       agreement (the "Agreement") with the Corporacion 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 was granted the exclusive right to explore, develop and exploit
       the Las Cristinas 4, 5, 6 and 7 properties including the processing of
       gold for its subsequent commercialization and sale (Note 16). 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.

                                                                   Page 12 of 43
<PAGE>
Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================

5.     PROPERTY, PLANT AND EQUIPMENT (continued)

       The aggregate cost incurred by the Company to December 31, 2006 to obtain
       the right to exploit the area is $256,284,114, represented by
       $239,359,968 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 in cash; and
       $11,192,076 through shares); professional fees and related expenses of
       $115,422,074 ($109,690,004 in cash; and $5,732,070 through shares); and
       equipment purchases ($104,691,647 in cash). 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
       relating to travel and administrative costs of $793,557 during the year
       ended December 31, 2006 (2005 -$370,579 ; 2004 - $634,679).

       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. On February 25, 2005, the MEM
       notified the Company that it had terminated the Company's Albino
       concession rights. The Company wrote down the carrying value of its
       investment in the Albino concession to $ Nil as at December 31, 2004.

6.       DEFERRED FINANCING FEES

       Deferred financing fees of $2,595,627, net of accumulated amortization of
       $1,215,618 (December 31, 2005 - $3,237,263, net of accumulated
       amortization of $617,908), relate to costs incurred in the issuance of
       unit offerings and debt borrowings.

7.       DEBT

<TABLE>
<CAPTION>

                                                                    2006                 2005
                                                             -------------------   ------------------

<S>                                                           <C>                    <C>
Bank loan                                                     $    3,163,011         $  12,840,234
Exchangeable promissory notes                                      1,800,000             3,600,000
Notes payable                                                     82,734,477            80,497,698
-----------------------------------------------------------------------------------------------------
                                                                  87,697,488            96,937,932
Less: Current portion of debt                                     (3,172,559)           (2,442,350)
-----------------------------------------------------------------------------------------------------
                                                              $   84,524,929         $  94,495,582
-----------------------------------------------------------------------------------------------------
</TABLE>




                                                                   Page 13 of 43
<PAGE>
Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================

7.     DEBT (continued)

       Bank loan

       On December 23, 2005 the Company and its subsidiaries restructured their
       outstanding obligations to Standard Bank Plc ("SB") to close out all
       outstanding gold forward sales and call option transactions and to amend
       its existing credit agreement.

       Pursuant to the restructuring, (1) the gold forward sales and call
       options transactions were closed out and the resulting liability of
       approximately $14,315,000 was converted into a fully drawn term loan
       facility, which is being amortized over the next two years and matures on
       December 31, 2008 and (2) the payment obligation under the existing
       credit agreement due in January 2006 was restructured and coordinated
       with the payment terms of the new term loan facility. The Company's
       guarantee will continue to apply to its subsidiaries' obligations under
       the new term loan facility and the restructured credit agreement. The
       obligations under the restructured credit agreement continue to be
       secured by charges against certain mining properties (other than the Las
       Cristinas Project and the Lo Increible operations) and a pledge of shares
       of certain Crystallex subsidiaries.

       The principal amounts outstanding under the new term loan facility and
       the restructured credit agreement bear interest at a rate per annum equal
       to LIBOR plus 2.5%. The Company is required to make a single aggregate
       payment of $150,000 per month on account of interest and principal under
       the term loan facility and the restructured credit agreement. The Company
       is also required to make additional principal repayments under the new
       term loan facility and the restructured credit agreement in certain
       circumstances, including the issuance of equity or convertible or
       exchangeable debt securities other than issuances pursuant to existing
       credit arrangements. Accordingly, upon completion of the private
       placement unit offerings in February 2006 and August 2006 (Note 9), the
       Company repaid $2,123,800 and $1,889,324, respectively, of principal due
       to SB.

       Of the principal amount outstanding under the new term loan facility,
       $7,500,000 was exchangeable at the option of SB for Crystallex common
       shares at a price per common share equal to the lesser of the average
       market price of Crystallex common shares on the Toronto Stock Exchange
       ("TSX") for the five trading days preceding December 23, 2005 and the
       average market price of Crystallex common shares on the TSX for the five
       trading days preceding the exchange date. The exchange price per common
       share may not be less than C$2.00. Crystallex may require SB to exercise
       its exchange right if the average market price of Crystallex common
       shares on the TSX for any five trading days after April 24, 2006 exceeds
       C$4.40. If SB does not exercise all of its exchange rights in these
       circumstances, the remainder of the exchangeable portion of the debt
       under the new term loan facility becomes non-exchangeable. The
       exchangeable portion of the debt under the new term loan facility ranks
       subordinate by its terms to the senior unsecured notes of the Company due
       December 2011.

       Of the $7,500,000 exchangeable portion of the debt, $4,935,634 and
       $2,564,366 respectively, was allocated between the liability and equity
       components of the debt. The liability component represents the present
       value of the exchangeable portion discounted using the interest rate that
       would have been applicable to the non-exchangeable debt. The equity
       component represents the present value of the interest payments which the
       Company could settle through the issuance of shares or by cash,
       discounted at the same rate as the liability component (the interest
       component) and the right of SB to convert the

                                                                   Page 14 of 43
<PAGE>
Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


7.     DEBT (continued)

       Bank loan (continued)

       principal of the debt into common shares, determined as the residual
       amount at the date of the new term loan facility.

       As a result of restructuring the $2,054,000 principal payment due in
       January 2006 under the previous credit agreement with SB, the Company
       recorded a gain of $875,610 in December 2005.

       In May 2006, SB elected to convert into common shares $7,500,000
       principal amount of the loan in accordance with the terms of the credit
       agreement. As a result of the conversion, Crystallex issued 3,765,841
       common shares to SB as settlement of the $7,500,000 face value amount of
       the loan as well as including the accrued interest, accretion and
       deferred financing fees all of which resulted in a value of $7,641,266
       being assigned to the shares issued.

       Exchangeable promissory note

       On December 31, 2005 in connection with the acquisition of the
       non-controlling interest described in Note 10, the Company, through ECM
       (Venco) Ltd, ("ECM"), an indirect wholly-owned subsidiary, issued to
       Corporacion Vengroup, S.A. ("Vengroup") a $3,600,000 exchangeable
       promissory note of ECM.

       The exchangeable promissory note is non-interest bearing and is payable
       in four equal semi-annual instalments commencing the earlier of the
       delivery of a notice or on June 29, 2006. Vengroup may elect to exchange
       the instalment payments for, and ECM may elect to satisfy its obligations
       to make instalment payments by delivery of Crystallex common shares. The
       number of Crystallex common shares to be delivered to Vengroup will be
       based upon the weighted average trading price of the Crystallex common
       shares on the TSX during the five trading days immediately preceding the
       delivery of an exchange notice by Vengroup or ECM.

       In March 2006 Vengroup exercised its right to exchange the June 29, 2006
       principal instalment payment of $900,000 for common shares of Crystallex.
       The Company issued 307,213 common shares as settlement of this principal
       instalment payment. In July 2006 Vengroup exercised its right to exchange
       the December 29, 2006 principal instalment payment of $900,000 for common
       shares of Crystallex. The Company issued 304,087 common shares as
       settlement of this principal instalment payment.

       Where the Company elects to satisfy its obligations to make instalment
       payments on the due date by delivery of Crystallex common shares, the
       Company has agreed with Vengroup that Vengroup will dispose of these
       shares in an orderly fashion. The Company has agreed to indemnify
       Vengroup for any net cumulative loss on the sale of these shares for a
       six month period, up to the next instalment payment due date. At December
       31, 2006 the Company had not delivered any common shares to Vengroup
       under this arrangement.

                                                                   Page 15 of 43
<PAGE>
Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


7.     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 (the
       "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 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 is 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.


       Interest accretion

       Interest accretion on the Notes payable and bank loan of $2,960,413 was
       expensed during the year ended December 31, 2006 (2005 - $2,672,895) as a
       component of interest expense.

       Principal payments

       Principal payments of debt are due as follows:

<TABLE>
<CAPTION>

                                              Exchangeable        Notes
                         Bank loan          promissory notes      payable              Total
                         ---------          ----------------      -------              -----
<C>                     <C>                 <C>             <C>                  <C>
2007                    $ 1,593,705         $   1,800,000   $           -        $      3,393,705
2008                      1,983,952                   -                 -               1,983,952
2011                            -                     -        100,000,000            100,000,000
----------------------------------------------------------------------------------------------------
                          3,577,657             1,800,000      100,000,000            105,377,657
Less:  discount            (414,646)                  -        (17,265,523)           (17,680,169)
----------------------------------------------------------------------------------------------------
                        $ 3,163,011         $   1,800,000   $    82,734,477      $     87,697,488
----------------------------------------------------------------------------------------------------
</TABLE>



                                                                   Page 16 of 43
<PAGE>
Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


7.     DEBT (continued)

       As at December 31, 2006 the fair value of the Company's debt was
       $84,878,219 (2005 - $71,880,208).


8.     ASSET RETIREMENT OBLIGATIONS

       The key assumptions on which the fair value of the asset retirement
       obligations is based include the estimated future cash flows, the timing
       of those cash flows, and the credit-adjusted risk-free rate or rates at
       which the estimated cash flows have been discounted. The Company used
       discount rates of 15% to 25%. As of December 31, 2006, undiscounted cash
       outflows approximating $1.69 million (2005 - $3.78 million) are expected
       to occur over a five year period. The significant decrease in the
       estimated cash flows is due to a reduction in the estimate of costs
       associated with the retirement of the Revemin mill.

       In view of the uncertainties concerning future asset retirement and
       progressive reclamation costs, the ultimate costs to the Company could
       differ materially from the amounts estimated. The estimate for the future
       liability is subject to change based on possible amendments to applicable
       laws and legislation, the nature of ongoing operations and technological
       innovations. Future changes, if any, due to their nature and
       unpredictability, could have a significant impact and would be reflected
       prospectively, as a change in an accounting estimate.


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

<TABLE>
<CAPTION>

As at December 31                                                      2006                   2005
-----------------------------------------------------------     -------------------     -----------------
<S>                                                                    <C>                    <C>
Asset retirement obligations, beginning of year                        $ 1,520,738            $2,301,181
        Liabilities settled                                                    -                 (30,000)
        Accretion expense                                                  288,376               345,460
        Revisions in estimated cash flows                                 (598,539)           (1,095,903)
---------------------------------------------------------------------------------------------------------
                                                                       $ 1,210,575            $1,520,738

Less : Current portion                                                    (239,408)             (126,092)

---------------------------------------------------------------------------------------------------------
Asset retirement obligations, end of year                              $   971,167            $1,394,646
---------------------------------------------------------------------------------------------------------
</TABLE>


9.  SHARE CAPITAL

<TABLE>
<CAPTION>

                                                                          2006                     2005
                                                                 -------------------      -------------------
Authorized
        Unlimited common shares, without par value
        Unlimited Class "A" preference shares, no par value
        Unlimited Class "B" preference shares, no par value
Issued
<S>    <C>                       <C>     <C>                          <C>                   <C>
       245,424,494 Common Shares (2005 - 208,036,316)                 $448,100,697          $ 336,491,624
---------------------------------------------------------------------------------------------------------------
</TABLE>





                                                                   Page 17 of 43
<PAGE>
Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


9.     SHARE CAPITAL (continued)

       Warrants

       As at December 31, 2006 common share purchase warrants were outstanding
       enabling the holders to acquire common shares as follows:

                                                                 Weighted
                                                                  Average
                                                                Remaining
                                          Number              Contractual
Exercise Price                         of Shares             Life (Years)
--------------------------------------------------------------------------

$1.75                                    500,000                     0.27
$3.65 ($4.25 CAD)                      5,062,500                     1.12
$4.00                                    875,000                     1.54
$4.25                                 12,250,000*
--------------------------------------------------------------------------
                                      18,687,500
--------------------------------------------------------------------------


       * These warrants become exercisable for an 18 month period commencing on
         a date which is 45 days following the receipt of the Permit for the
         Company's Las Cristinas project. (See Financing Transactions - Fiscal
         2006 Activities).

       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, 2006 stock options were outstanding enabling the
       holders to acquire common shares as follows:

<TABLE>
<CAPTION>

Range of                           Number                Contractual             Exercise
Exercise Price - Cdn. $         of Shares               Life (Years)         Price - Cdn$
--------------------------------------------------------------------------------------------

<C>      <C>                    <C>                             <C>                  <C>
$1.00 to $1.50                  1,352,500                       1.07                 1.29
$1.75 to $2.60                  3,714,935                       4.27                 2.22
$2.65 to $3.60                  3,924,750                       5.20                 3.08
$4.00 to $4.65                  2,401,900                       4.87                 4.21
--------------------------------------------------------------------------------------------
                               11,394,085                       4.33                 2.80
--------------------------------------------------------------------------------------------
</TABLE>


                                                                   Page 18 of 43
<PAGE>
Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


9.     SHARE CAPITAL (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:

<TABLE>
<CAPTION>

                              2006                       2005                        2004
                         --------------------------- --------------------------  --------------------------
                                          Weighted                   Weighted                    Weighted
                                          Average                     Average                    Average
                             Number       Exercise      Number       Exercise       Number       Exercise
                            of Shares     Price -      of Shares      Price -      of Shares     Price -
                                           Cdn$                        Cdn$                       Cdn$
                         --------------- ----------- --------------  ----------  -------------- -----------
<S>                          <C>           <C>        <C>            <C>          <C>           <C>
Outstanding,
   beginning of year         11,327,394    $  2.63    10,950,250     $  2.46      8,966,000     $  1.97
Granted                       1,773,400       3.73     1,407,644        3.28      3,285,250        3.37
Exercised                    (1,641,800)      2.31      (775,000)      (1.66)    (1,251,000)       1.44
Expired                         (64,909)      2.51      (255,500)      (2.02)       (50,000)       1.50
-----------------------------------------------------------------------------------------------------------
Outstanding,
end of year                  11,394,085    $  2.80    11,327,394     $  2.63     10,950,250     $  2.46
-----------------------------------------------------------------------------------------------------------
Weighted average fair
value of options granted
during the year - Cdn $                    $  2.63                   $  2.75                    $  2.23
-----------------------------------------------------------------------------------------------------------
</TABLE>


       As at December 31, 2006, there were 868,833 options outstanding, with a
       weighted average exercise price of C$4.02 that were not fully vested
       (2005 - 139,429 options; $3.19 weighted average exercise price).

       Supplemental information for stock-based compensation

       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:


                                        2006           2005           2004
                                     ------------  -------------  ------------

          Risk free interest rate      4.13%          3.61%         4.38%
          Expected life (years)         3.70           3.97          5.98
          Expected volatility           119%           105%           75%
          Expected dividends               -              -             -





                                                                  Page 19 of 43
<PAGE>

Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


9.     SHARE CAPITAL (continued)

       Financing Transactions

        Fiscal 2006 Activities

        During January 2006, the Company issued 1,661,130 common shares for net
        proceeds of $4,317,661 under the terms of its equity draw down facility.

        During February 2006, the Company completed a private placement of
        10,799,000 units. Each unit was comprised of one common share and 1.1344
        common share purchase warrants. Each whole warrant entitles the holder
        to purchase one common share at a price of US$4.25. The warrants are
        non-transferable and are exercisable for an 18 month period commencing
        45 days following receipt of the Permit for the Company's Las Cristinas
        project in Venezuela. Certain events, including change in control of the
        Company or in the Company's interest in the Las Cristinas project, make
        the warrants immediately exercisable. The net proceeds received by the
        Company, after considering issuance costs of $991,972, was $30,325,130.
        The issuance costs were allocated proportionately to the amounts
        recorded as share capital of $28,233,742 and contributed surplus of
        $2,091,388.

        During March 2006, under the terms of the exchangeable promissory notes
        between Vengroup and ECM (Note 7), the Company issued 307,213 common
        shares to Vengroup as payment of $900,000 due to Vengroup on June 29,
        2006.

        During May 2006, upon SB's exercise of its exchange rights, the Company
        issued 3,765,841 common shares to SB as settlement of the $7.5 million
        exchangeable portion of the bank loan (Note 7)

        During July 2006, under the terms of the exchangeable promissory notes
        between Vengroup and ECM (Note 7), the Company issued 304,087 common
        shares to Vengroup as payment of $900,000 due to Vengroup on December
        29, 2006

        During July 2006, the Company agreed to amend the terms of 2,197,727
        unlisted common share purchase warrants (the "Warrants"). Each Warrant
        entitled the holder to acquire one common share of the Company at an
        exercise price of US$2.75 per share until September 15, 2006. Pursuant
        to the terms of the amendment to the Warrants and their subsequent
        exercise, the Company issued approximately 0.398 new common share
        purchase warrants (the "New Warrants") in exchange for each Warrant
        exercised, for an aggregate of 875,000 New Warrants. Each New Warrant
        issued entitles the holder to acquire one common share in the capital of
        the Company at an exercise price of US$4.00 per share until July 14,
        2008.

        The Company agreed to amend the terms of warrants granted to its project
        finance advisor ("Advisor"). The Company previously issued 500,000
        common share purchase warrants to its Advisor in April 2003 that would
        only become exercisable to the Advisor should the Advisor secure
        financing for the Las Cristinas project ("the Financing Condition"). In
        July 2006 the Company agreed to remove the Financing Condition from
        these warrants and, accordingly, recorded professional fees of
        $1,365,839.

        During August 2006, the Company completed a public offering of
        10,125,000 units. Each unit was comprised of one common share and one
        half of one common share purchase warrant. Each whole warrant entitles
        the holder to purchase one common share at a price

                                                                   Page 20 of 43
<PAGE>
Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================

9.      SHARE CAPITAL (continued)

        Financing Transactions (continued)

        of C$4.25. The warrants are exercisable on or before February 10, 2008.
        The net proceeds received by the Company, after considering issuance
        costs of C$2,309,331 (US$2,061,078), was C$30,090,669 (US$26,855,922).
        The issuance costs were allocated proportionately to the amounts
        recorded as share capital of C$25,742,567 (US$22,975,241) and
        contributed surplus of $4,348,102 (US$3,880,681).

        Fiscal 2005 Activities

        On July 29, 2005, the Company filed a preliminary short form base shelf
        prospectus with the Ontario Securities Commission and a corresponding
        registration statement with the United States Securities and Exchange
        Commission pursuant to the multijurisdictional disclosure system. On
        August 23, 2005 the preliminary short form base shelf prospectus and
        registration statement became effective. This prospectus enables the
        Company to offer at its option, over a 25-month period, up to an
        aggregate of C$75 million of senior unsecured notes, common shares,
        warrants and units in one or more offerings.

        On September 14, 2005 the Company established, as covered under the
        short form base shelf prospectus, a C$60 million equity draw down
        facility with a counterparty and also issued and sold to them for gross
        proceeds of C$10 million (received on closing), units comprising
        C$10,000,000 principal amount of 5% Series 2 Notes due March 13, 2006,
        200,000 common shares, and warrants to acquire 450,000 common shares
        exercisable on or before September 13, 2006 at a price of C$3.19 per
        share. The securities comprising the units separated immediately upon
        issue (Note 7). During the period October 5, 2005 through to December
        16, 2005 the Company issued 12,272,236 common shares for net proceeds of
        $17.8 million under its equity draw down facility. In accordance with
        the terms of the draw down facility a portion of the proceeds were used
        to repay the outstanding Series 2 Notes.

        On December 30, 2005, the Company acquired the non-controlling
        shareholder interests in the holding companies which own or control the
        interests in certain of Lo Increible mining properties located in
        Bolivar State, Venezuela (including the La Victoria deposit). Under the
        terms of the transaction ECM purchased the 49% outstanding interest in
        Osmin Holdings Limited ("Osmin") and the 30% outstanding interest in
        Tamanaco Holdings Limited ("Tamanaco") owned by Vengroup and a related
        company, for consideration consisting of $6,600,000 payable as follows:

        -    $3,000,000 by the issuance and delivery to Vengroup of 1,467,136
             Crystallex common shares;
        -    $3,600,000 by the issuance and delivery to Vengroup of a $3,600,000
             exchangeable  promissory  note of ECM (Note 7).

                                                                   Page 21 of 43
<PAGE>
Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================

9.      SHARE CAPITAL (continued)

        Financing Transactions (continued)

        Fiscal 2005 Activities (continued)

        In addition, the arbitration proceedings between Crystallex and Vengroup
        were terminated and the parties delivered mutual releases with respect
        to the subject matter of the arbitration proceedings. As a result of the
        transaction, the joint venture arrangements between ECM and Vengroup
        have been terminated and the Company, through its subsidiaries, now owns
        100% of Osmin and Tamanaco. ECM's obligations under the exchangeable
        promissory note are guaranteed by a subsidiary of ECM and secured by a
        pledge of the shares of ECM's Venezuelan subsidiary that directly holds
        the interest in the Lo Increible properties.

        As part of the transaction, Crystallex also entered into a consulting
        agreement with the principals of Vengroup pursuant to which Crystallex
        has agreed to pay aggregate consulting fees of $600,000. These amounts
        were expensed during 2005 and included in general and administrative
        expenses in the consolidated statement of operations.

        Fiscal 2004 Activities

        On April 5, 2004, the Company completed a C$100 million public equity
        offering whereby 25,000,000 common shares were issued at C$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 C$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 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 7).

        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 were
        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").

                                                                   Page 22 of 43
<PAGE>
Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


9.      SHARE CAPITAL (continued)

        Financing Transactions (continued)

        Fiscal 2004 Activities (continued)

        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.

        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.

        Shareholder Rights Plan

        On October 30, 2006 the shareholders of the Company voted to ratify,
        confirm and approve a new shareholder Rights Plan (the "Rights plan")
        which was originally approved by the Board of Directors of the Company
        on June 22, 2006. The rights issued under the Rights plan are subject to
        reconfirmation at every third annual meeting of shareholders and will
        expire at the close of the Company's annual meeting in 2016 (the
        "Expiration Time") .

        Pursuant to the Rights 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 Rights plan.

        In order to constitute a "Permitted Bid", an offer must be made in
        compliance with the Rights plan and must be made to all shareholders
        (other than the offeror), must be open for at least 60 days and be
        accepted by shareholders holding more than 50% of the outstanding voting
        shares and, if so accepted, must be extended for a further 10 business
        day period.

10.     INVESTMENT IN SUBSIDIARIES

        In November 2004, Vengroup delivered a notice of arbitration to the
        Company and ECM. On December 29, 2005 the Company and ECM reached a
        settlement with Vengroup. As part of this settlement ECM acquired the
        non-controlling shareholder interests in the holding companies which own
        or control the mining rights to certain of its Lo Increible mining
        properties for consideration of $6.6 million. As part of the transaction
        to acquire the non-controlling shareholder interests, the Company also
        entered into a two-year consulting agreement for total fees of $600,000.
        This investment in ECM and its subsidiaries was

                                                                   Page 23 of 43
<PAGE>
Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


10.     INVESTMENT IN SUBSIDIARIES (continued)

        subsequently written down to $ Nil in 2005, as the Company had
        previously written off its controlling interest in the related
        underlying mining assets.

        Effective August 19, 2004, the Company acquired, under a plan of
        arrangement, all of the outstanding shares of El Callao Mining
        Corporation ("El Callao") not previously owned. As a result of this
        transaction 0702259 B.C. Ltd., a successor company to El Callao under
        the plan of arrangement and a subsequent amalgamation, is now a
        wholly-owned subsidiary of Crystallex. As consideration, shareholders of
        El Callao (other than Crystallex) received 0.01818 of a Crystallex
        common share for each of their El Callao shares representing a total
        obligation to issue 172,975 Crystallex common shares. The value
        associated with acquiring these shares was $493,702. This investment was
        subsequently written down to $ Nil in 2004. As at December 31, 2006, the
        Company had issued 164,736 common shares against this obligation.

11.     RELATED PARTY TRANSACTIONS

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

        a) Paid or accrued consulting and underwriting fees of $2,947,156 (2005
           - $120,900; 2004 - $2,843,447) to a company related to the Chairman
           of the Company.

        b) Paid or accrued legal fees of $ Nil (2005- $729,901; 2004 -
           $1,232,816) to a law firm, while a partner of whom was 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.

12.     INCOME TAXES

        The Company did not record a provision or benefit for income taxes for
        the years ended December 31, 2006, 2005 and 2004, due to the recurrence
        of operating losses and the Company's determination that it is not more
        likely than not that future income tax assets will be realized.

                                                                   Page 24 of 43
<PAGE>
Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


12.     INCOME TAXES (continued)

        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:

<TABLE>
<CAPTION>

                                                      2006                  2005                  2004
                                               --------------------  --------------------  --------------------

<S>                                                        <C>                   <C>                   <C>
Statutory tax rate                                         35.88%                36.12%                36.12%
---------------------------------------------------------------------------------------------------------------
Loss before income tax provision                    $ (35,684,229)        $ (45,206,916)        $ (60,654,063)
---------------------------------------------------------------------------------------------------------------

Expected income taxes recoverable                   $ (12,803,501)        $ (16,328,738)        $ (21,908,248)
Change in valuation allowance                            7,769,253             7,268,282            21,090,347
Change in enacted tax rates                              2,772,385                   -                     -
Permanent differences                                    1,946,169             2,289,571                   -
Reduction in loss carry forwards                           284,071             6,484,430                   -
Difference in foreign tax rates                             31,623               286,455               817,901
---------------------------------------------------------------------------------------------------------------
Actual income tax provision                         $          -          $          -          $          -
---------------------------------------------------------------------------------------------------------------
</TABLE>



        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:

<TABLE>
<CAPTION>

                                                                         2006                      2005
                                                                 ----------------------    ----------------------

Future income tax assets:
<S>                                                                       <C>                       <C>
    Loss carry forwards and deferred financing fees                       $ 75,807,550              $ 62,664,077
    Less:  valuation allowance                                             (64,394,004)              (56,624,751)
-----------------------------------------------------------------------------------------------------------------
Net future income tax asset                                                 11,413,546                 6,039,326

Future income tax liabilities:
    Property, plant and equipment                                          (11,413,546)               (6,039,326)
-----------------------------------------------------------------------------------------------------------------
Net future income taxes                                                   $        -                 $       -
-----------------------------------------------------------------------------------------------------------------
</TABLE>



        Future income tax assets are recognized to the extent that realization
        is considered more likely than not. Since the Company has determined
        that it is more likely than not that the future income tax assets are
        not recoverable, the net future income tax assets have been fully offset
        by a valuation allowance. The prior years' presentation has been amended
        to conform to the current years' presentation.



                                                                   Page 25 of 43
<PAGE>

Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================




12.     INCOME TAXES (continued)

        At December 31, 2006 the Company has the following unused tax losses
        available for tax purposes:

                                                     Country
                                      -----------------------------------------
          Year of Expiry                    Canada               Venezuela
          --------------                    ------               ---------
                 2007                    $          -          $ 38,230,247
                 2008                    $  1,589,061          $ 13,512,021
                 2009                    $ 38,974,834          $  1,682,068
                 2010                    $ 33,036,515          $          -
                 2014                    $ 14,982,866          $          -
                 2015                    $ 31,502,426          $          -
                 2026                    $ 49,851,765          $          -
                                                               $          -

13.     SUPPLEMENTAL DISCLOSURES WITH RESPECT TO CASH FLOWS

<TABLE>
<CAPTION>

                                                         2006                 2005                 2004
                                                   ------------------   ------------------    ---------------

<S>                                                <C>                  <C>                   <C>
Cash paid during the year for interest             $    9,985,572       $      5,239,726      $       251,617
-------------------------------------------------------------------------------------------------------------

Cash paid during the year for income taxes         $          -         $            -        $          -
-------------------------------------------------------------------------------------------------------------



                                                          2006                  2005
                                                   -------------------    ------------------
Cash and cash equivalents comprises:
Cash                                               $    28,573,142      $      3,870,573
Cash equivalents                                               -                 199,446
-----------------------------------------------------------------------------------------------
Cash and cash equivalents balance                  $   $28,573,142      $      4,070,019
-----------------------------------------------------------------------------------------------
</TABLE>




                                                                  Page 26 of 43
<PAGE>

Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


13.     SUPPLEMENTAL DISCLOSURES WITH RESPECT TO CASH FLOWS (continued)

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

<TABLE>
<CAPTION>

                                                              2006                      2005                     2004
                                                      ----------------------   -----------------------  -----------------------

<S>                   <C>                                     <C>                      <C>                      <C>

Net book value of property, plant and
    equipment January 1                                       $ 215,260,043            $  117,329,337           $  102,274,263
Net book value of property, plant and
    equipment December 31                                       256,455,027               215,260,043              117,329,337
-------------------------------------------------------------------------------------------------------------------------------
Net additions to property , plant and equipment
  (after amortization and depletion) during the
   year ended December 31                                        41,194,984                97,930,706               15,055,074
 Amortization and depletion expenses for the
  year ended December 31                                          1,887,587                 2,636,655               35,845,450
-------------------------------------------------------------------------------------------------------------------------------
Net additions to property , plant and equipment
  during the year ended December 31                              43,082,571               100,567,361               50,900,524
 Reduction  (increase)  to accruals related to
   property,  plant and equipment acquisitions
   of prior periods                                               5,328,173               (6,197,488)                         -
-------------------------------------------------------------------------------------------------------------------------------

Cash investment in property,plant and equipment
  during the year ended December 31                           $  48,410,744            $   94,369,873           $   50,900,524
-------------------------------------------------------------------------------------------------------------------------------



        Issuance of common shares for the year ended December 31

                                                               2006                    2005                    2004

                                                      --------------------     --------------------     ---------------------

Cash received on :
   Unit offerings                                             $  51,208,985             $   466,549           $  81,935,995
   Conversion of warrants                                        23,773,051               5,080,357              11,283,478
   Issuance of shares under equity draw down
       facility                                                   4,317,661               9,292,313              20,484,750
   Exercise of options                                            3,651,754               1,053,023               1,408,888

----------------------------------------------------------------------------------------------------------------------------
Issuance of common shares for cash during the
year ended December 31                                         $ 82,951,451            $ 15,892,242           $ 115,113,111
----------------------------------------------------------------------------------------------------------------------------


        Directors' fees for the year ended December 31

                                                                 2006                     2005                 2004
                                                         -------------------    --------------------    --------------------

Issuance of common shares for directors'
  fees - 19,170 shares ( 2005 - 65,186 shares ;
   2004 - 40,976 shares)                                      $      60,000            $    190,000           $     100,000
----------------------------------------------------------------------------------------------------------------------------

</TABLE>




                                                                   Page 27 of 43
<PAGE>

Crystallex International Corporation

Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================

14.     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 2005 and 2004 comparative tables have been restated to confirm to
        the segment disclosure adopted for 2006. The Company's Venezuelan
        Operations segment combines the Revemin mill and Tomi mine, and the La
        Victoria mine. These were previously presented as two separate business
        segments. The mill and both mines are under the responsibility of the
        same segment manager and the business results are now assessed as if
        they are integrated operations.

        The segments' accounting policies are the same as those described in the
        summary of significant accounting policies except that other expenses,
        the commodity contract 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.

        Geographic information:

        Substantially all revenues generated and capital assets held by the
        Company are in Venezuela, except for long-lead time capital assets
        required for the development of Las Cristinas, which are located
        temporarily in Houston, Texas and Antwerp, Belgium.



                                                                   Page 28 of 43
<PAGE>

Crystallex International Corporation
Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


14.     SEGMENTED INFORMATION (continued)

<TABLE>
<CAPTION>

                                                            Venezuelan        Las Cristinas      Discontinued
                                          Corporate         Operations         Development         Operations        Total
                                    -------------------- ------------------------------------------------------------------------


<S>                                  <C>                  <C>                <C>                 <C>             <C>
2006
Mining revenue                       $            -       $  28,087,764      $          -        $        -     $  28,087,764
Operating costs                      $            -       $ (27,099,113)     $          -        $        -     $ (27,099,113)
Interest and other income            $     1,159,586      $         -        $          -        $        -     $   1,159,586
Interest expense                     $   (12,389,335)     $    (556,650)     $          -        $        -     $ (12,945,985)
Depletion and amortization           $      (701,875)     $  (1,783,423)     $          -        $        -     $  (2,485,298)
Segment (loss)                       $   (34,096,015)     $  (1,588,214)     $          -        $        -     $ (35,684,229)
Segment assets                       $    31,536,272      $   9,922,076      $  256,284,114      $        -     $ 297,742,462
Capital expenditures                 $            -       $         -        $   48,410,744      $        -     $  48,410,744
-------------------------------------------------------------------------------------------------------------------------------
2005
Mining revenue                       $            -       $  24,989,681      $           -       $        -     $  24,989,681
Operating costs                      $            -       $ (22,754,642)     $           -       $        -     $ (22,754,642)
Interest and other income            $     1,926,425      $         -        $           -       $        -     $   1,926,425
Interest expense                     $   (11,532,146)     $    (276,941)     $           -       $        -     $ (11,809,087)
Depletion and amortization           $    (1,048,296)     $  (2,696,784)     $           -       $        -     $  (3,745,080)
Segment (loss)                       $   (44,468,230)     $    (738,686)     $           -       $        -     $ (45,206,916)
Segment assets                       $    29,543,350      $   7,895,306      $  213,201,542      $        -     $ 250,640,198
Capital expenditures                 $        54,571      $     855,961      $   93,459,341      $        -     $  94,369,873
-------------------------------------------------------------------------------------------------------------------------------
2004
Mining revenue                       $            -       $  20,245,690      $            -      $        -     $  20,245,690
Operating costs                      $            -       $ (18,037,768)     $            -      $        -     $ (18,037,768)
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)    $ (38,230,247)     $            -      $  (350,000)   $ (60,654,063)
Segment assets                       $    139,289,973     $   7,376,922      $   113,451,761     $        -     $ 260,118,656
Capital expenditures                 $        289,312     $   9,939,717      $    40,671,495     $        -     $  50,900,524
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>






                                                                   Page 29 of 43
<PAGE>

Crystallex International Corporation
Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================

15.     DISCONTINUED OPERATIONS

        On October 27, 2003, the Company finalized a purchase and sale agreement
        with Uruguayan Mineral Explorations Inc. for the sale of the Company's
        Uruguayan mining operations. The Company received $1,650,000 as cash
        consideration for this sale.


16.     COMMITMENTS AND CONTINGENCIES

        Lease agreements

        The Company has entered into various operating lease agreements which
        expire over the next three years. Total rent expense charged to
        operations under these agreements was $181,686 (2005 - $178,135; 2004 -
        $176,181).

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

            2007                                     173,426
            2008                                     171,665
            2009                                      42,176
            -------------------------------------------------
                                                   $ 387,267
            -------------------------------------------------


        Las Cristinas

        The rights of Crystallex to develop the Las Cristinas deposits are
        derived from the Agreement between the Company and the CVG (Note 5). The
        Agreement does not transfer to Crystallex any property ownership rights
        or title rights to the gold produced 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 43
<PAGE>

Crystallex International Corporation
Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


16.     COMMITMENTS AND CONTINGENCIES (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 in March 2006. The
        Company is awaiting the receipt of the Permit from MARN.

        The Agreement allows for delays which may be outside the control of the
        CVG and the Company. The Company has met all of its obligations under
        the Agreement to the extent possible prior to receipt of the Permit.

        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 $123
        million (December 31, 2005 - $179 million), of which approximately $121
        million (December 31, 2005 - $89 million) has been paid, and will be
        required to make additional commitments approximating $170 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.

        Other

        On May 23, 2006 the Company and certain directors and officers were
        served with a Statement of Claim by an individual alleging
        misrepresentation, conspiracy and breach of contract, and claiming
        damages of approximately Cdn$1,750,000. The Company has filed its
        Statement of Defense and believes that there is little likelihood of any
        ultimate liability. However, as the outcome of this matter cannot be
        determined at this time, the Company has made no provision for this
        contingency as at December 31, 2006.

        In the normal course of business, the Company may enter into contracts
        that contain commitments to pay amounts dependent upon future events.
        Such amounts, if any, are not determinable as yet; consequently, no
        amounts have been accrued in the financial statements with respect to
        these commitments.


17.     SUBSEQUENT EVENTS

        In January 2007 Vengroup exercised its right to exchange the June 29,
        2007 principal instalment payment of $900,000 for common shares of
        Crystallex. The Company issued 245,710 common shares as settlement of
        this principal instalment payment.

        On March 29, 2007 the Company announced that it had entered into a
        bought deal agreement with a syndicate of underwriters to purchase
        12,500,000 Common Shares of the Company at a price of CDN$4.25 per
        Common Share for gross proceeds of $45.9 million


                                                                   Page 31 of 43
<PAGE>
Crystallex International Corporation
Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


17.     SUBSEQUENT EVENTS (continued)

        (CDN$53.1 million). The Company has also agreed to grant the
        underwriters an over-allotment option, to purchase an additional
        1,875,000 Common Shares for gross proceeds of $6.9 million (CDN$8.0
        million). The Company expects to file a Preliminary Short Form
        Prospectus with the applicable securities regulatory authorities
        to qualify the Common Shares for distribution.


18.     RISK

        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.

        The Company's principal mineral properties and mining rights are located
        in Venezuela. In 2005 the Government of Venezuela announced that it
        would be changing the mining title regime from a system where title was
        granted in the form of either concessions or operating contracts to a
        system where all new titles would be granted in the form of operating
        contracts. In order to effect this change, the Government advised that
        it would need to create a national mining company which would be the
        nation's contracting party covering the entire country of Venezuela. The
        Government also indicated that, given this change in title regime, it
        would also be appropriate to review all existing mining companies in a
        single comprehensive exercise to ensure that only companies found to be
        in compliance with their existing title terms and conditions would
        qualify for the new title. The Government's public references to the
        type of operating contract that it intends to implement for the mining
        industry are comparable to the Mine Operation Agreement the Company
        currently holds for the Las Cristinas project.

        Country Risk

        The Company's mineral exploration and exploitation activities may be
        adversely affected by political instability and legal and economic
        uncertainty in the countries where the Company has operations. The risks
        associated with the Company'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, regulation 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 Company'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 Company's principal mineral properties and mining
        rights are located in Venezuela and as such the Company may be affected
        by political or economic instabilities.

        Currency risk

        The Company is exposed to currency risk as certain of its purchases are
        denominated in foreign currencies. 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.

                                                                   Page 32 of 43
<PAGE>
Crystallex International Corporation
Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================

18.     RISK (continued)

        Currency risk (continued)

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

        Credit and market risk

        The Company has in the past entered 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 subjected the Company to market risk and
        concentrations of credit risk, consisted primarily of cash and accounts
        receivable.

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

        Credit risk is the risk that a counterparty might fail to fulfill its
        performance obligations under the terms of a contract. 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.

19.     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 would be
        required in order to present the financial statements in accordance with
        U.S. GAAP.

                                                                   Page 33 of 43
<PAGE>
Crystallex International Corporation
Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================

19.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
       ACCEPTED ACCOUNTING PRINCIPLES (continued)

       Balance Sheets

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

<TABLE>
<CAPTION>

                                                                2006
                                      -------------------------------------------------------------------
                                            Canadian                                           U.S.
                                              GAAP                  Adjustments                GAAP
                                         --------------           --------------           --------------

<S>                                     <C>                    <C>                          <C>
Current assets                          $  38,691,808          $           -                38,691,808
Restricted cash                                   -                        -                       -
Property, plant and equipment             256,455,027             (75,725,819) (a)         180,729,208
Deferred financing fees                     2,595,627                      -                 2,595,627
-------------------------------------------------------------------------------------------------------
                                        $ 297,742,462          $  (75,725,819)           $ 222,016,643
-------------------------------------------------------------------------------------------------------

Current liabilities                     $  16,203,423          $           -             $  16,203,423
Asset retirement obligations                  971,167                      -                   971,167
Long-term debt                             84,524,929                      -                84,524,929
Shareholders' equity                      196,042,943             (75,725,819)             120,317,124
-------------------------------------------------------------------------------------------------------
                                        $ 297,742,462          $  (75,725,819)           $ 222,016,643
-------------------------------------------------------------------------------------------------------


                                              2005
                                      ----------------------------------------------------------------------
                                             Canadian                                           U.S.
                                              GAAP                 Adjustments                  GAAP
                                      ---------------------   ----------------------    --------------------

Current assets                          $  20,061,580          $          -                      20,061,580
Restricted cash                            12,081,312                     -                      12,081,312
Property, plant and equipment             215,260,043             (75,725,819) (a)              139,534,224
Deferred financing fees                     3,237,263                     -                       3,237,263
------------------------------------------------------------------------------------------------------------
                                        $ 250,640,198          $  (75,725,819)           $      174,914,379
------------------------------------------------------------------------------------------------------------

Current liabilities                     $  22,713,476          $          -              $       22,713,476
Asset retirement obligations                1,394,646                     -                       1,394,646
Long-term debt                             94,495,582               2,564,366 (b)                97,059,948
Shareholders' equity                      132,036,494             (78,290,185)                   53,746,309
------------------------------------------------------------------------------------------------------------
                                        $ 250,640,198          $  (75,725,819)           $      174,914,379
------------------------------------------------------------------------------------------------------------
</TABLE>



       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.





                                                                   Page 34 of 43
<PAGE>
Crystallex International Corporation
Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


19.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
       ACCEPTED ACCOUNTING PRINCIPLES (continued)

       Statements of Operations

       The impact of the differences between Canadian GAAP and U.S. GAAP on the
       loss for the year would be as follows:
<TABLE>
<CAPTION>

                                                          2006               2005              2004
                                                    ------------------ ----------------- -----------------
Net loss for the year
<S>                                                    <C>               <C>                <C>
per Canadian GAAP                                      $ (35,684,229)    $ (45,206,916)     $(60,654,063)
Adjustments to mineral properties               (a)               -           (235,900)        5,172,791
Changes in fair value of exchangeable
  portion of bank loan                          (b)       (8,638,661)              -                 -
Accretion of interest on bank loan              (b)          (54,064)              -                 -
Unamortized deferred financing costs
     on exchangeable portion of bank loan       (b)         (121,405)              -                 -
Beneficial conversion interest                  (c)               -           (598,000)              -
Adjustment to amortization
of Series 2 Notes discount                      (c)               -           (539,125)              -
Unamortized deferred financing costs
of Series 2 Notes                               (c)               -           (356,820)              -
----------------------------------------------------------------------------------------------------------
Net loss for the year per U.S. GAAP                    $ (44,498,359)    $ (46,936,761)     $(55,481,272)
----------------------------------------------------------------------------------------------------------
Net loss per share - basic and diluted                 $       (0.19)    $       (0.24)     $      (0.32)
----------------------------------------------------------------------------------------------------------
</TABLE>




                                                                   Page 35 of 43
<PAGE>
Crystallex International Corporation
Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


19.     DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES (continued)

        Statement of Operations Presentation

        The following table reconciles "Net loss for the year per U.S. GAAP" to
        "Loss from operations for U.S. GAAP".
<TABLE>
<CAPTION>

                                                            2006               2005               2004
                                                     ------------------ -----------------  ------------------
Net loss for the year per U.S. GAAP                      $(44,498,359)     $(46,936,761)      $ (55,481,272)
------------------------------------------------------------------------------------------------------------

Non-operating loss components
Under Canadian GAAP:
<S>                                                      <C>               <C>                   <C>
Interest on long-term debt                               $ 12,945,985      $ 11,809,087          $  548,131
Commodity contract loss                                             -         3,770,835             963,717
Foreign exchange (gain) loss                                   65,133         1,192,593            (397,313)
Gain on settlement of debt                                          -          (875,610)                  -
Interest and other income                                  (1,684,453)       (1,926,425)           (697,638)
Investment in subsidiaries                                          -         6,600,000             493,702
Write-down of marketable securities                                 -                 -                   -
Non controlling interest
                                                                    -                 -            (111,053)
U.S. GAAP reconciling items:
        Changes in fair value of exchangeable
           portion of bank loan                             8,638,661                 -                   -
        Accretion of interest                                  54,064                 -                   -
        Unamortized deferred financing costs
           on exchangeable portion of bank loan               121,405                 -                   -
        Beneficial conversion interest                              -           598,000                   -
Adjustment to amortisation of
     Series 2 Notes discount                                        -           539,125                   -
Unamortized deferred financing
     costs of Series 2 Notes                                        -           356,820                   -
------------------------------------------------------------------------------------------------------------
Non-operating loss per U.S. GAAP                           20,140,795        22,064,425             799,546
------------------------------------------------------------------------------------------------------------
Loss from operations per U.S. GAAP                       $(24,357,564)     $(24,872,336)      $ (54,681,726)
------------------------------------------------------------------------------------------------------------


</TABLE>




                                                                   Page 36 of 43
<PAGE>
Crystallex International Corporation
Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


19.     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:


<TABLE>
<CAPTION>

                                                           2006               2005               2004
                                                    ------------------- ------------------ -----------------

<S>                                                  <C>                 <C>                <C>

Cash flows used in operating
activities, Canadian GAAP                            $  (32,052,785)     $(32,714,407)      $(36,005,098)
Adjustment for net loss
  from discontinued operations                                   -                 -            (350,000)
Adjustments to mineral properties                                -           (235,900)        (2,709,655)
Adjustment to working capital relating to
discontinued operations                                          -                 -             350,000
------------------------------------------------------------------------------------------------------------
Cash flows used in operating activities,
U.S. GAAP                                               (32,052,785)      (32,950,307)       (38,714,753)
------------------------------------------------------------------------------------------------------------
Cash flows provided by (used in) investing
  activities, Canadian GAAP                             (27,087,581)       12,589,880       (179,183,440)
Cash flows provided by discontinued
operations, Canadian and U.S.  GAAP                              -                 -           1,650,000
Adjustments to mineral properties                                -            235,900          2,709,655
------------------------------------------------------------------------------------------------------------
Cash flows provided by (used in) investing
  activities, U.S. GAAP                                 (27,087,581)       12,825,780       (174,823,785)
------------------------------------------------------------------------------------------------------------
Cash flows provided by financing activities,
  Canadian and U.S. GAAP                                 83,643,489        18,427,804        193,101,744
------------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash
  equivalents during the year                            24,503,123        (1,696,723)       (20,436,794)
Cash and cash equivalents, beginning of year              4,070,019         5,766,742         26,203,536
------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year               $   28,573,142      $  4,070,019       $  5,766,742
------------------------------------------------------------------------------------------------------------
</TABLE>




        For U.S. GAAP, the statement of cash flows is required to be reconciled
        to the net loss for the year rather than to the loss from continuing
        operations. The above table reflects this change and in addition
        reflects the cash flows from the discontinued operations as a component
        of operating, investing, and financing activities, respectively.



                                                                   Page 37 of 43
<PAGE>
Crystallex International Corporation
Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


19.     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.

        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, 2006, 2005, and 2004 are
        expenses of $Nil, $235,900 and $251,324 respectively, related thereto.


        Property, Plant and Equipment


                                      2006                        2005
                               --------------------       ---------------------

Net book value under
Canadian GAAP                         $256,455,027                $215,260,043
-------------------------------------------------------------------------------
Adjustments to Las Cristinas
capitalized costs                     (75,725,819)                (75,725,819)
-------------------------------------------------------------------------------
Net book value under U.S. GAAP        $180,729,208                $139,534,224
-------------------------------------------------------------------------------






                                                                   Page 38 of 43
<PAGE>

Crystallex International Corporation
Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


19.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
       ACCEPTED ACCOUNTING PRINCIPLES (continued)

       (b)    Bank Loan - Exchangeable Portion

       In accordance with Canadian GAAP, upon the issuance on December 23, 2005
       of the exchangeable portion of the bank loan, the exchangeable portion
       was bifurcated between its liability and equity components. The liability
       portion of the debt was measured by determining the carrying amount of
       the notes by discounting the stream of future payments of principal and
       interest at the prevailing market rate for a similar liability that does
       not have an associated equity component.

       Under US GAAP, on issuance, the conversion option contained in the
       exchangeable portion of the bank loan is considered to be an embedded
       derivative that is required to be bifurcated and accounted for as a free
       standing derivative financial liability separate from the debt
       instrument. The Company is required to re-measure the fair value of the
       derivative financial liability at each reporting date with changes in
       fair value recorded in earnings. The difference between the value of the
       free standing derivative and the face value of the debt will be accreted
       over the term of the debt.

       On May 5, 2006, the holder exercised their conversion option and the full
       value of the debt was settled for shares.

       Accordingly, for US GAAP purposes, for the year ended December 31, 2006
       an expense of $8,638,661 has been recorded with respect to the changes in
       fair value of the embedded derivative, an expense of $54,606 to reflect
       the additional accretion expense, and an expense of $121,405 to reflect
       the unamortized deferred financing costs.

       (c)     Series 2 Notes

       Under Canadian and US GAAP, upon issuance of the C$10.0 million Units,
       the net proceeds received were allocated between the liability and equity
       components of the notes by measuring the relative fair value of each
       component. The equity components were measured at the fair value of the
       200,000 common shares and the 450,000 warrants using the current market
       price of the Company's common shares and the value obtained using the
       black-sholes option pricing model, respectively. The liability portion of
       the notes was measured by determining the carrying amount of the notes by
       discounting the stream of future payments of principal and interest at
       the prevailing market rate for a similar liability that does not have an
       associated equity component.

       Under Canadian GAAP, this discount on the liability is then accreted to
       its principal value over the original contractual term of the notes.



                                                                   Page 39 of 43
<PAGE>
Crystallex International Corporation
Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


19.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
       ACCEPTED ACCOUNTING PRINCIPLES (continued)

       (c)     Series 2 Notes (continued)

       Under US GAAP, the discount on the liability is accreted to its principal
       value and deferred financing costs are amortized over the term of the
       notes, or, in the event of an equity draw down, over the minimum period
       from the date of the draw down notice to the date at which common shares
       are issued to settle the liability. As at December 31, 2006 there were no
       Series 2 Notes outstanding. As a result, an adjustment to amortization
       expense of $ Nil (2005 - $539,125; 2004 - $ Nil) is required under US
       GAAP so that the unamortized discount is fully accreted upon final
       conversion by the holder. In addition, under US GAAP an adjustment of $
       Nil (2005 - $356,820; 2004 - $ Nil) was required in order to expense the
       remaining unamortized deferred financing costs and a further adjustment
       of $ Nil (2005 - $598,000; 2004 - $Nil) was required in order to reflect
       the beneficial conversion feature that was deemed to exist as the common
       shares that were issued in settlement of the obligation were at a
       discount to the prevailing market price.

       (d)    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 and the change in cumulative translation
       adjustment. This information is presented on the following page.


                                                                   Page 40 of 43
<PAGE>

Crystallex International Corporation
Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================

19.     DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES (continued)

        (e)  Comprehensive Income (loss) (continued)


        For U.S. GAAP, the accumulated other comprehensive loss would be
        calculated as follows:


                                             2006           2005         2004
                                          ------------  -----------  -----------

        Accumulated other
           comprehensive loss
        Accumulated other comprehensive
           loss, beginning of year        $  (695,329)  $ (695,329)  $ (695,329)


        Accumulated other comprehensive loss, end of year, is comprised entirely
        of the cumulative translation adjustment.

        Comprehensive Loss

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

                                    2006             2005              2004
                               --------------   ---------------  ---------------

        Comprehensive loss
        comprises Net loss
        for the year           $ 44,498,359    $ (46,936,761)   $ (55,481,272)
                               ==============  ===============  ================


        (f)  Recent Accounting Pronouncements

        Accounting Policies Adopted during the year

        Effective 2006, we adopted SFAS No. 151, "Inventory costs, an amendment
        of ARB No. 43 chapter 4," for US GAAP. This standard clarified that
        abnormal amounts of idle facility expense, freight, handling costs and
        wasted materials should be recognized as current period charges. The
        standard also required an allocation of fixed production overhead based
        on normal production capacities. The adoption of this standard did not
        have a material impact on our US GAAP results.

        In February 2006, the Financial Accounting Standards Board ("FASB")
        issued FAS 155 Accounting for Certain Hybrid Financial Instruments - an
        amendment of FASB Statements No. 133 and 140. This Statement resolves
        issues addressed in Statement 133 Implementation Issue No. D1,
        "Application of Statement 133 to Beneficial Interests in Securitized
        Financial Assets." This Statement: o Permits fair value remeasurement
        for any hybrid financial instrument that contains an embedded derivative
        that otherwise would require bifurcation o Clarifies which interest-only
        strips and principal-only strips are not subject to the requirements of
        Statement 133 o Establishes a requirement to evaluate interests in
        securitized financial assets to identify interests that are freestanding
        derivatives or that are hybrid financial instruments that contain an
        embedded derivative requiring bifurcation o Clarifies that
        concentrations of credit risk in the form of subordination are not

                                                                   Page 41 of 43
<PAGE>


Crystallex International Corporation
Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================

19.     DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES (continued)

        (f)    Recent Accounting Pronouncements (continued)

        embedded derivatives o Amends Statement 140 to eliminate the prohibition
        on a qualifying special-purpose entity from holding a derivative
        financial instrument that pertains to a beneficial interest other than
        another derivative financial instrument. Management does not expect the
        adoption of this Statement to have a material effect on the Company's
        consolidated financial position and results of operations. This standard
        will be applicable to the Company during the period ended 2007.

        In May 2005, FASB issued SFAS No. 154, `Accounting changes and error
        corrections,' replacing APB Opinion No. 20 and SFAS No. 3, which applies
        to all voluntary changes in accounting principles and changes required
        by new accounting standards where specific transition provisions are not
        included. SFAS No. 154 require retrospective application to prior
        periods' financial statements for changes in accounting principles. This
        standard also redefines restatement as the revising of previously issued
        financial statements to reflect the correct of an error. The standard
        was effective for 2006. The adoption of this standard did not have a
        material impact on our US GAAP results.

        In June 2005, the Emerging Issues Committee issued EITF 04-6, Accounting
        for Stripping Costs Incurred during the Production in the Mining
        Industry, which states that costs incurred during production from the
        removal of overburden and waste material should be considered variable
        production costs included in the costs of the inventory produced during
        the period that the stripping costs are incurred. Once production has
        commenced from a mine, production-related stripping costs will be
        accounted for as a cost of current production and, therefore as a
        component of the cost of any inventory extracted from the mine and held
        at period end. The consensus was effective for the first reporting
        period in fiscal years beginning after December 15, 2005. The adoption
        of this standard did not have a material impact on our US GAAP results.

        Accounting Policies yet to be adopted

        In July 2006, FASB issued FASB Interpretation No. 48, Accounting for
        Uncertainty in Income Taxes - an interpretation of FASB Statement No.
        109 ("FIN 48"). FIN 48 provides guidance for recognizing and measuring
        uncertain tax positions, as defined in SAS 109, Accounting for Taxes.
        FIN 48 prescribes a threshold condition that a tax position must meet
        for any of the benefit of the uncertain tax position to be recognized in
        the financial statements. Guidance is also provided regarding
        de-recognition, classification and disclosure of these uncertain tax
        positions. FIN 48 is effective for fiscals years beginning after
        December 15, 2006. The Company has currently not recorded any tax
        amount, due to more likely than not and does not anticipate any changes
        to the financial position, operations or cash flows.

        In September 2006, the FASB issued SFAS No. 157, `Fair Value
        Measurements' ("SFAS 157"). SFAS 157 defines fair value, establishes a
        framework for measuring fair value under GAAP and to expand disclosures
        about fair value measurements. The statement is effective for fair value
        measures already required or permitted by other standards for financial
        statements issued for fiscal years beginning after November 15, 2007 and
        interim

                                                                   Page 42 of 43
<PAGE>

Crystallex International Corporation
Notes to the Consolidated Financial Statements
December 31, 2006, 2005 and 2004
(Expressed in United States dollars)
================================================================================


19.     DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES (continued)

        (f)    Recent Accounting Pronouncements (continued)

        periods within those fiscal years. The Company has not yet determined
        the impact of the financial position, results of operations or cash
        flows from SFAS 157.

        CICA Handbook Section 1530 : Comprehensive Income, effective for fiscal
        years beginning on or after October 1, 2006, establishes standards for
        reporting comprehensive income, defined as a change in value of net
        assets that is not due to owner activities, by introducing a new
        requirement to temporarily present certain gains and losses outside of
        net income.

        CICA Handbook Section 3251: Equity, effective for fiscal years beginning
        on or after October 1, 2006, establishes standards for the presentation
        of equity and changes in equity during the reporting period.

        CICA Handbook Section 3855: Financial Instruments - Recognition and
        Measurement, effective for fiscal years beginning on or after October 1,
        2006, establishes standards for the recognition, classification and
        measurement of financial instruments including the presentation of any
        resulting gains and losses. Assets classified as available-for-sale
        securities will have revaluation gains and losses included in other
        comprehensive income (and not included in the income statement) until
        such time as the asset is disposed of or incurs a decline in fair value
        that is other than temporary. At such time, any gains or losses will
        then be realized and reclassified to the income statement. At December
        31, 2006, the Company had certain long-term investments that would be
        classified as available-for-sale securities under this new standard, and
        any unrealized gains and losses would be included in comprehensive
        income.

        CICA Handbook Section 1506: Accounting Changes ("CICA 1506") effective
        for fiscal years beginning on or after January 1, 2007 establishes
        standards and new disclosure requirements for the reporting of changes
        in accounting policies and estimates and the reporting of error
        corrections. CICA 1506 clarifies that a change in accounting policy can
        be made only if it is a requirement under Canadian GAAP or if it
        provides reliable and more relevant financial statement information.
        Voluntary changes in accounting policies require retrospective
        application of prior period financial statements, unless the
        retrospective effects of the changes are impracticable to determine, in
        which case the retrospective application may be limited to the assets
        and liabilities of the earliest period practicable with a corresponding
        adjustment made to opening retained earnings.

        The Company will be required to adopt the above new accounting
        pronouncements for its fiscal period beginning January 1, 2007.

        The Financial Accounting Standards Board has recently indicated an
        intention to issue interpretive guidance clarifying the appropriate
        accounting for freestanding and embedded derivatives which are linked
        to an entity's own equity but are denominated in a currency other than
        the issuer's functional currency. It is expected that the guidance will
        indicate that such derivatives, including free standing warrants,
        should be classified as liabilities and carried at fair value; however,
        it is expected that this guidance will have some transitional relief.
        The Company will analyze this guidance when it becomes available and
        will determine the impact, if any, on its current and prior period
        financial statements.



                                                                   Page 43 of 43


<PAGE>

                                                                 Document No. 3


<PAGE>


                      CRYSTALLEX INTERNATIONAL CORPORATION

                      Management's Discussion and Analysis
                      For the Year Ended December 31, 2006
           (All dollar amounts in US dollars, unless otherwise stated)

This 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, 2006 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"). All dollar amounts in this MD&A are in US
dollars, unless otherwise specified. This MD&A was prepared as of March 27,
2007.

Highlights

    o    The Government of Venezuela,  through the Ministry of Basic  Industries
         and Mining,  ("MIBAM") formal approval of the Las Cristinas Feasibility
         Study, announced March 27, 2006.

    o    Gold reserves at Las  Cristinas of 14.0 million  ounces based on a $450
         per ounce gold price.

    o    Completed a 13,500 metre drilling  program at Las Cristinas in February
         2007.  New  resource  and reserve  estimate  expected by the end of the
         second quarter 2007.

    o    Gold production of 47,345 ounces at the Revemin Mill.

    o    Corporate debt reduced by $9.2 million.

    o    Net loss for the year of $35.7 million, ($0.15) per share.

<TABLE>

Key Statistics
-----------------------------------------------------------------------------------------------
                                                        2006             2005              2004
-----------------------------------------------------------------------------------------------
<S>                                                     <C>               <C>               <C>
Operating Statistics
Gold Production (ounces)                              47,345           53,178            48,973
Gold Sold (ounces)                                    48,570           55,217            49,478
Per Ounce Data:
     Total Cash Cost (1)                                $552             $401              $365
     Average Realized Gold Price                        $578             $453              $409
     Average Spot Gold Price                            $604             $445              $410
Gold Reserves(2) (ounces):
     Operating Mines                                     ---           38,100            90,400
     Las Cristinas                                14,006,000       13,594,000        12,849,000

Financial Results ($ 000's)
Revenues                                             $28,088          $24,990           $20,246
Net Loss                                            ($35,684)        ($45,207)         ($60,654)
Net Loss per Basic Share                              ($0.15)          ($0.23)           ($0.35)
Cash Flow from Operating Activities                 ($32,053)        ($32,714)         ($36,005)

Financial  Position ($ 000's)
Cash and Cash  Equivalents                           $28,573           $4,070            $5,767
Short-term  Investments                                  ---              ---           $30,277
Restricted  Cash and  Equivalents                        ---          $21,323           $98,006
Total Debt                                           $87,697          $96,938           $85,088
Shareholders' Equity                                $196,043         $132,067          $143,554
Weighted Average Shares  Outstanding -
Basic (millions)                                       230.2            194.7             172.2
------------------------------------------------------------------------------------------------
(1)  For an  explanation,  refer  to  the  section  on  Non-GAAP  measures.  The
calculation is based on ounces of gold sold.
(2)  Calculated in accordance  with  National  Instrument  43-101 as required by
Canadian securities regulatory authorities.

</TABLE>


                                       1
<PAGE>

Financial Results Overview

The Company recorded a net loss of $35.7 million, or $0.15 per share in 2006,
compared with a net loss of $45.2 million or $0.23 per share in 2005. The
higher net loss in 2005 is attributable to a $6.6 million write-down of
investments in subsidiaries and a $3.8 million commodity contract loss.

Revenue of $28.1 million in 2006 was 12% higher than the $25.0 million of
revenue generated in 2005 and reflects higher realized prices on gold sales,
which offset the reduction of ounces sold. In 2006, the Company sold 48,570
ounces of gold at an average realized price of $578 per ounce, while in 2005,
55,217 ounces of gold were sold at an average realized price of $453 per ounce.
The average spot gold price in 2006 was $604 per ounce, 36% higher than the
2005 average of $445 per ounce.

Operating cash flow was a deficit of $32.1 million in 2006, compared with a
deficit of $32.7 million in 2005. The cash flow deficit in 2006 includes
general and administrative expenses of $20.4 million, $10.0 million of cash
interest payments and a $5.4 million utilization of working capital. The 2005
deficit reflected a similar level of expenditures on general and administrative
expenses and cash interest payments, but also included $12.0 million of
expenditures for settling gold contract positions, partially offset by a $4.8
million positive contribution from working capital changes. Capital
expenditures were $48.4 million in 2006, a decrease of $46.0 million from the
prior year due to a reduction in spending on Las Cristinas. At year end 2006,
the Company had cash and cash equivalents of $28.6 million.

Development Project

Las Cristinas

Overview

In September 2002, the Company signed a Mining Operation Agreement, ("MOA")
with the State owned Corporacion Venezolana de Guayana, ("CVG") which granted
Crystallex exclusive rights to develop and exploit the gold deposits on the Las
Cristinas property. Since signing the MOA, Crystallex has achieved a number of
important milestones in the development of Las Cristinas, including:

    o    September 2003 - completed a Feasibility  Study for a 20,000 tonnes per
         day,  ("tpd")  operation.   Gold  production  at  20,000  tpd  averages
         approximately 270,000 ounces per year over a 41 year mine life.

    o    March 2004 - the Las  Cristinas  Feasibility  Study is  approved by the
         CVG.

    o    April 2004 - SNC Lavalin  Engineers  and  Constructors  Inc.,  ("SNCL")
         appointed as Engineering, Procurement and Construction Management,
         ("EPCM") contractors.

    o    April 2004 - Environmental  Impact Statement,  ("EIS") submitted to the
         Ministry of Environment and Natural Resources, ("MARN").

    o    August 2004 - the first and  prerequisite  permit,  the Land Occupation
         Permit, which authorizes the use of the Las Cristinas properties for
         mining was confirmed.

    o    August 2005 - SNCL  completed a  comprehensive  update to the September
         2003 Feasibility  Study,  titled Development Plan 2005. The Development
         Plan 2005 is a National Instrument 43-101 compliant Technical Report.

    o    October 2005 - SNCL completed a  Pre-Feasibility  Study  considering an
         expansion of Las Cristinas from 20,000 tpd to 40,000 tpd.  Gold
         production at 40,000 tpd averages approximately 490,000 ounces per year
         over a 23 year mine life.

    o    March 2006 - the  Ministry of Basic  Industries  and Mining,  ("MIBAM")
         approved the Las Cristinas Feasibility Study.

    o    March 2007 - All long lead time  mining and  processing  equipment  has
         been received and paid for.  Approximately  $61 million of equipment is
         in storage, primarily in Houston, Texas.


                                       2
<PAGE>


         Engineering  design  was  largely  completed  at the end of  2005.  The
         construction  camp at site is  operational  and  includes  kitchen  and
         recreation   facilities   (with   services   provided   by  a  catering
         contractor),  refurbished  accommodation and a malarial clinic. A 1,000
         metre  tarred  airstrip  at site  and a 19  kilometre  access  road are
         operational.  Community  social  programs  continue,  and the principal
         projects for 2007 include  construction of a sewage treatment plant and
         designing and initiating  construction of a new medical facility in the
         town of Las Claritas.

Permitting Progress

Mining projects in Venezuela require a land use permit and an authorization to
impact the natural resources, both of which are issued by the MARN. The Land
Use Permit was confirmed for Las Cristinas in August 2004. The Permit to Impact
Natural Resources, (the "Permit") authorizes the developer to construct and
operate its mine.

At a meeting in Venezuela in October 2006, the MARN indicated its intention to
expedite the permitting process for Las Cristinas. MARN requested that
Crystallex and Gold Reserve Inc., (Gold Reserve is developing the Las Brisas
property to the south of Las Cristinas) cooperate on a number of shared
projects to reduce the overall environmental impact of both projects in the Km
88 region. The joint projects include use of a shared airstrip, use of a shared
explosives plant, designing and constructing a single National Guard command
post for both projects, consideration of sharing access roads and agreeing to
work with the community of San Isidro in designing and building a solid waste
landfill facility to ultimately be handed to the community for administration.

Crystallex and Gold Reserve have reached agreements in principal on these joint
environmental related projects and have recently provided the MARN with
supporting documentation on these and other requests.

At the same October meeting, the MARN representatives confirmed that Las
Cristinas and Las Brisas were recognized as separate and distinct projects by
the Ministry and that each will be issued its own permit and that the timing
for granting of the permits for each project would be independent of one
another.

Reserves and Resources

In August 2005, SNCL completed a comprehensive update to the September 2003 Las
Cristinas Feasibility Study. The updated report titled "Development Plan -
2005" represents the Company's current Technical Report as defined by the
Canadian Securities Administrators in National Instrument 43-101. The
Development Plan included an updated estimate of resources and reserves at Las
Cristinas. The Development Plan reserve estimate incorporated new operating
cost estimates, the results of Crystallex drilling programs in 2004 and 2005
and was based on an open pit design using a $350 per ounce gold price. For
year-end 2006 reserve reporting, Mine Development Associates ("MDA") was
engaged to provide an estimate of reserves at Las Cristinas using a $450 per
ounce gold price. The pit design (based on $350 per ounce) and other parameters
and costs from the Development Plan - 2005 did not change. At $450 per ounce,
proven and probable reserves at Las Cristinas are estimated to be 14.0 million
ounces of gold. Total proven and probable reserves are 378 million tonnes
grading 1.15 g/t, including proven reserves of 50 million tonnes grading 1.25
g/t and probable reserves of 328 million tonnes grading 1.14 g/t. There is no
change to the resource estimate, which includes Measured and Indicated
resources of 501 million tonnes grading 1.1 grams per tonne gold, containing
17.7 million ounces of gold. The reserves are included in the resource
estimate.

Crystallex completed a 13,500 metre drill program at Las Cristinas in February
2007. MDA has been engaged to incorporate the new drill results in an updated
resource and reserve estimate. The Las Cristinas open pit will be redesigned
using a $450 per ounce gold price. The new resource and reserve estimate should
be available by the end of the second quarter 2007.

2006 Development Expenditures

In 2006, Crystallex spent $48.4 million on development expenditures for Las
Cristinas as compared with $94.4 million in 2005. The reduction in expenditures
in 2006 reflects the fact that engineering design was largely completed at the
end of 2005 and also the majority of payments for long lead time equipment were
made in 2005. Considering 2006 expenditures, approximately $26 million was for
engineering services, equipment purchases, camp catering and freight and
storage costs as detailed in the Development Plan -


                                       3
<PAGE>

2005 capital budget of $293 million and governed by the EPCM contract. The
balance of $22.4 million was expended in areas not included in the $293 million
capital budget, including site security, general and administrative
expenditures at the camp, social and community development programs,
exploration and environmental work.

Since the inception of the EPCM contract in April 2004, expenditures related to
Las Cristinas have totalled $181 million. Of this amount, approximately $115
million is related to items governed by the EPCM contract and included in the
2005 capital estimate of $293 million. The Company intends to update both
capital and operating cost estimates following receipt of the Permit.

Operations Review

Production

<TABLE>

-----------------------------------------------------------------------------
Gold Production (ounces)                        2006       2005         2004
-----------------------------------------------------------------------------
  <S>                                          <C>          <C>          <C>
     Tomi Open Pits                           19,428     30,290       35,961
     Tomi Underground                         22,210     19,811        5,891
     La Victoria                               3,260      1,491        2,412
     Purchased Material                        2,447      1,586        4,709
-----------------------------------------------------------------------------
Total Gold Production (ounces)                47,345     53,178       48,973
-----------------------------------------------------------------------------
Total Ore Processed(1) (tonnes)              367,667    418,414      443,504
Head Grade of Ore Processed (g/t)                4.4        4.2          3.7
Total Recovery Rate (%)                          92%        94%          93%
Total Recovered (ounces)                      47,345     53,178       48,973
-----------------------------------------------------------------------------
Total Cash Cost Per Ounce Sold                  $552       $401         $365
-----------------------------------------------------------------------------
Mine Operating Cashflow(2) ($,000)            $1,300     $2,235       $2,208
Capital Expenditures ($,000)                     ---       $856       $9,900
Mine Cash Flow After Capital(3) ($,000)       $1,300     $1,379      ($7,692)
-----------------------------------------------------------------------------
(1) Ore from Tomi,  La  Victoria  and  purchased  material is  processed  at the
Company's Revemin mill.
(2) Mining  Revenue less  Operating  Expenses  (adjusted for non-cash  items and
excludes exploration costs of $621,000 in 2006). This is an non-GAAP item.
(3)Capital   Expenditures  at  the  El  Callao  operating  mines,  excludes  Las
Cristinas.  Since  the  second  quarter  of 2005,  all  costs  at the El  Callao
operations have been expensed due to the short reserve life of these mines.

</TABLE>

For the past three years, over 85% of the Company's gold production has been
sourced from mines on the Tomi concession, located near El Callao in Bolivar
state.

The Company produced 47,345 ounces of gold at its Venezuelan operations in
2006, an 11% decrease from 2005. The decrease in gold production was
attributable to mining significantly more waste material, and mining and
processing fewer tonnes of ore. The Revemin mill, which processes ore from
Tomi, La Victoria and purchased material, processed approximately 368,000
tonnes of ore in 2006, a 12% decrease from 2005.

At Tomi, open pit mining was conducted principally at the Mackenzie and
Fosforito pits, with a modest amount of mining undertaken at the Milagrito 1
pit until its depletion at the end of the first quarter. As compared with the
year earlier period, gold production from the Tomi open pits declined by 36% in
2006. Lower ore production from the Tomi pits was attributable to a significant
increase in the requirement for waste stripping. The strip ratio (the ratio of
waste rock mined to ore mined) increased by 58%, from 6.3:1.0 in 2005 to
10.0:1.0 in 2006. The strip ratio is expected to remain high for the first half
of 2007, then decline as the pits are exhausted in 2008. Lower production from
the Tomi open pits was partially offset by production increases at the Tomi
underground mine and the La Victoria open pit mine.

During 2007, the Company plans to conduct exploration on the Tomi properties
with the aim of finding sufficient open pit ore to supply the Revemin mill
after the depletion of the existing Tomi pits in 2008. The Company also plans
to mine and process over 100,000 tonnes of non-refractory ore from the La
Victoria deposit in 2007 and is evaluating fine grinding of the La Victoria
refractory sulphide ore prior to treatment in the Revemin mill. An in-pit
crusher at La Victoria is currently being used to crush waste rock which is
trucked to Las Cristinas for use as construction aggregate.


                                       4
<PAGE>

The mining operations generated cash flow of approximately $1.3 million in
2006, as compared with $1.4 million in 2005. The decrease was attributable to
lower gold sales and an increase in operating costs, which offset higher
realized gold prices.

Tomi

<TABLE>
------------------------------------------------------------------------------
100% Basis                                        2006       2005        2004
------------------------------------------------------------------------------
<S>                                               <C>         <C>        <C>
Tomi Open Pits (100% Crystallex)
Tonnes Ore Mined                               227,845    313,599     334,289
Tonnes Waste Mined                           2,287,217  1,971,402   2,751,124
Tonnes Ore Processed                           211,936    319,287     350,008
Average Grade of Ore Processed (g/t)               3.1        3.2         3.5
Recovery Rate (%)                                  94%        93%         92%
------------------------------------------------------------------------------
Production (ounces)                             19,428     30,290      35,961
------------------------------------------------------------------------------
Tomi Underground (100% Crystallex)
Tonnes Ore Mined                                89,689     72,177      26,966
Tonnes Ore Processed                            88,183     63,319      28,454
Average Grade of Ore Processed (g/t)               8.4       10.2         6.9
Recovery Rate (%)                                  93%        95%         94%
------------------------------------------------------------------------------
Production (ounces)                             22,210     19,811       5,891
------------------------------------------------------------------------------
</TABLE>


La Victoria

<TABLE>
-----------------------------------------------------------------------
100% Basis                                    2006      2005      2004
-----------------------------------------------------------------------
<S>                                            <C>      <C>        <C>
La Victoria
Tonnes Ore Mined                            64,222    24,892    36,012
Tonnes Waste Mined                         353,052   126,704   481,210
Tonnes Ore Processed                        51,424    25,649    25,974
Average Grade of Ore Processed (g/t)           2.3      2.02      3.18
Recovery Rate (%)                              86%       89%       91%
-----------------------------------------------------------------------
Production (ounces)                          3,260     1,491     2,412
-----------------------------------------------------------------------
</TABLE>

Income Statement

Revenue

Mining  revenue in 2006 was $28.1  million,  as compared  with $25.0  million in
2005.  The  increase in revenue in 2006 was  attributable  to realizing a higher
average  price on gold sales,  which more than  offset a reduction  in ounces of
gold sold.  In 2006 the  Company  sold  48,570  ounces of gold and  realized  an
average  gold  price of $578 per ounce as  compared  with  2005  sales of 55,217
ounces at an average realized price of $453 per ounce. Spot gold prices averaged
$604 per ounce in 2006 and $445 per ounce in 2005.  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.

Revenue in 2005 was $25.0  million,  as  compared  with  $20.2  million in 2004.
Higher revenue in 2005 was due to selling  approximately  11% more gold than the
prior year and  realizing a higher  average  price on gold sales.  Gold sales in
2005 were 55,217  ounces,  compared with 49,478 in 2004.  The increase in ounces
sold was due to higher gold  production.  The Company  realized an average  gold
sales price of $453 per ounce in 2005, up from $409 per ounce in 2004. Spot gold
prices averaged $445 per ounce in 2005 and $410 per ounce in 2004.

Operating Expenses

The  Company's  total  cash  costs of sales  include  mining,  processing,  mine
administration,   royalties  and  production   taxes  and  exclude  general  and
administrative  expenses,  depreciation and depletion,  financing costs, capital
costs and  reclamation  accruals.  Since the second quarter of 2005, the Company
has expensed all costs at its  Venezuelan  operations  near El Callao due to the
short remaining life at the Tomi mines.


                                       5
<PAGE>


The  Company's  cash costs of sales for 2006 were $27.1  million,  compared with
$22.8 million in 2005. The increase in costs of sales primarily  reflects higher
underground  mining  contractor  rates,  which were  renegotiated in 2006 and an
increase  in the  amount  of waste  material  mined  from the open  pits.  Waste
stripping increased by 26%, or approximately  540,000 tonnes in 2006 as compared
with  2005.  To a lesser  extent,  higher  costs  in 2006  also  reflect  global
inflation in the mining industry for  consumables  and  commodities  used in the
production of gold. The Company experienced  significant increases in explosives
costs,  which were  approximately  20% higher on a cost per tonne mined basis in
2006 as compared with 2005.  There were also  material  increases in the cost of
consumables used in the mill,  including cyanide,  steel grinding balls and lime
and increases in costs for mill  maintenance.  Security expenses also increased,
as did royalties and exploitation  taxes that are linked to higher revenues from
gold sales.

On a unit cost basis, total cash costs were $552 per ounce of gold sold in 2006,
compared with $401 per ounce in 2005.  Unit costs were higher in 2006 due to the
combined impact of higher operating costs and fewer ounces sold.

The  Company's  costs of sales and unit costs reflect the expensing of all costs
at  the  El  Callao   operations,   including  costs  that  would  typically  be
capitalized,  such as  underground  ramp  development  and  expenditures  on the
Revemin mill.

In 2005, cash costs of sales were $22.8 million,  as compared with $18.0 million
in 2004.  Although  tonnes of waste and ore mined were 30% lower in 2005 than in
2004 and less ore was  processed,  operating  costs  were  higher  in 2005 for a
number of  reasons.  For the last nine  months of 2005,  all costs at the mining
operations were expensed. Higher operating costs in 2005 also reflect the impact
of worldwide  price inflation of  commodities,  including  mining and processing
consumables, particularly explosives, cyanide and steel grinding media. The Tomi
open pit operations are relatively  high cost due to the  significant  amount of
waste rock  required  to be mined.  The strip ratio (the ratio of waste mined to
ore mined) at the Tomi open pits averaged 6.3:1.0 in 2005. In addition, the 2005
operating expense figure includes costs associated with the BIOX pilot plant and
concentrate studies for the La Victoria deposit.

On a unit cost basis, total cash costs were $401 per ounce of gold sold in 2005,
compared  with $365 per ounce in 2004.  Unit  costs  were  higher in 2005 as the
increase in operating costs more than offset the increase in ounces sold.

Amortization and Depletion

Amortization and depletion  expense related to the operations  decreased by $0.9
million in 2006 as compared  with 2005.  The decrease was  primarily  due to the
amortization of substantially all of the remaining carrying value of the Revemin
mill by the end of September  2006. The  amortization  expense in 2005 was for a
full 12 months.

Comparing 2005 with 2004,  operation's  amortization  expense  increased by $1.2
million  in 2005  due to the  decision  to,  commencing  in 2005,  amortize  the
remaining  carrying  value of the Revemin mill over a two year period to reflect
the  estimate at the time of a two year life of reserves to be  processed at the
mill.  Depletion expense decreased from $4.9 million in 2004 to $330,000 in 2005
as a result of a write-down of various mineral properties at the end of 2004.

General and Administrative Expenses

General and Administrative expenses were $20.4 million in 2006, as compared with
$19.5  million in 2005 and $18.2  million in 2004.  In 2006,  an increase  legal
fees, principally related to the Las Cristinas project, were partially offset by
a decrease in capital taxes, payroll and travel expenses.

Comparing  expenditures  of $19.5  million  and $18.2  million  in 2005 and 2004
respectively,  higher legal fees related to Las  Cristinas,  and higher  capital
taxes were offset, in part, by a reduction in payroll related charges.

Interest Expense

                                       6
<PAGE>

Interest  expense was $12.9  million in 2006,  as compared with $11.8 million in
2005. In both 2006 and 2005, $9.4 million of interest  expense was cash interest
payments on the Company's  $100 million of 9.375% senior  unsecured  notes.  The
$1.1 million  increase in interest expense in 2006 was primarily due to the fact
that the  restructured  Standard  Bank debt,  which was entered into in December
2005, was interest bearing throughout 2006.

A portion of  interest  expense  is  non-cash  ($2.96  million in 2006 and $2.67
million in 2005) and represents interest accretion on the senior unsecured notes
and the Standard Bank debt, both of which are  instruments  with debt and equity
components,  (refer  to  Note  7 in the  Company's  Notes  to  the  Consolidated
Financial Statements).

Comparing  2005 with 2004,  interest on debt  increased  to $11.8  million  from
$548,000.  The increase in 2005 was due to interest  expense on the $100 million
senior unsecured notes issued in December 2004

Forward Sales and Written Call Options

Crystallex  eliminated  its gold contract  positions in 2005.  During 2005,  the
Company spent cash of $12.0 million to financially  settle 93,119 ounces of gold
contracts.  An additional  71,239 ounces of gold contract  positions were closed
out on  December  23,  2005  and the  settlement  amount  of $14.3  million  was
converted  into a term loan facility with Standard Bank Plc maturing in December
2008,  (see Financing  Activities).  In 2005,  the Company  recorded a commodity
contract loss of $3.8 million.

Write-Down of Property Plant and Equipment and Investment in Subsidiaries

The Company did not incur any  write-downs  in property,  plant and equipment in
2005 or 2006.  With the  exception of the Las Cristinas  project,  all property,
plant and equipment for operating  assets had been fully  depleted and amortized
by December 31, 2006. During 2005, the Company incurred a charge of $6.6 million
due to the write-down of its  investment in ECM,  (refer to Note 10 in the Notes
to the Company's Consolidated Financial Statements).

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).

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. At its current rate of expenditures,  the
Company will need to raise  additional funds by the end of the second quarter of
2007.

An update of the capital  estimate for Las Cristinas  will be  undertaken  after
receipt of the Permit.  At that time,  the Company  will  determine  its overall
funding  requirements to cover the period through  commercial  production of Las
Cristinas.  The funding requirement will include the balance of capital required
to complete the  development of Las  Cristinas,  and funds to meet the Company's
general and  administrative  expenses,  debt  service and  financing  fees.  The
Company  intends to fund the overall  requirement  with existing cash and from a
combination of limited recourse project debt financing and other forms of public
market debt and equity financing.

Cash and Cash Equivalents

On  December  31,  2006,  the  Company  had cash and cash  equivalents  of $28.6
million,  as compared with $25.4 million  (including $21.3 million of restricted
cash) at year end 2005. The restricted  cash at the end of 2005  represented the
balance of proceeds of a $100 million  senior  unsecured  note financing held in
escrow  to pay  for  approved  capital  expenditures  for Las  Cristinas  and to
partially fund interest  payments for the senior unsecured notes. The restricted
cash was fully utilized in 2006.

The change in the cash balance during 2006 is reconciled as follows:

                                       7
<PAGE>


<TABLE>
<CAPTION>

                                                                      $ millions
                                                                      ----------
Cash, Cash Equivalents and Restricted Cash on December 31, 2005                   $25.4

<S>                                                                   <C>
     Common Share and Warrant Financing Activities                    $88.9
     Debt Borrowings                                                      0
     Total Sources of Cash                                            $88.9

     Operating Cash Flow Deficit                                    ($32.1)
     Capital Expenditures - Las Cristinas                           ( 48.4)
     Debt Repayments                                                 ( 5.2)
                                                                     ------
     Total Uses of Cash                                             ($85.7)

Net Addition to Cash and Cash Equivalents                                          $3.2
                                                                                   ----
Cash and Cash Equivalents on December 31, 2006                                    $28.6
                                                                                  =====
</TABLE>


Cash Flow from Operating Activities

Cash flow from operations (before capital  expenditures) is principally affected
by general and administrative expenditures,  cash interest expense, the level of
gold sales,  realized  gold  prices,  cash  operating  costs,  and  movements in
non-cash working capital.  In previous years, cash flow from operations was also
impacted by expenditures on reducing the Company's gold sales commitments, which
were eliminated at the end of 2005.

Cash flow from operations was a deficit of $32.1 million in 2006,  compared with
a deficit  of $32.7  million  the year  earlier.  The cash flow  deficit in 2006
reflects general and administrative  expenses of $20.4 million, $10.0 million of
cash interest  payments and a $5.4 million  utilization of working  capital.  In
2005, the cash flow deficit of $32.7 million was largely  attributable  to $19.5
million  of  general  and   administrative   expenditures,   $12.0   million  of
expenditures  for  settling  gold  contract  positions  and $9.3 million of cash
interest payments,  offset in part by a $4.8 million positive  contribution from
working capital changes.

Cash flow from operations was a deficit of $32.7 million in 2005,  compared with
a deficit of $36.0 million in 2004. The larger deficit in 2004 was mainly due to
higher spending on settling gold contract positions.  In 2004, the Company spent
$19.1 million on settling gold contracts, as compared with $12 million in 2005.

Investing Activities

Capital  expenditures  totalled  $48.4  million in 2006,  as compared with $94.4
million in 2005. The decrease in capital  expenditures  is  attributable  to the
delay in receiving the Permit to commence  site  development  of Las  Cristinas.
Capital  spending in 2006 was exclusively  used for advancing the development of
Las Cristinas and included  expenditures  for  engineering  design and equipment
procurement  under  the EPCM  contract  and also for  owner's  costs,  including
security,   site  general  and   administrative   costs,   environmental   work,
socio-economic  programs,  exploration drilling and legal and professional fees.
Higher capital  expenditures in 2005, as compared to both 2006 and 2004, reflect
greater activity in the areas of engineering design and equipment procurement.

Until  the  Permit is  received,  capital  expenditures  for Las  Cristinas  are
expected to largely comprise the owner's costs described above and EPCM governed
costs, such as SNC Lavalin charges, camp catering, freight and storage.

Capital expenditures for 2004-2006 are summarized as follows:

--------------------------------------------------------------------------------
$ millions                      2006                 2005                  2004
--------------------------------------------------------------------------------
Las Cristinas                  $48.4                $93.5                 $40.7
Revemin/ Tomi                    ---                  0.4                   9.1
Albino                           ---                  0.5                   0.8
Corporate                        ---                  ---                   0.3
                                 ___                  ___                   ___
Total                          $48.4                $94.4                 $50.9
--------------------------------------------------------------------------------

                                       8
<PAGE>

The amount of capital spending in 2007 depends upon the timing of the receipt of
the Las Cristinas Permit and the timing of future financings.

Financing Activities

In August 2006,  the Company  raised net  proceeds of $26.9  million in a public
offering of 10,125,000  units,  with each unit consisting of one common share of
the  Company  and one half of one  common  share  purchase  warrant.  Each whole
warrant  entitles  the holder to purchase  one common  share of the Company at a
price of C$4.25 on or before February 10, 2008.

In February 2006, the Company  completed a private placement of 10,799,000 units
at a purchase  price of $2.90 per unit for net  proceeds of $30.3  million.  The
units  consisted of  10,799,000  common  shares and  12,250,000  share  purchase
warrants.  Each  warrant  allows  the holder to  purchase a common  share of the
Company  for $4.25 per share  for a period  of 18  months,  exercisable  45 days
following the receipt of the Permit for the Las Cristinas project.

The Company received  proceeds of $21.3 million during the third quarter of 2006
from the exercise of common share purchase warrants.  Approximately $6.0 million
of these  proceeds were received in July 2006,  when the Company agreed to amend
the terms of  2,197,727  warrants,  expiring  September  15,  2006 and issue new
warrants in exchange for the early exercise of the 2,197,727 warrants.  Upon the
early exercise of the warrants,  the Company issued  2,197,727 common shares and
issued 0.398 new common share purchase warrants for each warrant exercised,  for
an aggregate issue of 875,000 new warrants. Each new warrant entitles the holder
to purchase  one common  share of the Company at an exercise  price of $4.00 per
share until July 14, 2008.

Standard Bank Loan

On December 23, 2005, the Company closed out the remaining 71,239 ounces of gold
contract  positions and converted  the $14.3 million  settlement  amount into an
amortizing  term loan  facility  with Standard Bank Plc maturing on December 31,
2008.  The loan  consisted  of a $7.5  million  convertible  portion  and a $6.8
million  non-convertible  portion.  During the second quarter of 2006,  Standard
Bank  elected to convert the entire $7.5  million  convertible  portion of their
loan into  common  shares of  Crystallex.  As a result  of the  conversion,  the
Company issued 3,765,841 common shares to Standard Bank.

The  Company  is  required  to make  monthly  principal  and  interest  payments
totalling $150,000 under the term loan agreement.  In addition, the terms of the
loan agreement  require the Company to make mandatory loan  prepayments upon the
issue of equity or equity  linked  debt  securities,  including  convertible  or
exchangeable debt securities.  The prepayment amount is tied to the net proceeds
of new equity  financings.  As a result of the private  placement  financing  in
February 2006 and the unit  financing in August 2006, the Company made mandatory
prepayments to Standard Bank of $2.1 million and $1.9 million  respectively.  At
December 31, 2006,  there was $3.2 million  outstanding  under the Standard Bank
term loan.

Crystallex is providing a guarantee of the obligations  under the term loan. The
loan is secured by the Company's Tomi and Revemin  assets.  The  non-convertible
portion of the term facility ranks pari passu with unsecured and  unsubordinated
debt of Crystallex.

Equity Draw Down Facility

The Company has a C$60 million  equity draw down facility  with a  counterparty.
Under the terms of the equity  facility,  the Company has the right, but not the
obligation,  to require the  counterparty  to purchase up to C$60 million of the
Company's  common  shares  in a series  of draws  over a 24 month  period,  from
September 14, 2005 to September  14, 2007.  The minimum share price at which the
Company will sell shares to the counterparty is C$1.00. On January 26, 2006, the
Company  exercised a fifth draw under the equity draw down  facility  and issued
1,661,130 common shares to the counterparty for gross proceeds of C$5.0 million.
At  December  31,  2006,  a total of C$26.6  million  had been  drawn  under the
facility.

The Company  issued the  following  common shares to the  counterparty  upon the
exercise of four draws under the equity draw down facility.

                                       9
<PAGE>

-------------------------------------------------------------------------------
Date                                  Shares Issued             Gross Proceeds
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
October 5, 2005                           4,092,680              C$6.0 million
October 31, 2005                          2,924,259              C$4.6 million
November 30, 2005                         3,163,657              C$6.0 million
December 16, 2005                         2,092,640              C$5.0 million
January 26, 2006                          1,661,130              C$5.0 million
-------------------------------------------------------------------------------


Asset Retirement Obligations

The estimate of future cash flows required for asset retirement  obligations was
reduced by  approximately  $0.4  million  during  2006.  The decrease was mainly
attributable  to a  reduction  in the  estimate  of  costs  associated  with the
retirement of the Revemin mill.

In 2005,  the  estimate  for asset  retirement  obligations  was reduced by $1.1
million,  as compared  with 2004.  This  reduction was mainly as a result of the
reduction  in the  estimate  of surface  area to require  rehabilitation  at the
Company's Lo Increible properties.

Contractual Obligations and Commitments

The Company's contractual obligations and commitments,  as at December 31, 2006,
are tabled below:

<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------
                                           Less than One      1 - 3          4 - 5       More Than 5
$ millions                                     Year           Years          Years          Years          Total
-----------------------------------------------------------------------------------------------------------------
<S>                      <C>                    <C>            <C>          <C>                           <C>
Long Term Debt Repayments(1)                    $3.4           $2.0         $100.0            ---         $105.4
-----------------------------------------------------------------------------------------------------------------
Asset Retirement Obligations                    $0.2           $1.0            ---            ---           $1.2
-----------------------------------------------------------------------------------------------------------------
Operating Lease Obligations                    $0.17          $0.21            ---            ---          $0.38
-----------------------------------------------------------------------------------------------------------------
</TABLE>


(1)  Included in the debt  repayment  schedule is $1.8  million of  exchangeable
notes,  payable  in two  equal  instalments  in  June  and  December  2007.  The
Noteholders  may elect to exchange the instalments for shares of the Company and
the Company has the option to satisfy the  instalment  obligation  with  shares.
Subsequent to year-end,  the Company  received notice that the Noteholders  have
elected to receive shares of the Company for the June 2007 instalment.

In  addition,   the  Company  has  approximately  $1.9  million  in  outstanding
commitments related to long lead time equipment ordered for Las Cristinas.

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 of Venezuela. The exploitation tax is presently 3% of gold revenue.

In the normal course of business,  the Company has entered into  contracts  that
contain  commitments to pay amounts dependent upon future events.  Such amounts,
if any, are not determinable by the year end; consequently, no amounts have been
accrued in the financial statements with respect to these commitments.

Related Party Transactions

During  2005  and  2006,   Crystallex   entered  into  the  following   material
transactions with related parties:

Orion  Securities  Inc.:  Orion  Securities  Inc. is an  investment  dealer that
provided  underwriting services to the Company in 2005 and 2006. Mr. Robert Fung
is an  employee  of  Orion  Securities  Inc.  and is  Chairman  of the  Board of
Directors  of  Crystallex.  During  2006,  Orion was paid  $2,947,156  for these
services,  none of which was to the benefit of Mr. Fung.  During 2005, Orion was
paid  $121,000.  The  increase in 2006 was  attributable  to Orion's role in the
Company's financing activities during the year.

During 2005, a portion of the Company's legal fees were paid to a related party.
McMillan Binch  Mendelsohn  LLP provides  legal  services to the Company.  David
Matheson is counsel to  McMillan  Binch  Mendelsohn  LLP and was a member of the
Board of Directors  of  Crystallex  until June 24,  2005.  During

                                       10
<PAGE>


that  period in 2005,  McMillan  Binch  Mendelsohn  LLP was paid  C$730,000  for
providing legal services to Crystallex.

 Outstanding Share Data

At March 26,  2007,  246,196,806  common  shares of  Crystallex  were issued and
outstanding.  In  addition,  at March 26, 2007  options to  purchase  11,289,089
common shares of Crystallex  were  outstanding  under the Company's stock option
plan and warrants to purchase 18,687,500 common shares of Crystallex were issued
and outstanding.

 Quarterly Data

<TABLE>

-----------------------------------------------------------------------------------------------------------------------
US$,000                                2006                                                2005
                         Q4           Q3           Q2            Q1          Q4           Q3           Q2           Q1
<S>                  <C>          <C>          <C>           <C>         <C>          <C>          <C>          <C>
Revenue              $5,720       $9,769       $5,520        $7,079      $6,623       $7,020       $6,301       $5,046
Net (Loss)        ($11,617)     ($8,815)     ($8,296)      ($6,956)   ($18,585)    ($10,338)     ($8,295)     ($7,989)

-----------------------------------------------------------------------------------------------------------------------
</TABLE>

Quarterly  revenue in 2006,  as compared  with 2005  reflects  lower gold sales;
however, in some quarters,  notably the third quarter of 2006, this is offset by
higher realized gold prices. The net loss in the fourth quarter of 2005 reflects
the  impact  of a $6.6  million  write-down  of an  investment  in a  subsidiary
company.

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 assets and  liabilities  and
disclosure  of  contingent  assets  at the  date of the  consolidated  financial
statements.  Significant  estimates  used herein  include those relating to gold
prices,  recoverable proven and probable  reserves,  available  resources,  fair
values of commodity derivative  contracts,  (principally fixed forward contracts
and written call options) available  operating capital and required  reclamation
costs. Among other things,  these estimates each affect management's  evaluation
of asset impairment and the recorded  balances of inventories,  site closure and
reclamation and remediation  obligations.  It is reasonably possible that actual
results  could  differ in the near term from 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

                                       11
<PAGE>

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

Commodity Derivative Contracts

The  Company  has in the  past  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
were not  designated as hedges for  accounting  purposes and were 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.

Special Note Regarding Forward Looking Statements

Certain  statements  included or  incorporated  by reference in this  Management
Discussion and Analysis,  including  information  as to the future  financial or
operating  performance  of the  Company,  its  subsidiaries  and  its  projects,
constitute   forward-looking   statements.   The  words   "believe,"   "expect,"
"anticipate,"  "contemplate," "target," "plan," "intends," "continue," "budget,"
"estimate," "may," "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 Company,  are inherently  subject to
significant business, economic, competitive,  political and social uncertainties
and  contingencies.  Many factors  could cause the Company's  actual  results to
differ  materially  from  those  expressed  or  implied  in any  forward-looking
statements made by, or on behalf of, the Company.  Such factors  include,  among
others, risks relating to additional funding requirements,  reserve and resource
estimates,  gold prices,  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 and
dependence on key employees.  See "Risk Factors" below and in the Company's 2006
40-F/Annual  Information  Form.  Due to risks and  uncertainties,  including the
risks and uncertainties  identified  above,  actual events may differ materially
from  current   expectations.   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 Management  Discussion and Analysis and the Company 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.

                                       12
<PAGE>

RISK FACTORS

The business and  operations of the  Crystallex  Group are subject to risks.  In
addition to considering the other  information in the Company's 2006 40-F/Annual
Information Form, you should carefully  consider the following  factors.  Any of
the following  risks could have a material  adverse  effect on the Company,  its
business and future prospects.

Risks Associated with Operating in Developing Countries

The Company's mineral exploration and mining operations are located in Venezuela
and may be adversely  affected by whatever  political  instability and legal and
economic uncertainty that might exist in such country. The risks associated with
the Company's foreign operations may include political unrest,  labour disputes,
invalidation of governmental  orders,  permits,  agreements or property  rights,
risk of corruption  including violations under U.S. and Canadian foreign corrupt
practices statutes, military repression,  war, civil disturbances,  criminal 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,
high rates of inflation and increased  financing costs. These risks may limit or
disrupt the Company'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.

Risks Specific to Operations in Venezuela

Political and Economic Instability

The Company's  principal mineral properties are located in Venezuela and as such
the Company may be affected by political or economic  instabilities  there.  The
risks  associated  with carrying on business in Venezuela,  in addition to those
highlighted  above,  include,  but are not  limited to violent  crime,  which is
prevalent  throughout  the country and includes  kidnapping,  smuggling and drug
trafficking  especially  in remote  areas.  Changes in resource  development  or
investment  policies or shifts in political attitudes in Venezuela may adversely
affect the Company's business.  Operations may be affected in varying degrees by
government  regulations  with  respect  to  restrictions  in  production,  price
controls,  export controls,  exchange controls,  income taxes,  expropriation of
property,   maintenance  of  claims,   environmental   legislation,   land  use,
unauthorized mining activities,  land claims of local people, water use and mine
safety. The effect of these factors cannot be accurately predicted.

Environmental Permit Still Required

MIBAM completed its overall approval process of Las Cristinas on March 26, 2006.
However,  the Company has  experienced  delays in  acquiring  the  environmental
permit  necessary  to  allow  commencement  of  construction  of the  mine.  The
Company continues  to  await  the  issuance  of  the  Permit,  the  initial
application of which was submitted in April 2004. Continued  development and the
ultimate commencement of commercial production are dependent upon receipt of the
Permit,  which will allow the  Company to proceed to put in place  financing  to
fund  construction.  As the  Las  Cristinas  project  is the  Company's  primary
development project, the failure to obtain the Permit or to obtain the Permit in
a timely  manner  could  have a  material  adverse  affect on the  future of the
Company's  business.  There can be no assurance as to when or if the Permit will
be granted.

Exchange Controls

Venezuela  currently has exchange  controls that affect the ability of companies
doing  business in Venezuela to convert  Venezuelan  source  income into foreign
currency.  The Central Bank of Venezuela  enacted such exchange control measures
in  2003  in  order  to  protect  international  reserves.  The  exchange  rate,
originally fixed at  approximately  1,600 Bolivars /US$, has since been adjusted
twice upwards and presently stands fixed at 2,150 Bolivars/US$.  There can be no
assurance  that  exchange  controls will not continue and, if they do, that they
will not  adversely  affect the Company's  operations,  including its ability to
satisfy its foreign currency obligations.

                                       13
<PAGE>


Mine Operation Agreement

Lack of Ownership Rights

Under the Venezuelan Mining Law of 1999 ("VML"), 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" in  the  Company's  2006
40-F/Annual  Information  Form. The Mine  Operation  Agreement  is an operation
agreement and does not transfer any property ownership rights or title rights to
the gold produced to the Company. Rather, the Company has been authorized to
exploit the Las Cristinas  Deposits for the CVG in  accordance  with to the Mine
Operation Agreement.  The interests of the Company in the Las Cristinas Deposits
are contingent upon the Company  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 also contain very low levels of
copper,  0.13% on average.  Under the Mine Operation  Agreement,  the Company is
only entitled to exploit the gold contained in the Las Cristinas Deposits. Based
on the feasibility studies carried out by the Company and following  discussions
with the CVG, the Company has determined that exploiting the copper contained in
the Las Cristinas Deposits would detract from the economics of the Las Cristinas
project.  The Company 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  Company  does not  believe  that the MIBAM would do so, the MIBAM
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
Company has been advised by its Venezuelan counsel that:

          (a)     if the MIBAM 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 MIBAM 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 Company; and

          (b)     if the MIBAM grants the right to exploit the copper contained
                  in  the  Las  Cristinas   Deposits  to  a  third  party,  the
                  Company'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 MIBAM  grants  the  right to  exploit  the  copper  contained  in the Las
Cristinas  Deposits to the CVG,  there can be no  assurance  that the MIBAM will
grant to the CVG the  additional  right to  negotiate  the  exploitation  of the
copper  with third  parties or that the  Company  will be able to  negotiate  an
agreement with respect to the  exploitation of the copper with the CVG. Also, if
the MIBAM grants the right to exploit the copper  contained in the Las Cristinas
Deposits  to a third  party,  or if the MIBAM  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
Company 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.

Proposed Amendments to Mining Laws

In 2005,  the  Government of Venezuela  announced  that it would be changing the
mining  title regime from a system where title was granted in the form of either
concessions  or  operating  contracts  to a  system  where  all  "new"  economic
interests would be granted in the form of joint ventures or operating contracts.
In order to effect this change,  the  Government of  Venezuela,  advised that it
would need to create a  national  mining  company  which  would be the  nation's
contracting  party covering the entire  country of Venezuela.  The Government of
Venezuela also indicated that, given this change in title regime,  it would also
be appropriate to review all existing mining companies in a single comprehensive
exercise  to ensure that only  companies  found to be in  compliance  with their
existing  title terms and  conditions  would  continue to qualify  under the new
regime on the same terms and  conditions.  The  Government of

                                       14
<PAGE>

Venezuela  further stated that all those companies found not to be in compliance
would have their operations turned over to small mining  cooperatives  supported
by the Government of Venezuela via the national mining company. MIBAM issued its
formal approval of Las Cristinas on March 26, 2006.

Arbitration Proceedings

The  Company is a  party  interested  in,  but  not  a  party  to,  an  ongoing
arbitration. Please see "Legal  Proceedings - Withdrawal of MINCA  Litigation -
Venessa Arbitration" in the Company's 2006 40-F/Annual Information Form.

Sale of Gold

For  the  past  several  years  the  Company  sold  all of its  Venezuelan  gold
production to the Central Bank of Venezuela.  In June 2006,  the Central Bank of
Venezuela  informed  the  Company it was  suspending  purchase  of gold from the
Company. During June and July, the Company sold gold to accredited third parties
within  Venezuela  and in August 2006 the Central Bank resumed  purchasing  gold
from the Company. The Company is updating the registration of its export licence
which will also allow it to export and sell gold outside of  Venezuela.  Pending
the update of the Company's export licence, should the Company be unable to sell
gold  within  Venezuela,  it  could  have an  adverse  effect  on the  Company's
revenues, cash flow and profitability in the short-term.

Unauthorized Miners

The Company's  operations  may also be affected by the presence of  unauthorized
miners which is not uncommon in the gold mining areas of the Guyana  Shield area
of northern South America, including Venezuela. The methods used by unauthorized
miners to  extract  gold are  typically  harmful to the  environment  and may be
disruptive of authorized mining operations. Although the Company, in conjunction
with the local  authorities,  employs  strategies  to control  the  presence  of
unauthorized  miners,  there can be no assurance that these  strategies  will be
successful or that the Company's  operations  will not be adversely  affected by
the presence of unauthorized miners.

Imataca Forest Reserve

In addition to the general risks  associated with  environmental  regulation and
liability (see "Risk Factors - General Risk Factors -  Environmental  Regulation
and  Liability"),  the Las  Cristinas  Deposits  are located  within the Imataca
Forest Reserve (the "Reserve").  On September 22, 2004 Presidential Decree 3110,
which  establishes an ordinance plan and regulations for the use of the Reserve,
permits various  activities  (including  mining) in up to 13% of the Reserve and
establishes the legal framework for such  activities,  was issued.  Presidential
Decree 3110 was issued in response to previous  Presidential  Decree  1850,  the
latter of which was issued in May 1997. Decree 1850 reserved an even larger part
of the Reserve for various  activities and became  subject to a legal  challenge
before the  Venezuelan  Supreme  Court.  The  Venezuelan  Supreme Court issued a
prohibition  order on November  11, 1997  prohibiting  the  relevant  government
authorities from granting concessions, authorization and any other acts relating
to  various  mining  activities  in the  Reserve  under  Decree  1850  until the
Venezuelan courts ruled on the merits of the nullity action. It is possible that
Presidential Decree 3110 could be similarly  challenged and that such challenge,
if ultimately  successful,  could  prevent the Company from  exploiting or fully
exploiting the Las Cristinas Deposits.

Venezuelan Decree No. 1257 establishes the environmental assessment requirements
for mining projects.  The Company was advised that the Las Cristinas  project is
not a new  project  and,  accordingly  Article 40 of Decree  1257 does not apply
since no significant increase in environmental impact is predicted.

General Risk Factors

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  Company  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 Company 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 Company
does

                                       15
<PAGE>

not carry title insurance with respect to its mineral  properties.  A successful
claim that the Company does not have title to a mineral property could cause the
Company 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 Company.

In 2005 the  Government  of  Venezuela  announced  that it would be changing the
mining  title  regime from a system where title was granted in the form of joint
ventures or either concessions or operating  contracts to a system where all new
economic interests would be granted in the form of operating contracts. In order
to effect this  change,  the  Government  advised that it would need to create a
national mining company which would be the nation's  contracting  party covering
the entire country of Venezuela.  The Government also indicated that, given this
change in title  regime,  it would also be  appropriate  to review all  existing
mining  companies  in a  single  comprehensive  exercise  to  ensure  that  only
companies  found  to be in  compliance  with  their  existing  title  terms  and
conditions  would  qualify for the new title.  This review was  completed  as of
December 31, 2005.  MIBAM  completed its approval  process for the Las Cristinas
project  at the end of  March  2006.  However,  there is no  assurance  that the
Government  will not  issue  further  decrees  or  otherwise  attempt  to modify
existing mining rights.

Environmental Regulation and Liability

The Company'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 Company's properties, the extent of which cannot be predicted.

In the context of environmental  permits,  in particular the approval of closure
and  reclamation  plans,  the Company  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.  In accordance with applicable  laws, the Company has
provided various forms of financial  assurances to cover the cost of reclamation
activities.  However,  there can be no assurance that the Company will not incur
reclamation  costs that are in excess of such  financial  assurances.  While the
Company plans to establish a reserve for reclamation activities, there can be no
assurance that the  combination of the reserve and financial  assurances will be
sufficient  to  meet  future  reclamation  standards,   if  such  standards  are
materially more stringent than existing standards. The Company does not maintain
environmental  liability  insurance.  The Company has adopted high  standards of
environmental  compliance,  however,  failure with or  unanticipated  changes in
Venezuela's laws and regulations pertaining to the protection of the environment
in the future could adversely affect the Company.

Additional Funding Requirements

Under the terms of the Mine Operation Agreement,  the Company 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 Company 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.

In September  2005,  the Company  issued C$10 million of 5% unsecured  notes due
March 13, 2006 to Azimuth  Opportunity,  Ltd. ("Azimuth") and established a C$60
million equity draw down facility with the

                                       16
<PAGE>

same entity.  The agreements  between Azimuth and the Company  stipulated  that,
until the C$10 million principal value of the unsecured notes was repaid, 50% of
the proceeds of each draw under the equity draw down  facility  would be applied
to repay the  unsecured  notes.  During the fourth  quarter of 2005 the  Company
received gross proceeds of C$21.6 million under the equity draw down facility, a
portion of which was used to repay the outstanding C$10 million  principal value
of the unsecured  notes.  In January 2006 the Company  raised  additional  gross
proceeds of C$5.0 million under the equity draw down facility.  In February 2006
the Company received gross proceeds of US$31.3 million under a private placement
of units.  In July 2006 the  Company  received  US$6.04  million  from the early
exercise of  warrants  held by  Riverview  Group LLC.  On August 11,  2006,  the
Company issued 10,125,000 units, each unit comprised of one common share and one
common share purchase warrant, for an aggregate price of C$32.4 million. Despite
these  financings,  the Company has limited  access to financial  resources  and
there can be no assurance that sufficient additional financing will be available
to the Company 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 Company and could also result
in the Company  defaulting in the performance of its obligations  under the Mine
Operation Agreement.

Reserve and Resource Estimates

The Company'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  mineral
deposits and the processing of new or different ore grades, may adversely affect
the Company's  profitability in any particular accounting period. If its mineral
reserve and resource  estimates  are  incorrect,  the Company 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.

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 Company 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
material processed 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  Company  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 Company
will be  obtained  on a timely  basis or at all.  The  economics  of  exploiting
mineral  reserves and  resources  discovered by the Company are affected by many
factors,  many  outside  the  control  of the  Company,  including  the  cost of
operations,  variations  in the grade of  material  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 Company's mineral exploration and
exploitation activities will be successful.

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 Company 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 Company's profitability

                                       17
<PAGE>

and financial  position and the value of the common  shares of the Company.  The
Company does not maintain insurance against environmental risks.

Competition

The  competition to discover and acquire mineral  properties  considered to have
commercial  potential  is  intense.  The  Company  competes  with  other  mining
companies, many of which have greater financial resources than the Company, 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 Company will be able to  successfully  compete  against such
companies.

Dependence on Limited Mining Operations and Properties

The  Company's  Tomi   operations   and  Revemin  mill  currently   account  for
substantially all of the Company's mineral production and revenues.  Any adverse
development  affecting these  operations  could  adversely  affect the Company's
financial performance and results of operations. Furthermore, future results for
the Company depend largely on the Las Cristinas  project,  which is currently in
the  development  stage and which may  never be  developed  into a  commercially
viable mining  operation.  Any event,  or combination  thereof,  which adversely
affects the Las Cristinas  project (whether the property itself or the Company's
ability to finance and/or  construct and operate a  commercially  viable mine on
the property), would adversely impact the Company's future performance.

Production Risks

The Company 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 Company
will achieve its production estimates.

The  Company'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 Company 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  Company  to cease  production.  These  factors  also  apply to the
Company's future operations.  For example,  it is not unusual for new mining and
processing  operations to  experience  unexpected  problems  during the start-up
phase.

In addition to the general  production  risks  outlined  above,  one of the most
significant  physical  production  issues the Company faces in the Las Cristinas
Project  pertains to the heavy amount of rainfall the area  receives (an average
of 3.3 m/year).  MDA has accounted for anticipated  time lost due to rainfall in
scheduling   production  and  determining  equipment   requirements,   which  is
consistent  with the  range of  practice  employed  by the iron ore and  bauxite
mining  industry  in the same  high  rainfall  region  in  Venezuela  as well as
comparable  mining  operations in similar or greater rainfall regions of Guyana,
Suriname and Brazil.  Regardless,  actual mining experience with the combination
of wet  saprolite  and high  rainfall  rates  may  require  adjustment  of these
estimates.

Regulations and Permits

The  Company'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  Company  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

                                       18
<PAGE>

Company'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  Company's  permits  that
could have a  significant  adverse  impact on the  Company's  existing or future
operations  or  projects.  Obtaining  permits  can be a complex,  time-consuming
process.  There can be no assurance  that the Company 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 Company 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.

Gold Price Volatility

The gold price can fluctuate  widely and is affected by numerous  factors beyond
the Company's control,  including industrial and jewellery 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 2006,  the gold  price  fluctuated  between a low of
US$253 per ounce and a high of US$725.75  per ounce.  On December 29, 2006,  the
a.m.  fixing price of gold sold in the London  Bullion  Market was US$635.70 per
ounce.

The Company'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 Company's  operations  for a  significant  period,  the
Company may be  required  to suspend or  terminate  production  at the  affected
operation.  In  addition,  the  Company  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 Company's profitability, cash flows and
financial  position.  Accordingly,  even if the Company  discovers  and produces
gold,  there can be no  assurance  that the gold  price  will be high  enough to
enable the Company to sell the gold produced by it profitably.

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

Currency Fluctuations

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

The Company enters into financial agreements (financial  instruments) with major
international  banks,  other  international  financial  institutions  and  other
accredited third parties 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 and accounts receivable.

Market  risk is the risk  that  the  value of a  financial  instrument  might be
adversely affected by a change in 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  contract.  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.

                                       19
<PAGE>

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.  The  Company  currently  does not have  metal  forward  and  option
contracts.

Recent Losses and Write-downs

The Company  incurred net losses in each of 2006,  2005, and 2004. The Company's
deficit at December 31, 2006 was US$287.2 million.  The Company'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 Company.  There can be no assurance  that the Company will become
profitable in the near future.

As part of the  preparation of its audited  comparative  consolidated  financial
statements for the years ended December 31, 2004 and 2003, the Company undertook
a detailed  review of the  carrying  value of its mineral  properties,  deferred
exploration  costs and plant and equipment.  These reviews  resulted in combined
asset write-downs of US$49.5 million in the 2003 and 2004 financial statements.

Operating Losses are Expected to Continue In the Near Future

The Company has  experienced  losses from  operation  for each of the last three
years.  The Company expects that it will continue to incur losses,  and possibly
incur increased losses, until the Las Cristinas mine is operational. The Company
expects  that this trend  will  reverse  if and when gold is  produced  from the
future Las  Cristinas  mine in  commercial  quantities  at prices equal to or in
excess of the prices assumed in the 20,000 TPD Feasibility Study.

Dependence on Key Employees

The Company's business and operations are dependent on retaining the services of
a small number of key management  personnel.  The success of the Company is, and
will  continue to be, to a  significant  extent,  dependent on the expertise and
experience of the directors  and senior  management.  The loss of one or more of
these people could have a materially adverse effect on the Company.  The Company
does not maintain  insurance on any of its key  employees.  Due to the length of
time in  obtaining  the Permit the  Company  has  granted  retention  bonuses to
certain members of senior management. Further delays in obtaining the Permit may
make it more difficult for the Company to retain key employees.

Compliance with Sarbanes-Oxley Act of 2002

Passed by the U.S.  Congress on July 30, 2002,  the  Sarbanes-Oxley  Act of 2002
("Sarbanes-Oxley")  requires  companies to, among other things,  have management
provide a report on the  Company's  internal  controls with respect to financial
reporting.   The  Company  has   complied   with  this   particular   aspect  of
Sarbanes-Oxley  for its  fiscal  year  ended  December  31,  2006.  Management's
evaluation  of, and report on, the Company's  internal  controls over  financial
reporting is set out in this  Management's  Discussion  and  Analysis  under the
heading  "Report on Disclosure  Controls and Procedures - Internal  COntrol over
Financial Reporting".  There can be no assurance the Company's internal controls
over financial  reporting will be free of material weaknesses in future periods.
When a material  weakness is discovered,  the Company will likely incur costs to
fix the internal  controls for financial  reporting as well as costs incurred to
remediate any financial inaccuracies.  There is also a risk that the market will
react adversely to such a finding.

Common Share Price Volatility

The  market  price  of  the  common  shares  of  the  Company  could   fluctuate
significantly  based on a number of factors in addition to those  listed in this
Annual Information Form, including:

     o    the  Company's   operating  performance  and  the  performance  of
          competitors and other similar companies;

                                       20
<PAGE>

      o   the  public's reaction to the Company's press releases, other
          public  announcements and the Company's filings with the various
          securities regulatory authorities;
     o    changes in earnings estimates or recommendations by research analysts
          who track the common shares or the shares of other companies  in the
          resource sector;
     o    changes in general economic conditions;
     o    the  number of the common  shares to be  publicly  traded  after this
          offering;
     o    the arrival or departure of key personnel;
     o    acquisitions, strategic  alliances or joint  ventures involving the
          Company or its competitors; and
     o    gold price volatility.

In addition,  the market price of the common  shares of the Company are affected
by many  variables  not  directly  related  to the  Company's  success  and are,
therefore,  not within the Company's control,  including other developments that
affect the market for all  resource  sector  shares,  the  breadth of the public
market for the common shares, and the attractiveness of alternative investments.
The effect of these and other  factors on the market  price of common  shares on
the exchanges on which the Company  trades has  historically  made the Company's
share price  volatile and suggests that the Company's  share price will continue
to be volatile in the future.

Potential Dilution

As at  December  31,  2006,  the  Company  has  outstanding  options to purchase
approximately  11,394,085 (common shares of the Company and warrants to purchase
approximately  18,687,500  common  shares of the Company  (including  12,250,000
warrants  that do not become  effective  until after the receipt of the Permit).
There  were a  further  868,833  options  outstanding  with a  weighted  average
exercise price of C$4.03 that were not fully vested.  The issue of common shares
of the Company  upon the  exercise of the options and  warrants  will dilute the
ownership interest of the Company's current  shareholders.  The Company 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 Company's then
current shareholders could also be diluted.

Enforcement by Investors of Civil Liabilities

The  enforcement by investors of civil  liabilities  under United States federal
securities  laws may be  adversely  affected  by the fact  that the  Company  is
organized under the laws of Canada,  that most of its officers and directors and
most of the  experts  named in this Annual  Information  Form are  residents  of
Canada, and that a substantial portion of the Company's assets and the assets of
a majority of the Company's directors and officers and the experts named in this
Annual Information Form are located outside the United States.  Furthermore,  it
may not be possible to enforce against the Company or its directors, officers or
experts,  judgments  contained  in U.S.  courts.  The  Company  believes  that a
monetary  judgment of a Canadian court  predicated  solely on the Canadian civil
liability  regime would likely be  enforceable in the U.S. if the Canadian court
in which the judgment was  obtained had a basis for  jurisdiction  in the matter
that was recognized by a U.S. court for such purposes.  However, the Corporation
can provide no assurances to this effect.

Future Hedging Activities

The  Company  has  not  entered  into  forward  contracts  or  other  derivative
instruments  to sell gold that it might  produce  in the  future.  Although  the
Company has no near term plans to enter such  transactions,  it may do so in the
future if required for project financing.  Forward contracts obligate the holder
to sell  hedged  production  at a price  set when  the  holder  enters  into the
contract,  regardless  of what the price is when the product is actually  mined.
Accordingly, there is a risk that the price of the product is higher at the time
it is mined  than  when the  Company  entered  into the  contracts,  so that the
product  must be sold at a price  lower  than could  have been  received  if the
contract  was not  entered.  There is also the risk  that the  Company  may have
insufficient  gold  production  to deliver into  forward  sales  positions.  The
Company may enter into option contracts for gold to mitigate the effects of such
hedging.

                                       21
<PAGE>

No Payment of Cash Dividends in the Near Future

Given that the Company is currently in the  development  stage for its principle
property,  the Las Cristinas project,  the Company intends to retain its earning
to finance the growth and  development of the business rather than pay dividends
to shareholders. The Company does not intend to declare or pay cash dividends in
the near future,  nor has it done so since its inception.  In the event that the
Company decides to declare and pay cash dividends in the future, such a decision
will made  entirely in the  discretion  of the board of  directors  and shall be
dependent on factors such as the existing earnings, capital requirements, future
business  opportunities,  financing  agreements  and market  conditions  for the
Company's shares and the underlying commodities markets.

REPORT ON DISCLOSURE CONTROLS AND PROCEDURES

Internal Control over Financial Reporting.


As of December 31, 2006,  Management  evaluated the Company's  internal controls
over financial  reporting  ("ICFR"),  as defined under  Multilateral  Instrument
52-109 -  Certification  of Disclosure in Issuer's Annual and Interim Filings of
the  Canadian  Securities  Administrators.  For  the  purposes  of  Management's
evaluation,  a  weakness  in the  Company's  ICFR  would be  considered  to be a
"material  weakness"  if  the  weakness  was  a  significant  deficiency,  or  a
combination of significant deficiencies,  that resulted in there being more than
a remote  likelihood  that a  material  misstatement  of the  annual or  interim
financial  statements  would not be  prevented  or detected on a timely basis by
Management  or  employees  in the normal  course of  performing  their  assigned
functions.


In  making  its  assessment  of the  Company's  ICFR as of  December  31,  2006,
Management   used  the  criteria  set  forth  by  the  Committee  of  Sponsoring
Organizations of the Treadway  Commission (COSO) in Internal  Control-Integrated
Framework.  Management  identified the material weaknesses in the Company's ICFR
described below. The material weaknesses identified by Management did not result
(either individually or collectively) in any adjustments to the Company's annual
or interim  consolidated  financial  statements  for the 2006 fiscal year or any
prior period.

1. Override and Monitoring of Established Controls. During the process of review
and evaluation, it was determined that certain weaknesses existed which resulted
in local  management  of the Company's  Venezuelan  branch having the ability to
override  established  internal  controls  relating  to the  granting of service
contracts and approval of completion of contractual  service work. This weakness
has  the  potential  to  result  in  material  misstatements  in  the  Company's
consolidated financial statements.

To address this weakness,  Management has implemented additional controls around
the granting of service  contracts  and the required  approvals of completion of
contractual   service   work   performed   to  ensure   the   completeness   and
appropriateness of all amounts recorded in the Company's  consolidated financial
statements.

2. Tax  Obligations.  During the  process of review and  evaluation,  Management
concluded that, as of December 31, 2006, a weakness  existed in ICFR caused by a
lack of competent  staff in place at its Venezuelan  subsidiaries  to ensure the
Company  appropriately  recorded  and  disclosed  taxation  related  matters  in
preparing its consolidated financial statements with respect to various types of
tax  obligations  in  Venezuela.  This  weakness has the  potential to result in
material misstatements of the Company's recorded tax liabilities.

Management has since taken steps to remediate this problem. In January 2007, the
Company  hired a qualified  tax  manager in  Venezuela  to ensure the  Company's
Venezuelan  tax  obligations  are  appropriately  recorded and  disclosed in the
Company's consolidated financial statements.

3. Complex  Accounting  Issues - US GAAP.  Management has concluded  that, as of
December 31, 2006,  the Company did not have adequate  levels of expertise  with
respect to US GAAP complex accounting issues. This weakness has the potential to
result in material misstatements in the Company's US GAAP reconciliation note in
its financial statements.

                                       22
<PAGE>

Management has concluded and the Board of Directors has agreed that, taking into
account the present stage of the Company's  development,  the present competency
of the finance  personnel  charged with the preparation of the annual  financial
statements,  the  findings  of the  results  from the annual  audit and the best
interests of its shareholders, the Company is not currently of a sufficient size
and scale to  warrant  the  hiring  of  additional  professional  staff to fully
respond to this weakness. Management intends to minimize the potential impact of
this weakness on a going forward basis by engaging  external  advisors to review
all US GAAP accounting matters relating to the Company's  consolidated financial
statements.

4. Segregation of Duties. During the process of review and evaluation
Management concluded that, as of December 31, 2006, a weakness existed in ICFR
caused by a lack of adequate segregation of duties in the preparation, review
and approval of subsidiary operating results which are included in the
Company's consolidated financial statements. This weakness has the potential to
result in material misstatements in the Company's consolidated financial
statements.

To address this weakness, Management is in the process of hiring additional
staff at appropriate levels within the Company to ensure that an adequate
segregation of duties can be achieved in the preparation of the Company's
consolidated financial statements. Management has also performed additional
procedures relating to subsidiary operating results that are included in the
Company's consolidated financial statements.

NON GAAP MEASURES

Total cash cost per ounce data are presented to provide additional information
and are not prepared in accordance with Canadian or U.S. GAAP. Total cash costs
per ounce are derived from amounts included in the Operations Expenses line on
the Company's 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 are calculated by the aggregate of these costs by gold ounces
sold. Total cash cost statistics should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with GAAP. The
measures are not necessarily indicative of operating profit or costs of
operations as determined under Canadian or U.S. GAAP. The total cash cost per
ounce calculation is derived from amounts included in the Operating Expense
line on the Statement of Operations. As this line item is unchanged under U.S.
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 may be reconciled to our Statement of Operations as
follows:

-----------------------------------------------------------------------------
$,000's                                                 2006            2005
-----------------------------------------------------------------------------
Operating Costs per Financial Statements             $27,099         $22,755
Adjust for Albino Development Expenditures               ---            $592
Exploration Expenditures                              ($621)             ---
Asset Retirement Obligations Adjustment                 $310             ---
Operating Costs for Per Ounce Calculation            $26,788         $22,163

Gold Ounces Sold                                      48,570          55,217
Total Cash Cost Per Ounce US$                           $552            $401
-----------------------------------------------------------------------------


Additional information relating to Crystallex, including the 2006 Form
40-F/Annual Information Form, is available on SEDAR at www.sedar.com.

                                       23
<PAGE>

A.       Disclosure Controls and Procedures

         As of December 31, 2006, the end of the period covered by this report,
Crystallex International Company (the "Company" or the "Registrant")
carried out an evaluation, under the supervision and with the participation of
the Company's management, including the Company's Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of
the Company's disclosure controls and procedures, as defined in Rules 13a-15(e)
and 15d-15(e) of the United States Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Based on that evaluation, the Chief Executive Officer and
Chief Financial Officer have concluded that, because of the material weaknesses
discussed below under "Management's Report on Internal Control Over Financial
Reporting", as of December 31, 2006, the Company's disclosure controls and
procedures were not effective.

B.       Management's Annual Report on Internal Control Over Financial Reporting

         Management of the company is responsible for establishing and
maintaining adequate internal control over financial reporting. Because of its
inherent limitations, internal control over financial reporting may not prevent
or detect misstatements. Projections of any evaluation of effectiveness to
future periods are subject to the risks that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

         A material weakness is a significant deficiency (as defined in PCAOB
Auditing Standard No. 2), or a combination of significant deficiencies, that
results in there being more than a remote likelihood that a material
misstatement of the annual or interim financial statements will not be
prevented or detected on a timely basis by management or employees in the
normal course of performing their assigned functions.

         Management assessed the effectiveness of the Company's internal
control over financial reporting as of December 31, 2006. Management's
assessment identified the following material weaknesses in the Company's
internal control over financial reporting. The material weaknesses identified
by management did not result (either individually or collectively) in any
adjustments to the Company's annual or interim consolidated financial
statements for the 2006 fiscal year or any prior period.

         1. Override and Monitoring of Established Controls. During the process
of review and evaluation, it was determined that certain weaknesses existed
which resulted in local management of the Company's Venezuelan branch having
the ability to override established internal controls relating to the granting
of service contracts and approval of completion of contractual service work.
This weakness has the potential to result in material misstatements in the
Company's consolidated financial statements.

         To address this weakness, management has implemented additional
controls around the granting of service contracts and the required approvals of
completion of contractual service work performed to ensure the completeness and
appropriateness of all amounts recorded in the Company's consolidated financial
statements.

         2. Tax Obligations. During the process of review and evaluation,
management concluded that, as of December 31, 2006, a weakness existed in the
Company's internal controls over financial reporting caused by a lack of
competent staff in place at its Venezuelan subsidiaries to ensure the Company
appropriately recorded and disclosed taxation related matters in preparing its
consolidated financial statements with respect to various types of tax
obligations in Venezuela. This weakness has the potential to result in material
misstatements of the Company's recorded tax liabilities.

<PAGE>

         Management has since taken steps to remediate this problem. In January
2007, the Company hired a qualified tax manager in Venezuela to ensure the
Company's Venezuelan tax obligations are appropriately recorded and disclosed
in the Company's consolidated financial statements.

         3. Complex Accounting Issues - US GAAP. Management has concluded that,
as of December 31, 2006, the Company did not have adequate levels of expertise
with respect to US GAAP complex accounting issues. This weakness has the
potential to result in material misstatements in the Company's US GAAP
reconciliation note in its financial statements.

         Management has concluded and the Board of Directors has agreed that,
taking into account the present stage of the Company's development, the present
competency of the finance personnel charged with the preparation of the annual
financial statements, the findings of the results from the annual audit, and
the best interests of its shareholders, the Company is not currently of a
sufficient size and scale to warrant the hiring of additional professional
staff to fully respond to this weakness. Management intends to minimize the
potential impact of this weakness on a going forward basis by engaging external
advisors to review all US GAAP accounting matters relating to the Company's
consolidated financial statements.

         4. Segregation of Duties. During the process of review and evaluation
management concluded that, as of December 31, 2006, a weakness existed in the
Company's internal controls over financial reporting caused by a lack of
adequate segregation of duties in the preparation, review and approval of
subsidiary operating results which are included in the Company's consolidated
financial statements. This weakness has the potential to result in material
misstatements in the Company's consolidated financial statements.

         To address this weakness, Management is in the process of hiring
additional staff at appropriate levels within the Company to ensure that an
adequate segregation of duties can be achieved in the preparation of the
Company's consolidated financial statements. Management has also performed
additional procedures relating to subsidiary operating results that are
included in the Company's consolidated financial statements.

         In making the above assessment, management used the criteria set forth
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)
in Internal Control-Integrated Framework. Because of the material weaknesses
described above, management believes that, as of December 31, 2006, the
company's internal control over financial reporting was not effective.

C.       Attestation Report of the Registered Public Accounting Firm

         This Annual Report on Form 40-F does not include an attestation report
of the Registrant's registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject to
attestation by the Registrant's registered public accounting firm pursuant to
temporary rules of the Commission that permit the Registrant to provide only
management's report in this Annual Report on Form 40-F.

D.       Changes in Internal Control Over Financial Reporting

     During the period covered by this report, there have been no changes in
the Registrant's internal control over financial reporting that have materially
affected or are reasonably likely to materially affect, the Registrant's
internal control over financial

<PAGE>

reporting. All changes in the Registrant's internal control over financial
reporting described in Item A, above, were changes that occurred subsequent to
December 31, 2006.

E.       Notice of Pension Fund Blackout Period

         The Registrant was not required by Rule 104 of Regulation BTR to send
any notice to any of its directors or executive officers during the fiscal year
ended December 31, 2006.

F.       Audit Committee Financial Expert

         The Registrant's board of directors has determined that Johan C. van't
Hof, an individual serving on the audit committee of the Registrant's board of
directors, is an audit committee financial expert, within the meaning of
General Instruction B(8)(a) of Form 40-F. Mr. van't Hof is independent, as that
term is defined in the rules of the American Stock Exchange.

         The Commission has indicated that the designation of a person as an
audit committee financial expert does not make such person an "expert" for any
purpose, impose any duties, obligations or liability on such person that are
greater than those imposed on members of the audit committee and the board of
directors who do not carry this designation or affect the duties, obligations
or liability of any other member of the audit committee or board of directors.

G.       Code of Ethics

         The Registrant's board of directors has adopted a code of ethics (the
"Code") that applies to all directors and officers. A copy of the Code may be
obtained at www.crystallex.com. The Registrant will provide a copy of the Code
without charge to any person that requests a copy by contacting Investor
Relations, Crystallex International Company, at the address that appears on
the cover of this Annual Report on Form 40-F.

H.       Principal Accountant Fees and Services

         Audit Fees

         The aggregate fees billed by Deloitte & Touche LLP for the fiscal years
ended December 31, 2006 and December 31, 2005, respectively, for professional
services rendered by Deloitte & Touche LLP for the audit of the Registrant's
annual financial statements or services that are normally provided by Deloitte &
Touche LLP in connection with statutory and regulatory filings or engagements
for such fiscal years were $640,363 and $859,324, respectively.

         Audit-Related Fees

         The aggregate fees billed by Deloitte & Touche LLP for the fiscal years
ended December 31, 2006 and December 31, 2005, respectively, for assurance and
related services rendered by it that are reasonably related to the performance
of the audit or review of the Registrant's financial statements and are not
reported above as audit fees were $nil and $nil, respectively.

<PAGE>

         Tax Fees

         The aggregate fees billed by Deloitte & Touche LLP for the fiscal years
ended December 31, 2006 and December 31, 2005, respectively, for professional
services rendered by it for tax compliance, tax advice and tax planning were
$29,870 and $349,208, respectively.

         All Other Fees

         The aggregate fees billed by Deloitte & Touche LLP for the fiscal years
ended December 31, 2006 and December 31, 2005, respectively, for products and
services provided by Deloitte & Touche LLP, other than the services reported in
the preceding three paragraphs, were $226,315 and $288,697, respectively.
Products and services provided under this category included fees for regulatory
filing requirements and the review of prospectuses.

         Audit Committee Pre-Approval Policies and Procedures

         The Registrant's policy regarding pre-approval of all audit,
audit-related and non-audit services is based upon compliance with the
Sarbanes-Oxley Act of 2002, and subsequent implementing rules promulgated by
the SEC. The audit committee of the Registrant has developed a policy on the
provision of services by external auditors (the "Policy"). Under the terms of
the Policy:

     |X| the external auditors may not provide services to the Registrant 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 the Registrant, are remunerated through a "success fee"
         structure, act in an advocacy role for the Registrant, or may be
         required to audit their own work);

     |X| the audit committee has pre-approved certain audit and permitted
         non-audit services as services that the auditors may provide to the
         Registrant, including: services that constitute the agreed scope of
         the external audit or interim reviews of the Registrant; services that
         are outside the agreed scope of, but are consistent with, the external
         audit or interim reviews of Registrant; 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 audit; and

     |X| an authorization process has been established which provides, among
         other things, that (i) the audit committee must authorize in advance
         all engagements of the external auditors to provide pre-approved
         services to the Registrant (provided however that the chair of the
         audit committee and the Chief Financial Officer of the Registrant may
         together authorize in advance all engagements of the external auditors
         to provide pre-approved services to the Registrant 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
         (ii) 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 the Policy where the exceptions are in the
interests of the Registrant and appropriate arrangements are established to
ensure the independence and objectivity of the external


<PAGE>

auditors in relation to the external audit. Any exception must be authorized by
the audit committee and must be reported to the Registrant's board of
directors.

         Since the enactment of the Sarbanes-Oxley Act of 2002 on July 30,
2002, all services described above under the captions Audit-Related Fees, Tax
Fees and All Other Fees were pre-approved by the audit committee of the
Registrant.

I.       Off-Balance Sheet Arrangements

         The Registrant is not a party to any off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on its
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources
that is material to investors.

J.       Tabular Disclosure of Contractual Obligations

         See "Management's Discussion and Analysis for the Year Ended December
31, 2006 - Contractual Obligations and Commitments", included in Document No. 3
to this Annual Report.

K.       Identification of Audit Committee

         The Registrant has an audit committee comprised of three individuals:
Johan C. van't Hof (chair), C. William Longden and Harry J. Near. Each of the
members of the audit committee is independent as that term is defined by
applicable securities laws and applicable American Stock Exchange rules.

L.       Critical Accounting Policies

         See "Management's Discussion and Analysis for the Year Ended December
31, 2006 - Critical Accounting Policies and Estimates", included in Document
No. 3 to this Annual Report.


<PAGE>



                 UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

A.       Undertaking

         The Registrant undertakes to make available, in person or by
telephone, representatives to respond to inquiries made by the Commission
staff, and to furnish promptly, when requested to do so by the Commission
staff, information relating to the securities in relation to which the
obligation to file an annual report on Form 40-F arises, or transactions in
said securities.

B.       Consent to Service of Process

         The Registrant has previously filed with the Commission a Form F-X in
connection with its Common Shares.


<PAGE>


                                   SIGNATURE

         Pursuant to the requirements of the Exchange Act, the Registrant
certifies that it meets all of the requirements for filing on Form 40-F and has
duly caused this annual report to be signed on its behalf by the undersigned,
thereto duly authorized.

                                           CRYSTALLEX INTERNATIONAL CORPORATION


Date: March 30, 2007                       By:     /S/ DANIEL E. HAMILTON
                                                   ----------------------
                                           Name:   Daniel E. Hamilton
                                           Title:  Chief Financial Officer


<PAGE>


                                 EXHIBIT INDEX


Exhibit
No.               Document
---               --------

 23.1            Consent of Deloitte & Touche LLP
 23.2            Consent of SNC-Lavalin Engineers & Constructors Inc.
 23.3            Consent of Mine Development Associates Ltd.
 23.4            Consent of SGS Lakefield Research Ltd.
 23.5*           Consent of ProConsult, C.A.
 23.6*           Consent of Buckland Harapiak
 23.7            Consent of J.R. Goode and Associates
 31              Certification of the CEO and CFO pursuant to Section 302 of
                 the Sarbanes-Oxley Act of 2002
 32              Certification of the CEO and CFO pursuant to Section 906 of
                 the Sarbanes-Oxley Act of 2002

*  To be filed by amendment