Crew Gold Corp. WKN A0B L46 ISIN CA2265341057 CRU

Guten Morgen Gogh und Kuddel

gogh: Das im Link genannte Ebitda ist negativ, nicht positiv ausgefallen. Allerdings sieht es mit minus 5 Mio noch viel besser aus als der tatsächliche Verlust mit 19 Mios.

Vestrum beschönigt die Dinge, unbestritten. Negative Entwicklungen läßt er sehr gerne untern Tisch fallen. Er kommt aus dem Finanzsektor, promotet zu sehr. Das ist in der News Release wieder deutlich zu erkennen. Cash Cost werden nicht berichtet, da nicht „meaningful“. Sie müssen sich in stratosphärischen Bereichen bewegen bei den unglaublich niedrigen Produktionsziffern in allen drei Gruben.

Vestrum berichtet von 309 t/Tag verarbeitetem Erz in Nalunaq, das auf 500 t/Tag gesteigert werden soll. Die viel wichtigere Zahl der Goldproduktion verschweigt er in der News Release. Ein Blick in den Quartalsbericht zeigt auch warum:

Nalunaqproduktion: 1,3 koz!

Lefa 10,6 koz ( da hatten wir durchschnittlich in 2006 auch ohne CIP Anlage mehr erreicht )
Masara 0,9 koz
Zusammen nur 12,9 koz

Da erscheint es doch unwahrscheinlich, ob das Produktionsziel für 2007 von 550 koz erreicht werden kann. Und wieder typisch Vestrum: nun nennt er kein Produktionsziel für 2007 mehr, sondern eine (Peak-) Produktionsrate für das Jahresende, die annualisiert 515-600 koz ergeben würde.

Für Lefa nannte eine Präsentation im November ein Produktionsziel von 320 koz für 2007. Nun wird mit 220-260 koz gerechnet. Gehen wir eingedenk der Vestrumschen Übertreibungen somit von max. 220 koz aus, ist die erwartete Lefaproduktion um 100 koz oder über 30% gefallen!

Die Reaktion an der Börse ist auch recht heftig ausgefallen, -15% in den letzten beiden Tagen ( schon vorgestern starke Verluste !), gestern sehr hoher Umsatz von über 30 Mio Aktien. Ein Verkauf macht m.E. keinen Sinn, eher wieder Einstiegsniveau. Ich gehe davon aus, daß es sich um übliche Startprobleme bei Apex und Masara handelt, der Turbo soll nun im letzten Quartal kommen. Nugget Pond ging auch erst im Laufe des Quartal in Betrieb, es wurde ein Mehrfaches an Erz nach Kanada verschifft, als verarbeitet worden ist.

In der Konferenzschaltung hat Vestrum auch leise Selbstkritik geäußert, daß er vielleicht zu sehr kurzfristige Ziele von Kurzfristanlegern bedient hat. Für Masara und Lefa ist er weiterhin optimistisch, ein weiterer Ausbau der Produktionskapazität von Lefa ist beschlossen. Abstriche an Vestrums Zielen sind sicherlich nötig, aber der Tiefpunkt im diesem Jahr sollte erreicht sein. Auch wenn die Geduld strapaziert ist, ich rechne weiterhin mit einem starken Turnaround in Produktion und Ergebnis in den nächsten Quartalen.

Die Minderproduktion im ersten Quartal war keine Ausnahme. Die letzte Präsentation vom Juni vermeldet eine drastische Herabstufung des diesjährigen Produktionsziels von früher erwarteten 500-600 koz auf nur noch 290-350 koz. Auf die Ausreden im nächsten Quartalsbericht darf man schon gespannt sein. Vermutlich wird auf Kapazitätserweiterungen für die nächsten Jahre bei Lefa verwiesen. Das hatten wir bei Masara auch schon: 2005 wurde die Produktion für 07/06-06/07 auf 100-120 koz geschätzt (von Pareto), jetzt wurde die Schätzung für das Kalenderjahr 2007 auf magere 40-60 koz zurückgenommen.

Pareto Update:
Delayed production growth, but the gold values are intact.
When Crew delivers on its revised production profile next year, the underlying values defend NOK 20-25 per share. 12-18 month target NOK 25.

Crew recently announced changes to production targets for 2007, most importantly missing its projected Lefa production by 100-150,000 Oz. This came as a big surprise and the stock was hammered. Most of the downside is taken out.

• The value of the gold in the ground is intact, in fact the company has over the last few weeks delivered encouraging drilling results from its exploration program in Guinea.
• The ramp up at Lefa will be delayed by 9-15 months, this because new impellers and gear systems will have to be manufactured. The positive consequence is that reengineering will be done with optimized flowsheet leading to higher tonnage capacity. The capacity increase is estimated to between 50-100,000 Oz p.a..
• Our peer group comparison shows that Crew should defend values around NOK 20/share when looking to 2008.
• The company will probably have to demonstrate production ramp up before investors are willing to re-price the stock towards peers. In that sense Crew has become a waiting game, another year will go by before we can reach our target price, unless there is a takeover situation.
• The bid on Meridian gold last week shows that consolidation continues at good pace, its valuation would defend Crew Gold values of around NOK 25 per share.

Crew is set to deliver strong production growth and it is a highly undervalued company relative to peers when this happens. We re-iterate Buy and NOK 25 share price target.

• The recommendation was not presented to the issuer before dissemination.

SUMMARY.

Crew in mid May announced changes to production targets for 2007, missing its annual gold output by 100-150,000 Oz. and delaying ramp up by 9-15 months.

We believe Crew still has a good equity story. It will take longer than previously expected, but its value relative to peers when looking into 2008E is deep discounted. A stand alone value would justify NOK 20/share, and an acquisition scenario could realize NOK 25 or more.

The negative surprise. Breakdown at Lefa during final commissioning, leading to delays of 9-15 months.

Crew recently announced changes to production targets for 2007, missing its annual gold output by 100-150,000 Oz. This came as a big surprise and the stock was hammered from NOK 16.5 to NOK 12.

Clearly, Crew had ambitious growth targets for 2007. Stepping up production in one year from 150,000 to 600,000 ounces would have been far more than any other medium sized gold company targeted, and ultimately Crew failed.

The key reason leading to the shortfall relates to last minute technical break down during the final commissioning stage at Lefa. We had people on site just a few weeks prior to the negative news, and at that time 90-95% of commissioning was complete without bigger problems. As throughput reached full blast the plant did not handle the volumes, and impellers as well as gear systems broke down under the higher pressure.

When Crew bought into Guinor, the capex budget on the Lefa plant was USD 144m, including 7m in contingencies. After the acquisition there has been several cost overruns. The capex was on the first such occasion upped to USD 166m, a few months later the figure was revised to around 180mUSD. The latest news takes the figures well above 200m, in addition the re-engineering also involve capacity upgrades, meaning the total plant expenditure on Lefa becomes around USD 220m.

Disregarding the capacity upgrade, the cost has thus increased by 50% relative to projection given when Guinor was acquired.

One may of course also ask what technical due diligence Crew had done beforehand on the equipment, and whether the Guinor management (including the site managers) were overly optimistic, but we will probably never get an exact answer. This is now history and most likely also sunk costs. The cost overruns are big but one should not be very surprised when projects like these come at higher costs. Considering that a new plant probably today would cost USD 400m or more, this 2nd hand plant is still a good investment.

The ramp up at Lefa will be delayed by 9-15 months, this because new impellers and gear systems will have to be manufactured. The positive consequence is that re-engineering will be done with optimized flowsheet leading to higher tonnage capacity. The capacity increase is estimated to between 50-100,000 Oz p.a..

The gold values are intact and attractively valued

Gold companies’ reserves and resources are valued highly relative to the underlying commodity price, particularly for producing goldmines, because gold is discounted at a low discount rate. Gold is the ultimate currency.

For the Lefa project, the gold in the ground is still there, and the company is running the new plant, albeit at low capacity. Getting the plant up and running to full capacity is no rocket science. It will happen, Lefa will produce 300,000 and 400,000 Oz per annum, and probably also much higher output will be reached after the 2 years due to increasing grades from satellite deposits. The discounted value of the production cash flow is hardly affected by the production delay.

Crew Gold’s equity story is therefore still good. Crew is set to deliver strong production growth and it is a highly undervalued company relative to peers when this happens. We also expect Crew to be an attractive take candidate when the company demonstrates its potential.

In the meantime (next 9-12 months) it will be a waiting game, hopefully with some good newsflow on project progress and drilling - both at Lefa and Apex. Crew has in fact recently had two positive drilling updates from the area.

Nachdem einige schon spekulierten, daß LEFA zur Zeit stillgelegt sei, brachte die Antwort auf eine entsprechende Email Beruhigung:

"Natürlich produzieren wir in LEFA. Woher kommt dieser Unsinn? Wir sind bei 55-65% der Kapazität und erhöhen gradweise Woche für Woche. Wir werden kaum mehr als 75% erreichen, da wir die Agitatoren (Rührwerk) austauschen, wie in Q1 gemeldet. Dies ist nichts abweichend Neues von dem, was wir in Q1 berichtet haben. "

«Selvfoelgelig produserer vi fra Lefa. Hvor kommer dette tullet ifra? Vi ligger paa 55-65% av kapasiteten og oeker gradvis uke for uke. Vi vil neppe overstige 75% foer etter at vi har byttet ut agitatorene som angitt i Q1 meldingen. Det er intet nytt fra det som er angitt i Q1 meldingen.»

Naja, zumindest ist der desaströse Tiefpunkt von Q1 überwunden. Aber alles
dauert bedeutend länger als geplant.

Nalunaq, endlich mal ne Produktionszahl, bei der man nicht gleich vom Stuhl kippt (21,7 kUz ); aber Cash Kosten von 530$!

Apex, lächerliche Produktion von 2,2 kUz

Lefa, immerhin verdoppelt zum Vorquartal ( 24 kUz ggü 10,6 kUz), aber weit von jeder Planungsziffer.

Im 1. Hj Produktion von ca. 61 kUz. Da erscheint es doch fraglich, ob das bereits mehrmals reduzierte Ziel von 291-351 kUz in diesem Jahr noch erreichbar ist. Nalunaq wird kaum steigen und Apex kann man für dieses Jahr vergessen. Dabei sind die geplanten Zahlen 291-351 kUz grademal 2 Monate alt.

Analyse von CAR:

CRU (10,50) –Further delays, but patience pays. Buy
Crew Gold Corporation (CRU) yesterday released their results for Q2. As CRU still is in the ramp up period of LEFA and Apex the P&L was of limited interest.

As at 30th of June, the company has ca $40m cash and invested ca $30m in Q2 of which the majority was spent on LEFA ($28,5m). We believe that CRU eventually will need more financing. CRU currently holds ca 32,9% (including the forward agreement) in CMI representing a value of ca $70m which could be used as a buffer, however we believe there is a possibility for some dilution.

Operations wise, LEFA and APEX are making progress but ramp up takes longer time than announced in Q1 and than our estimates. The process facility at LEFA is already commissioned, CRU took a decision in Q1 to increase the throughput capacity of ore. This shouldn’t be too hard to achieve, the question is the timing of completion. In the Q1 report CRU announced that full capacity should be reached by the end of 2007, which now has been postponed to Q1 08, not a big deal isolated but given the previous delays we believe the market will be reluctant to re-price the share until full production capacity is reached. At full capacity at the current reserve grade of 1,6 g/t, LEFA will be able to produce ca 400,000oz p.a. at a cash cost of $330-350/oz. Production should increase as higher-grade ore from the Sigurini (3,2 g/t) and Banora (2,9 g/t) deposits are included in production. This will also lower cash costs/oz. CRU will release a reserve and resource statement for Sigurini and Banora in Q3.

The phase 2 facility (2,400 tpd) at Apex is also delayed and was announced to be commissioned in the 2nd half of 2008, annualized production for 2008 was estimated to 140,000-165,000oz at a cash cost of $260-280/oz. However, management also declared that the operation is geographically and technically challenging, particularly since no feasibility study has been completed. As such we could see further delays until an optimal production flowsheet has been achieved. On the positive side the company was bullish on the historical (not NI 43-101 compliant) copper-gold porphyry resource of 85m tonnes @ 0,4% Cu and 0,4 g/t Au. During the autumn CRU will perform drillings of these targets.

Nalunaq was on track and produced a record of ca 22,00oz in Q2 and production for the quarter was 450 tpd and increasing towards the target of 500 tpd which is key to achieve the target cash cost of $350-400/oz. Production is still estimated to ca 100,000oz going forward.

In 2008 CRU expects to produce a total of over 500,000oz (management was reluctant to give any more precise guiding due to the uncertainties of exact timing of ramp up completion of LEFA and Apex).

We have made preliminary revisions to our cash cost, production estimates and long-term assumptions and now expect CRU to produce a total of ca 530,000oz @ a cash cost of ca $360/oz increasing to ca 700,000oz in 2009 @ cash cost ca $315/oz. Based on the current forward curve until 2012 and then a drop to $650/oz onwards our DCF-model returns a value of ca NOK 14,5/share which we set as our 6 month target (approximately when LEFA is expected to be fully commissioned).

After successfully commissioning the LEFA project there is further upside when comparing to mid-tier peers, based on an annualized production rate of ca 700,000oz which CRU could hit in late 2008 if LEFA and Apex are commissioned on time @ a cash cost of ca $315, the share would trade at an EV/EBITDA of 5x whereas peers currently trade at an average of 8,3x EV/EBITDA 09e implying a share price of NOK 24, however the average mine life based on reserves and 06 production for the peer group is 22 years whereas CRU only has a mine life of 6 years based on reserves.

We believe the share should hit our 6 month target when LEFA is running at full capacity, prior to that we believe investors are reluctant to re-price the share and CRU will likely also have to increase the reserves (and grade) of LEFA prior to a re-pricing towards peers.

Aus einem Userbericht von einer Präsentation bei Færder Securities (vorgestern oder so) in Norwegen (wie immer ohne Gewähr):

>Nach der Erweiterung der Anlage wird Crew 2 Mrd [Kronen] einnehmen und die Cashkosten werden von 400 auf 330-340 zurückgehen. Der Goldsektor hat in letzter Zeit Kostenerhöhungen von 30-50% gehabt und es war nötig aktive Maßnahmen zu treffen, um die Kosten zu bremsen

Vestrum hatte Gespräche mit den größten Aktionären und glaubt, dass ein feindliches Übernahmeangebot mindestens das Doppelte des jetzigen Tageskurses enthalten müsste, um eine Chance zu haben.

Finanzierungsbedarf wird weniger durch Kapitalerhöhung, sondern durch Schulden gedeckt

Crew Minerals soll nicht zu den niedrigen jetzigen Preisen verkauft werden. Möglichkeit wäre, jetzt zu verkaufen und mit einem Forwardkontrakt wieder zurückzukaufen.

Nalunaq wird bei erster Gelegenheit verkauft, wenn der richtige Käufer auftaucht ( wird aber nicht zeitig genug geschehen, um kurzfristigen Finanzierungsbedarf zu decken)

Schultz ist inzwischen im Ruhestand

Da Vestrum eine positive Goldpreisentwicklung erwartet, ist Hedging derzeit kein Thema

An North Davao weiterhin interessiert, aber das bleibt der Zeit überlassen. <

Der Bericht zeigt, dass es nicht so doll aussieht und das Problem nicht nur bei überlasteten Agitatoren in Lefa liegt.
- Verkaufswunsch von Nalunaq beweist das Scheitern des Optimierungsprogramms. Grönland, Nugget Pond und Glover Island sind damit wohl hinfällig.

- Nicht kommuniziert waren bislang Cashkosten von 400$; so hatte die Februarpräsentation noch von Gruppen-Cashkosten von 275-300$ für dies Jahr (und sinkend in den Folgejahren) gesprochen. Die höheren Cashkosten, selbst nach Erweiterung, machen die bisherigen Analysen wertlos.

- Mit Trevor Schultz ( Präsident der Afrikaoperationen, Ex-COO von Ashanti Goldfields) verliert Crew einen erfahrenen Mann.

- Positiv nur, dass die institutionellen Anleger kein feindliches Übernahmeangebot zu den niedrigen Preisen akzeptieren werden. Einige große Shareholder, insbesondere Umoe Invest, scheinen ihre Beteiligungen sogar ausgeweitet zu haben.

Fazit: Lefa um 1 Jahr verschoben; was in Masara wirklich abläuft, ist ungewiß; Nalunaq anscheinend hoffnungslos; Finanzierungsbedarf

Der jüngste Verkauf von 3,6 Mio Aktien von Quist und Vestrum zu Niedrigpreisen ist da keine Ermutigung.

Nun ziehen auch die bislang so optimistischen Analysten nach.

We reduce our target price to NOK 13 (17) on the back of less visibility in the short-term during the ramp-up. This has made us more cautious, and we want to see more production before we include the aggressive growth going forward. However, Crew Gold is still a growth story, and we believe that there is more chance of hiking up our long- term assumptions than adjusting them downwards. We stick to our BUY. Less visibility during the ramp-up has made us more cautious with our forecast. Low visibility and high uncertainty in the ramp-up at Lefa and the expansion programme at Masara have made us lower our production estimates and increase our cash cost projections in the short-term (down 40koz in '07 and 145koz in '08 ). We want to see management prove its ability to get Lefa and Masara to reach a steady state before we include a more aggressive long-term growth (long-term production target is down by 9%).Crew Gold's cash situation is stretched, despite its stake in Crew Minerals We believe that Crew Gold has to produce 45-50koz during a quarter to break even at Lefa and our production estimates for Q3 and Q4'07 are now 34koz and 45koz (down from 48koz and 67koz, respectively). Our analysis shows that Crew will use all its funds during Q3 and Q4'07, and we believe it is likely that it will need extra financing. Production focus should not be on the coming quarters Due to the ramp-up, production is hard to predict at Lefa and we therefore argue that the most important milestone is the completion of the ramp-up and the run rate going forward. We believe the ramp-up will be completed during Q2'08, with a run rate at Lefa in Q3 of 360koz-390koz, depending on the grade. The current drilling at Lefa indicates higher grade and continuing strong reserve growth, which highlights Crew as a growth case.Our DCF value returns a value of NOK 11.4, but peers justify a value of NOK 13.5. However, based on our new production estimates for 2008, peer valuation points at NOK 17.

Na, da ist es günstig, daß die Analyseabteilung einer Finanzierungsbank von Crew noch nicht den Optimismus verloren hat.

Update von Pareto

Dirt cheap, upping to Strong Buy

Crew has been hammered down on production delays and cost overruns. The share price is now well below NAV. We expect strong re-rating over the next 6 months when Lefa finally ramps up.

Crew has been hammered on disappointing project progress (particularly on Lefa), we now find the share price has fallen to levels that warrants a Strong Buy recommendation.
The current resources base, including reserves, is close to 10mOz. Our NAV based on this is around 30% higher than the current valuation, NOK 12/share. This increases when Lefa gets fully commissioned, because production ounces in the gold world are slightly more valuable and because the market then also will factor the Apex ramp up.
Most mining companies with good exploration results are valued at a premium to their NAV, this should also be the case when Crew delivers strong production ramp up. The market may well be ready to discount its nuts and bolts long before they are all pulled together early next year.
The company expects a resource update on Lefa during 3q, and the annual yearend reserve and resource update is to be completed in 1q08. These updates should increase resources significantly, and the geology holds so promising data such that longer term exploration targets are aggressive.
Looking to DCF, we arrive at a low case value of NOK 21/share. This is based on what we find is a likely minimum minelife of the various projects, partly based on existing resource base and partly based on discussion with its engineers and geologist. If the company continues to expand its resource base (very important for the Apex property which today has very low resource base), a much longer minelife is realistic and the DCF value may well exceed NOK 30/share. Maintaining USD 4 target, we up to Strong Buy
The recommendation was not presented to the issuer before dissemination.

Crew has been hammered on disappointing project progress (particularly on Lefa), we find the share price to have fallen so much as to warrant a Strong Buy recommendation. The energy and money put into its projects has a far higher value than its current share price implies. There is some short term financing risk, the company will probably need another USD 50m in fresh cash by yearend. This may be done through an equity offering or a new bond - the model assumes debt. This is a small amount relative to the company’s financial gearing and also relative to its market capitalization. We believe the operational disappointment, combined with fear of a highly dilutive share issue, has pushed the share price to highly attractive levels.

The current resources base, including reserves, is close to 10mOz. The company expects a resource update on Lefa during 3q, and the annual yearend reserve and resource update is to be completed in 1q08. These updates should increase resources significantly. The geology is very promising both at Lefa and Apex, and the company has quite aggressive longer term exploration targets.

Andvari,

Pareto spricht von 50m USD, die Crew zum Jahresende braucht und nimmt in ihrem Modell an, das dies eher durch Schulden als durch Kaperhöhung gedeckt würde. Vielleicht wieder durch Wandelanleihen: erst Schulden, dann Aktien-Verwässerung.

Gruß
Ulfur

Ulltveit-Moe gehört, wenn ich mich recht erinnere, zu den 15 vermögensten Norwegern.
http://www.umoe.com

Neue Audio-Präsentation von der Denver-Goldshow:
http://events.onlinebroadcasti…dex.php?mode=1&sel_date=1

Kuddel,

ich hoffe auch noch, daß Crew wieder aus dem Loch rauskommt, in das es sich gegraben hat.

Bloomberg Artikel:

Crew Gold Delays Acquisitions Until Mine Starts, Shares Recover

By Stewart Bailey

Sept. 24 (Bloomberg) -- Crew Gold Corp., which is developing Guinea's biggest gold mine, said acquisition plans for this year have been delayed until the mine is operating at full capacity and the company's share price recovers from a collapse.

Chief Executive Officer Jan Vestrum said in February the company planned production of 500,000 ounces of gold in 2007 and would make an acquisition to help it reach annual output of 1 million ounces by 2010. The stock has dropped 30 percent this year, trailing the 21 percent gain of the Philadelphia Gold & Silver Index, which tracks the world's 16 largest gold producers.

Crew, based in Vancouver, expects to produce 380,000 ounces to 420,000 ounces of gold from the Lefa mine in Guinea by 2009, Vestrum said today in an interview in Denver. The Masara mine in the Philippines will yield as much as 180,000 ounces by then, and the Nalunaq site in Greenland will produce 100,000 ounces, the company said in an Aug. 15 statement.

``Until we have Guinea up and running, there is no likelihood we'll do any mergers and acquisitions,'' Vestrum said. ``With the share price where it is, no.''

The company has rejected approaches from investment bankers seeking to take advantage of the depressed share price, Vestrum said. Crew's shareholder structure, which includes about 19 percent held by Norwegian industrialist Jens Ulltveit-Moe and other investors ``very well-known'' to Crew's management, makes it unlikely a hostile bid would succeed, he said.

Ulltveit-Moe, who acquired 1.69 million new shares in the company on Sept. 18, will have an ``active role'' in Crew, Vestrum said. He may also assist in corporate activity ``sooner or later,'' he added.

Crew shares rose 8 cents, or 4.7 percent, to C$1.78 as of 1:45 p.m. in Toronto Stock Exchange composite trading.

To contact the reporter on this story: Stewart Bailey in New York at sbailey7@bloomberg.net .
Last Updated: September 24, 2007 17:32 EDT
http://www.bloomberg.com/apps/…r=CRU:CN&sid=aiRYi5QoPL9Q