Crystallex International (KRY:TO) is seeking to overturn a Venezuelan government decision denying permission to mine the massive Las Cristinas gold deposit, the company said on Monday.
Crystallex said it has filed a legal rebuttal to the decision, which it said it in conflict with previous environmental and development approvals.
In addition, Crystallex believes that the (decision) contradicts presidential decrees, national assembly resolutions, ministry of the environment and natural resources resolutions and ministry of basic industry and mines resolutions, it said.
Toronto-based Crystallex has been trying for years to nail down approvals to mine the massive gold deposit, which has proven and probable reserves of 17 million ounces.
The company had thought it was close to getting the final go-ahead, but then announced last month it had been informed by the government-owned holder of the mine concessions that the environment ministry was denying mining rights in the region.
The news carved more than 40 percent from Crystallex's stock price, and the Toronto-listed shares have continued to slide in the two weeks since then.
On Monday, however, the stock charged ahead 47 percent, or 28 Canadian cents to 88 Canadian cents, although it is still well below its levels of two weeks ago, and down more than 80 percent over the past year.
The uncertainty surrounding Crystallex follows a recent wave of nationalizations in Venezuela's cement and steel sectors as President Hugo Chavez seeks to establish more control over the country's resources.
(Reporting by Cameron French; editing by Rob Wilson)