LONDON, Feb. 26, 2004 (PRIMEZONE) -- Crew Gold Corporation ("Crew") (TSE:CRU) (OSE:CRU) (Frankfurt:KNC) (Other OTC:CRUGF): For the six months ended December 31, 2003, (figures in CAD thousands unless otherwise stated) Crew Gold Corporation (Crew, "the Company") incurred a net loss of CAD 438 (CAD 0.00 per share), compared with a net loss of CAD 9,614 (CAD 0.07 per share) for the six months ended December 31, 2002. Included in the net loss of CAD 438 are charges of CAD 210 (2002: - CAD nil) relating to the amortization arising from the equity portion of the convertible bonds. Also included in the net loss is CAD 511 (2002 - CAD nil) in interest expense on the bonds. The performance of Barberton exceeded expectations for the quarter, and Crew recorded equity income of in total CAD 367 (2002-CAD nil) arising from Barberton Mines Limited plus interest earned on loans advanced of CAD 355 (2002: CAD nil). Overhead expenditure for the quarter ended December 31 2003 was CAD 1,793 (2002-CAD 2,059), representing a further decrease from the previous year of 13%.
The results in 2002 were negatively impacted by the loss on disposal of Metorex shares ($2,426), the provision for the decline in the market value of Asia Pacific investment ($1,980) and the provision for the impairment of the geothermal asset ($2,818). The Company has revised the accounting classification of its convertible bonds. In accordance with generally accepted accounting principles, a lower value has been ascribed to the bond holders' option to convert and accordingly this change has resulted in a balance sheet reclassification of CAD 6,746 from the equity component of the convertible bonds to long term liabilities. Cash on hand at December 31, 2003 amounted to CAD 13,531 (June 30, 2003 - CAD 6,690).
Nalunaq Gold Mine
During the quarter the work at the mine was focused on preparing the mine for production, completing permanent mining and mine site infrastructure. The loading of the first shipment of ore had started by the end of the quarter. Of NGM's total stockpile of around 38.000 tons to be sent for processing, 30,969 tonnes of ore has been sent to the El Valle processing plant in Spain. The Company was pleased to announce that the first gold from the Nalunaq mine was poured at El Valle on February the 9th. The processing of the first batch of ore is nearly complete and the Company is pleased to report that the preliminary results appear to confirm that actual gold grades are in line with models and forecasts. The future shipments of ore will take place on a three-month rolling basis and the next shipment of ore is expected to take place in May 2004.
An aggressive exploration campaign is planned at Nalunaq for 2004 including work on the extension of levels 350, 400 and 450, the valley sector and in particular the high grade zone from level 600 to 800. The objective is to deliver a significant increase in resources, allowing for added mine life, potentially increased production and more importantly an economic basis for an on-site processing plant.
Seqi Olivine Project
The Feasibility Study for the Seqi Olivine Project will be completed shortly. Data from last autumn's drilling indicates a substantially larger resource than needed for the scale of operations planned at, or above, industry quality requirement. With no other known technical obstacle, management believes the finalization of the economic evaluations will result in a positive conclusion. Subject to the exercise of their option to participate in the project by industrial partner LKAB, Crew will seek to advance towards a (quarrying) operation with a target of commencing in production in 2005.
Liquidity and Cash Resources
Cash on hand at December 31, 2003 amounted to CAD 13,531 (June 30, 2003 - CAD 6,690). During the three months ended December 31, 2003, the Company used CAD 852 in cash from operating activities. The Company raised, net of expenses of the issue, CAD 20,561 by issuing Convertible Bonds in September 2003. During the three months ended December 31, 2003, the Company used CAD 8,333 in investing activities. The Company invested CAD 10,740 in the final stages of the development of the Nalunaq Gold Mine. The Company also invested CAD 229 in exploration activities on its Nanortalik exploration licence in Greenland.
Outlook
The Company's immediate priority is the finalization of the Nalunaq development programme and to reach the Company's target of full-scale production by early 2nd quarter 2004. It remains management's opinion that the exploration licence held by the Company and its partner, Nunaminerals on both Nalunaq and the remaining Nanortalik license, could prove to be a new gold region and high priority will be given to ongoing gold exploration activities. Planning is under way for a follow-up exploration program on both Lake 410 and Niaqornarsuk based on last summer's encouraging exploration results.
The Company is well positioned for further growth in addition to representing solid value based on cash flow generation projects with very attractive margins. In our efforts to develop shareholder value further, Crew Gold Corporation has an ambition of becoming a mid-tier gold producer through a combination of organic growth and favourable acquisitions.
With the present strong commodity prices, and with gold and nickel in particular, the company is seeking to leverage on this situation through aggressive exploration, industrial partnerships and possible acquisitions. Crew has a strong financial position and will use this in a prudent way to expand its activity to reach its strategic goals and has adequate liquid resources to fund the development of its mining properties and for ongoing corporate purposes.
JAN A. VESTRUM President & 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 1932 268 755), or Crew's Oslo Office (TEL +47 2212 1650), or send an email to IR@crew.no. For more information about Crew, additional contact information or to subscribe to future news releases, please visit our website www.crewgold.com
CREW GOLD CORPORATION
(formerly Crew Development Corporation)
Consolidated Balance Sheets
(Expressed in thousands of Canadian dollars)
December 31, June 30,
2003 2003
(unaudited)
ASSETS
CURRENT
Cash $13,531 $ 6,690
------- --------
Accounts receivable 1,365 359
Prepaid expenses 2,875 344
Due from Metorex
Limited 572 639
Investment in Metorex
Limited 2,757 3,716
Investment in Asia
Pacific Resources 144 1,731
------- --------
$21,244 13,479
NALUNAQ MINERAL
PROPERTY 62,282 45,135
INVESTMENT IN AND
ADVANCES TO BARBERTON
MINES LTD 6,859 5,258
SECURITY DEPOSIT 926 877
DEFERRED FINANCING
COSTS 1,420 -
OTHER MINERAL PROPERTY
INTERESTS 4,053 3,453
OTHER 186 191
------- --------
$96,970 $68,393
------- --------
LIABILITIES
CURRENT
Accounts payable and
accrued liabilities $7,831 $ 2,859
Accrued restructuring
costs 232 328
Promissory notes
due to related parties - 378
------- --------
8,063 3,565
CONVERTIBLE BONDS 20,967 -
FUTURE INCOME TAXES 3,338 3,338
NON-CONTROLLING INTEREST 3,940 4,008
------- --------
36,308 10,912
------- --------
SHAREHOLDERS' EQUITY
Share capital 162,257 160,115
Share purchase
warrants 22 22
Contributed surplus 275 275
Equity component of
convertible bond 859 --
Deficit (103,146) (102,708)
Cumulative translation
adjustment 395 (222)
------- --------
60,662 57,482
------- --------
$96,970 $68,393
ON BEHALF OF THE BOARD:
Signed "Jan Vestrum" Signed "Cameron G. Belsher"
Jan Vestrum, Director Cameron G. Belsher, Director
CREW GOLD CORPORATION
(formerly Crew Development Corporation)
Consolidated Statements of Loss and Deficit
(Expressed in thousands of Canadian dollars)
(Unaudited)
Three months ended Six months ended
December 31 December 31
------------------------- ------------------------
2003 2002 2003 2002
----------- ----------- ----------- ----------
EXPENSES
Administration,
office and
general (1,321) (1,503) (2,572) (2,568)
Amortization (20) (56) (38) (115)
Interest - - - (55)
Professional
fees (452) (500) (600) (804)
----------- ----------- ----------- -----------
(1,793) (2,059) (3,210) (3,542)
----------- ----------- ----------- -----------
OTHER INCOME
(EXPENSES)
Equity earnings
from investment
in Barberton
Mines Ltd. 367 - 696 -
Equity earnings
from investment
in Metorex
Limited - 213 - 1,713
Gain (loss) on
disposal of
interest in
Metorex 182 (2426) 183 (,2426)
Foreign exchange
gain (loss) 168 (859) 168 (976)
Gain on disposal
of interest in
Asia Pacific 701 - 701 -
Gain on disposal
of assets 16 216 16 195
Interest and
other income 282 124 541 175
Gain on sale of
Geothermal
asset - - 1,320 -
Interest and
charges on
convertible
bond (592) - (721) -
Provision for
decline in
market value of
investment in
Asia Pacific - (1,980) - (1,980)
Provision for
impairment of
Geothermal
asset - (2,818) - (2,818)
----------- ----------- ----------- -----------
1,124 (7,529) 2,904 (6,116)
----------- ----------- ----------- -----------
NET INCOME (LOSS)
BEFORE PROVISION
FOR INCOME
TAXES AND
NON-CONTROLLING
INTEREST (669) (9,589) (306) (9,658)
----------- ----------- ----------- -----------
PROVISION FOR
INCOME TAXES
Current (108) - (108) -
----------- ----------- ----------- -----------
(108) - (108) -
----------- ----------- ----------- -----------
NET INCOME (LOSS)
BEFORE
NON-CONTROLLING
INTEREST (777) (9,589) (414) (9,658)
NON-CONTROLLING
INTEREST (39) 27 (24) 44
----------- ----------- ----------- -----------
NET INCOME (LOSS)
FOR THE PERIOD (816) (9,561) (438) (9,614)
DEFICIT,
BEGINNING OF
FISCAL PERIOD (102,330) (83,899) (102,708) (83,847)
----------- ----------- ----------- -----------
DEFICIT, END OF
FISCAL PERIOD $ (103,146) $ (93,460) $(103,146) $(93,460)
NET INCOME
(LOSS) PER
SHARE--
BASIC AND
FULLY
DILUTED $ (0.00) $ (0.07) $ 0.00 $ (0.07)
----------- ----------- ----------- -----------
WEIGHTED AVERAGE
NUMBER OF
SHARES
OUTSTANDING 140,420,068 125,506,194 140,104,512 128,506,194
----------- ----------- ----------- -----------