Crew raises $28.7 million, and stake in Nalunaq

Crew Development (CRU-T) has completed the private placement of about 25.4 million units at $1.13 apiece for proceeds of $28.7 million.

Each unit consists of one share and half a warrant. One warrant allows for the purchase of an additional share at $1.47 for 12 months. Crew now has 128.4 million shares outstanding, or 146.7 million shares fully diluted.

The investments were made by institutional and private investors. The proceeds are earmarked primarily for the advancement to production of the company’s 67%-owned, high-grade Nalunaq gold project in Greenland. Some of the funds will also be used for investment.

Crew has also announced that it has entered into an agreement with NunaMinerals, its joint-venture partner at Nalunaq, to gain full operational control with a direct 82% interest. NunaMinerals'(which is owned by the state of Greenland) interest has been converted to an 18% net carried position from its previous 33% contributing interest.

In return, Crew must fund the project through to the end of a final feasibility study, which is expected in four-to-six months. Crew must also provide the necessary project loan guarantees. Once the study is completed, Nuna will be required to cover 18% of any expenditures, including working capital, until the mine is commissioned.

Crew has begun a 2001 work program with the aim of completing a final feasibility study and preparing for mine construction. The program will include the completion of necessary environmental work, a resource expansion drilling program and further underground test mining.

The remainder of the 1,081-sq.-km concession held by the Nalunaq joint venture will continue to be owned 67% by Crew and 33% by NunaMinerals. The concession includes several other high-grade gold discoveries, which the partners plan to explore further.

Nalunaq measures 1,080 sq. km and is a high-grade, narrow-vein, underground project. It is 40 km from the village of Nanortalik on the southern tip of Greenland. Crew acquired its stake in the project in late 1999 through a merger with Mindex, a Norwegian exploration company. The remaining 33% is held by NunaMinerals, which is owned by the government of Greenland.

The prospect is a gold-bearing quartz vein and calc-silicate altered shear system that outcrops on the eastern and northern faces of Nalunaq Mountain. The vein system has been exposed semi-continuously along a 1,750-metre slope of the mountain.

Gold occurs in a free state and almost exclusively in association with quartz in veins and veinlets. A high nugget effect has caused erratic grades, raising concerns about the continuity of ore zones. Surface sampling has returned up to 800 grams gold per tonne across 1 metre. Underground channel sampling has yielded up to 5,000 grams.