the west.com.au - 14th july 2011

It's been a slow start for Focus Minerals boss Campbell Baird in his $72 million friendly scrip-swap takeover of Crescent Gold.

The suitor's shareholding has only just passed the 20 per cent threshold and even then most of the stake has come courtesy of a pre-bid acceptance from Deutsche Bank while Crescent's directors last week folded their shares into the Focus one-for-1.18 offer.

While a rival offer appears unlikely in the run up to the August 1 deadline, shareholders in both camps are still deciding whether the union of the Goldfields miners is a good one.

Crescent has been on its last legs and there has been talk the Laverton-focused miner had been hunting for a white knight. Crescent's problem, and hence its shareholders', is that it has struggled to make money at a time of record gold prices.

Baird's punt is based on a belief Focus can turn around Crescent's performance and, at the very least, reduce cash costs to levels around $800/oz. He has pointed to a new operational team at Crescent, plus Focus' experience, as the reason for his confidence. Hence his plan to create a Goldfields player with a 230,000oz a year production footprint.

The gold price has been above $1000/oz for almost three years and production costs of between $800/oz and $900/oz have become common in the industry.

Focus investors are yet to be convinced that bigger is better, given their own miner's battle to curb costs at the Coolgardie base.

There's mystery surrounding Focus' Treasure Island exploration project near Kambalda, touted as a potential game changer earlier this year.

Focus is in the midst of a 20-hole drilling program at Treasure Island to follow-up some high-grade rock chip sampling. There's been little news on the drilling although word around the traps is the last holes have struck some high gold grades.

It is the sort of news that could propel Focus' share price (it closed at 6.9? on Friday). Ever since the Crescent bid was announced three weeks ago, there have been mutterings that Focus would need to rattle the tin for a substantial amount of money post-takeover. Any tick-up in share price is welcome, although next month will be when Focus really needs its stock to head north.