Crescent Gold Limited
ASX : CRE
TSX : CRA
FRANKFURT : CRE5

Crescent Gold Limited

December 30, 2010 21:53 ET

Crescent Gold Raises A$31.5m to Date From Rights Issue

PERTH, WESTERN AUSTRALIA--(Marketwire - Dec. 30, 2010) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Top 10 Australian gold producer, Crescent Gold Limited (TSX:CRA)(ASX:CRE)(FRANKFURT:CRE5), is pleased to announce the Company has to date raised A$31.5 million through the issue of 286,524,297 ordinary shares under the rights issue announced to the market in November.

The Company also announced today that as a result of ongoing Expressions of Interest in the rights issue from domestic and international investors, it is confident of achieving full subscriptions for the target total of A$45 million when the capital raising closes at the end of next month.

In an update released today on progress with the capital raising, Crescent Gold said it had received more than A$4.4 million from existing shareholders and had placed shares worth a further A$27.0 million with sophisticated investors, including global gold funds based in Australia, North America and the United Kingdom. 

Due to the proximity of the holiday season with the closing of the rights issue, Crescent Gold has extended its rights shortfall capital raising until January 31, 2011. The Company has received Expressions of Interest from a number of northern hemisphere and Australian institutions. Due to the holiday interruption, CRE will keep the placement open for another month to allow these institutions an opportunity to participate in the shortfall placement in an orderly manner.

"The success of this raising to date demonstrates inherent interest in Crescent Gold as an expanding 100,000 ounce a year producer, and the Company's investment appeal has been identified by a number of sophisticated investors," Crescent Gold's Interim Managing Director, Mr. Mark Tory, said today. "Based on existing expressions of interest the Company is confident the remaining A$14 million target will be placed before the end of January."

Crescent Gold is using proceeds from the rights issue to substantially strengthen its balance sheet and provide financial flexibility to further grow its gold production profile.

One of the principal uses of proceeds from the 2-for-3 non-renounceable rights issue will be to advance feasibility and development work on the Summit underground gold mine located within the Company's flagship Laverton area north of Kalgoorlie in Western Australia.

An operating gold mine in the 1980s, Summit produced in excess of 1.0 million ounces but closed in 1994 when the gold price was approximately US$380 per ounce.

Crescent's initial studies have suggested a resurrected Summit mine could produce between 50,000 and 70,000 ounces of gold per annum.

Preliminary mining studies indicate the opportunity to recommence mining from the existing resource of 2.66 million tonnes grading 6.64 gpt gold, for total production of over 500,000 ounces. Independent cash flow analysis suggests that at current gold prices robust profit margins and an estimated IRR exceeding 50% can be expected, based on an initial capital outlay of A$33 million.

The following table shows the breakdown of these resources into Measured, Indicated and Inferred.

  Tonnes Kt Grade g/t Contained Au oz
Measured - - -
Indicated 2,040 6.5 427,000
Total Measured & Indicated 2,040 6.5 427,000
Inferred 620 7.1 141,000
Total ounces 2,660 6.64 568,000

Attached is the Company's Reserves and Resource tables as previously disclosed in a statement issued to the ASX on 28 September 2010 and also within the 30 June 2010 Annual Report.

In addition, the rights issue proceeds will also be used to undertake a partial reduction of Crescent Gold's debt, allowing a negotiation of more attractive working capital facilities, and to consider widening its highly successful reserve enhancement and exploration drilling across its substantive Laverton holdings.

Cautionary Statement Regarding Forward-Looking Statements

Information set out in this press release contains forward-looking statements, which involve a number of risks and uncertainties. These statements reflect Crescent's current expectations, beliefs, hopes, intentions or strategies regarding the future and assumptions in light of currently available information. Crescent cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information. Such forward-looking statements include, but are not limited to, statements about the Summit underground development, including estimated production and costs, possible or assumed future results of operations and operating cash flows, growth opportunities and other statements that are not historical facts. These forward-looking statements should not be relied upon as predictions of future events. Crescent does not undertake any obligation to update publicly or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.

The information in this report that relates to gold Exploration Results is based on information compiled by Mr Jeff Ion, who is a Member of the Australasian Institute of Mining and Metallurgy and a member of the Australian Institute of Geoscientists and is employed by Crescent. The information in this report that relates to Ore Reserves utilising underground extraction (the Summit deposit) is based on information compiled by Mr William Holly, who is a Member of the Australasian Institute of Mining and Metallurgy and is an independent consultant. They each have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and a Qualified Person under "Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects". They each consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

Additional information related to the Company is available for review at sedar.com or on the Company's website at www.crescentgold.com.

Regards

Crescent Gold Limited

Mark Tory, Interim Managing Director

To view the tables associated with this release, please visit: http://media3.marketwire.com/docs/cratabs.pdf.




SHARE INFORMATION
ASX Share Price: A$0.12
Issued Shares: 914.7m
Market Cap: A$109.8m
Unlisted options: 35.9m
 
FULLY DILUTED BASIS
Shares: 950.6m

ABN 49 087 360 996

Contact Information

  • Crescent Gold Limited - In Australia
    Mark Tory
    Interim Managing Director
    +61 8 6380 7100
    +61 8 6380 7199 (FAX)
    or
    Crescent Gold Limited - In Canada
    Renee Brickner
    +1 604 802 6806
    info@crescentgold.com
    www.crescentgold.com
    or
    Field Public Relations
    Kevin Skinner
    Media Contact
    + 61 8 8234 9555