UPDATE 1-Crystallex pursues settlement of Venezuela mine dispute

Wed May 19, 2010 4:15pm EDT

* May seek int'l arbitration if settlement not reached

* Says Court of Appeal dismisses noteholders claim

May 19 (Reuters) - Gold miner Crystallex International Corp KRY.TO said it is actively pursuing a resolution of a permit dispute with the Venezuela government over its principle asset there, and it may file for international arbitration if a settlement is not arrived at.

Last October, President Hugo Chavez said he would develop the mines in the southeastern state of Bolivar with Russian companies instead of Canadian companies.

Canada's Gold Reserve GRZ.A and Crystallex KRY.TO had purchased the rights to Venezuela's Brisas and Las Cristinas mines, respectively. [ID:nN26190764]

The company also said the Court of Appeal for Ontario upheld the Dec. 16 decision of the Ontario Superior Court dismissing noteholders' claims that the company had not acted in accordance with its obligations to noteholders.

The Ontario Superior Court had ordered the noteholders to pay Crystallex its costs.

Shares of the company closed at 54 Canadian cents a share on the Toronto Stock Exchange. (Reporting by Aftab Ahmed in Bangalore; Editing by Roshni Menon) (aftab.ahmed@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: aftab.ahmed.reuters.com@reuters.net))