DATE: August 17, 2009

 

TRADING SYMBOLS;

TORONTO AND OSLO - CRU

LONDON, United Kingdom, August 17, 2009 - Crew Gold Corporation ("Crew" or "the Company") (TSE & OSE: CRU)

 

The Company will hold a conference call on August 18, 2009 at 11am (UK) / 12 midday (Oslo) to discuss these results. The details of this conference call have been released already.

         Overview

�   Total gold sold in the quarter was 60,525 oz at an average realised price of $926/oz (Q2 2008 - 65,737 oz sold at an average realised price of $913/oz)

�   Total gold sold for the six months ended June 30, 2009 was 136,933 oz (six months ended June 30, 2008 - 126,397 oz)

         Financial Results

�   EBITDA for the quarter of $14.0 million (quarter ended June 30, 2008 - negative $11.5 million)

�   Net profit of $4.1 million for the quarter ended June 30, 2009 (quarter ended June 30, 2008 - net loss of $30.6 million) with EBITDA of $14.0 million being offset mainly by amortisation charges of $6.0 million and interest and finance charges of $5.8 million

         LEFA

-          Quarterly gold production of 40,743 oz, due to reduced SAG mill capacity (Q2 2008 - 53,531 oz)

-          SAG Mill 2 ("SAG2") reinstalled in June 2009

-          SAG Mill 1 ("SAG1") taken offline for trunnion repair in July 2009, expected to be operational in early September 2009

-          Lero crusher stopped operations in June 2009 due to lightning, expected to be operational in early September 2009

-          Annual 2009 production target revised downwards to a range of 220,000 to 240,000 oz from previous estimate of 290,000 oz

-          Environmental bond agreed with the Government of Guinea with an unbudgeted $5 million being paid in June and July, to be followed by further analysis to reconfirm the estimated amounts of reclamation costs and the annual review process

 

         Maco

-          Quarterly gold production of 5,447 oz, (Q2 2008 - 5,380 oz)

-          Continuing to explore strategic alternatives

           Nalunaq Gold Mine ("Nalunaq") and Nugget Pond Processing Facility ("Nugget Pond")

-            Q2 gold production of 15,131 poured oz (Q2 2008 - 11,001 oz). The final gold recovery of the ore processed from Nalunaq is not yet complete. The treatment of the residual material from the process plant has not yet been completed

-            Toll milling at Nugget Pond commenced on June 29, 2009

-            Sale of all Nalunaq gold mine's assets, infrastructure, inventories and goodwill to Angus & Ross Plc completed in early July for $1.5 million cash of which $1 million has been paid and the remainder is due on authorisation of the transfer of the mining license by the Greenlandic Bureau of Minerals and Petroleum

           Outlook

-            SAG1 will be operational in early September 2009. A replacement for the Lero crusher transformer will be installed in August 2009 bringing the crusher back on line

-            Improve process plant reliability, improve efficiencies and reduce costs at LEFA

-            Continue to explore strategic alternatives for Maco

-            Continued reduction of corporate costs

-            Continue to work with the Government of Guinea on various issues. For example, industrial relations difficulties being resolved proactively to attempt to minimize disruptions as the workers and unions confirm various issues with the new Government, review of import duties to be completed and finalising the analysis on the environmental bond

 

 

 

Crew is an international mining company currently focused on restructuring its project portfolio and maximising the performance of its gold projects.

 

The Company adopted Canadian Institute of Chartered Accountants statement 3064 "Goodwill and Intangible Assets" during the year ended December 31, 2008. As a result prior period pre-operating revenues and costs for LEFA and Maco were recognised in the profit and loss statement and comparative unaudited profit and loss statement and balance sheet amounts have been restated where applicable.

For the quarter ended June 30, 2009, Crew reported EBITDA of $14.0 million (quarter ended June 30, 2008 - negative $11.5 million) with mineral sales of $56.7 million, realized gains of $1.9 million on the repurchase of a portion of the Company's outstanding long-term bonds in the quarter,direct mining and mine site administration costs of $40.2 million and general corporate expenditures of $3.5 million.

Net profit for the quarter ended June 30, 2009 was $4.1 million (quarter ended June 30, 2008 - net loss of 30.6 million) with EBITDA of $14.0 million being offset by amortisation charges of $6.0 million and interest and finance costs on the bonds and other long term debt of $5.8 million.

Total gold produced in the quarter ended June 30, 2009 was 61,321 oz (quarter ended June 30, 2008 - 69,912 oz).Total gold sold during the quarter ended June 30, 2009 was 60,525 oz (quarter ended June 30, 2008 - 65,737 oz).

For the six months ended June 30, 2009, Crew reported EBITDA of $27.4 million (six months ended June 30, 2008 - negative $14.5 million) with mineral sales of $124.5 million, realized gains of $1.9 million on the repurchase of a portion of the Company's outstanding long-term bonds in the period,  direct mining and mine site administration costs of $92.1 million and general corporate expenditures of $5.7 million.

Net loss for the six months ended June 30, 2009 was $7..8 million (six months ended June 30, 2008 - net loss of $68.4 million). This net loss arises from the EBITDA of $27.4 million offset by higher amortisation charges of $22.4 million (due mainly to the acceleration of the amortisation of some major components of the open pit mining equipment at LEFA) and interest and finance costs on the bonds and other long term debt of $12.8 million.

Total gold produced in the six months ended June 30, 2009 was 124,168 oz (six months ended June 30, 2008 - 131,292 oz). Total gold sold during the six months ended June 30, 2009 was 136,933 oz (six months ended June 30, 2008 - 126,397 oz).

For full results, please see attached pdf file.

 

Certain statements contained herein that are not statements of historical fact, may constitute forward-looking statements and are made pursuant to applicable and relevant national legislation (including the Safe-Harbour provisions of the United States Private Securities Litigation Reform Act of 1995) in countries where Crew is conducting business and/or investor relations. Forward-looking statements, include, but are not limited to those with respect to (1) the price of gold, (2) the estimation of mineral reserves and resources, (3) the realization of mineral reserves estimates, (4) the timing and amount of estimated future success of exploration activities, (5) the timing and amount of production estimates, (6) targeted production cash costs and forecasted cash reserves, (7) Crews hedging practices, (8) currency fluctuations, (9) requirements for additional capital, (10) government regulation of mining operations, (11) environmental risk, (12) title disputes or claims limitations on insurance coverage, (13) the timing and possible outcome of pending litigation, (14) the timing and terms of Crews proposed rights offering (15) expected cost reductions, and (16) the expected future capacity and success of the LEFA mine and its expansion potential. Often, but not always, forward-looking statements can be identified by the use of words such as plans, expects, does not expect, is expected, targets, budget, estimates, forecasts, intends, anticipates or does not anticipate, or believes, or equivalents or variation, including negative variation, of such words and phrases, or state that certain actions, events or results, may, could, would, might or will be taken, occur or be achieved..

 

Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, (1) the actual results of current exploration activities, (2) conclusions of economic evaluations, (3) changes in project parameters as plans continue to be refined, (4) possible variations in grade and ore densities or recovery rates, (5) failure of plant, equipment or processes to operate as anticipated, (6) accidents, labour disputes and other risks of the mining industry, (7) delays in obtaining government approvals or financing or in completion of development or construction activities, and (8) risks and uncertainties existing in world capital markets generally. Although Crew has attempted to identify important factors that could cause actual events or results to differ from those described in forward-looking statements contained herein, there can be no assurance that the forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements.

The material factors and assumptions used to develop forward-looking statements which may be incorrect, include, but are not limited to, (1) there being no significant disruptions affecting operations, whether due to labour disruptions, supply disruptions, damage to equipment or otherwise, (2) continued development, operation and production at LEFA and Maco consistent with our current expectations, (3) foreign exchange rates among the currencies the Crew does business in being approximately consistent with current levels, (4) certain price assumptions for gold, (5) prices for electricity, fuel oil and other key supplies remaining consistent with current levels, (6) production forecasts meeting expectations, (7) the accuracy of our current mineral reserve and mineral resource estimates, and (8) materials and labour costs increasing on a basis consistent with Crews expectations.

Except as may be required by applicable law or stock exchange regulation, the Company undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.

Cautionary Note to US investors The United States Securities and Exchange Commission permits US mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this document, such as measured, indicated, and inferred resources, which the SEC guidelines strictly prohibit US registered companies from including in their filings with the SEC. US Investors are urged to consider closely the disclosure from the SECs website at http://www.sec.gov/edgar.shtml.