Crescent Gold: Substantial shareholder Stone Mining boosts stake with on market purchases

The Crescent Gold (ASX: CRE, TSE: CRA) takeover by Focus Minerals (ASX: FML) took an interesting turn today, when Crescent substantial shareholder Stone Mining announced an increased stake.

Stone Mining, a company incorporated in Hong Kong, used on-market purchases to boost the company's stake to 13.1% - from 11.9%, this month.

Crescent though has announced to the market today that the company declines to conduct proceedings following an application by Stone Mining on 19 August 2011 - in relation to the affairs of Crescent.

In May and June 2011, Focus made loans to Crescent which could be converted into convertible notes, and in late June, Focus launched a conditional off-market takeover for all of the shares in Crescent.

The Focus interest in Crescent would increase to around 78% if Focus converted up to $13 million worth of Crescent convertible notes.

The Crescent board unanimously recommends the offer in the absence of a superior proposal, with Focus considering that it is highly unlikely that a superior competing bid will eventuate - due to the current control.

The new Focus Minerals

The transaction will allow Focus to become one of Australia's top five gold producers, with targeted annual production of 230,000 ounces.

The JORC Resource base of the new Focus would be 4.3 million ounces, with strong growth potential across two major Western Australian mining regions.

Highlighting the potential of Crescent for Focus, is that Crescent last month announced gold production forecasts exceeded guidance by 8.5% in the June quarter, producing 23,871 ounces for a gross value of around US$36 million, based on a spot of US$1500.

Crescent has recently also been receiving some encouraging results from diamond core drilling at Apollo, Aurora and Calypso gold resources, which form part of the broader Laverton gold project.

During the June quarter Crescent announced a maiden probable gold reserve of 54,000 ounces near surface at Apollo Deposit, where mining operations have been fast tracked and are scheduled to commence in the September quarter of 2011.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/19066/crescent-gold-substantial-shareholder-stone-mining-boosts-stake-with-on-market-purchases-19066.html