CAR: CRU (13,55) – LEFA exploration update
Crew Gold Corporation (Crew) could Friday announce an exploration update from their LEFA project in Guinea.
The update was positive with several drilling intercepts significantly higher, up to 100 g/t, than the current average grade in the reserve statement of 1,6 g/t.
It is also of significant importance that priority of the exploration program has been given to targets within trucking distance of the existing plant, meaning that the additional ore encountered can be included in the current operations and mine plan. As such, management is confident that the higher grade ores will contribute to increase the production from the current year’s target of 320,000oz at LEFA to 340,000oz in 2008, when the higher grade ores will be fed to the plant.
In addition, the drillings also seems to confirm that the mineralization at LEFA continues to the depth and Crew is currently assessing the possibility of an underground operation to extract these ores. The underground mine is expected to contribute with an output of an additional 60,000 to 80,000oz and would thus increase the total production at LEFA to 400,000 to 420,000oz in 2009.
Overall, we view the update as encouraging, particularly that the new drillings confirms higher grades which should ensure a higher production when these are being fed to the plant and the scope for an underground operation which would further increase the production from 2009. The new drillings and there promising results are also an important step in Crew’s target to double LEFA’s reserves and resources from the current 2,51m oz in reserves and total resources of 4,7m oz.
We keep our buy recommendation with a target of NOK 18.
Quelle CAR Morgenrapport 22.01.07