Crescent Gold Limited: Quarterly Report-31 December 2005

HIGHLIGHTS

A$8.9m cash received, A$12m cash total.

- Some 49.5m of the total 67m CREO's were exercised, raisingA$8.9m;

- The company can proceed with production with a strong balancesheet.

- Contract tenders and schedules are now being prepared.

Laverton - substantial improvements in reserves, gold price.

- Net Cashflow (Profit) from reserves est. at A$74.3m (A$750/oz - recent spot price).

- Three year Flat Forward gold price is now quoted at A$794/oz.

- Cash (C1) costs A$313/oz (US$235/oz @ A$0.75) - excellent margins.

- 1mtpa restart cost re-estimated A$5.6m

- A$5.9m capex to expand to 1.5 mtpa.

Laverton Ore Reserves nearly double to 292,000 ozs.

- Ore Reserve 4.4mt at 2.1g/t.

- Nearly double the previous (BFS Nov 2004 - 148,500 ozs, 1mpta at A$575/oz).

- 53% increase on previous Sickle Reserve. Probable ore reserves now 2.2mt at 2.1 g/t for 149,000 ozs.

- Better drill intersections received:

12m at 9.6 g/t from 41m

6m at 7.3 g/t from 139m

1.38m oz of Inferred Resource - Laverton Gold.

- 29.5mt @1.5 g/t mostly soft, shallow oxide at Laverton.

- Fish Mineral Resource estimate of 0.66mt at 4.1 g/t for 87,000 ozs.

Board Welcomes Tookie Angus - Independent Director.

- Tookie Angus appointed to the Board as an Independent Director.

Laverton Reserves - 4.4mt @ 2.1 g/t - 292,000 ozs

During the December quarter the company compiled its ore reserve statement for the Laverton gold project (Table 1). The ore reserves have been based on the company expanding the existing gold plant to 1.5 mtpa and a gold price of A$625/oz (US$460/oz).

This is a 97% increase on ounces and reflects the work completed over the last 12 months. The ore reserve estimate has been carried out by Orelogy consultant mining engineer Steve Craig.

Figure 1 - Location of Ore Reserves-Laverton Gold

To view Figure 1 please click on the following link: http://www.ccnmatthews.com/docs/CREfig1.jpg

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Table 1 - Summary of Ore Reserves as at December 2005
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Ore Reserves Pit Design
Strip Max
Tonnes Grade Ounces Work ratio Depth
Deposit (Kt) (g/t) (ozs) Index W:O (m)
-------------------------------------------------------------------

Sickle 2,160 2.1 149,000 10.6 7.7 100

Fish 430 4.0 55,000 19.0 16.6 100

Euro 530 1.6 28,000 5.7 6.5 80

Admiral Hill 1,110 1.4 49,000 8.2 4.5 75

West Laverton 150 2.4 11,000 5.7 17.0 70

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TOTAL 4,380 2.1 292,000
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Gold grades are rounded to 1 decimal figure.
Abbreviations used:
Kt equals 1,000 tonnes,
g/t equals grams per tonne

Definitions;
Ore reserves - Reserves are classified as Proven and Probable,
greater than 0.8 g/t cut off.
Reserve ounces - Net of mine dilution and ore loss Max.
Depth is the maximum pit depth below surface

Asumptions:
A$625/oz spot price,
State Royalty applied at 2.5% and Native Title Royalty of A$1.60/oz.
1.5mtpa mill expanded case

Table 2 - Financial Summary of Ore Reserves December 2005.
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Net Cashflow Recovered Cash Total
A$675/oz A$750/oz Ounces Costs/oz Costs/oz
Deposit (A$m) (A$m) (ozs) (C1) (C1+C2+C3)
-------------------------------------------------------------------

Sickle 26.4 40.2 137,700 306 466

Fish 11.9 17.1 52,700 253 433

Euro 2.9 5.5 26,800 336 551

Admiral Hill 4.8 9.5 47,100 370 556

West Laverton 0.9 2.0 11,100 384 577

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TOTAL 46.9 74.3 275,400 313 488
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Mining and processing costs were updated to reflect the recent
increases recorded. All other technical inputs were sourced and
updated from the BFS.

Definitions;
- C1 - Cash Costs, excluding admin, overheads, capitalised waste,
depreciation, amortisation
- C1+C2+C3 - Cash Costs + admin, overheads, capitalised waste
- Ore Reserve ounces - In-situ net of mine dilution and ore loss
- Recoverable ounces - Net recoverable ounces adjusted for CIP Plant
recovery
- Optimisations have been carried out at $625/oz, however cashflows
have been estimated using $675/oz and $750/oz.

Capex, Opex Cost - Updated for 2005 Cost Increases

Bemex Corporation Pty Ltd provided updated capital and operating costs for re-starting the 1mpta Laverton Gold Plant and also expanding the plant to 1.5 mtpa by adding a second ball mill (Expansion option).

The total infrastructure re-start cost of $5.6 million includes:

- Refurbishment of the 1mtpa Laverton Gold Plant,

- Including EPCM cost,

- First fill reagents,

- Commissioning; and

- 15% contingency.

The estimated processing cost per tonne, excluding administration, ranges between $11.2 and $12.7 per tonne.

The additional expansion to 1.5mtpa, estimated at $5.9 million, includes:

- EPCM cost,

- First fill reagents,

- Commissioning and

- Contingencies.

Bringing the total cost to 1.5mtpa capacity to $11.5 million. Estimated processing cost per tonne, excluding administration, ranges between $9.1 and $10.5 per tonne.

Sickle Ore Reserve - 2.2mt @ 2.1 g/t, 149,000 oz

The probable ore reserve estimate for the Sickle deposit has increased 41%. The new estimate incorporates the 1.5mtpa expansion study and a gold price of A$625/oz (US$460/oz).

This is a 41% increase on recovered ounces and reflects the work completed over the last nine months. The ore reserve estimate has been carried out by Orelogy consultant mining engineer Steve Craig.

The following table summarises results of the optimisation study.

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Sickle Deposit 1.5 mpta

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Ore mt 2.2
g/t 2.1

Waste mt 16.7

Strip ratio W:O 7.7
Gold - Contained ozs 149,000
Bond Work Index 10.6
Gold Recovery % 91.5
Gold - Recovered ozs 137,000

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Figure 2 - Sickle, 3D image of Resource and Pit Design

To view Figure 2 please click on the following link: http://www.ccnmatthews.com/docs/CREfig2.jpg

Fish Reserve - 430,000 t @ 4.1 g/t

The initial Fish Reserve estimate incorporates the 1.5 mtpa expansion study and a gold price of A$625/oz (US$460/oz).

This reflects the work completed over the last nine months. The ore reserve estimate has been carried out by Orelogy consultant mining engineer Steve Craig.

During November 2005, FinOre Mining Consultants produced a new block model using ordinary kriging (OK) estimation techniques for the Fish Resource which is 92 km from the Laverton plant and is located in the Jasper Hills Tenements. The resource contains 660,000t at 4.1 g/t for 86,000 ozs and provides the basis for the optimisation and design work.

A mineable reserve of 426,000t at 4.02 g/t for 54,900 ozs can be achieved after accounting for dilution and mining recovery. The strip ratio is approximately 17:1, and the total pit volume is nearly 3.0m bcm.

Overall cashflow at A$625/oz is robust at A$9m, before capital costs.

Figure 3 - Fish, 3D image of Resource and Pit Design

To view Figure 3 please click on the following link: http://www.ccnmatthews.com/docs/CREfig3.jpg

As at 31 December 2005, the measured, indicated and inferred resource at Laverton totalled 29.5 million tonnes at 1.5 g/t Au containing 1,384,000 ozs of gold, detailed as follows;

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Measured Indicated Inferred Total
Gold Ton- Gra- Ton- Gra- Ton- Gra- Ton- Gra-
Resources nes de nes de nes de nes de Ounces
(kt) (g/t) (kt) (g/t) (kt) (g/t) (kt) (g/t)
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Sickle 7,150 1.7 2,550 1.5 9,700 1.7 520,000
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Euro 570 1.7 76 1.5 53 1.5 699 1.7 38,000
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Armstrong 4,831 0.8 1,638 1.4 6,469 0.9 197,000
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West
Laverton 392 1.9 321 2.1 713 2.0 45,000
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Fish 320 4.0 180 4.4 160 3.7 660 4.1 87,000
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West
Laverton
Group 48 1.9 829 2.8 877 2.7 77,000
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Central
Laverton
Group 544 1.7 3,532 1.3 4,076 1.4 183,000
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South
Laverton
Group 948 1.1 948 1.1 35,000
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Jasper
Hills
Group 4,125 1.0 4,125 1.0 130,000
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Burtville
Group 210 2.1 1,060 1.7 1,270 1.8 72,000
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TOTAL
RESOURCES 890 2.5 13,431 1.4 15,216 1.4 29,537 1.5 1,398,000
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ADDITIONAL NOTES FOR TABLE 1
- Figures contained within Table 3 have been rounded. Gold grades are
rounded to 1 decimal figure; both estimated tonnes and contained
ounces are rounded to nearest 1000.
- Abbreviations used: Kt equals 1000 tonnes,
g/t equals grams per tonne
- West Laverton Group includes resources for West Laverton, Mary Mac,
Mary Mac South and Craiggiemore.
- Central Laverton Group includes resources for Castaway, Pieces of
Eight, She's Right West, She's Right East, Scotland Yet, Grouse,
Jacks, Bogle, Bogle South, Bells, Ida H and Low Grade Stockpiles.
- South Laverton Group includes resources for Black Label and Lily
Pond Well.
- Jasper Hill Group includes resources for Lord Byron.
- Burtville Group includes resources for Burtville and Karridale
deposits.
- The Karridale deposit is hosted within tenements that are subject
to the Merolia Joint Venture Agreement ("MJV"), in which the
company holds 75.5% interest in the MJV.
- The following mineral resource locations are contiguous with
existing open cut pits West Laverton, Mary Mac, Mary Mac South,
Craiggeimore, She's Right West, She's Right East, Scotland Yet and
Ida H.

Fish Mineral Resource - 660,000t @ 4.1 g/t

The initial Mineral Resource for Fish was based on recently completed work, including;

- 28 Infill RC drill holes.

- 3 HQ triple tube diamond drill holes.

- Further density determinations to substantiate the in-situ dry bulk density model.

- Improved geological interpretation.

- Metallurgical parameters

The Mineral Resource estimate confirms the earlier reported high grade continuity and indicates that the Fish deposit hosts a substantial amount of high grade material.

The estimate has been completed by independent resource consultants, FinOre Mining Consultants, and has been classified in accordance with Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the 'JORC Code').

The resource estimate at 1.0 g/t cut-off is detailed in Table 4.

Table 4 - Fish Mineral Resource Estimate Classification
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Measured Indicated Inferred Total
------------- ------------- ------------- ---------------------
Tonnes Grade Tonnes Grade Tonnes Grade Tonnes Grade Ounes
(kt) (g/t) (kt) (g/t) (kt) (g/t) (kt) (g/t)
------------- ------------- ------------- ---------------------
320 4.0 180 4.4 160 3.7 660 4.1 87,000
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ADDITIONAL NOTES FOR TABLE 1
- Figures contained within Table have been rounded. Gold grades are
rounded to 1 decimal figure; both estimated tonnes and contained
ounces are rounded to nearest 1000.
- Abbreviations used: Kt equals 1000 tonnes,
g/t equals grams per tonne

Figure 4 - Interpreted Geological Section 81010N

To view Figure 4 please click on the following link: http://www.ccnmatthews.com/docs/CREfig4.jpg

All metallurgical and mining parameters have been obtained and optimisation studies have commenced. Initial engineering assessment and current costing for haulage (100km) have also been completed.

Mineralisation at Fish is confined within a tabular steeply dipping BIF unit that has been delineated over a 350m strike length (refer Figure 4).

The immediate area north and south of the resource is considered prospective for further mineralisation. Furthermore, anomalous mineralisation has been recorded in the footwall and presents the company with a priority drill target.

Several mineralised intersections lie below the Mineral Resource estimate and could not be classified due to the lack of drilling. These intersections occur between the 330mRL and 175mRL, 140m below surface.

Figure 5 - Fish, 1.0 g/t shell, with Granite surfaces, looking

To view Figure 5 please click on the following link: http://www.ccnmatthews.com/docs/CREfig5.jpg

Figure 6 - Fish Geological Plan To view Figure 6 please click on the following link: http://www.ccnmatthews.com/docs/CREfig6.jpg

Exploration - Further Encouraging Results

Drill Result Highlights

- Better RC intersections received and previously reported at Fish include:

11m @ 7.6 g/t from 70m

10m @ 6.1 g/t from 154m

4m @ 5.3 g/t from 83m

13m @ 4.0 g/t from 8m

7m @ 2.9 g/t from 68m

7m @ 7.0 g/t from 12m

8m @ 5.7 g/t from 96m

8m @ 5.6 g/t from 107m

- Current RC drilling at Sickle will further impact the mineral resource estimate. Recently announced results include:

12m @ 9.6 g/t from 41m

6m @ 7.3 g/t from 139m

The project economics are highly leveraged to a higher gold price. The company is conducting optimisation studies based on gold price sensitivities for the other resources contained within the 1.38m ozs total.

Exploration - Sickle Corridor

Exploratory RAB drilling of regional gravity survey targets along the Sickle Corridor is planned to commence shortly.

The Black Swan tenement (E38/420) lies immediately to the south of Sickle and is considered highly prospective for the southerly extension of the East, West and Main Lodes of Sickle. Several new prospective areas have been identified for follow up over the course of 2006.

The Gravity survey (image below) was completed in the December Quarter and has highlighted a number of subtle, large gravity features, similar to those associated with the Sickle ore body.

Crescent will be discussing future work programs to the south on the Black Swan tenement with its Joint Venture Partner, Barrick Gold, following the recent Placer takeover.

Figure 7 - Sickle Corridor and Black Swan Gravity Anomalies

To view Figure 7 please click on the following link: http://www.ccnmatthews.com/docs/CREfig7.jpg

Uranium

The review of Crescents' Uranium properties continued during the quarter. All historical data, geophysics and remote sensing data was acquired and integrated into the exploration database. Although still in early stages, regional exploration models and preliminary targets have been developed, with projects ranked according to their overall prospectivity.

The company elected not to exercise the A$0.5m option over Woolner and Alive Springs, which were returned to the vendor in December 2005.

The present uranium portfolio consists of ten exploration licences or exploration licence applications in both Western Australia and the Northern Territory, covering over 5100 km2 of terrain highly prospective for uranium and other commodities.

Figure 8 - Uranium Projects

To view Figure 8 please click on the following link: http://www.ccnmatthews.com/docs/CREfig8.jpg

Western Australia - Ethel Hills

At the Ethel Creek project (E39/995 and 39/996) in Western Australia, located 130km southeast of the companies Laverton Gold Operations, geophysics and remote sensing data is currently being assessed. Already, a number of target areas prospective for calcrete and sandstone hosted uranium mineralisation as well as gold and nickel have been identified.

A number of paleochannel systems have been located that overlie Achaean granitoids. These will be targeted for calcrete-hosted uranium mineralization, similar to the many examples of this style of deposit in Australia, including the large Yeelirrie deposit.

Further to the east, Mulga Rocks style sandstone hosted targets within younger sediments overlying Achaean rocks also exist. The Mulga Rocks polymetallic deposit, located 40km southeast of Ethel Hills, contains 10.8Mt @ 0.13% U3O8 together with other elements including scandium, cobalt and nickel. Mineralisation is contained within Eocene channel sands and lignites.

The project also contains the partly covered southern extension of the Meriola Greenstone belt, which contains ultramafic flows and sills prospective for nickel sulphide mineralization, as well as BIF and mafic volcanics similar to those that host the companies Lord Byron and Fish gold deposits some 45km north.

Northern Territory-Calvert Hills

A review of the geology and controls to uranium mineralization in the Westmoreland Uranium Field in the Northern Territory has led to the preliminary identification of regional targets within the companies Calvert Hills Project. No exploration for uranium has been completed in the area for some 15 years.

The project covers over 3500 km2 of Proterozoic sediments, volcanics and granitoids within the Murphy Inlier. This terrain is actively being explored for uranium by Laramide Resources Ltd across the border in Queensland.

A number of structural settings with proximal radiometric anomalies have been identified, similar to the setting that hosts one of the largest deposits in the area, Redtree (10.2Mt @ 0.12% U3O8). The company considers the region to be prospective for IOCGU (Iron Oxide Copper Gold +/- Uranium) styles of mineralization, due to the presence of potentially hydrothermal iron in the area, as well as the association of hematite and structurally controlled copper-gold-uranium mineralisation. A number of geophysical features have been identified from broad spaced regional surveys that require further investigation.

Northern Territory-Tennant Creek

Within the Tennant Creek project, previous exploration by CRA in the 1980's identified an uraniferous granitoid to the northwest of the Warrego copper-gold mine. Anomalous water samples to 1.6% U3O8 were returned, although the source could not be located.

The Projects covers over 1000 km2 of ground contained within two ELA's. No exploration for uranium has been completed since this time.

A large drainage system that flows north from the granitoid into Crescents ground is to be investigated for potential channel hosted uranium mineralization.

Lying under thin cover in the southern portion of the project, the project also contains potential easterly strike extensions from known IOCG deposits, namely the Bull Pup and Last Hope Prospects. Further work assessing the potential for this style of deposit is continuing.

Northern Territory-Rum Jungle

Crescent is currently reviewing the potential within the Rum Jungle Project to host unconformity-style uranium deposits, typical of the area. The project comprises three ELA's that surround known uranium deposits within the Rum Jungle Mineral Field. Within the northern ELA, the unconformity between the Whites Formation and Wildman Sandstone that hosts the Mt. Fitch uranium occurrence passes close to the eastern portion of licence area, and regional aeromagnetics suggests the Whites Formation may also extend further west. The central licence, located immediately north of Mt. Burton uranium deposits overlies Coomalie Dolomite.

China - Wulaste

The process of transferring the Wulaste Exploration Licences to Crescent Gold's Business Licenced entity progressed during the quarter.

Corporate

Tookie Angus joined the Board as an Independent Director. Tookie is a well respected International Mining Lawyer, based in Canada, with extensive experience spanning over 30 years in the legal and commercial aspects of Mining across the World.

Tookie is currently a Director of several public companies including IMA Exploration Inc. and Nevsun Resources Ltd. Before he resigned in 1997 on completion of a successful takeover, he was Chairman of the Board of BC Sugar Refinery Limited.

Tookie's appointment strengthens the Board and facilitates new opportunities for the company to grow. His appointment will also assist the company in completing its TSX Interlisting, which will compliment the existing ASX listing and providing a local market opportunity for our North American shareholders.

Planned March Quarter Activity

Advancement to Gold Production - 2006

- Completion of project implementation plan.

- Schedule for commencement of production of Laverton Gold Project.

- Contract tenders in preparation.

- Finalization of term sheets with a Bank.

- Selection and appointment of a bank for Project Finance.

- Completion of Notice of Intent to mine.

- Securing operational management team.

Exploration Activity

- RC follow-up of significant RAB intersections and geophysical anomalies around and within Sickle Corridor.

- Regional compilation and new target generation.

- Advance nickel study.

Corporate

- Advancing the Crescent Gold TSX inter-listing.

- Strategic review of recently acquired Uranium assets.

Crescent Gold Limited

Andrew Haythorpe, Executive Director

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Andrew Spinks, who is a Member of The Australasian Institute of Mining and Metallurgy included in a list promulgates by the ASX from time to time.

Andrew Spinksis employed by Crescent Gold Limited and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves".

Andrew Spinks consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Crescent Gold Limited (ASX.:CRE)