http://ca.hotstocked.com/article/19021/crystallex-international-corp-tse-kry.html

by Gediminas Jasionis Sep 21, 2011 0 Comments

Crystallex International Corp. (TSE:KRY) (PINK:CRYXF) stock price fired up during heavy trading but missed the chance to break out mostly on heavily negative sentiment surrounding the business.

KRY added 18% on Tuesday under a trading volume of nearly 2.8 million, which is way above the average 401 thousand, and recorded as one of the few heaviest trading days of the past couple of years. However, the stock price didn't manage to break out of the channel it's in. The resistance at 13 cents proved to be strong and thus might discourage bulls from further attempts. The stock has lost 97% of its value since mid 2007 and holds a strong bearish image.

Crystallex had no important news since mid August when the company published their financial statements for the second quarter 2011. The report didn't have much new information either.

Among the most notable lines, the company used $10.2 million for continuing operating activities. They had the deficit covered with money Crystalellex received from selling equipment and the company hasn't issued new shares over the quarter. The dilution rate still reached 23.4% over the last year.

The key debt component that could cause trouble is the outstanding amount of $97.4 million in senior unsecured notes issued in December 2004. The business has only $33 million liquid capital and adverse changes with ownership of Las Cristinas project. The company is currently in a process of defending in courts against claims that such a change already happened and the outcome remains unclear.

The company also has a feud with the government of Venezuela and is awaiting arbitration led by International Centre for Settlement of Investment Disputes. The company claims that the Ministry of Environment and Natural Resources decision to deny an exploration permit for the Las Cristinas project was unfair and is seeking restitution of invested funds.