TIDMCAS
RNS Number : 1714S
Crusader Resources
07 March 2019
Back on Track - Strategies for the future of Crusader
ü Single focus; to bring the Borborema Gold Project into
production
ü Disposal of non-core exploration projects
ü Withdrawal from AIM and UK
ü Return to ASX Trading
ü Getting financials under control
ü $4.2m Shareholder offer with up to $3.5m underwriting
committed
Crusader Resources Limited (ASX: CAS, AIM: CAS) ("Company" or
"Crusader") would like to bring shareholders up to date with the
future direction of the Company including recent changes to the
Board.
As shareholders are aware the Company was facing a significant
funding challenge as recently as a few weeks ago. Thanks to an
injection of cash through Convertible Notes issued to its major
shareholder, the Copulos Group, and others, Crusader has been given
the opportunity to get back on track. The new directors have been
undertaking a review of the Company, its projects and finances.
The Board will be focussing on:
Bringing Borborema Gold Project into production.
-- Reviews have commenced of the current JORC resource model
that contains an estimated 2.43M oz gold at an average grade of 1.1
g/t Au with a view to defining a higher grade component in the
upper 120m of the mineralisation that will support an initial Stage
1 open pit operation targeting a throughput of approximately 2.0
Mtpa. The resource comprises 51Mt @ 1.14 g/t Au in Measured and
Indicated categories and 17.6Mt @ 1.00 g/t Au classified as
Inferred. The Company is not aware of any new information or data
that has materially affected the Mineral Resource since it was
announced on 24 July 2017.
-- Processing routes and design plans are being reviewed with a
view to simplifying operations and reducing both the initial
construction capital and ongoing operational costs.
-- Crusader aims to target profitable production rather than
maximise ounces of gold produced. A working plan is to establish an
operation targeting a 10-year mine life utilising a CIL plant
before considering a Stage 2 upgrade.
-- The revised Bankable Feasibility Study (BFS) is some way off
completion and Crusader has appointed Corporate Mining Services Pte
(CMS) to manage and co-ordinate its completion. CMS has extensive
experience in managing Feasibility Studies and a track record of
successfully commissioning both CIL and heap leach gold projects
around the world.
-- Completion of the BFS, with final design and equipment
selection along with firm pricing and quotations, is expected to be
completed by the end of the third quarter 2019. Submission of the
BFS for project financing is expected to commence in the following
quarter with plant/mine construction in 2020.
Disposal of non-core assets.
-- The value of non-core assets will be realised and offers
invited for the sale or joint venture of all exploration projects
other than Borborema.
-- A number of these projects are considered by the Company to
be highly prospective but in its current position the Company
considers that better value can be delivered to shareholders by the
application of required expenditure to the Borborema Gold Project.
Juruena in particular has returned excellent results from the
efforts of the Company's geological team and defined an extensively
mineralised fault/shear system with a high-grade component (up to
12 g/t Au) and suggestions that this is a part of a high level
porphyry style system.
-- The Company has recently been approached by several parties
interested in the Juruena Gold Project and the aim is to raise
additional cash and remove future expenditure commitments by
entering into an arrangement over this and other projects as soon
as possible.
Withdrawal from AIM and UK
-- The cancellation of the AIM listing and closure of the UK
office will be completed by 8 March 2019 and result in savings of
approximately A$0.9M p.a.
-- As advised to the market on 1st March 2019, the Company held
a General Meeting on 28 February 2019 at which shareholders
overwhelmingly resolved to cancel the Company's AIM listing.
Subsequent to that meeting the UK based Chairman, Mr Andrew
Vickerman and Managing Director, Mr Marcus Engelbrecht resigned as
directors and Mr Stephen Copulos and Mr Andrew Richards were
appointed as Non-Executive Chairman and Executive Director.
-- The position of Managing Director has been made redundant.
-- Executive Director, Andrew Richards will assume the day to
day company and operational management, and oversee the Brazil
team.
Return to trading on the ASX
-- Crusader has been suspended from the ASX since October 2018.
We intend to take all necessary steps to remedy that position and
return to trading as soon as possible.
-- With the cost controls and fundraising described in this
letter, along with the corporate strategy and cashflow models being
developed, we feel we can meet any and all concerns raised by the
ASX and will enter discussions with their officers this week.
Getting financials under control.
-- An immediate and significant reduction in the cash burn rate will be undertaken in all areas.
-- The delisting from the AIM and closure of the UK office will save approximately $300,000 p.a.
-- New directors, including executive directors, have accepted
reduced remuneration for their services. Total annual directors'
fees will reduce from $1,050k in to $170k (plus share based
payments) - a further cash saving of $880,000 p.a.
-- Exploration expenditure will be reduced and the sale of
non-core assets will realise additional cash.
-- Office and personnel costs in Australia and Brazil will be reduced.
-- A Shareholder rights issue to raise $4.2m before costs is now in process.
$4.2m Shareholder offer with up to $3.5m underwriting
committed.
-- As foreshadowed to the market on 22 February 2019, A$4.2m million will be raised through a non-renounceable rights issue to shareholders. This raising will be underwritten by up to A$3.5 million comprising $2.5 million from Eyeon Investments Pty Ltd, a company related to Mr Copulos (announced on 22 February 2019) plus a further $1.0 million from another company, with whom an underwriting agreement is expected to be executed later this week.
-- The company is currently completing the documentation and
plans to make the full details of this financing available to the
market by next week.
The Board intends to action these strategies vigorously and cost
effectively. Key developments and news will be shared promptly with
our shareholders and we look forward to delivering value to our
shareholders.
Link to signed document
http://www.rns-pdf.londonstockexchange.com/rns/1714S_1-2019-3-7.pdf
Yours sincerely,
Stephen Copulos
Stephen Copulos Andrew Richards John Evans
Chairman Executive Director Non Executive Director
About Crusader
Crusader Resources Limited (ASX:CAS, is a minerals exploration
and development company listed on the Australian Securities
Exchange. Its major focus is Brazil; a country Crusader believes is
vastly underexplored and which offers high potential for the
discovery of world class mineral deposits. The Company has two key
gold assets:
Borborema Gold Project
The Borborema Gold Project is in the Serido area of the
Borborema province in north-eastern Brazil. It is 100% owned by
Crusader and consists of three mining leases covering a total area
of 29 km(2) including freehold title over the main prospect
area.
The Borborema Gold Project benefits from a favourable taxation
regime, existing on-site facilities and excellent infrastructure
such as buildings, grid power, water and sealed roads. It is close
to major cities and regional centres and the services they can
provide. The project's measured, indicated and inferred Mineral
Resource Estimate of 2.43Moz @ 1.10 g/t gold, remains open in all
directions (refer to Table 1 and ASX Announcement of 24 July
2017).
Borborema Gold Project
Mineral Resource by Multiple Indicator Kriging
(MIK) estimation
Category Tonnes Grade Contained
(Mt) (g/t Gold (Moz)
Au)
------- ------ ------------
Measured 8.2 1.22 0.32
------- ------ ------------
Indicated 42.8 1.12 1.55
------- ------ ------------
Total Measured
+ Indicated 51.0 1.14 1.87
------- ------ ------------
Inferred 17.6 1.00 0.57
------- ------ ------------
Total Mineral Resources 68.6 1.10 2.43
------- ------ ------------
Table 1. Mineral Resource (JORC 2012) table, reported above 0.5
g/t Au cut-off. Parent Block 25mE x 25mN x 5mRL. Selective Mining
Unit 5mE x 6.25mN x 2.5mRL. Note, appropriate rounding has been
applied, subtotals may not equal total
Juruena Gold Project
The Juruena Gold Project is located in the highly prospective
Juruena-Alta Floresta Gold Belt, which stretches east-west for
>400km and has historically produced more than 7Moz of gold from
40 known gold deposits. Historically there is a database of more
than 30,000 meters of drilling and extensive geological data.
Competent Person Statement
The information in the report to which this statement is
attached that relates to Mineral Resources is based on information
compiled by Mr. Lauritz Barnes, Mr. Aidan Platel and Mr. Brett
Gossage, Competent Persons who are Members of The Australasian
Institute of Mining and Metallurgy. Mr. Barnes (Trepanier), Mr.
Platel (Platel Consulting) and Mr. Gossage (EGRM Consulting) are
all independent consultants to the company.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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