VANCOUVER, British Columbia, Feb. 18, 2003 (PRIMEZONE) -- Crew Development Corp. (Crew) (TSE:CRU) (OSLO:CRU) (Frankfurt:KNC) (OtherOTC:CRWVF) is pleased to announce that it has, as part of a consortium, signed a purchase agreement with Avgold Ltd. (Avgold) of South Africa for the purchase of Eastern Transvaal Consolidated (ETC).
The consortium consists of Metorex Ltd. (Metorex) 54%, MCI Resources Ltd. (MCI) 26% and Crew 20%. The purchase price is ZAR 300 million (CAD 55/ NOK 251 million) of which ZAR 150 million will be bank financed. Crew will participate with ZAR 30 million (CAD 5.5 million/NOK 25 million), financed by the pre-arranged sale of 10 million shares in Metorex to a South African institution at ZAR 3.00 per share. The ETC operation consists of three operating gold mines: Sheba, Fairview and Consort. ETC is currently producing approximately 100,000 oz per year at a cash cost of USD 242/oz.
The measured, indicated and inferred gold resources at ETC currently consist of 1.47 million oz, of which 453,000 oz are inferred resources. The current mine plan is based on the extraction of 1.07 million oz over ten years from 2004. The mine plan average head grade is 10.5 g/t, and cash cost is forecasted by Metorex at USD 240/oz.
The various mines at ETC have been in operation for up to 100 years. At intervals over this period the remaining life of each of the mines has often been forecast as only 6 to 10 years while new ore bodies, resources and reserves have constantly been discovered, as reported by Avgold.
The ETC investment has an equity shareholder payback period of below 3 years without interest and 4 years with interest. At higher gold prices, the project return improves materially. Based on a gold price of USD 335/oz, the NPV of the project at a 10% discount rate is ZAR 469 million before financing and ZAR 322 million including financing.
This acquisition is in full alignment with Crew's strategic focus on gold and precious metals, as well as in line with the company's intentions of entering into projects with existing or near-term cash flow. The acquisition of ETC will provide Crew with a cash flow that will cover a significant share of Crew's current corporate overhead costs. In combination with the forthcoming gold production from the Nalunaq gold mine in Greenland, as well as other projects where Crew is investigating the potential for near term production and cash flow, the acquisition of ETC strengthens Crew's ambition of becoming a growth oriented low-cost gold producer.
For more information or to be put on the email list, please contact the Vancouver Office, (604) 683 7585 or US/Canada Toll Free: 1-866-818-2211, email: ir@crewdev.com or the Oslo Office at +47 67 59 2424, email crew@crew.no. Visit the website at http://www.crewdev.com.