UPDATE 1-Crystallex seeking clarification on Venezuela mine

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By Cameron French

TORONTO, May 1 (Reuters) - Crystallex International (KRY.TO) said on Thursday it was seeking clarification from the Venezuelan government on the status of its Las Cristinas gold development, adding it was unsure how to proceed following an apparent denial of mining rights in the region.

Crystallex stock tumbled on Wednesday after the Canadian-based miner said it had been denied authorization to "affect natural resources to carry out exploration activities", which seemed to run contrary to past approvals for the mine.

Spokesman Richard Marshall said Crystallex was not sure whether the exploration ruling meant it would be denied final permits to complete the mine.

"We're trying to get clarification exactly on what this is," he told Reuters.

Toronto-based Crystallex has been trying for years to nail down approvals to mine the massive gold deposit, but had thought it was on the verge of receiving the go-ahead to begin the final construction phase. The deposit has proven and probable reserves of 14 million ounces.

"This letter seems to suggest a complete policy change in position relating to this region," Marshall said.

He said word of the denial had come by way of a letter from a director general of the Venezuelan Ministry of the Environment to the CVG, which is the government-owned body that owns the Las Cristinas concessions. The CVG in turn informed Crystallex.

"We felt based on the content of the letter and because it seemed to completely contradict everything that has happened pertaining to this project and mining in this region that we needed to make the market aware of it immediately," Marshall said.

"Now we're trying to determine what this means, where we stand, and what our course forward is."

Shares of Crystallex, which dropped 43 percent on Wednesday, were down 5 Canadian cents at 87 Canadian cents late in Thursday's session. ($1=$1.02 Canadian) (Reporting by Cameron French)