Overview of our Main Operations

Apex Mining Company Inc

The Company announced its intention to acquire 72.5% of the share capital of Apex Mining ompany Inc (“Apex”) in February 2005. The due diligence process was concluded satisfactorily and the Company signed a Definitive Agreement relating to the acquisition of the shares by Crew Gold Corporation and its Philippine partner, Mapula Creek Gold Corporation Inc in August 2005. The total consideration paid for the 72.8% shareholding was $6.6 million.

In line with the requirements of the Philippine Stock Exchange and Securities Commission (“PSE”), the Company, having acquired 72.8% of the share capital is obliged to make an offer to the minority shareholders to acquire the remaining 27.2% shares. This offer was published in national media on September 25 with a tender period until October 25.

Property Description and Location

Apex Mining Company Inc (“Apex”) is a Philippine-owned listed on the Philippine Stock Exchange, Apex holds a mineral property in Maco Municipality of Compostela Valley Province in Eastern Mindanao. The mining licenses extend over an area of approximately 5,000 hectares.

In the last few years Apex has not undertaken its own mining operations but leased various parts of its property and processing plant to three subcontractors, in exchange for royalty and rental payments. These subcontractors operated on a small scale in different parts of the property, namely the Masara vein, the Don area and the tailings deposits.

The Apex gold processing plant is situated near the entry point, in the northern part of the mining area. The plant covers an area of approximately 18,000 m2. The plant currently consists of two parts, a building with a steel roof and open sides containing the crushing, grinding and flotation equipment, and an open area containing the thickener and carbon-in-leach (“CIL”) circuits, gold room and maintenance/storage building.

Mineral Resources and Reserves

The mineral property includes an assemblage of gold-vein deposits and a cluster of porphyry copper ore bodies, located largely in the western portion of the property. Gold deposits have been exploited by underground mining methods from surface to about 200 m depth from a number of narrow drifts and cross-cuts. The copper deposits have been proven by previous shallow drilling and trenching. Initial mining has occurred in some of these targets, which may be operated from open pit.

The epithermal gold deposits comprise a series of discrete veins which split and merge along three to four E-W and N-W trending major structural lineaments. These veins have been exploited using underground small-scale mining methods largely by manual/unmechanized drifting on structure at 30 meter intervals and driving raises between the drifts at roughly 40 meters intervals. Some 8 vein segments have been partially mined between the surface and the 690-level. A cross-cut at level 510 represents the lowest access at present.

According to an independent report by the Mines and Geosciences Bureau (“MGB”), a Philippines Government Agency, the Apex property had a gold reserve in the range of 500,000-600,000 tonnes at 9-10 g/t (JORC) and an inferred resource of 1.7 to 1.9 million ounces at similar grades in 2004.

The Apex property also contains copper-gold porphyry mineralization with promising potential. Drilling has revealed several open pittable deposits in a geological setting, which may lead to more discoveries. Independent studies conducted by MGB suggested an Indicated (JORC) resource of approximately 85 million tones grading approximately 0.4 % copper and 0.4 g/t gold for these porphyry deposits.

A Technical Report on the historical resource evaluation is being compiled for an independent resource assessment by Snowden Mining Industry Consultants Limited (“Snowden”). The technical report will satisfy requirements of Canadian Stock Exchanges on disclosure in relation to the Company’s acquisition of Apex and will be National Instrument 43-101-compliant for reporting of historical data. Dr Simon C Dominy of Snowden will be “Qualified Person” as defined by Canadian NI 43-101.

An extensive exploration drilling program commenced in September 2005 to assess the resource potential and to obtain better information of the mineralized system. Three drills were initially mobilized to site with two additional drills to follow shortly. The initial program of 9,000 meters core drilling will concentrate on two parts of the system where access for underground development into un-mined areas is already available and economic grades are known from overlying drifts on structure. The drilling will document the nature of mineralization in deeper parts and along strike-parallel extensions. The results from this exploration drilling will form the basis of detailed mine planning and the start of underground pre-mining development. An subsequent 10,000 meters drilling program will be initiated as soon as the first program is complete. This program will focus on two other areas where additional mining can be commenced.

All available underground maps and sampling results are currently being compiled by the company’s geologists and digitized allowing a full reconstruction of the mine potential and facilitating the ongoing mine planning.

Development Plan

Since the conclusion of the acquisition, Management’s efforts have focused on commencing production from the existing plant facility. The agreed objectives are to initially establish a 300-500 tpd working mine by end 2005 and to further establish a 2,000tpd working mine by end 2006. This will be subject to the resolution of permitting issues and at all times local management will work closely with the local communities to ensure that no social distress arises from the transformation of small-scale mining to a modern operation.

The mill is being redesigned to initially handle 500 tpd while necessary construction and rehabilitation will be completed to handle higher production rates. The initial production will utilize existing equipment except for the crushing section, which will be replaced by a mobile plant near the mine portals from where the ore can be trucked to the plant. This will free up space at the plant for cleaning up and preparation for the second-stage construction.

A portion of the existing CIL facility will be fitted to handle so-called “clean ore” with low sulphide content without a flotation stage, while the expanded production will introduce SAGmilling and flotation to also handle complex ore types with higher sulphide content and also change from CIL to CIP processing with a gravity circuit to recover coarse gold.

Ongoing test work has shown that free gold can be recovered efficiently by gravity separation and that CIP leaching will recover the remaining gold. Flotation will substantially reduce cyanide consumption while maintaining high recoveries in the processing.

Initial mine planning for two new mines has been completed. The plan introduces modern trackless mining from declines and cross-cuts to mining levels below the already worked vein segments. The first two mines will be established in the Masara and the Pag-asa valleys, respectively, where parallel development will prepare for two further mines, when additional mining equipment has been sourced and mobilized to site. The first mine activities will re-open the Don Fernando mine from level-690 towards level-510 along 400 meters strike-length, west of the previous operation. The other mine will be the St. Benedict Mine between level-1000 and level- 850. Both these mines will be accessed from the surface through new portals. Initial underground works until year-end will focus on the completion of the necessary pre-mine development and installation of adequate mine services, as well as the rehabilitation of access roads and power supply.

A major concern is safety and the local management will implement new guidelines for the operation on all levels. Currently, small-scale miners access the underground structures from numerous locations. Regulation of the transition from small-scale operations requires delicate handling. The social stability of the mine site is a fundamental factor for successful operation and this matter will be given the highest priority together with increased safety procedures.

The initial work program on site will include the following activities:

1. Aggressive exploration drilling which will form the basis for the first stage mine site plan and the start of pre-mining underground development.
2. Initial assessment of temporary production sites within the existing infrastructure to provide a source for the initial processing of clean ore in the 300-500 tpd range.
3. Rehabilitation and refurbishment of the existing plant with a view to commencing production as soon as possible. This process will be undertaken in stages. The first stage will be the commencement of production. After this, further refurbishment will focus on increasing the capacity of the plant.
4. Equipment for the initial underground work and limited mining will be sourced immediately. A number of drills, compressors, haulage scoops and trucks will be sourced locally as a supplement to available equipment to allow initial production to commence as early as possible. The selection of equipment will be conducted with a view to the plans for an expanded production case.
5. The recruitment of suitably qualified personnel will be completed and expected to be largely in place by the end of October, 2005, following a census and skills mapping program by a local human resources consultant.
6. A Technical Report on the historical resource evaluation is being compiled for an independent resource assessment by Snowden, Australia where Dr Simon C. Dominy has been nominated qualified person.