croesus capital raising

Croesus capital raising


Ben Sharples


Thursday, December 01, 2005
GOLD producer Croesus Mining is looking to top up its coffers with an $A8.6 million raising to fund accelerated mine development and exploration at its Norseman gold operations in Western Australia.

Croesus is offering a pro-rata renounceable rights issue on the basis of one share for every 10 shares at 26c each. A total of 32.9 million shares will be issued.

The funds will be used to extend development at the Harlequin mine, which provides the bulk of high-grade ore feed to Norseman, and the Bullen mine, as well as fund accelerated exploration of the Mararoa Reef.

At Harlequin, the HV1 East and Redfin declines will be extended to increase production, while at Bullen, mine development will be undertaken at the St Patricks and Mararoa orebodies.

Croesus expects the mainstay Norseman operations to produce around 45,000-50,000 ounces in the first half of fiscal 2006, increasing in the second half to 60,000-65,000oz at cash costs of around $A450/oz.

Production from Norseman in the following year is forecast at 130,000-140,000oz at cash costs of under $A400/oz. In 2004/05, Croesus produced 183,000oz at $A440/oz.

Earlier this month, Croesus warned shareholders to expect a significant loss in the first half of fiscal 2006 on the back of hedging losses brought to account and operational underperformance. Operationally, the company is staring at a loss in the order of $A10 million for the half.

Shares in Croesus hit a 52-week high around this time last year of 68c before slipping to a 52-week low of 29c in June. The stock remained unchanged during morning trade at 30.5c.