Nugget Pond Processing Facility - Canada

Project description and location

On October 27, 2006 the Corporation reached an agreement with New Island Resources Inc (“New Island”) to acquire the Nugget Pond processing facility in Newfoundland, Canada. The Corporation refurbished the facility and commenced processing ore produced from Nalunaq Gold Mine A/S (“NGM”) in February 2007.

NGM entered into a milling agreement with Nugget Pond, in which ore from Nalunaq was shipped to Goodyear Cove at South Brook in Newfoundland and then trucked to site. The resultant gold produced remained the property of NGM until sold after final refining. Performance of the plant was better than expected and consequently the planned activities to expand production were not required.

Results 

The Nugget Pond facility continued to process the remaining Nalunaq ore of 31,336 dry metric tonnes at an average grade of 13.7 g/t during the quarter ended June 30, 2009 (quarter ended June 30, 2008 – 26,691 tonnes at an average grade of 12.9 g/t). Total ore processed in the six months to June 30, 2009 was 65,714 tonnes at an average grade of 13.3 g/t (six months ended June 30, 2008 – 61,439 tonnes at an average grade of 11.9 g/t). All Nalunaq ore stockpiles at Nugget Pond were processed by June 30, 2009.

Gold produced during the quarter ended June 30, 2009 was 13,231 oz (quarter ended June 30, 2008 – 11,001 oz) and for the six months to June was 26,714 oz (six months to June 30, 2008 – 22,507 oz).

Gold sold during the quarter ended June 30, 2009 was 16,672 oz at an average realised gold price of $923/oz (quarter ended June 30, 2008 – 12,113 oz at an average price of $896/oz) and for the six months to June was 33,514 oz (six months to June 30, 2008 – 24,159 oz).

Recent developments

Crew entered into a Toll Processing Agreement ("TPA") with Anaconda Mining Inc., a Toronto based mining and exploration company, whereby Anaconda will deliver ore for processing from its nearby Pine Cove gold mine to the Nugget Pond processing facility. The facility commenced toll milling operations on 29 June 2009 and the TPA will continue for a period of 12 months.

On 8 September 2009 Crew signed a sale and purchase agreement with Newfoundland based Rambler Resources for the sale of Nugget Pond processing facility. The closing date for the purchase will take place within 90 days of the signed agreement and therefore should be completed on or around December 9, 2009. Under the terms of the agreement Crew will continue to lease the processing facility from Rambler so that the existing TPA can continue without interruption.