crescent beats qtrly gold production forecasts

http://www.proactiveinvestors.com.au/companies/news/15990/crescent-gold-beats-quarterly-gold-production-forecasts-15990.html

Crescent Gold beats quarterly gold production forecasts

Thursday, May 05, 2011 by John Phillips

With a successful 21 day processing campaign recovering 11,929 ounces of gold through Barrick Gold?s Granny Smith processing mill, Crescent is looking at annual gold production of 80,000 - 90,000 ounces. Current market valuation is light based on gross revenues of $120m.

Top ten Australian listed gold producer Crescent Gold's (ASX: CRE TSX: CRA, FFT: CRE5) gold production through the Barrick Gold (NYSE: ABX) Granny Smith gold processing mill (BGSM) is on track to exceed quarterly gold production forecasts.

In the first 21 days using BGSM, Crescent recovered 11,929 ounces of gold, which kicked off in April, therefore putting the company on track to exceed forecast gold production of 22,000 ounces for the June quarter.

Under the ore purchase agreement with Barrick, Crescent transports ore to BGSM for processing in a 50 day processing cycle per quarter, with the processing mill strategically located in the Laverton region of Western Australia.

Mark Tory, managing director, said "The progressive re-establishment of multiple ore sources at Laverton and increased mining flexibility should see production rates progressively increase over the course of the year, associated with increasing grade profiles.

"Forecast production for the full year to December 2011 is between 80,000 and 90,000 ounces.?

The recent flooding in Laverton and the significant weather impacts previously reported at Crescent?s operations (which also impacted other local mining companies) during the March 2011 quarter is now historic.

Helping the bullish gold production forecast are the initial pit optimisations from the recent drilling results at Apollo indicate five pits are likely to be mined, with average grades of over 2 grams per tonne (g/t) gold.

Crescent said a reserve update will be made once further work is completed.

With 30 million tonnes of Measured, Indicated and Inferred Mineral Resources containing over 2.1 million ounces of gold, and a Probable Ore Reserve position of 445,000 ounces, Crescent aims to continue to build a presence in the Laverton district.

Building the prospectivity further of Crescent's holdings, the Laverton area hosts multi-million ounce deposits starting at 200 metres, and boosting the potential less than 2% of all drill holes are below 150 metres.

This provides significant upside potential on exploration targets and at depths, with opportunities including extensions to existing open pit resources, high grade underground and conceptual large scale, bulk mining targets.

Crescent plans to continue exploration and development to grow its reserve and resource base, and further leverage its production base to grow reserves, production, cash flow and earnings.

The company recently raised A$48.1 million, using proceeds from the rights issue to substantially strengthen its balance sheet and provide financial flexibility to further grow its gold production profile.

Crescent is currently valued at a significantly lower level to its peers on resource and reserve ounces of gold.

With estimated annual gross revenues of $120 million at a gold price of $1,500 an ounce relative to market value of $47.4 million, this tri-country listed gold producer's share valuation is trading at a discount to intrinsic value.
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That article tells the story. We may finally be coming out of the slump. The buying still looks "thoughtful" to me- it hasn't gone too hard- with $387,000 bought today, it looks solid: again, sellers aren't rushing for the exits, and we haven't become a trading freak show from too much attention.

Slow and steady, CRE. We've been down the elevator, now we're climbing up the stairs.