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CRE, CRESCENT GOLD LIMITED
busylion
post Posted: Apr 30 2010, 03:59 PM
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In Reply To: busylion's post @ Apr 30 2010, 12:37 PM

Quarterly confirm my previous comments in last post:

  • The cash cost (C1) of the second campaign is about A$1397/oz (from appendix 5b to get production cost. Production cost/oz of gold produced= A$31.655m /to produce 22658 oz of gold = A$1397/oz.)
  • The cashflow is negative A$4.39m
  • The total cashflow for the last two campaigns is negative A$2.09m and hence it is highly unlikely (or practically impossible) to get positive cashflow of A$50 for phase 1 operations/ with end date 31 December 2010 (it is hard for the next 2 or 3 quarters to get A$48m positive cashflow).


 
busylion
post Posted: Apr 30 2010, 12:37 PM
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North American Roadshow and Capital raisings





My observation and comments:



[A] The road show slide pack provides an excellent picture of CRE operation and future strategies.



  • It seems the statement ” +A50m of operating cashflow from phase 1 operation to December 2010” and “forecasting about A$30 to 40m free cashflows per annum ” are very ambitious. In my assessment, the probability of achieving the above statements are very remote/small based on the last two campaigns under OPA (ore purchase agreement).Refer to the December quarterly report (page 5), the cashflow is + A2.3 m (this is the first campaign) and March quarterly is not out yet and today is the last to lodge the March quarterly. ASX announcement on 11 March “successful Completion of second ore process campaign” indicated the gold produced was 22658 oz this March quarter compared to 27251 oz produced in the December quarter. Hence the cash cost (C1) will most likely to increase beyond A$841/oz (December quarter and will not be surprised if it is above A$1000/oz) and the cash flow maybe just near break even or just positive. Need to be confirmed by the March quarterly. Due to the past 2 quarters with OPA, the cash flow is below A$3 million each, hence it is highly unlikely to achieve the +A50m cashflow for phase 1 operation (till December 2010).


The half yearly report and Auditor Report

The half yearly report and its BRR (board Room radio) present the first half yearly profit of A$ 898k. It is the first profit in the past 9 years as an explorer and a gold producer. It seems the company has turned the corner by having OPA/Ore Purchase Agreement [ie by using Barrick’s Granny Smith Mill (BGSM) instead of its own troublesome Crecent gold's Barnicoat mill. For further details, refer to the OPA agreement, ASX announcement 15 Jun 2009]. [b]Unless share holders read the auditor’s “going Concern” comment in the section 2 (page 20)
of the half yearly, no share holders will know that it required to raise more capital. I copied the Auditor’s comment below.




The financial report had been prepared on the going concern basis, which contemplates the continuity of

normal business activity and the realisation of assets and the settlement of liabilities in the normal

course of business.



The consolidated entity has experienced net cash outflows of $5,129,000 for the half year ended 31

December 2009.



As at 31 December 2009 the consolidated entity has net current assets of $12,315,000 which includes

$7,145,000 in cash and cash equivalents, inventories of $14,512,000 and convertible notes of

$4,971,000 which were repaid or converted on 1 March 2010 (repaid $4,500,000; converted $500,000).



The scheduled repayment of the convertible notes and forecast operational and capital expenditure

arising from the mining operations at the Laverton Gold Project are expected to be met from operational

cash flows, existing cash resources and additional short-term financing and/ or capital raising.

During the half-year to 31 December 2009 and the period to the date of this report, the directors have

taken steps to ensure the consolidated entity continues as a going concern. These steps have included:



i) the signing in June 2009 of an Ore Purchase Agreement, with subsidiaries of Barrick Gold

Corporation, in relation to the purchase by Barrick Gold Corporation of Crescent’s Laverton gold

ore and its batch treatment through Barrick’s Granny Smith Mill;



ii) the signing in August 2009 of an agreement to acquire Barrick Gold and Carbon Energy Limited’s

assets in the Laverton region, thereby boosting Crescent’s gold inventory to over 2.1 million ounces

of Measured, Indicated and Inferred Resources;



iii) the commencement of mining and haulage operations from the Company’s Laverton Gold Project;

iv) on 22 January 2010, the Company completed a placement of 26,615,000 shares to raise

$5,323,000 million equity. The shares were placed at a price of $0.20 per share and include one

option for every two shares issued. These options expire on 15 January 2013 and have an

exercise price of $0.30 per option;



v) the marketing of a $15,000,000 convertible note issue, the indicative terms of which are interest at

9% per annum, 24 month term, convertible at 30 cents per share. The final terms and conditions of

the convertible note issue are still subject to negotiation;



vi) the negotiation of a $7,000,000 finance facility. It is currently proposed that the facility will have a

maturity date of 15 June 2010 and that interest will be charged at 12% per annum. The final terms

and conditions of the facility are still subject to negotiation.



The timing difference between the ramping up of mining activities and the receipt of proceeds from gold

production has given rise to temporary working capital deficiencies. The amount and timing of working

capital required will be dependent on various factors which are not in the control of directors including

future gold prices, gold recovery and processing costs. The consolidated entity has repaid or converted

$5,000,000 of convertible notes on 1 March 2010 (repaid $4,500,000; converted $500,000).



The ability of the consolidated entity to continue as a going concern is dependent on:



i) the finalisation and receipt of proceeds from the $15,000,000 convertible note issue by 31 March

2010;



ii) the finalisation of the $7,000,000 facility in March 2010;



iii) the receipt of the projected net cash inflows from the Ore Purchase Agreement with Barrick.

The directors have reviewed the consolidated entity’s overall position and outlook in respect of the

matters identified above and are of the opinion that the use of the going concern basis is appropriate in

the circumstances.



However, if the consolidated entity is unable to achieve successful outcomes in relation to the matters

discussed above there is significant uncertainty whether the consolidated entity will be able to continue

as a going concern.



Should the consolidated entity be unable to continue as a going concern, it may be required to realise its

assets and extinguish its liabilities other than in the normal course of business and at amounts different

from those stated in the financial report.



The financial report does not include any adjustments relating to the recoverability and classification of

recorded asset amounts or to the amounts and classification of liabilities that may be necessary should

the consolidated entity be unable to continue as a going concern.





[c] Raising capital

It seems the capital raising is mainly from convertible note and bank loan facility (from Auditor report). It will be nice if retail share holders can participate in the capital raising via SPP (share purchase plan) or right issue.





 
busylion
post Posted: Feb 18 2010, 12:24 PM
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Depressed share price with no announcement.



A placement of 26,615,000 million shares to raise a$5,323,000 million equity to sophisticated investors has been completed on 22 Jan 2010. These sophisticated investors include several global gold funds based in the US and Canada. The shares were placed at a price of a$0.20 per share and include one option for every two shares issued. These options expire on 15 January 2013 and will have an exercise price of a$0.30.





The funds raised will be used for the unbudgeted acquisition costs and subsequent accelerated development work (primarily drilling) on the Laverton Extended Joint Venture (LEJV) properties.



12.5 m convertible note, with total amount of 5m expiring on 1 March 2010, will be redeemed at 40c per note. Since the share price below 40c, therefore don not expect the note holders will convert the notes to shares (unless the share price can move higher than 40c before expiry date). As a result, the company cash holding will be reduced by $5m.



A few interesting events have taken place during this March qarterr.



Why the share price so depressed? Could it be the recent share market correction in the last 3 weeks casing the drop of 9% since new year (recent days it has recovered 4%, giving the net loss about 5%)? Lower grade open pits deposit (eg Admiral hill and Euro) being mined after higher grade Sickle open pit has been completely mined out and hence potential higher cash cost (C1)?



Anyone care to comment?



 
ricm
post Posted: Oct 16 2009, 09:07 AM
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knew this had to run eventually...great presso the other day!
layed out their plan, now lets see if it comes off smile.gif

 
ricm
post Posted: Jun 22 2009, 11:25 AM
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In Reply To: itm54's post @ Jun 11 2009, 11:57 PM

...even mushrooms can be made to taste good with the right recipe;)

i could see by a few anns earlier this year that deutche wouldnt take their previous failure lying down, pick yourself up, dust yourself off, good solid contract to now get them moving in the right direction. As long as they can provide the ore needed, get the cash coming in, then more room to move with more exploration...

 
itm54
post Posted: Jun 11 2009, 11:57 PM
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In Reply To: ricm's post @ Jun 11 2009, 10:14 PM

Yes, wonder what caused the big move today. No doubt when they get the inevitable speeding ticket from the ASX tomorrow they'll say they don't know what's happening & that they're fully compliant with the rules - then miraculously there'll be an ann. Meanwhile we sit here like mushrooms.

 

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ricm
post Posted: Jun 11 2009, 10:14 PM
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interesting goings on with this on the market...no news as yet, but something to keep a watch on.

 
itm54
post Posted: Feb 19 2009, 03:44 PM
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In Reply To: RADIO's post @ Sep 9 2008, 04:25 PM

The dead dog (cat ?) has awoken & bounced, any clues why ?

 
RADIO
post Posted: Sep 9 2008, 04:25 PM
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user posted image
Recent ShareScene.com Radio Broadcast (02/09/2008 14:00:00):
CRE - AMEC Investor Briefing: Investing in Mining Stocks - Mr Roland Hill, Managing Director

N.B. ShareScene.com Radio can normally be accessed by the 'RADIO' link, top of every page.
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ShareScene.com Radio delivers investor presentations from ASX listed companies. Keep up to date with the latest corporate dealings of the shares you follow. Hear news direct from the source. Listen to directors and investor relations mangers discuss their company, give investor updates and brief on current results. ShareScene.com Radio keeps you informed about company announcements and events, and provides you daily market wraps and industry discussions.
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RADIO
post Posted: Jul 15 2008, 12:42 PM
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user posted image
Recent ShareScene.com Radio Broadcast (09/07/2008 15:00:00):
CRE - Strategic Operational Review - Mr Roland Hill, Managing Director

N.B. ShareScene.com Radio can normally be accessed by the 'RADIO' link, top of every page.
-------------------------------------------------------------------------------------------------------------
ShareScene.com Radio delivers investor presentations from ASX listed companies. Keep up to date with the latest corporate dealings of the shares you follow. Hear news direct from the source. Listen to directors and investor relations mangers discuss their company, give investor updates and brief on current results. ShareScene.com Radio keeps you informed about company announcements and events, and provides you daily market wraps and industry discussions.
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