Crew Gold’s Nalunaq Hits Production High

Crew Gold’s (CRU-T, CRUGF-O) Nalunaq gold mine, in Greenland, has reached a record average daily production rate of 510 tonnes, surpassing the 500-tonne target each day for the entire month of September.

Nalunaq is Greenland’s first gold mine and the first new mine to be developed in the country for over 30 years.

Crew owns 82.5% of Nalunaq, which has been in production since July 2004. The mine produced about 75,000 oz. gold in fiscal 2006.

Transportation to Nalunaq — about 40 km northeast of the town of Nanortalik in the southernmost tip of Greenland — takes about 40 minutes by helicopter from the international airport at Narsarsuaq.

Ore is trucked to the port facility on the Saqqaa fjord about 11 km from the mine site. It is then shipped to Nugget Pond in Newfoundland for processing. Throughput at Nugget Pond was steady at between 450 and 500 tonnes per day during the third quarter.

Last year, all the ore from Nalunaq was processed at Rio Narcea’s el Valle plant in Spain and in batches of about 25,000 to 40,000 tonnes per shipment.

In the first quarter of this year, Nalunaq produced 27,778 tonnes of ore, an average of about 309 tonnes per day. But production in the quarter was interrupted by several late-season storms, which resulted in an 18-day production loss. From mid-April, production averaged 500- plus tonnes per day.

At the end of the quarter, Crew released an update of its mineral reserves and resources as of Dec. 31, 2006. This included the first-time reporting of probable ore reserves, which total 124,000 oz. or 205,000 tonnes of ore at 18.8 grams gold per tonne.

Indicated resources total 535,000 tonnes at 18 grams per tonne for about 315,000 oz. gold. Inferred resources have been estimated at 1.5 million tonnes grading 17 grams gold per tonne (assuming a 1.5-metre mining width and zero cutoff grade) containing about 823,000 oz. gold.

Crew spent $600,000 during the first quarter developing the mine, including developing the ramp to provide access to the eastern side of the upper target block.

Ramp development to connect the lower south block to the lower target block is under way, as is drilling and other work associated with the expansion of the resource base.

Nalunaq hosts high-grade, gold-only mineralization associated with quartz veins in a major shear zone. It is mesothermal vein-type gold mineralization, hosted in Proterozoic amphibolite-facies metavolcanic rocks.

Visible gold is found in sheeted quartz veins, which are located in a large-scale shear structure that appears to be related to regional thrusting.

The most pronounced structure at Nalunaq is a narrow zone of ductile shearing surrounded by relatively brittle margins.