Crescent Gold suspends operation

Crescent Gold shares have sunk to a 12-month low, after the gold producer suspended its Laverton operation in Western Australia following problems with the processing plant.

The company has been forced to slash its workforce and implement a six-month review of the processing plant, with resumption of production not expected until the first quarter of 2009.

The shares dropped to a low of 11 cents before easing to close at 14.5 cents — a loss of 25.64%.

The company said it had encountered a number of difficulties with the processing plant since it started milling in March 2007, with the facility not able to achieve the original bankable feasibility study production estimates.

Crescent Gold said it would review various courses of action, including further delineation of resources, alternative mine scheduling scenarios and additional optimisation of the plant configuration to enhance project economics.

It had about $86.48 million in cash reserves at the end of March 2008.

Crescent Gold was bankrolled by Deutsche Bank in March 2007, which bought $120 million worth of shares at 38 cents each, giving the group a 55.38% shareholding in the gold producer.