Aegis have upgraded from hold to buy.Aegis Equities...

Aegis have upgraded from hold to buy.

Aegis Equities Comments
Projects: The half year to December 2004 was hampered by low manning levels at Norseman, although the second quarter was above budget: 144kt mined from open pits and 35kt from underground, combined head grade of 6.35g/t to produce 34,884 oz, cash cost of $339/oz. At Davyhurst, mining tenders for the Callion, Walhalla and Federal Flag open pits plus several laterite ore bodies have been called.
Potential: Norseman has excellent exploration upside and the results from the HV1 East reef underline this. The mineralised reef has been developed over a strike length in excess of 200m and remains open down plunge. CRS plans to accelerate mining of the HV1 East with full production from this high grade reef to begin to make a significant contribution in the June quarter. Further drilling at Sunraysia north of Davyhurst may produce an initial resource estimate this quarter.
Overall: Gerard Anderson took over as CEO in February, following the resignation of the long serving Michael Ivey. With a background in narrow vein, underground mining, Mr Anderson is likely to bring new initiatives into the company with an extra focus on the underground potential of Norseman. CRS is in excellent shape with cash at hand of over $19M, an improving production outlook for the December half 2005, and a large exploration effort of $7.0Mpa.