crescent short term realities

Been ploughing through Crescent reports, etc as well as reading the informative posts by the usual suspects.

Think there are some harsh short term realities that need addressing in this proposed takeover of Crescent.

In the absence of production costings, if you examine Crescent's current open pit operations there appears to be insufficient ore availability at the required average grade to support a profitable campaign in the near future - the only decent pit appears to be Fish, however it is just not large enough to support sustained mining.

Would also say that the current level of exploration and development drilling is inadequate to locate new/upgrade deposits and maintain grade control of existing mining operations (this has perhaps been alluded to in the Focus Takeover Presentation).

To bring back underground operations at Summit will require expenditure of $13 million and could take up to six months (Alpha Securities Report Apr 2011).

It has been stated that the Barnicoat Mill requires a concentrator at a cost of $20 million (Alpha Securities Report Apr 2011) to become operational at Laverton, however its ability to perform satisfactorily with this new item has been questioned based on past problems with the plant (various reports back to 2005).

Any thoughts on moving this mill need to incorporate its suitability to treat ore at a new location.

Proceeds from toll treating are made at the end of 50 day campaigns which effectively leaves Crescent with a cash flow shortfall of around $15 million for 20 days per quarter to meet normal trade creditors., and the cost of any facility to provide temporary funding will have to be met, or alternatively Focus will have to meet it from cash reserves.

In all I can see Focus having to spend a fair bit of money in the short term to get Crescent back on track, and whether the gain is worth the pain needs questioning (especially when Focus may need funding for its own projects in the pipeline).