Nalunaq brightens Crew’s financial outlook

Vancouver – Initial gold production from the Nalunaq Gold mine in Greenland contributed a net profit of US$0.9 million for London-based Crew Gold’s (CRU-T) first quarter ended September 30, 2004. The company is focusing on resource expansion in the coming year. Its number one priority is Nalunaq but it is looking at opportunities in central Europe, Greenland and the Philippines as well.

Crew recorded EBITDA of US$1.3 million compared with US$0.2 million in 2003, and a net loss for the quarter of US$0.5 million compared with a profit of US$0.3 million last year. This year’s results were largely driven by the activities at Nalunaq, while a one time gain of US$1.1 million was realized from the sale of the company’s Meager Creek geothermal asset last year.

The Nalunaq gold mine was officially opened August 26, 2004 and ore is being shipped to Rio Narcea’s (RNG-T) mine in Spain for processing. Revenues from gold sales from the ramp-up phase for the quarter were US$9.9 million with cash costs at US$259 per oz., including milling and processing costs.

Crew aims to reduce cash costs to US$180-$200 per oz. in 2005 now that the mine is completely commissioned and operating at a steady 420-450 tonnes per day. The mine is expected to generate strong cash flow in the coming year and ore production is being geared towards improving grades by reducing dilution.

The first shipment of production ore left Greenland on August 12, 2004 and totals 40,000 tonnes shipped so far. The next shipment of 30,000 tonnes is expected to be processed before the end of the year.

The company is working toward expanding its reserves through exploration at Nalunaq including a program to increase the resource base and start planning for an on site processing plant. A US$3.5 million exploration program for the South Block (valley sector) was developed following this summer’s drilling program. It will be followed by testing the Upper Block (mountain sector between 600-900 level). Crew’s other gold concessions in the country will also be explored using two recently purchased drill rigs