TORONTO, ONTARIO--(Marketwire - May 8, 2012) -
Crocodile Gold Corp. (TSX:CRK)(OTCQX:CROCF)(FRANKFURT:XGC) ("Crocodile Gold" or the "Company") is pleased to announce that it expects a 200% increase in its 2012 gold production with the completion of the acquisition of the Fosterville and Stawell mines from AuRico Gold Inc.("AuRico"). Crocodile Gold also reports operational results for the first quarter of 2012 from its properties in the Northern Territory of Australia.
As publicly announced on May 4th, the Company announced that it had completed the acquisition of the Stawell and Fosterville mines located in Victoria State, Australia through the acquisition of all of the shares of Northgate Australian Ventures Corporation Pty Ltd ("Navco") from AuRico Gold Inc.
The rationale for Crocodile Gold to acquire these properties includes:
- The addition of two producing mines to Crocodile Gold's portfolio should increase 2012 expected production by approximately 155,000 - 175,000 ounces or about 200%;
- The strengthening of Crocodile Gold presence in Australia as a diversified miner with the combination of two highly talented operating teams;
- The accretive nature of the deal for Crocodile Gold with limited dilution to existing shareholders;
- The significant near-term cash flow which can be redeployed into projects such as Union Reefs and Maud Creek;
- The potential to extend mine lives through further exploration prospectivity; and
- The synergies expected between management, operations, and procurement.
Northern Territory Operations Update
In the first quarter of 2012, Crocodile Gold processed 371,000 tonnes of ore at an average grade of 0.99 g/t Au, with a 92% mill recovery, for gold production of 10,900 ounces. Tonnes milled and recovery rates were above budget forecasts, however, gold grade was below plan due to delayed underground ore and lower than planned open pit ore grades which impacted the year to date plan by 2,000 ounces.
Monsoonal rainfall during the month of March was heavy and persistent, which closed and damaged many public and Company access roads. Due to the access issues, mill feed was predominately sourced from low grade stockpiles and the West Howley Pit-Cosmo underground ore made up only 8% (8,500 tonnes) of the ore processed in March. Contingency plans put in place after the exceptionally heavy 2011 rainy season allowed the Company to maintain a degree of steady, although low-grade, mill feed, which allowed the Company to exceed first quarter 2011 tonnage by 18% and 2012 budgeted tonnage by 25%.
At the Cosmo underground mine, a total of 498 development metres (vertical/lateral) were completed. Development metres increased 40% from the previous quarter (see Figure 2). Stope ore production continued, although 50% below budgeted levels due to the affects of power outages and site access closures. Initial mining of the long hole stopes is progressing well and meeting expectations (see Figure 1). The second ventilation shaft (126 metre deep, 5 metre diameter vertical shaft) has been completed to surface at the Cosmo Mine. This second shaft should significantly de-risk the project's ventilation requirements moving forward.
April's production will also be affected by the damage to the public road servicing East Burnside (Rising Tide, North Point and Princess Louise deposits) with ore unable to be hauled to the Union Reef processing facility. While mining will continue at these pits and ore stockpiled, the Government authorities anticipate opening this road to ore haulage in mid-May once repairs are completed. Tonnes treated at the Union Reefs processing facility are anticipated to be slightly below March's results with ore sourced from the Cosmo Underground mine and West Howley pit (due to be finished at the end of April). Development metres at the Cosmo underground will be similar to March, with underground ore production anticipated to be above 20,000 tonnes due to continued stope production from Zone A, as well as some high grade development ore being mined from the Eastern Main Lode.
About Crocodile Gold
Crocodile Gold is a Canadian company with operating gold mines in the Northern Territory of Australia with a land package of over 3,300 square kilometers. The Company has also recently acquired two operating mines—Fosterville and Stawell—in Victoria State, Australia. Currently, Crocodile Gold is mining a number of open pits in the Howley Corridor and is completing the development of the Cosmo underground mine with commercial production expected in the second half of 2012. Ore is processed at the Union Reefs Mill with a capacity of 2.4 million tonnes per year. The Company has an extensive exploration program in place and is focusing advanced exploration efforts on its key properties, Union Reefs and Maud Creek.
Crocodile Gold has 3.175 million ounces of NI 43-101 compliant Measured and Indicated mineral resources and 2.14 million ounces of Inferred mineral resources (see the NI 43-101 compliant technical report entitled "Report on the Mineral Resources and Mineral Reserves of the northern Territory Gold and Base Metals Properties for Crocodile Gold Corp." by Fleur Muller, Mark Edwards and Heath Gerritsen dated April 4, 2011, filed under the Company's profile on SEDAR for the details regarding these mineral resource estimates). Mineral resource estimates are currently being prepared on Crocodile Gold's recent property acquisitions at Fosterville and Stawell and the Company expects to file a NI 43-101 compliant technical report by the third quarter of 2012.
For additional information, please visit our website www.crocgold.com. Follow us on Twitter (@crocgold_crk) or Facebook (www.facebook.com/CrocodileGoldCorp).
David Keough F.AusIMM, Chief Operation Officer of Crocodile Gold Corp. is a "qualified person" as such term is defined in National Instrument 43-101 and has reviewed and approved the technical information and data included in this press release.
Certain information set forth in this press release contains "forward-looking statements" and "forward-looking information" under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements which include management's production projections and cash costs, of Crocodile Gold's future plans, operations and mineral resource estimates and are based on Crocodile Gold's current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by words such as "expects" "anticipates", "believes", "projects", "plans", and similar expressions. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Crocodile Gold's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: liabilities inherent in mine development and production; geological, mining and processing technical problems; Crocodile Gold's inability to obtain required mine licenses, mine permits and regulatory approvals required in connection with mining and mineral processing operations; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; changes in commodity prices and exchange rates; currency and interest rate fluctuations; various events which could disrupt operations and/or the transportation of mineral products, including labour stoppages and severe weather conditions; the demand for and availability of rail, port and other transportation services; the ability to secure adequate financing and management's ability to anticipate and manage the foregoing factors and risks. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Crocodile Gold undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.
To view the Figures associated with this release, please visit: http://media3.marketwire.com/docs/crk508_F1.pdf