Crew Gold Corporation
TSX : CRU
OSLO STOCK EXCHANGE : CRU

Crew Gold Corporation

April 01, 2010 09:08 ET

Crew Gold Corporation: Financial Results for the Year Ended December 31, 2009

LONDON, UNITED KINGDOM--(Marketwire - April 1, 2010) - Crew Gold Corporation ("Crew" or "the Company") (TSX:CRU)(OSLO:CRU) -

INTRODUCTION

As a result of the debt-to-equity restructuring (the "Restructuring", see later discussion) completed on December 11, 2009, and the Canadian accounting implications surrounding it, the quarter ended December 31, 2009 incorporates the 72 day period ended December 11, 2009 and the 20 day period ended December 31, 2009. Likewise, the year ended December 31, 2009 incorporates the 345 day period ended December 11, 2009 and the 20 day period ended December 31, 2009.

HIGHLIGHTS

For the Quarter Ended December 31, 2009 ("Q4 2009")

  • Q4 2009 LEFA gold production of 54,816 ounces ("oz") from 52,904 oz in Q4 2008
  • Q4 2009 LEFA gold sold of 58,781 oz (Q4 2008 – 44,124 oz)
  • Sale of all Nalunaq Gold Mine's ("Nalunaq") assets, infrastructure and inventories completed in October 2009 for total cash consideration of $1.5 million
  • Sale of Nugget Pond processing facility ("Nugget Pond") completed in October 2009 for total cash consideration of CDN$3.5 million (US$3.4 million)
  • Disposal of majority share in Maco project ("Maco") for total cash consideration of $7 million, of which $6 million was received in 2009
  • Net loss of $18.1 million for the quarter (Q4 2008 – net loss of $18.0 million)
  • Restructuring successfully completed in December

For the Year Ended December 31, 2009

  • Overview
    • Total LEFA gold sold for the year ended December 31, 2009 was 188,823 oz at an average price of $978/oz (year ended December 31, 2008 – 188,528 oz at an average price of $878/oz)
  • Financial Results
    • EBITDA (excluding discontinued operations) for the year of $3.4 million (year ended December 31, 2008 – negative $7.4 million)
    • Net loss (including discontinued operations) of $49.1 million for the year ended December 31, 2009 (year ended December 31, 2008 – net loss of $203.5 million mainly due to impairment charges of $184.5 million)
  • LEFA
    • Annual gold production of 177,623 oz (2008 – 197,556 oz), due to reduced SAG mill capacity while repairs were undertaken
    • Upon the return to service of SAG Mill 1 ("SAG1") in September following the replacement of the trunnion bearings, all four mills operated commencing in October 2009
    • Process Plant throughput rates averaging 15,500 tonnes per day ("tpd") in the final quarter of 2009
  • Maco
    • Agreement signed in September for the sale of the project in its entirety for cash consideration of $7 million; sale completed and all proceeds received by the end of January 2010
  • Nalunaq and Nugget Pond
    • Agreement signed in July for the sale of Nalunaq assets for total cash consideration of $1.5 million; all proceeds received by October 2009
    • Agreement signed in October for the sale of Nugget Pond for total cash consideration of CDN$3.5 million (US$4.4 million); all proceeds received in October 2009
    • The final gold recovery of the ore processed from Nalunaq and the treatment of the residual material from the process plant was completed
    • Toll milling at Nugget Pond commenced on June 29, 2009
  • Outlook
    • All mills at LEFA are expected to be operational during 2010. An average Process Plant throughput rate of 15,000 tpd has been budgeted to take into account the last of the planned major shutdowns
    • Work will continue on improving plant availabilities through the $75 million capital program which includes the purchase of insurance spares, progressive refurbishment and debottlenecking projects
    • The $75 million capital program includes capital expenditures required to refurbish the LEFA mining fleet as it reaches its mid life and to improve process plant reliability and efficiencies through the acquisition of insurance spares and mobile equipment with the goal of improved throughput and reduced operating costs per oz at LEFA. The capital program also includes a restart of the exploration program

OVERVIEW

Crew is a mining company currently focused on maximizing the performance of its gold mining operations and exploration projects in Guinea.

Results

Following the sales of the assets of Nalunaq, Nugget Pond and the Maco property, these operations have been reclassified as discontinued operations and the results of the continuing operations of the Company reflect LEFA and corporate overheads. The comparative profit and loss statement and balance sheet amounts have been reclassified where applicable.

Income from discontinued operations (Nalunaq/Nugget Pond and Maco) totalled $11.0 million in the quarter ended December 31, 2009 (quarter ended December 31, 2008 – loss of $32.1 million).

Net loss (including discontinued operations) for the quarter ended December 31, 2009 was $18.1 million (quarter ended December 31, 2008 – net loss of $18.0 million).

LEFA gold produced in the quarter ended December 31, 2009 was 54,816 oz (quarter ended December 31, 2008 – 52,904 oz). LEFA gold sold during the quarter ended December 31, 2009 was 58,781 oz (quarter ended December 31, 2008 – 44,124 oz).

For the year ended December 31, 2009, EBITDA (excluding discontinued operations) was $3.4 million (year ended December 31, 2008 – negative $7.4 million) with mineral sales of $184.6 million partly offset by direct mining and mine site administration costs of $159.3 million and general corporate expenditure and exploration write-offs of $11.7 million and net losses of $6.0 million from the disposals of Nalunaq, Maco and Nugget Pond.

Income from discontinued operations (Nalunaq/Nugget Pond and Maco) totalled $21.6 million in the year ended December 31, 2009 (year ended December 31, 2008 – loss of $111.3 million due mainly to impairment charges of $28.6 million for Maco and $51.3 million for Nalunaq/Nugget Pond).

Net loss (including discontinued operations) for the year ended December 31, 2009 was $49.1 million (year ended December 31, 2008 – net loss of $203.5 million). This net loss arises from the EBITDA of $3.4 million and income from discontinued operations of $21.6 million, offset by depletion and depreciation charges of $44.0 million (due mainly to the acceleration of the amortisation of some major components of the open pit mining equipment at LEFA), interest and finance costs on bonds and other long term debt of $23.9 million, and non-cash foreign exchange losses of $14.0 million.

LEFA gold produced in the year ended December 31, 2009 was 177,923 oz (year ended December 31, 2008 – 197,556 oz). LEFA gold sold during the year ended December 31, 2009 was 188,623 oz (year ended December 31, 2008 – 188,526 oz). Gold produced from discontinued operations in the year ended December 31, 2009 was 51,772 oz (year ended December 31, 2008 – 75,989 oz) and gold sold from discontinued operations was 58,838 oz (year ended December 31, 2008 – 73,649 oz).

Total group attributable gold produced in the year ended December 31, 2009 was 229,395 oz (year ended December 31, 2008 – 273,545 oz). Total group attributable gold sold during the year ended December 31, 2009 was 247,661 oz (year ended December 31, 2008 – 262,177 oz).

For Full Results See attached PDF file.

William LeClair, Chief Executive Officer

Safe Harbour Statement

Certain statements contained herein that are not statements of historical fact, may constitute "forward-looking statements" and are made pursuant to applicable and relevant national legislation (including the Safe-Harbour provisions of the United States Private Securities Litigation Reform Act of 1995) in countries where Crew is conducting business and/or investor relations. Forward-looking statements, include, but are not limited to those with respect to (1) the expected availability of the SAG mills at LEFA, (2) the political environment in Guinea, (3) future operations at LEFA, (4) the expected reduction in corporate costs, (5) the effect of discontinued operations on Crew's ongoing operations, (6) expected expenditures at LEFA, (7) the expected future capacity and success of the LEFA mine and its expansion potential, (8) government regulation of mining operations, and (9) the price of gold. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "does not expect", "is expected", "targets", "budget", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or equivalents or variation, including negative variation, of such words and phrases, or state that certain actions, events or results, "may", "could", "would", "might" or "will" be taken, occur or be achieved.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, (1) the actual results of current exploration activities, (2) conclusions of economic evaluations, (3) changes in project parameters as plans continue to be refined, (4) possible variations in grade and ore densities or recovery rates, (5) failure of plant, equipment or processes to operate as anticipated, (6) accidents, labour disputes and other risks of the mining industry, (7) delays in obtaining government approvals or financing or in completion of development or construction activities, (8) actual cash flow and capital expenditure requirements being greater than anticipated, and (9) risks and uncertainties existing in world capital markets generally. Although Crew has attempted to identify important factors that could cause actual events or results to differ from those described in forward-looking statements contained herein, there can be no assurance that the forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements.

The material factors and assumptions used to develop forward-looking statements which may be incorrect, include, but are not limited to, (1) there being no significant disruptions affecting operations, whether due to labour disruptions, supply disruptions, damage to equipment or otherwise, (2) continued development, operation and production at LEFA consistent with our current expectations, (3) foreign exchange rates among the currencies the Crew does business in being approximately consistent with current levels, (4) certain price assumptions for gold, (5) prices for electricity, fuel oil and other key supplies remaining consistent with current levels, (6) production forecasts meeting expectations, (7) the accuracy of our current mineral reserve and mineral resource estimates, (8) materials and labour costs increasing on a basis consistent with Crew's expectations, and (9) the actions of the government of Guinea. 

Except as may be required by applicable law or stock exchange regulation, the Company undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.

Cautionary Note to US investors - The United States Securities and Exchange Commission permits US mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this document, such as "measured", "indicated", and "inferred" "resources", which the SEC guidelines strictly prohibit US registered companies from including in their filings with the SEC. US Investors are urged to consider closely the disclosure from the SEC's website at http://www.sec.gov/edgar.shtml.

Financial Results for Year Ended 31 Dec 2009

http://hugin.info/90/R/1400144/355542.pdf

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