**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC  20549**








**Amendment
      No. 2 to**





**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
                Jurisdiction*
            *(Primary
                Standard Industrial*
            *(I.R.S.
                Employer**of
                Incorporation or Organization)*
            *Classification
                Code Number)*
            *Identification
                No..)*


****


** **


**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:





Title
                of each class
            Name
                of each exchange 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:





[****]  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










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  _____














**Explanatory
        Note**
 
  This
        Form 40-F/A is being filed to
        amend the Annual Report on Form 40-F for the fiscal year ended December 31,
        2006, originally filed with the Commission on March 30, 2007. Crystallex
        International Corporation (the "Company" or the "Registrant") is filing this
        Amendment because it has restated the U.S. GAAP reconciliation note included
        in
        its consolidated financial statements for the years ended December 31, 2006
        and
        2005 for the reasons discussed herein.
  Please
        refer to Note 19 of the notes to
        the restated consolidated financial statements included herein, which discloses
        the adjustments to the Registrant's U.S. GAAP reconciliation note for the
        years
        ended December 31, 2006 and 2005 resulting from this restatement.
  The
        Registrant has also revised "Item
        A. Disclosure Controls and Procedures", "Item B. Changes in Internal Control
        Over Financial Reporting" and "Item D. Changes in Internal Control Over
        Financial Reporting", as set forth below.




**DOCUMENTS
      FILED UNDER COVER OF THIS FORM**





Document
                No. 1:
            Restated
                Audited Consolidated Financial Statements for the year ended December
                31,
                2006 and 2005, prepared in accordance with Canadian generally accepted
                accounting principles, together with a reconciliation to United States
                generally accepted accounting
                principles.













**Document
      No. 1**











**Crystallex
        International
        Corporation**
 
 
 
 **Consolidated
        Financial Statements**
 
 **As
        Restated**
 
 **December
        31, 2006 and 2005**
 
 **(Expressed
        in United States Dollars)**
 
  
  
  
 **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.
 
 We
        have
        withdrawn our audit report dated March 27, 2007, except as to Note 17, which
        is
        as at March 29, 2007, as Note 19 to the consolidated financial statements
        has
        been restated.  Note 19 contains the reconciliation of the
        consolidated financial statements from Canadian generally accepted accounting
        principles to accounting principles generally accepted in the United States
        and
        contains additional information on the restatement.
 
 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, and October
        22,
        2007 as to the effects of the restatement described in Note 19
 
 
 
  Crystallex
        International
        Corporation
 **Table
        of Contents**
 **December
          31, 2006, 2005 and
          2004**
 
 
 PageConsolidated
                    Balance Sheets
                1Consolidated
                    Statements of Operations
                2Consolidated
                    Statements of Cash Flows
                3Consolidated
                    Statements of Shareholders’ Equity
                4Notes
                    to the Consolidated Financial Statements
                5
                    - 43
 
    
  **Crystallex
          International
          Corporation**
 **Consolidated
                      Balance
                      Sheets****As
                      at December 31, 2006 and
                      2005****(Expressed
                      in United States
                      dollars)****2006**
                  
                  2005**ASSETS**CURRENTCash
                      and cash
                      equivalents
                  
                  **$**
                  **28,573,142**
                  
                  
                  $
                  4,070,019Restricted
                      cash and
                      cash equivalents (Note 3)
                  
                  ****
                  **-**
                  
                  
                  
                  9,241,851Accounts
                      receivable
                  
                  ****
                  **490,090**
                  
                  
                  
                  1,395,394Production
                      inventories (Note 4)
                  
                  ****
                  **4,867,577**
                  
                  
                  
                  2,566,821Prepaid
                      expenses and
                      other
                  
                  ****
                  **4,760,999**
                  
                  
                  
                  2,787,495****
                  **38,691,808**
                  
                  
                  
                  20,061,580RESTRICTED
                      CASH AND CASH
                      EQUIVALENTS (Note 3)
                  
                  ****
                  **-**
                  
                  
                  
                  12,081,312PROPERTY,
                      PLANT AND EQUIPMENT
                      (Note 5)
                  
                  ****
                  **256,455,027**
                  
                  
                  
                  215,260,043DEFERRED
                      FINANCING FEES (Note
                      6)
                  
                  ****
                  **2,595,627**
                  
                  
                  
                  3,237,263TOTAL
                      ASSETS
                  
                  **$**
                  **297,742,462**
                  
                  
                  $
                  250,640,198**LIABILITIES**CURRENTAccounts
                      payable and
                      accrued liabilities
                  
                  **$**
                  **12,791,456**
                  
                  
                  $
                  20,145,034Current
                      portion of
                      debt (Note 7)
                  
                  ****
                  **3,172,559**
                  
                  
                  
                  2,442,350Current
                      portion of
                      asset retirement obligations (Note 8)
                  
                  ****
                  **239,408**
                  
                  
                  
                  126,092****
                  **16,203,423**
                  
                  
                  
                  22,713,476DEBT
                      (Note
                      7)
                  
                  ****
                  **84,524,929**
                  
                  
                  
                  94,495,582ASSET
                      RETIREMENT OBLIGATIONS (Note
                      8)
                  
                  ****
                  **971,167**
                  
                  
                  
                  1,394,646****
                  **101,699,519**
                  
                  
                  
                  118,603,704COMMITMENTS
                      AND CONTINGENCIES
                      (Notes 1 & 16)**SHAREHOLDERS'
                      EQUITY**SHARE
                      CAPITAL (Note
                      9)
                  
                  ****
                  **448,100,697**
                  
                  
                  
                  336,491,624CONTRIBUTED
                      SURPLUS
                  
                  ****
                  **23,135,187**
                  
                  
                  
                  32,489,216EQUITY
                      COMPONENT OF EXCHANGEABLE
                      BANK LOAN (Note 7)
                  
                  ****
                  **-**
                  
                  
                  
                  2,564,366CUMULATIVE
                      TRANSLATION
                      ADJUSTMENT
                  
                  ****
                  **11,958,981**
                  
                  
                  
                  11,958,981DEFICIT
                  
                  ****
                  **(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
  **Crystallex
          International
          Corporation**
 **Consolidated
                    Statements of
                    Operations****Years
                    ended December 31, 2006,
                    2005, 2004****(Expressed
                    in United States
                    dollars)****2006**
                
                2005
                
                2004MINING
                    REVENUE
                
                **$**
                **28,087,764**
                
                
                $
                24,989,681
                
                
                $
                20,245,690OPERATING
                    EXPENSESOperations
                
                ****
                **27,099,113**
                
                
                
                22,754,642
                
                
                
                18,037,768Amortization
                
                ****
                **949,996**
                
                
                
                2,366,312
                
                
                
                1,161,042Depletion
                
                ****
                **833,427**
                
                
                
                330,472
                
                
                
                4,869,005****
                **28,882,536**
                
                
                
                25,451,426
                
                
                
                24,067,815OPERATING
                    LOSS
                
                ****
                **(794,772**
                **)**
                
                
                (461,745
                )
                
                
                (3,822,125
                )OTHER
                    EXPENSESGeneral
                    and
                    administrative
                
                ****
                **20,397,226**
                
                
                
                19,460,501
                
                
                
                18,223,193Interest
                    on
                    debt
                
                ****
                **12,945,985**
                
                
                
                11,809,087
                
                
                
                548,131Stock
                    based
                    compensation (Note 9)
                
                ****
                **2,463,691**
                
                
                
                3,665,894
                
                
                
                5,296,977Amortization
                
                ****
                **701,875**
                
                
                
                1,048,296
                
                
                
                158,969****
                **36,508,777**
                
                
                
                35,983,778
                
                
                
                24,227,270COMMODITY
                    CONTRACT
                    LOSS
                
                ****
                **-**
                
                
                
                (3,770,835
                )
                
                
                (963,717
                )LOSS
                    BEFORE OTHER
                    ITEMS
                
                ****
                **(37,303,549**
                **)**
                
                
                (40,216,358
                )
                
                
                (29,013,112
                )OTHER
                    ITEMSInterest
                    and other
                    income
                
                ****
                **1,159,586**
                
                
                
                1,926,425
                
                
                
                697,638Foreign
                    exchange
                    (loss) gain
                
                ****
                **459,734**
                
                
                
                (1,192,593
                )
                
                
                397,313Write-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
                    OPERATIONSBEFORE
                    NON-CONTROLLING INTEREST
                
                ****
                **(35,684,229**
                **)**
                
                
                (45,206,916
                )
                
                
                (60,415,116
                )NON-CONTROLLING
                    INTEREST
                
                ****
                **-**
                
                
                
                -
                
                
                
                111,053LOSS
                    FROM CONTINUING
                    OPERATIONS
                
                ****
                **(35,684,229**
                **)**
                
                
                (45,206,916
                )
                
                
                (60,304,063
                )LOSS
                    FROM
                    DISCONTINUEDOPERATIONS
                    (Note
                    15)
                
                ****
                **-**
                
                
                
                -
                
                
                
                (350,000
                )NET
                    LOSS FOR THE
                    YEAR
                
                **$**
                **(35,684,229**
                **)**
                
                $
                (45,206,916
                )
                
                $
                (60,654,063
                )NET
                    LOSS PER SHARE - basic and
                    dilutedContinuing
                    operations
                
                **$**
                **(0.15**
                **)**
                
                $
                (0.23
                )
                
                $
                (0.35
                )Discontinued
                    operations
                
                ****
                **-**
                
                
                
                -
                
                
                
                -**$**
                **(0.15**
                **)**
                
                $
                (0.23
                )
                
                $
                (0.35
                )WEIGHTED
                    AVERAGE
                    NUMBEROF
                    SHARES OUTSTANDING
                    - basic and diluted
                
                ****
                **230,229,162**
                
                
                
                194,729,931
                
                
                
                172,234,551The
                    accompanying notes are an
                    integral part of the consolidated financial
                    statements.
   Page
            2 of
            43
  **Crystallex
          International
          Corporation**
  **Consolidated
                      Statements of Cash
                      Flows****Years
                      ended December 31,2006, 2005
                      and 2004****(Expressed
                      in United States
                      dollars)****2006**
                  
                  2005
                  
                  2004**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 cashused in operating activities:Amortization and depletion
                  
                  ****
                  **2,485,298**
                  
                  
                  
                  4,495,523
                  
                  
                  
                  6,189,016Interest accretion on debt
                  
                  ****
                  **2,960,413**
                  
                  
                  
                  2,672,895
                  
                  
                  
                  79,249Stock based compensation
                  
                  ****
                  **2,463,691**
                  
                  
                  
                  3,665,894
                  
                  
                  
                  5,296,977Warrants 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
                  
                  
                  
                  100,000Investment in subsidiaries
                  
                  ****
                  **-**
                  
                  
                  
                  6,600,000
                  
                  
                  
                  493,702Gain on settlement of debt
                  
                  ****
                  **-**
                  
                  
                  
                  (875,610
                  )
                  
                  
                  -Write-down of mineral properties
                  
                  ****
                  **-**
                  
                  
                  
                  -
                  
                  
                  
                  32,003,253Extension of warrants
                  
                  ****
                  **-**
                  
                  
                  
                  -
                  
                  
                  
                  225,178Non 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
                  )
                  
                  
                  330,994Increase 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 andaccrued 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
                  
                  
                  
                  115,113,111Debt
                      borrowings
                  
                  ****
                  **-**
                  
                  
                  
                  7,673,793
                  
                  
                  
                  78,550,000Debt
                      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
                  
                  
                  $
                  5,766,742Supplemental
                      disclosure with
                      respect to cash flows (Note 13)The
                      accompanying notes are an
                      integral part of the consolidated financial
                      statements.
   Page
            3 of
            43
  **Crystallex
          International
          Corporation**
  **Consolidated
                      Statements of
                      Shareholders' Equity****Years
                      ended December 31, 2006,
                      2005 and 2004****(Expressed
                      in United States
                      dollars)**
 Numberof
                    
                    
                    
                    
                    
                    Numberof
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    Equitycomponent
                    
                    
                    CumulativeCommon
                    
                    
                    
                    
                    
                    Special
                    
                    
                    
                    
                    
                    Numberof
                    
                    
                    Contributed
                    
                    
                    Notes/Exchangeable
                    
                    
                    TranslationShares
                    
                    
                    Amount
                    
                    
                    Warrants
                    
                    
                    Amount
                    
                    
                    Warrants
                    
                    
                    Surplus
                    
                    
                    Debt
                    
                    
                    Adjustment
                    
                    
                    Deficit
                    
                    
                    TotalBalanceatDecember31,2003
                    
                    
                    135,403,523
                    
                    
                    $
                    171,994,591
                    
                    
                    
                    12,800,000
                    
                    
                    $
                    11,886,581
                    
                    
                    
                    20,042,772
                    
                    
                    $
                    25,808,171
                    
                    
                    
                    -
                    
                    
                    
                    11,958,981
                    
                    
                    $
                    (142,650,559
                    )
                    
                    $
                    78,997,765Adjustmentforchangeinpolicyrestock-basedcompensation
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    2,956,155
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (2,956,155
                    )
                    
                    $
                    -Sharesissued:Publicequityoffering
                    
                    
                    28,750,000
                    
                    
                    
                    81,935,995
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    81,935,995Unitoffering
                    
                    
                    6,500,000
                    
                    
                    
                    20,484,750
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    20,484,750Exerciseofoptions
                    
                    
                    1,251,000
                    
                    
                    
                    1,581,512
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (172,624
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    1,408,888Conversionofwarrants
                    
                    
                    4,908,046
                    
                    
                    
                    13,573,007
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (4,908,046
                    )
                    
                    
                    (2,289,529
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    11,283,478Directors'fees
                    
                    
                    40,976
                    
                    
                    
                    100,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    100,000Findersfee
                    
                    
                    19,232
                    
                    
                    
                    50,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    50,000Conversionofspecialwarrants
                    
                    
                    12,800,000
                    
                    
                    
                    11,886,581
                    
                    
                    
                    (12,800,000
                    )
                    
                    
                    (11,886,581
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    -Shareexchange-ElCallao
                    
                    
                    163,958
                    
                    
                    
                    468,062
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    468,062Proceedsfromorderlydispositionofshares
                    
                    
                    -
                    
                    
                    
                    3,957,285
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    3,957,285Optionsissued
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    5,296,977
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    5,296,977Warrantsexpiredduringtheyear
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (2,126,491
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    -Extensionofwarrants
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    225,178
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    225,178Netlossfortheyear
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (60,654,063
                    )
                    
                    $
                    (60,654,063
                    )BalanceatDecember31,2004
                    
                    
                    189,836,735
                    
                    
                    
                    306,031,783
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    13,008,235
                    
                    
                    
                    31,824,328
                    
                    
                    
                    -
                    
                    
                    
                    11,958,981
                    
                    
                    
                    (206,260,777
                    )
                    
                    
                    143,554,315Sharesissued:Unitoffering
                    
                    
                    200,000
                    
                    
                    
                    466,549
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    450,000
                    
                    
                    
                    272,926
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    739,475Exerciseofoptions
                    
                    
                    775,000
                    
                    
                    
                    1,196,957
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (143,934
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    1,053,023Issuanceofsharesunderequitydrawndownfacility
                    
                    
                    12,273,236
                    
                    
                    
                    17,394,493
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    17,394,493Acquisitionofnon-controllinginterest
                    
                    
                    1,467,136
                    
                    
                    
                    3,000,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    3,000,000Conversionofwarrants
                    
                    
                    3,418,500
                    
                    
                    
                    8,210,355
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (3,418,500
                    )
                    
                    
                    (3,129,998
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    5,080,357Directors'fees
                    
                    
                    65,186
                    
                    
                    
                    190,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    190,000Shareexchange-ElCallao
                    
                    
                    523
                    
                    
                    
                    1,487
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    1,487Exchangeabledebt
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    2,564,366
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    2,564,366Optionsissuedtoemployees
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    3,665,894
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    3,665,894Warrantsexpiredduringtheyear
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (1,042,008
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    -Netlossfortheyear
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (45,206,916
                    )
                    
                    $
                    (45,206,916
                    )BalanceatDecember31,2005
                    
                    
                    208,036,316
                    
                    
                    
                    336,491,624
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    8,997,727
                    
                    
                    
                    32,489,216
                    
                    
                    
                    2,564,366
                    
                    
                    
                    11,958,981
                    
                    
                    
                    (251,467,693
                    )
                    
                    
                    132,036,494Sharesissued:Unitofferings
                    
                    
                    20,924,000
                    
                    
                    
                    51,208,985
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    17,312,500
                    
                    
                    
                    5,972,069
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    57,181,054Exerciseofoptions
                    
                    
                    1,641,800
                    
                    
                    
                    5,490,735
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (1,838,981
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    3,651,754Issuanceofsharesunderequitydrawndownfacility
                    
                    
                    1,661,130
                    
                    
                    
                    4,317,661
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    4,317,661Settlementofpromissorynote
                    
                    
                    611,300
                    
                    
                    
                    1,800,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    1,800,000Settlementofbankloan
                    
                    
                    3,765,841
                    
                    
                    
                    7,641,266
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    (2,564,366
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    5,076,900Conversionofwarrants
                    
                    
                    8,764,682
                    
                    
                    
                    41,089,701
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (8,764,682
                    )
                    
                    
                    (17,316,647
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    23,773,054Directors'fees
                    
                    
                    19,170
                    
                    
                    
                    60,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    60,000Shareexchange-ElCallao
                    
                    
                    255
                    
                    
                    
                    725
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    725Optionsissuedtoemployees
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    2,463,691
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    2,463,691Warrantsissuedforprofessionalfees
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    500,000
                    
                    
                    
                    1,365,839
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    1,365,839Warrantsissuedinexchangeforearlyexerciseofwarrants
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    875,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    -Warrantsexpiredduringtheyear
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (233,045
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    -Netlossfortheyear
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (35,684,229
                    )
                    
                    $
                    (35,684,229
                    )BalanceatDecember31,2006
                    
                    
                    245,424,494
                    
                    
                    $
                    448,100,697
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    18,687,500
                    
                    
                    $
                    23,135,187
                    
                    
                    $
                    -
                    
                    
                    $
                    11,958,981
                    
                    
                    $
                    (287,151,922
                    )
                    
                    $
                    196,042,943
  
  Page
            4 of
            43
  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
 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
  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
                yearsField
                    vehicles
                5
                yearsFurniture
                    and equipment
                5
                yearsMill
                    and plant
                20
                yearsMining
                    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
  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
        doré, gold in process and stockpiled ore are stated at the lower of average
        production cost which includes all direct and indirect costs, including
        amortization of equipment and facilities, and net realizable value.
 
 Consumables
        and spare parts inventory are valued at the lower of average and replacement
        cost.
 
 *Income
        taxes*
 
 The
        Company uses the liability method of accounting for income taxes whereby
        future
        income taxes are recognized for the tax consequences of temporary differences
        by
        applying statutory tax rates applicable to future years to differences between
        the financial statement carrying amounts and the tax 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
  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
  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**
                
                2005Gold
                    in
                    doré
                
                **$**
                **524,360**
                
                
                $
                406,435Gold
                    in
                    process
                
                ****
                **563,746**
                
                
                
                732,074Stockpiled
                    ore
                
                ****
                **958,271**
                
                
                
                28,484Consumables
                    and spare
                    parts
                
                ****
                **2,821,200**
                
                
                
                1,399,828**$**
                **4,867,577**
                
                
                $
                2,566,821
   Page
                10 of
                43
  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:
  **2006****Accumulated****Cost,
                    Net**
                **Amortization****of**
                **and**
                
                **Net
                    Book****Write-downs**
                
                **Depletion**
                
                **Value**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
                    anddevelopment
                    expenditures
                **3,658,007**
                
                
                ****
                **3,658,007**
                
                
                ****
                **-****$**
                **277,022,733**
                
                
                **$**
                **20,567,706**
                
                
                **$**
                **256,455,027**2005AccumulatedCost,
                    Net
                
                Amortizationof
                
                and
                
                Net
                    BookWrite-downs
                
                
                Depletion
                
                ValuePlant
                    and
                    equipment
                
                $
                99,939,283
                
                
                $
                7,783,659
                
                
                $
                92,155,624Mineral
                    properties
                
                
                130,177,569
                
                
                
                7,877,218
                
                
                
                122,300,351Deferred
                    exploration
                    anddevelopment
                    expenditures
                3,658,007
                
                
                
                2,853,939
                
                
                
                804,068$
                233,774,859
                
                
                $
                18,514,816
                
                
                $
                215,260,043
 
 Page
            11 of
            43
 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:
 **2006****Plant
                    and Equipment**
                
                
                **Mineral properties**
                
                
                **Deferred
                    exploration and
                    development expenditures**
                
                
                **Total****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**2005Plant
                    and Equipment
                
                
                Mineral properties
                
                
                Deferred
                    exploration and
                    development expenditures
                
                
                TotalLas
                    Cristinas
                
                $
                90,930,549
                
                
                $
                122,270,993
                
                
                $
                -
                
                
                $
                213,201,542Tomi
                    Concession
                
                
                -
                
                
                
                29,358
                
                
                
                804,068
                
                
                
                833,426Revemin
                    mill
                
                
                957,455
                
                
                
                -
                
                
                
                -
                
                
                
                957,455Corporate
                
                
                267,620
                
                
                
                -
                
                
                
                -
                
                
                
                267,620Total
                
                $
                92,155,624
                
                
                $
                122,300,351
                
                
                $
                804,068
                
                
                $
                215,260,043
    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 Corporación Venezolana de Guayana (“CVG”), acting
        under the authority of the Ministry of Energy and Mines of Venezuela (“MEM”),
        pursuant to Venezuelan mining law, under which the Company 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
 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**
 
 **2006**
              
              2005Bank
                  loan
              
              **$**
              **3,163,011**
              
              
              $
              12,840,234Exchangeable
                  promissory
                  notes
              
              ****
              **1,800,000**
              
              
              
              3,600,000Notes
                  payable
              
              ****
              **82,734,477**
              
              
              
              80,497,698****
              **87,697,488**
              
              
              
              96,937,932Less:
                  Current portion of
                  debt
              
              ****
              **(3,172,559**
              **)**
              
              
              (2,442,350
              )**$**
              **84,524,929**
              
              
              $
              94,495,582
  Page
                  13 of
                  43
 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
 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
 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:
  Bank
                    loan
                
                Exchangeable
                    promissory
                    notes
                
                Notes
                    payable
                
                Total2007
                
                $
                1,593,705
                
                
                $
                1,800,000
                
                
                $
                -
                
                
                $
                3,393,7052008
                
                
                1,983,952
                
                
                
                -
                
                
                
                -
                
                
                
                1,983,9522011
                
                
                -
                
                
                
                -
                
                
                
                100,000,000
                
                
                
                100,000,0003,577,657
                
                
                
                1,800,000
                
                
                
                100,000,000
                
                
                
                105,377,657Less:  discount
                
                
                (414,646
                )
                
                
                -
                
                
                
                (17,265,523
                )
                
                
                (17,680,169
                )$
                3,163,011
                
                
                $
                1,800,000
                
                
                $
                82,734,477
                
                
                $
                87,697,488
 
  Page
                16 of
                43
 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:
  As
                    at December
                    31
                
                **2006**
                
                2005Asset
                    retirement obligations,
                    beginning of year
                
                **$**
                **1,520,738**
                
                
                $
                2,301,181Liabilities
                    settled
                
                ****
                **-**
                
                
                
                (30,000
                )Accretion
                    expense
                
                ****
                **288,376**
                
                
                
                345,460Revisions
                    in estimated cash flows
                
                ****
                **(598,539**
                **)**
                
                
                (1,095,903
                )**$**
                **1,210,575**
                
                
                $
                1,520,738Less
                    : Current
                    portion
                
                ****
                **(239,408**
                **)**
                
                
                (126,092
                )Asset
                    retirement obligations, end
                    of year
                
                **$**
                **971,167**
                
                
                $
                1,394,646
   **9.**
              **SHARE
                  CAPITAL**
 
 The
          following table explains the change in the asset retirement
          obligations:
  **2006**
                  
                  2005AuthorizedUnlimited
                      common shares, without par valueUnlimited
                      Class "A" preference shares, no par valueUnlimited
                      Class "B" preference shares, no par valueIssued245,424,494
                      Common Shares (2005 - 208,036,316)
                  
                  **$     448,100,697**
                  
                  $     336,491,624
  
 Page
                17 of
                43
 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:
 WeightedAverageRemainingNumber
                  
                  
                  ContractualExercise
                      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:
  Range
                    of
                
                Number
                
                Contractual
                
                ExerciseExercise
                    Price - Cdn.
                    $
                of
                    Shares
                
                Life
                    (Years)
                
                Price
                    -
                    Cdn$$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
                
                4.2111,394,085
                
                4.33
                
                2.80
  Page
                  18 of
                  43
 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:
  **2006**
                
                2005
                
                2004**Weighted**
                
                
                
                
                Weighted
                
                
                
                
                Weighted**Average**
                
                
                
                
                Average
                
                
                
                
                Average**Number**
                
                **Exercise**
                
                Number
                
                Exercise
                
                Number
                
                Exercise**of
                    Shares**
                
                **Price
                    -
                    Cdn$**
                
                of
                    Shares
                
                Price
                    -
                    Cdn$
                
                of
                    Shares
                
                Price
                    -
                    Cdn$Outstanding,beginning
                    of
                    year
                
                ****
                **11,327,394**
                
                
                **$**
                **2.63**
                
                
                
                10,950,250
                
                
                $
                2.46
                
                
                
                8,966,000
                
                
                $
                1.97Granted
                
                ****
                **1,773,400**
                
                
                ****
                **3.73**
                
                
                
                1,407,644
                
                
                
                3.28
                
                
                
                3,285,250
                
                
                
                3.37Exercised
                
                ****
                **(1,641,800**
                **)**
                
                ****
                **2.31**
                
                
                
                (775,000
                )
                
                
                (1.66
                )
                
                
                (1,251,000
                )
                
                
                1.44Expired
                
                ****
                **(64,909**
                **)**
                
                ****
                **2.51**
                
                
                
                (255,500
                )
                
                
                (2.02
                )
                
                
                (50,000
                )
                
                
                1.50Outstanding,end
                    of
                    year
                
                ****
                **11,394,085**
                
                
                **$**
                **2.80**
                
                
                
                11,327,394
                
                
                $
                2.63
                
                
                
                10,950,250
                
                
                $
                2.46Weighted
                    average fairvalue
                  of options grantedduring
                  the year - Cdn $
                
                
                
                
                
                **$**
                **2.63**
                
                
                
                
                
                
                $
                2.75
                
                
                
                
                
                
                $
                2.23
 
 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).
  upplemental
        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
                
                2004Risk
                  free interest
                  rate
                **4.13%**
                
                3.61%
                
                4.38%Expected
                  life
                  (years)
                **3.70**
                
                3.97
                
                5.98Expected
                  volatility
                **119%**
                
                105%
                
                75%Expected
                  dividends
                **-**
                
                -
                
                -
 
 
 Page
                    19 of
                    43
 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
 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 Incréible 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
 **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
 **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
 **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 which retains the Chairman
                    of
                    the Company as an employee.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
 **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:
  **2006**
                
                2005
                
                2004Statutory
                    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
                
                
                
                21,090,347Change
                    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
                
                
                
                817,901Actual
                    income tax
                    provision
                
                **$**
                **-**
                
                
                $
                -
                
                
                $
                -
  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:
 
 **2006**
                
                2005Future
                    income tax
                    assets:Loss
                    carry
                    forwards and deferred financing fees
                
                **$**
                **75,807,550**
                
                
                $
                62,664,077Less:  valuation
                    allowance
                
                ****
                **(64,394,004**
                **)**
                
                
                (56,624,751
                )Net
                    future income tax
                    asset
                
                ****
                **11,413,546**
                
                
                
                6,039,326Future
                    income tax
                    liabilities:Property,
                    plant and equipment
                
                ****
                **(11,413,546**
                **)**
                
                
                (6,039,326
                )Net
                    future income
                    taxes
                
                **$**
                **-**
                
                
                $
                -
 
 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
 **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
                
                $
                -
                
                
                $
                38,230,2472008
                
                $
                1,589,061
                
                
                $
                13,512,0212009
                
                $
                38,974,834
                
                
                $
                1,682,0682010
                
                $
                33,036,515
                
                
                $
                -2014
                
                $
                14,982,866
                
                
                $
                -2015
                
                $
                31,502,426
                
                
                $
                -2026
                
                $
                49,851,765
                
                
                $
                -
  
 **13.      SUPPLEMENTAL
        DISCLOSURES WITH RESPECT TO CASH FLOWS**
 
 **2006**
                
                2005
                
                2004Cash
                    paid during the year for
                    interest
                
                **$**
                **9,985,572**
                
                
                $
                5,239,726
                
                
                $
                251,617Cash
                    paid during the year for
                    income taxes
                
                **$**
                **-**
                
                
                $
                -
                
                
                $
                -
 
 **2006**
                
                2005Cash
                    and cash equivalents
                    comprises:Cash
                
                **$**
                **28,573,142**
                
                
                $
                3,870,573Cash
                    equivalents
                
                ****
                **-**
                
                
                
                199,446Cash
                    and cash equivalents
                    balance
                
                **$**
                **28,573,142**
                
                
                $
                4,070,019
   Page
                26 of
                43
 **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*
 
 **2006**
                
                2005
                
                2004Net
                    book value of property, plant
                    andequipment
                    January 1
                
                **$**
                **215,260,043**
                
                
                $
                117,329,337
                
                
                $
                102,274,263Net
                    book value of property, plant
                    andequipment
                    December 31
                
                ****
                **256,455,027**
                
                
                
                215,260,043
                
                
                
                117,329,337Net
                    additions to property , plant
                    and equipment(after
                    amortization
                    and depletion) during theyear
                    ended
                    December 31
                
                ****
                **41,194,984**
                
                
                
                97,930,706
                
                
                
                15,055,074Amortization
                    and depletion
                    expenses for theyear
                    ended December
                    31
                
                ****
                **1,887,587**
                
                
                
                2,636,655
                
                
                
                35,845,450Net
                    additions to property , plant
                    and equipmentduring
                    the year ended
                    December 31
                
                ****
                **43,082,571**
                
                
                
                100,567,361
                
                
                
                50,900,524Reduction  (increase)  to
                    accruals related toproperty,  plant
                    and equipment acquisitionsof
                    prior
                    periods
                
                ****
                **5,328,173**
                
                
                
                (6,197,488
                )
                
                
                -Cash
                    investment in property,plant
                    and equipmentduring
                    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
                
                
                2004Cash
                    received on
                    :Unit
                    offerings
                
                **$**
                **51,208,985**
                
                
                $
                466,549
                
                
                $
                81,935,995Conversion
                    of
                    warrants
                
                ****
                **23,773,051**
                
                
                
                5,080,357
                
                
                
                11,283,478Issuance
                    of
                    shares under equity draw downfacility
                
                ****
                **4,317,661**
                
                
                
                9,292,313
                
                
                
                20,484,750Exercise
                    of
                    options
                
                ****
                **3,651,754**
                
                
                
                1,053,023
                
                
                
                1,408,888Issuance
                    of common shares for cash
                    during theyear
                    ended December
                    31
                
                **$**
                **82,951,451**
                
                
                $
                15,892,242
                
                
                $
                115,113,111
 
 
 *Directors’
        fees for the year ended December 31*
  **2006**
                
                
                2005
                
                
                2004Issuance
                    of common shares for
                    directors'fees
                    - 19,170 shares (
                    2005 - 65,186 shares ;2004
                    - 40,976
                    shares)
                
                **$**
                **60,000**
                
                
                $
                190,000
                
                
                $
                100,000
 
 
 Page
            27 of
            43
  **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
  **Crystallex
            International
            Corporation**
 **Notes
            to the Consolidated Financial Statements**
 **December
              31, 2006, 2005 and 2004**
 **(Expressed
            in United States dollars)**
 **14.      SEGMENTED
        INFORMATION (continued)**
  **Venezuelan**
                
                **Las
                    Cristinas**
                
                **Discontinued****Corporate**
                
                **Operations**
                
                **Development**
                
                **Operations**
                
                **Total****2006**Mining
                    revenue
                
                $
                -
                
                
                $
                28,087,764
                
                
                $
                -
                
                
                $
                -
                
                
                $
                28,087,764Operating
                    costs
                
                $
                -
                
                
                $
                (27,099,113
                )
                
                $
                -
                
                
                $
                -
                
                
                $
                (27,099,113
                )Interest
                    and other
                    income
                
                $
                1,159,586
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                1,159,586Interest
                    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
                
                
                $
                -
                
                
                $
                297,742,462Capital
                    expenditures
                
                $
                -
                
                
                $
                -
                
                
                $
                48,410,744
                
                
                $
                -
                
                
                $
                48,410,744**2005**Mining
                    revenue
                
                $
                -
                
                
                $
                24,989,681
                
                
                $
                -
                
                
                $
                -
                
                
                $
                24,989,681Operating
                    costs
                
                $
                -
                
                
                $
                (22,754,642
                )
                
                $
                -
                
                
                $
                -
                
                
                $
                (22,754,642
                )Interest
                    and other
                    income
                
                $
                1,926,425
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                1,926,425Interest
                    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
                
                
                $
                -
                
                
                $
                250,640,198Capital
                    expenditures
                
                $
                54,571
                
                
                $
                855,961
                
                
                $
                93,459,341
                
                
                $
                -
                
                
                $
                94,369,8732004Mining
                    revenue
                
                $
                -
                
                
                $
                20,245,690
                
                
                $
                -
                
                
                $
                -
                
                
                $
                20,245,690Operating
                    costs
                
                $
                -
                
                
                $
                (18,037,768
                )
                
                $
                -
                
                
                $
                -
                
                
                $
                (18,037,768
                )Interest
                    and other
                    income
                
                $
                697,638
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                697,638Interest
                    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
                
                
                $
                -
                
                
                $
                260,118,656Capital
                    expenditures
                
                $
                289,312
                
                
                $
                9,939,717
                
                
                $
                40,671,495
                
                
                $
                -
                
                
                $
                50,900,524
 
 Page
              29 of
              43
  **Crystallex
            International
            Corporation**
 **Notes
            to the Consolidated Financial Statements**
 **December
              31, 2006, 2005 and 2004**
 **(Expressed
            in United States dollars)**
  **15.     DISCONTINUED
        OPERATION**
  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
                
                
                173,4262008
                
                
                171,6652009
                
                
                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
 **Crystallex
          International
          Corporation**
 **Notes
          to the Consolidated Financial Statements**
 **December
            31, 2006, 2005 and 2004**
 **(Expressed
          in United States dollars)**
    
 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
  **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
  Page
            32 of
            43
  **Crystallex
          International
          Corporation**
 **Notes
          to the Consolidated Financial Statements**
 **December
            31, 2006, 2005 and 2004**
 **(Expressed
          in United States dollars)**
   
 *Country
        Risk
        (continued)*
 
 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.
 
 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.
 
 Page
            33 of
            43
 
 **Crystallex
          International
          Corporation**
 **Notes
          to the Consolidated Financial Statements**
 **December
            31, 2006, 2005 and 2004**
 **(Expressed
          in United States dollars)**
  DIFFERENCES
        BETWEEN
        CANADIAN AND UNITED STATES GENERALLY
 **ACCEPTED
        ACCOUNTING PRINCIPLES (AS RESTATED)**
 
 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.
 
 The
        Company is amending and restating its US GAAP note disclosure in its financial
        statements for the years 2006 and 2005.  During 2007, the Company
        reviewed its accounting policy relating to the capitalization of interest
        costs
        incurred during the period of development on qualifying mineral
        properties.  As a result of this review, the Company has determined
        that certain interest costs should be capitalized under U.S. GAAP during
        the
        period of construction and development on its Las Cristinas project. Under
        Canadian GAAP these costs will continue to be expensed as incurred. Accordingly,
        this note to the  consolidated financial statements has been restated
        to give effect to the capitalization of interest to the qualifying Las Cristinas
        project in the amount of $9,591,736 and $5,025,761 in 2006 and 2005,
        respectively (see 19(a)).
 
 **Balance
        Sheets**
 
 The
        impact of differences between Canadian GAAP and U.S. GAAP on the consolidatedbalance
        sheets is as
        follows:
  **2006****U.S.
                    GAAP****Canadian**
                
                
                
                
                
                **(As
                    Originally**
                
                
                **Interest**
                
                
                **U.S.
                    GAAP****GAAP**
                
                
                **Adjustments**
                
                
                **Reported)**
                
                
                **Adjustment**
                **(a)**
                
                **(As
                    Restated)**Current
                    assets
                
                **$**
                **38,691,808**
                
                
                **$**
                **-**
                
                
                **$**
                **38,691,808**
                
                
                **$**
                **-**
                
                
                **$**
                **38,691,808**Property,
                  plant and
                  equipment
                
                
                **256,455,027**
                
                
                
                **(75,725,819**
                **)
                  (a)**
                
                
                **180,729,208**
                
                
                
                **14,617,497**
                
                
                
                **195,346,705**Deferred
                    financing
                    fees
                
                ****
                **2,595,627**
                
                
                
                -
                
                
                ****
                **2,595,627**
                
                
                ****
                **-**
                
                
                ****
                **2,595,627****$**
                **297,742,462**
                
                
                **$**
                **(75,725,819**
                **)**
                
                **$**
                **222,016,643**
                
                
                **$**
                **14,617,497**
                
                
                **$**
                **236,634,140**Current
                    liabilities
                
                **$**
                **16,203,423**
                
                
                **$**
                **-**
                
                
                **$**
                **16,203,423**
                
                
                **$**
                **-**
                
                
                **$**
                **16,203,423**Asset
                    retirement
                    obligations
                **971,167**
                
                
                ****
                **-**
                
                
                ****
                **971,167**
                
                
                ****
                **-**
                
                
                ****
                **971,167**Long-term
                    debt
                
                ****
                **84,524,929**
                
                
                ****
                **-**
                
                
                ****
                **84,524,929**
                
                
                ****
                **-**
                
                
                ****
                **84,524,929**Shareholders'
                    equity
                
                ****
                **196,042,943**
                
                
                ****
                **(75,725,819**
                **)**
                
                ****
                **120,317,124**
                
                
                ****
                **14,617,497**
                
                
                ****
                **134,934,621****$**
                **297,742,462**
                
                
                **$**
                **(75,725,819**
                **)**
                
                **$**
                **222,016,643**
                
                
                **$**
                **14,617,497**
                
                
                **$**
                **236,634,140**
  
 Page
            34 of
            43
 **Crystallex
          International
          Corporation**
 **Notes
          to the Consolidated Financial Statements**
 **December
            31, 2006, 2005 and 2004**
 **(Expressed
          in United States dollars)**
   **ACCEPTED
        ACCOUNTING PRINCIPLES (AS RESTATED) (continued)**
 
 **Balance
        Sheets (continued)**
 2005U.S.
                    GAAPCanadian
                
                
                
                
                (As
                    Originally
                
                
                Interest
                
                
                U.S.
                    GAAPGAAP
                
                Adjustments
                
                
                Reported)
                
                
                Adjustment
                (a)
                
                (As
                    Restated)Current
                    assets
                
                $
                20,061,580
                
                
                $
                -
                
                
                $
                20,061,580
                
                
                $
                -
                
                
                $
                20,061,580Restricted
                    cash
                
                
                12,081,312
                
                
                
                -
                
                
                
                12,081,312
                
                
                
                -
                
                
                
                12,081,312Property,
                    plant and
                    equipment
                
                
                215,260,043
                
                
                
                (75,725,819
                )
                  (a)
                
                
                139,534,224
                
                
                
                5,025,761
                
                
                
                144,559,985Deferred
                    financing
                    fees
                
                
                3,237,263
                
                
                
                -
                
                
                
                3,237,263
                
                
                
                -
                
                
                
                3,237,263$
                250,640,198
                
                
                $
                (75,725,819
                )
                
                $
                174,914,379
                
                
                $
                5,025,761
                
                
                $
                179,940,140Current
                    liabilities
                
                $
                22,713,476
                
                
                $
                -
                
                
                $
                22,713,476
                
                
                $
                -
                
                
                $
                22,713,476Asset
                    retirement
                    obligations
                
                
                1,394,646
                
                
                
                -
                
                
                
                1,394,646
                
                
                
                -
                
                
                
                1,394,646Long-term
                    debt
                
                
                94,495,582
                
                
                
                2,564,366
                (b)
                
                
                97,059,948
                
                
                
                -
                
                
                
                97,059,948Shareholders'
                    equity
                
                
                132,036,494
                
                
                
                (78,290,185
                )
                
                
                53,746,309
                
                
                
                5,025,761
                
                
                
                58,772,070$
                250,640,198
                
                
                $
                (75,725,819
                )
                
                $
                174,914,379
                
                
                $
                5,025,761
                
                
                $
                179,940,140
  For
        the purposes of reporting in accordance with U.S. GAAP, amounts
        referred to as contributed surplus under Canadian GAAP are referred to as
        additional paid in capital.
 **Statements
        of Operations**
 
 The
        impact of the differences between Canadian GAAP and U.S. GAAP on the loss
        for
        the year would be as follows:
  **2006**
                
                2005
                2004**(Restated)**
                
                (Restated)Net
                    loss for the
                    yearper
                    Canadian
                    GAAP
                
                
                **$**
                **(35,684,229**
                **)**
                
                $
                (45,206,916
                )
                
                $
                (60,654,063
                )Adjustments
                    to mineral
                    properties
                **(a)**
                
                ****
                **-**
                
                
                
                (235,900
                )
                
                
                5,172,791Changes
                    in fair value of
                    exchangeableportion
                    of bank
                    loan
                **(b)**
                
                ****
                **(8,638,661**
                **)**
                
                
                -
                
                
                
                -Accretion
                    of interest on bank
                    loan
                **(b)**
                
                ****
                **(54,064**
                **)**
                
                
                -
                
                
                
                -Unamortized
                    deferred financing
                    costson
                    exchangeable portion of bank loan
                **(b)**
                
                ****
                **(121,405**
                **)**
                
                
                -
                
                
                
                -Beneficial
                    conversion
                    interest
                **(c)**
                
                
                -
                
                
                
                (598,000
                )
                
                
                -Adjustment
                    to
                    amortizationof
                    Series 2 Notes
                    discount
                **(c)**
                
                ****
                **-**
                
                
                
                (539,125
                )
                
                
                -Unamortized
                    deferred financing
                    costsof
                    Series
                    2 Notes
                **(c)**
                
                ****
                **-**
                
                
                
                (356,820
                )
                
                
                -Net
                    loss for the year per U.S.
                    GAAP,as
                    originally reported
                
                
                ****
                **(44,498,359**
                **)**
                
                
                (46,936,761
                )
                
                
                (55,481,272
                )Adjustments
                    to interest on
                    debt
                **(a)**
                
                ****
                **9,591,736**
                
                
                
                5,025,761
                
                
                
                -Net
                    loss for the year per U.S.
                    GAAP,as
                    restated
                
                
                **$**
                **(34,906,623**
                **)**
                
                $
                (41,911,000
                )
                
                $
                (55,481,272
                )Net
                    loss per share - basic and
                    diluted
                
                
                **$**
                **(0.15**
                **)**
                
                $
                (0.22
                )
                
                $
                (0.32
                )
   Page
            35 of
            43
  **Crystallex
        International
        Corporation**
 **Notes
        to the Consolidated Financial Statements**
 **December
          31, 2006, 2005 and 2004**
 **(Expressed
        in United States dollars)**
 
   **ACCEPTED
        ACCOUNTING PRINCIPLES (AS RESTATED) (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”.
 
 **2006**
                
                2005
                
                2004**(Restated)**
                
                (Restated)Net
                    loss for the year per U.S.
                    GAAP, as restated
                
                **$**
                **(34,906,623**
                **)**
                
                $
                (41,911,000
                )
                
                $
                (55,481,272
                )Non-operating
                    loss
                    componentsUnder
                    Canadian
                    GAAP:Interest
                    on long-term
                    debt
                
                **$**
                **12,945,985**
                
                
                $
                11,809,087
                
                
                $
                548,131Commodity
                    contract
                    loss
                
                ****
                **-**
                
                
                
                3,770,835
                
                
                
                963,717Foreign
                    exchange (gain)
                    loss
                
                ****
                **(459,734**
                **)**
                
                
                1,192,593
                
                
                
                (397,313
                )Gain
                    on settlement of
                    debt
                
                ****
                **-**
                
                
                
                (875,610
                )
                
                
                -Interest
                    and other
                    income
                
                ****
                **(1,159,586**
                **)**
                
                
                (1,926,425
                )
                
                
                (697,638
                )Investment
                    in
                    subsidiaries
                
                ****
                **-**
                
                
                
                6,600,000
                
                
                
                493,702Write-down
                    of marketable
                    securities
                
                ****
                **-**
                
                
                
                -
                
                
                
                -Non
                    controlling
                    interest
                
                ****
                **-**
                
                
                
                -
                
                
                
                (111,053
                )U.S.
                    GAAP reconciling
                    items:Changes
                    in fair value of exchangeableportion
                    of bank loan
                
                ****
                **8,638,661**
                
                
                
                -
                
                
                
                -Accretion
                    of interest
                
                ****
                **54,064**
                
                
                
                -
                
                
                
                -Unamortized
                    deferred financing costson
                    exchangeable portion of bank loan
                
                ****
                **121,405**
                
                
                
                -
                
                
                
                -Beneficial
                    conversion interest
                
                ****
                **-**
                
                
                
                598,000
                
                
                
                -Adjustment
                    to amortisation
                    ofSeries
                    2 Notes discount
                
                ****
                **-**
                
                
                
                539,125
                
                
                
                -Unamortized
                    deferred
                    financingcosts
                    of Series 2 Notes
                
                ****
                **-**
                
                
                
                356,820
                
                
                
                -Non-operating
                    loss per U.S.
                    GAAP,as
                    originally reported
                
                ****
                **20,140,795**
                
                
                
                22,064,425
                
                
                
                799,546Loss
                    from operations per U.S.
                    GAAP,before
                    capitalized interest adjustment
                
                ****
                **(14,765,828**
                **)**
                
                
                (19,846,575
                )
                
                
                (54,681,726
                )Capitalized
                    interest adjustment
                    (a)
                
                ****
                **(9,591,736**
                **)**
                
                
                (5,025,761
                )
                
                
                -Loss
                    from operations per U.S.
                    GAAP,as
                    originally stated and as restated
                
                **$**
                **(24,357,564**
                **)**
                
                $
                (24,872,336
                )
                
                $
                (54,681,726
                )
  
 Page
            36 of
            43
  **Crystallex
        International
        Corporation**
 **Notes
        to the Consolidated Financial Statements**
 **December
          31, 2006, 2005 and 2004**
 **(Expressed
        in United States dollars)**
 
   **ACCEPTED
        ACCOUNTING PRINCIPLES (AS RESTATED) (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:
 **2006**
              
              2005
              
              2004**(Restated)**
              
              (Restated)Cash
                  flows used in
                  operatingactivities,
                  Canadian
                  GAAP
              
              **$**
              **(32,052,785**
              **)**
              
              $
              (32,714,407
              )
              
              $
              (36,005,098
              )Adjustment
                  for net
                  lossfrom
                  discontinued
                  operations
              
              ****
              **-**
              
              
              
              -
              
              
              
              (350,000
              )Adjustments
                  to mineral
                  properties
              
              ****
              **-**
              
              
              
              (235,900
              )
              
              
              (2,709,655
              )Adjustment
                  to working capital
                  relating todiscontinued
                  operations
              
              ****
              **-**
              
              
              
              -
              
              
              
              350,000Cash
                  flows used in operating
                  activities,U.S.
                  GAAP, as
                  originally reported
              
              ****
              **(32,052,785**
              **)**
              
              
              (32,950,307
              )
              
              
              (38,714,753
              )Adjustments
                  to interest
                  (a)
              
              ****
              **9,591,736**
              
              
              
              5,025,761
              
              
              
              -Cash
                  flows used in operating
                  activities,U.S.
                  GAAP, as
                  restated
              
              ****
              **(22,461,049**
              **)**
              
              
              (27,924,546
              )
              
              
              (38,714,753
              )Cash
                  flows provided by (used in)
                  investingactivities,
                  Canadian
                  GAAP
              
              ****
              **(27,087,581**
              **)**
              
              
              12,589,880
              
              
              
              (179,183,440
              )Cash
                  flows provided by
                  discontinuedoperations,
                  Canadian
                  and U.S.  GAAP
              
              ****
              **-**
              
              
              
              -
              
              
              
              1,650,000Adjustments
                  to mineral
                  properties
              
              ****
              **-**
              
              
              
              235,900
              
              
              
              2,709,655Cash
                  flows provided by (used in)
                  investingactivities,
                  U.S.
                  GAAP, as originally reported
              
              ****
              **(27,087,581**
              **)**
              
              
              12,825,780
              
              
              
              (174,823,785
              )Adjustments
                  to interest
                  (a)
              
              ****
              **(9,591,736**
              **)**
              
              
              (5,025,761
              )
              
              
              -Cash
                  flows provided by (used in)
                  investingactivities,
                  U.S.
                  GAAP, as restated
              
              ****
              **(36,679,317**
              **)**
              
              
              7,800,019
              
              
              
              (174,823,785
              )Cash
                  flows provided by financing
                  activities,Canadian
                  and U.S.
                  GAAP
              
              ****
              **83,643,489**
              
              
              
              18,427,804
              
              
              
              193,101,744Net
                  increase (decrease) in cash
                  and cashequivalents
                  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
              
              
              
              26,203,536Cash
                  and cash equivalents, end of
                  year
              
              **$**
              **28,573,142**
              
              
              $
              4,070,019
              
              
              $
              5,766,742
   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
 **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 (AS RESTATED) (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, interest costs incurred during the period of development on
        qualifying mineral properties are expensed.  Under U.S. GAAP, interest
        costs of $9,591,736 and $5,025,761 associated with capitalized mineral
        properties have been capitalized in 2006 and 2005, respectively.
 
 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**(Restated)**
                
                (Restated)Net
                    book value
                    underCanadian
                    GAAP
                
                **$**
                **256,455,027**
                
                
                $
                215,260,043Adjustments
                    to Las
                    Cristinascapitalized
                    costs
                
                ****
                **(75,725,819**
                **)**
                
                
                (75,725,819
                )Net
                    book value under U.S.
                    GAAP,as
                    originally reported
                
                ****
                **180,729,208**
                
                
                
                139,534,224Interest
                    adjustment
                
                ****
                **14,617,497**
                
                
                
                5,025,761Net
                    book value under U.S.
                    GAAP,as
                    restated
                
                **$**
                **195,346,705**
                
                
                $
                144,559,985
 
 
 Page
            38 of
            43
  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 (AS RESTATED) (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
 
 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 (AS RESTATED) (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
 
 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 (AS RESTATED)
            (continued)**
 **(d)         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
                      and end of
                      year
                  **$    
                       (695,329)**
                  
                  $     
                      (695,329)
                  
                  $    
                       (695,329)
  Accumulated
        other comprehensive loss, end of year, is comprised entirely of thecumulative
        translation adjustment.
  
 **Comprehensive
        Loss**
 
 For
        U.S. GAAP, the comprehensive loss would be calculated as follows:
  **2006**
              
              2005
              
              2004**(Restated)**
              
              (Restated)**Comprehensive
                    loss
                    comprises**Net
                    loss for the
                    year
              **$    
                   (34,906,623)**
              
              $     
                  (41,911,000)
              
              $    
                   (55,481,272)
   **(e)         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: • Permits
        fair value remeasurement for any hybrid financial instrument that contains
        an
        embedded derivative that otherwise would require bifurcation • Clarifies which
        interest-only strips and principal-only strips are not subject to the
        requirements of Statement 133 • 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 • Clarifies that concentrations of credit risk
        in the form of subordination are not
  Page
            41 of
            43
  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 (AS RESTATED)
              (continued)**
 **(e)         Recent
        Accounting Pronouncements (continued)**
 
 embedded
        derivatives • 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.
 
 InJune2005, the Emerging Issues Committee
        issued EITF 04-6, Accounting for Stripping Costs Incurred during the
        Productionin
        the Mining Industry, which states
        that costs incurred during production from the removal of overburden and
        wastematerial
        should be considered variable
        production costs included in the costs of the inventory produced during the
        periodthat
        the stripping costs are incurred.
        Once production has commenced from a mine, production-related stripping costs
        willbe
        accounted for as a cost of current
        production and, therefore as a component of the cost of any inventory extracted
        fromthe
        mine and held at period end. The
        consensuswaseffective for the first reporting
        period in fiscal yearsbeginning
        afterDecember
        15, 2005. Theadoption 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
  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 (AS RESTATED)
              (continued)**
 **(e)**         **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







**A.**
            **Disclosure
                Controls and Procedures**





As
      of December 31, 2006, the end of the period covered by this report, the Company
      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.  Subsequent to December 31, 2006,
      certain changes have been made the Company's disclosure controls and procedures
      as outlined below in "B. Management's Annual Report on Internal Control Over
      Financial Reporting".







**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, except for the restatement to the U.S. GAAP
      reconciliation note included in its consolidated financial statements for the
      years ended December 31, 2006 and 2005 which is the subject of this amended
      Form
      40-F.




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.




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 – U.S. GAAP*.  Management has concluded that, as
      of December 31, 2006, the Company did not have adequate levels of expertise
      with
      respect to U.S. GAAP complex accounting issues.  The Company is filing
      this Amendment because it has restated the U.S. GAAP reconciliation note
      included in its consolidated financial statements for the years ended December
      31, 2006 and 2005 in order to correct the accounting for interest
      costs.




Under
      U.S. GAAP, interest costs are required to be capitalized to mineral properties
      which are under development, although these costs were appropriately expensed
      as
      an accounting policy alternative under Canadian GAAP. The Company had originally
      treated the interest costs in an identical way for both Canadian and U.S. GAAP
      purposes by recording the amount as an expense in 2006 and 2005. Accordingly,
      the net book value of "Property, plant and equipment" in the U.S. GAAP
      reconciliation note will increase in 2006 and 2005 with corresponding reductions
      in "Loss from operations" for those years under U.S. GAAP.




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 has minimized the
      potential impact of this weakness by engaging external advisors to review U.S.
      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 has hired 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**





Since
      the most recent evaluation of the Registrant's internal control over financial
      reporting, there have been some 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
      reporting.  Subsequent to December 31, 2006, the Company made the
      changes outlined above under "B. Management's Annual Report on Internal Control
      Over Financial Reporting".







**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 Corporation, at the address that appears on the cover
      of this Amendment No. 2 to Form 40-F.







**H.**
            **Principal
                Accountant Fees and
                Services**





***Audit
      Fees***





The
      aggregate fees billed by Deloitte & Touche LLP ("D&T") for the fiscal
      years ended December 31, 2006 and December 31, 2005, respectively, for
      professional services rendered by D&T for the audit of the Registrant's
      annual financial statements or services that are normally provided by D&T 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 D&T 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.







***Tax
      Fees***





The
      aggregate fees billed by D&T 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 D&T for the fiscal years ended December 31, 2006
      and December 31, 2005, respectively, for products and services provided by
      D&T, 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:







§
            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);





§
            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





§
            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 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 the Annual Report filed on Form 40-F, March 30, 2007.







**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 the Annual Report filed on Form 40-F, March 30, 2007.












**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.













**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:
                November 13, 2007
            By:
            /s/
                HEMDAT SAWHName:
            Hemdat
                SawhTitle:
            Chief
                Financial Officer














**EXHIBIT
      INDEX**








**Exhibit
                No.**
            
            **Document**23.1
            
            Consent
                of Deloitte & Touche LLP31
            
            Certification
                of the CEO and CFO pursuant to Section 302 of theSarbanes-Oxley
                Act of 200232
            
            Certification
                of the CEO and CFO pursuant to Section 906 of theSarbanes-Oxley
                Act of 2002