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

Crescent Gold Limited

January 27, 2011 00:01 ET

Gold Rush as Crescent Rights Issue Is Oversubscribed and $48.1m Is Raised

PERTH, WESTERN AUSTRALIA--(Marketwire - Jan. 27, 2011) -

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 that it has closed its A$45 million Rights Issue oversubscribed after fund managers and institutional investors pushed the level of acceptable applications beyond the offer target.

Crescent, whose >100,000 oz p.a. production and exploration assets are centred around the Laverton gold province north of Kalgoorlie in Western Australia, announced today that it had accepted final applications for A$48.1 million worth of shares, A$2.6 million or 6% higher than the original amount on offer.

The planned closure of the offer late last year was delayed until now after professional investors  in Australia and internationally encouraged an extension of time to allow them to undertake full due diligence amid the disruption of the traditional Christmas-New Year holiday period.

Crescent had before the former close date in December, attracted more than A$31 million towards the A$45 million target but announced then that it was confident of securing its full target through agreeing to an extension of the Offer's time period.

Crescent Gold Acting Managing Director, Mr Mark Tory stated:

"This is an outstanding result and vindicates the decision to hold the Offer open.

"We are now well cashed up for the medium term, and are able to vigorously and fully pursue our desired forward exploration and mine expansion initiatives, with no scale back required.

"The strength of the take-up is encouraging. Exceeding the targeted Rights issue raising indicates the strong support on a global level for Crescent, its gold mining operations and long term growth strategy. Crescent is a pure gold play with a healthy balance of producing assets and advanced brownfield and greenfields exploration assets. Combined, it's a strong package of production in one of the world's strongest performing commodities – so not surprisingly, this appealed to professional and senior investors in particular."

Crescent will issue 436,940,400 ordinary shares under the rights issue, taking the Company's total number of shares on issue to 1,065,078,087.

Sophisticated investors, including global gold funds based in Australia, North America and the United Kingdom, have been among the successful bidders for the new Crescent scrip.

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. 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. This will enable Crescent to have a secondary production source and cash flow.

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.

2011 work program

Mr Tory said the most immediate work ahead would be the dewatering of the Summit underground mine and the start of feasibility work on the project.  Also the Company would plan deep exploration holes on exciting targets within the Laverton region in the first quarter of 2011.

Mr Tory also thanked the efforts of the team at Jendens Securities in London and the team at Southern Cross Equities in Australia for their work and support in finalising the capital raising.

ABOUT CRESCENT GOLD

Crescent Gold is a top 10 listed Australian gold producer and explorer. Based in Western Australia, current annual production of 100,000-120,000 ounces is being sourced from a series of open pits at our Laverton Gold Project (LGP).

Crescent maintains a position of over 1,200km2 of highly prospective tenements in a world recognised and well endowed mineralised geological domain. With 30Mt of Mineral Resources which contain over 2.1Moz of gold, and an Ore Reserve position of 445,000 ounces contained gold, Crescent has a plan to carry on building its presence in the Laverton district and to continue with its exploration and development strategy of growing its reserve/resource base and extending the mine life of its production schedule beyond 2016.

FORWARD LOOKING STATEMENT This discussion and analysis contains certain forward-looking statements. These include statements about our expectations, beliefs, intentions or strategies for the future, and are indicated by words such as "budget", "anticipate", "intent", "believe", "estimate", "forecast", "expect", and similar words. While all forward-looking statements reflect our current views with respect to future events, they are subject to certain risks and uncertainties. Actual results may differ materially from those projected in these statements for a number of factors, including those which are described in the Corporation's periodic filings with securities regulatory authorities.  We base our forward-looking statements on information currently available to us and we do not assume any obligation to update or revise them, except in accordance with applicable securities laws, readers should not place undue reliance on forward-looking statements.

In accordance with the requirements of Canadian National Instrument 43-101 further information on the geology and mineralising setting can be found within the "Independent Technical Report on the Laverton Gold Project Western Australia" which is available on SEDAR (www.sedar.com) or the Company's website www.crescentgold.com.

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

SHARE INFORMATION

ASX Share Price: A$0.11
Issued Shares: 1,065.1m
Market Cap: A$117.2m
Unlisted options: 33.2m

ABN 49 087 360 996

Contact Information

  • Crescent Gold Limited - Australia
    Mark Tory
    Interim Managing Director
    +61 8 6380 7100
    or
    Crescent Gold Limited - Canada
    Renee Brickner
    +1 604 802 6806
    www.crescentgold.com