In the last week Crescent Gold (CRE.ASX) has been collapsing, and one is inclined to question the tangibility of this mining operation. A number of salient issues arise:
1. The company had an operating mine producing 110,000 oz per annum of gold
2. The company completed a $31mil rights issue; actually they were trying to raise $45mil
3. Deutsche Bank have been dumping the stock - having previously held over 50%.
4. The board is full of analysts, financiers and accountants. Where are the geologists and mining engineers. Looks like a recipe for failure.
I am left wondering whether news of expanded output from the Summit project area, is the same scam performed by Matrix Metals, which proposed an expanded 60% increase in output, but when broke instead. No clarification from management...it makes people wonder. The prospectiveness of a 2km exploration target seems moot in that context.
The gold price is at record highs...but I am always suspicious when I see some 20-odd resources in a resource inventory. The implication is that they are going to develop mine plans for all these 'pithy' little resources, and make a go of it. There is something to be said for virgin gold provinces, as opposed to the scraps from old mines which closed down. But of course, this is a gold boom. I keep telling people....but it seems more people lose money than gain in such times...at least in these small companies where regulators could not be bothered to tread.
We'll see. It gives one confidence to see that the company raised $31mil at 11c, and the stock in now 8.1-8.4c, and capitalised at $85mil. They ought to be able to make $50mil a year at their output, with the prospect of gold price upside. That's all I can garner from the limited info available.
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