VANCOUVER, Canada, May 30, 2003 (PRIMEZONE) -- Crew Development Corporation (TSE:CRU) (OSE:CRU) (Frankfurt:KNC) (Other OTC:CRWVF) today announced its financial results for the quarter ended March 31, 2003. The results of operations for the nine months ended March 31, 2003, in summary, compared with the nine months ended March 31, 2002, were as follows (all figures expressed in thousands of Canadian Dollars): For the nine months ended March 31, 2003, the Company incurred a net loss of $13,718 ($0.10 per share), compared with a net loss of $34,686 ($0.27 per share) for the nine months ended March 31, 2002. For the three months ended March 31, 2003, the Company incurred a net loss of $4,104 ($0.03 per share), compared with a net loss of $22,896 ($0.17 per share) for the three months ended March 31, 2002.
In line with our previously stated goals for cost reduction, overhead costs were down by 33% year-on-year. Crew administrative, office and general expenses for the nine months ended March 31, 2003, amounted to $4,080, compared with $6,076 for the nine months ended March 31, 2002. The company will continue its focus on cost-effective operation.
On May 1, 2003, the Company announced a corporate reorganisation, whereby corporate management and key technical staff will be relocated to a new UK-based management company, a wholly owned subsidiary of Crew. The reorganisation is being implemented according to plan, and will be finalized by the end of June 2003. Accordingly, the Company has made a provision for reorganisation costs of $717, which includes the costs of relocating the new team to the UK, along with the costs of terminating staff and closing offices in Norway and Canada.
Professional fees for the nine months ended March 31, 2003, amounted to $1,251 compared to $1,570 for the nine months ended March 31, 2002. Included in the professional fees are non-recurring costs of $513 for the nine months ended March 31, 2003, relating to corporate reorganisation, bank financing for the Nalunaq Gold project in Greenland and formation of the new company for the Gold project. Included in the professional fees are non-recurring costs of $810 for the nine months ended March 31, 2002 related to the dissident case and related litigation for change in the board of directors that took place in March 2002.
Included in the net loss for the nine months ended March 31, 2002, is a provision for the decline in the market value of Asia Pacific of $17,979, as reflected by the completion of the Asia Pacific reorganisation transaction. During the nine months ended March 31, 2003, management decided that the investment will not be held as a long-term investment and have reclassified this investment as a short-term investment. Generally accepted accounting principles ("GAAP") require that, when the market value of short-term investments has temporarily declined below cost, they must be written down to market value. Accordingly, the Company is required by GAAP to make a provision for this decline in value. Included in the net loss for the nine months ended March 31, 2003, is a provision for the decline in market value of Asia Pacific of $2,887. During the quarter ended March 31, 2003, the Company disposed of 2.7 million shares for cash proceeds of $213 resulting in a loss on disposal of $35.
During the nine months ended March 31, 2003, the Company sold an additional 28.2 million shares of Metorex for cash proceeds of $12.6 million, resulting in a loss on disposal of $2,426.
The Company's share of net income from Metorex, its African operations amounted to $1,330 for the nine months ended March 31, 2003. In comparison for the nine months ended March 31, 2002, the company consolidated its 53% interest in Metorex in the financial statements, the net loss for the period amounted to $6,228. Included in this loss in 2002 is an impairment provision of $16,013, relating to Chibuluma copper mine. The company's share of loss from Metorex for the three months ended March 31, 2003 amounted to $383, compared with net income of $1,776 for the three months ended March 31, 2002. The loss for the current period is mainly attributable to a 24% decrease in gross revenue from the previous quarter. The group's ZAR denominated commodity prices declined mainly as a result of the strengthening of the ZAR/USD exchange rate.
Capital Resources
Cash on hand at March 31, 2003 amounted to $8,108 (June 30, 2002 -- $4,376). During the nine months ended March 31, 2003, the Company used $4,544 in cash from operating activities. With respect to the changes in working capital the primary source of the increase in cash was due to an increase in accounts payables and accrued liabilities accompanied by a promissory note. The net cash generated by changes in working capital amounted to $607. The current period financing activities generated cash of $2,413, from dividends income and repayment of amounts due from Metorex Limited.
During the nine months ended March 31, 2003 the Company invested $6,558, in advancing the Nalunaq Gold project. The Company also invested $163 on a new mineral property in Northern Norway, Ringvassoy Gold project and on the Nanortalik concession in Greenland. In connection with the Geothermal project the Company spent $220. The company acquired property plant and equipment in the amount of $37. During the nine months ended March 31, 2003, the Company disposed of an additional 28 million shares of Metorex for cash proceeds of $12,657.
Share Capital
At March 31, 2003, there were 250,000,000 common shares authorized of which 138,664,295 are issued and outstanding. At March 31, 2003, there were 11,235,000 options to purchase common shares outstanding.
Outlook
Over the last nine months the Company has changed its strategy from having the ambition of becoming a broadly diversified multi-commodity mining company to focus primarily on precious metals. This change in strategy is a result of a management and board evaluation of where the main potential for near-term income is, as well as where the company can see further growth based on the company's own financial and human resources. Management will focus on identifying new projects with near-term cash flow potential as well as develop existing assets.
Crew seeks to maintain a balanced portfolio of both exploration projects and cash-generating projects. The recent ETC acquisition, with an anticipated pay back period of less than 3 years and at least 10-year expected remaining mine life, is in full alignment with Crew's strategic focus on gold and precious metals, as well as in line with the company's previously expressed intentions of entering into projects with existing or near-term cash flow. In combination with the forthcoming gold production from the Nalunaq gold mine in Greenland, as well as other projects where Crew is investigating the potential for near-term production and cash flow, the acquisition of ETC strengthens Crew's ambition of becoming a growth oriented gold producer. Crew is well positioned to meet the future with an attractive portfolio of projects, a solid balance sheet and treasury.
Please see link for 3rd Quarter Financials: http://www.crewdev.com/files/yearendfs/CRU_Q3MDA.pdf
Jan A. Vestrum President and CEO
This news release contains certain "Forward-Looking Statements." All statements, other than statements of historical fact, included in this release, and/or statements made by company officers or directors at any given time, as well as Crew's future plans are such forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made, and Crew does not undertake any obligation to update forward-looking statements should conditions or management's estimates or opinions change.
For more information please contact our UK Head Office, TEL: +44 193-226-8755 or the Oslo Office at +47 22 12 16 50, email IR@crew.no . For more information about Crew, additional contact information or to subscribe to future news releases, please visit our new website: www.crewdev.com