Crocodile Gold Corp.
TSX : CRK
FRANKFURT : XGC
OTCQX : CROCF

Crocodile Gold Corp.

May 03, 2010 07:00 ET

Crocodile Gold Extends Howley Mineralization-Intersections to 200m Depth: 2.41 g/t Au Over 28m-High Grade Potential Confirmed: 11.44 g/t Au Over 5m-Commercial Production to Be Declared Shortly

TORONTO, ONTARIO--(Marketwire - May 3, 2010) - Crocodile Gold Corp. (TSX:CRK)(OTCQX:CROCF)(FRANKFURT:XGC) ("Crocodile Gold" or the "Company") is pleased to announce the latest reverse circulation drill results from its Howley project in the Northern Territory of Australia (refer to Figure 1 below for location map). The project is currently the site of an ongoing reverse circulation drill program which is part of the recently expanded US$23 million exploration program being conducted on the Company's extensive landholdings in the Northern Territory (refer to Crocodile Gold press release dated March 22, 2010).

Highlights of these drill results are:

  • Confirmation that mineralization remains open to the north, south, east, west and at depth;

  • Mineralization intersected downdip from existing resources to a depth of 200 metres below surface with up to 2.41 g/t Au over 28 metres including a higher grade interval of 8.50 g/t over 6 metres;

  • The high grade potential of the east limb mineralization was confirmed with an intersection of 11.44 g/t Au over 5 metres at a vertical depth of 200 metres. This is 100 metres deeper than previous high grade intersections in the area;

  • The Howley area is the southern part of a more than 25 kilometre mineralized system within the Company's tenements and with existing shallow NI 43-101 compliant resources;

  • These results suggest the potential to maintain the previously announced low cost of discovery of US$6 per ounce (refer to Crocodile Gold press release dated January 25, 2010).

Background

The Howley mineralization occurs within an anticlinal structure and is located immediately north of the Cosmo pit (Figure 2) with mineralization present more than 5 kilometres to the north of Cosmo. The majority of work to date has focused on the west limb of the anticline which is also the location of the majority of the current known resources.

The Company was pleased to report considerable success from the initial phase of exploration drilling (see Crocodile Gold press releases dated January 14 and 25, 2010). These results suggested the potential for a substantially larger resource which required additional drill rigs in order to explore the potential as quickly as possible. As a result, there are now three reverse circulation drill rigs active at Howley.

The current results demonstrate encouraging results in three main areas as described below. The most recent reverse circulation drill results are summarized in Table 1 below.

Area 1: At depth beneath existing resources

The bulk of the existing resources are less than 100 metres below surface. The recent drilling has demonstrated the continuity of mineralization to a vertical depth of more than 200 metres (see Figure 3). For example, hole HSRC048 intersected 2.41 g/t Au over 28 metres, which included a higher grade interval of 8.50 g/t Au over 6 metres, in addition to a second intersection of 1.03 g/t over 43 metres, which included a higher grade interval of 2.27 g/t Au over 8 metres. In addition, hole HSRC046 intersected 1.12 g/t Au over 31 metres, which included a higher grade interval of 9.27 g/t Au over 3 metres, in addition to a second interval of 1.39 g/t Au over 17 metres. Both holes intersected this mineralization at vertical depths in excess of 200 metres below surface. Mineralization continues to remain open at depth.

Area 2: Mineralization in areas of no existing resources

In the area between approximately 6000N to 6500N, no resources have been defined due to an absence of previous drilling (Figure 2). A number of new holes in this area intersected mineralization indicating the potential for defining additional resources at this location. For example, hole HSRC059 intersected 1.46 g/t Au over 18 metres, which included a higher grade interval of 4.50 g/t Au over 5 metres, at a vertical depth of more than 150 metres. In addition, hole HSRC055 intersected 1.27 g/t Au over 12 metres at a vertical depth of approximately 125 metres.

Area 3: High grade mineralization on the east anticlinal limb

The majority of historical exploration at Howley has focused on the west limb of the anticlinal structure. The east limb has previously received little attention. This target area is considered a high priority area. In the area to the east of the Howley #4 pit, a number of significant historic high grade intersections have been obtained (Figure 2). In many cases the holes were incompletely sampled. Examples of some of these intersections include 58.1 g/t Au over 2 metres and 18.26 g/t Au over 7 metres in drill hole CH063 at a depth of only 50 metres below surface.

In the current program, hole HSRC038 intersected 11.44 g/t Au over 5 metres at a vertical depth of approximately 200 metres. This is the deepest intersection of high grade mineralization to date on the east limb, and is approximately 100 metres deeper than the previous deepest intersection in the area, and demonstrates the potential of this area to outline a high grade resource.

Summary

In releasing this information, President and CEO, Mike Hoffman, stated, "We continue to be excited by the results of our exploration efforts at Howley which have now been accelerated. A preliminary analysis of potential resource increases from this most recent drilling suggests our earlier discovery cost of approximately US$6 per ounce remains a realistic target."

"The results also continue to support our belief that the Howley mineralization is part of a larger system. We have identified mineralization within a corridor that is up to 500 metres wide over a strike length of more than 3.5 kilometres, which remains open to the north, south, east, west and at depth. The area is part of a larger mineralized geological trend that extends for more than 25 kilometres to the north on ground held by Crocodile Gold and which already hosts near surface NI 43-101 compliant inferred resources of approximately 240,000 ounces in the north end of the trend."

PRODUCTION UPDATE

Crocodile Gold expects to shortly declare commercial production as tonnes, grades and recoveries are now more consistently reaching target rates. Crocodile Gold expects to release production data from January to April 2010 prior to the quarterly results in mid May.

Annual General Meeting

Crocodile Gold's annual general meeting will be held on Tuesday, May 18, 2010 at 11:00am in Toronto at the Hilton Toronto in the Casson Room located at 145 Richmond Street West, Toronto, Ontario, M5H 2L2.

Table 1: Howley Project – Phase 2 RC Drill Results (partial list)

Hole # Easting Northing Interval (m) Grade (g/t Au)
  From To Total  
HSRC001 5200 3950 24 50 26 0.94
including     36 48 12 1.40
HSRC005 5115 4250 112 131 19 0.82
including     122 126 4 2.27
HSRC007 5285 4400 66 68 2 0.54
HSRC016 5510 5700 0 18 18 0.79
including     0 6 6 1.18
             
HSRC018 5320 5850 124 149 25 0.54
including     135 138 3 1.20
HSRC020 5510 5850 5 7 2 0.90
HSRC021 5510 6000 1 7 6 0.82
HSRC022 5410 6000 9 27 18 0.98
including     15 22 7 1.55
including     119 126 7 0.73
HSRC023 5320 6000 38 59 21 0.92
including     40 54 14 1.24
and     50 54 4 2.44
HSRC023     104 146 42 0.77
including     104 113 9 1.42
and     120 124 4 2.40
HSRC024 5230 4050 70 77 7 1.44
HSRC027 5520 4400        
HSRC032 5690 5000 159 171 12 0.81
including     192 196 4 2.14
HSRC033 5690 5150        
HSRC038 5755 5700 193 195 2 1.26
including     223 228 5 11.44
HSRC039 5705 5850 52 84 32 0.84
including     52 57 5 2.75
and     75 84 9 1.84
HSRC040 5755 5850 149 151 2 0.85
HSRC046 5350 5150 138 169 31 1.12
including     158 161 3 9.27
HSRC046     220 280 60 0.73
including     263 280 17 1.39
and     277 280 3 4.73
HSRC048 5380 5300 145 173 28 2.41
including     167 173 6 8.50
HSRC048     217 260 43 1.03
including     251 259 8 2.27
HSRC051 5400 6100 59 62 3 3.33
HSRC053 5600 6100 104 106 2 1.33
HSRC054 5300 6100 75 98 23 0.57
including     75 78 3 1.87
and     95 98 3 1.34
HSRC054     130 176 46 0.72
including     155 167 12 1.43
HSRC055 5300 6300 114 166 52 0.59
including     142 156 12 1.27
HSRC056 5400 6300 0 3 3 0.71
HSRC057 5500 6300 41 46 5 0.71
HSRC057A 5500 6300 35 40 5 1.04
HSRC059 5300 6500 52 59 7 0.94
HSRC059     188 206 18 1.46
including     199 204 5 4.50
HSRC060 5400 6500 48 57 9 0.78
including     108 113 5 0.90
HSRC061 5500 6500 0 4 4 1.68
including     24 32 8 0.72
and     104 110 6 1.24
HSRC167 5362 4580 0 18 18 0.67
including     0 4 4 1.37
and     234 239 5 0.73
HSRC169 5452 4580 0 52 52 1.00
including     2 17 15 2.00
HSRC170 5449 4600        
HSRC171 5479 4600 90 127 37 0.88
including     90 106 16 1.40

Qualified Person

Alfred John Gillman of Odessa Resources Pty Ltd is a "qualified person" as such term is defined in National Instrument 43-101 and has reviewed and confirmed the technical information and data included in this press release.

Drill samples were assayed at Northern Australian Laboratories (NAL).

Results are based on 50g fire assays.

Face sampling reverse circulation drilling (1m intervals).

Average grades have been determined from wider anomalous zones containing higher grade zones which average greater than 0.7 g/t Au over 2m minimum width and maximum of 2m internal dilution.

All intersections are downhole intervals.

Downhole surveying by downhole camera.

Collar co-ordinates confirmed by survey pick-up.Quality control procedures included blasts of compressed air to clean jaw and roll crushers between samples, a barren flush of river sand to clean bowls in between samples, laboratory duplicate samples undertaken at a rate of 1 in 10 and the insertion of NAL internal standards to monitor performance.

About Crocodile Gold

Crocodile Gold is a Canadian company with the Howley and Brocks Creek operating gold mines in the Northern Territory of Australia and a land package of over 2,500km2. Crocodile Gold announced its first gold pour in December 2009 at its Union Reefs mill, started development work at the Tom's Gully underground mine in Q1 2010 and has commenced activities at Cosmo to prepare it for underground development beginning in mid-2010 with full production expected by the end of 2011. Crocodile Gold has two mills, including the 8,000 tonne per day Union Reefs Mill and the 800 tonne per day Tom's Gully mill. Crocodile Gold has 3.09 million ounces of NI 43-101 compliant measured and indicated resources (42.9 million tonnes at an average grade of 2.3 g/t gold) and 1.94 million ounces of inferred resources (26.7 million tonnes at an average grade of 2.3 g/t gold) (See Management Information Circular dated October 5, 2009 and Crocodile Gold Press Releases dated September 8, 2009 and January 25, 2010). The Company has an aggressive exploration program in place and is drilling on several key properties. There are numerous exploration targets that the Company is prioritizing.

Cautionary Note

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 assessment 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 Figure 1, 2 and 3, please visit the following link: http://media3.marketwire.com/docs/crk503fig123.pdf

Contact Information

  • Crocodile Gold Corp.
    Michael Hoffman
    President and CEO
    416-861-2964
    or
    Crocodile Gold Corp.
    Ashleigh Clelland
    Manager, Investor Relations
    416-861-5899
    info@crocgold.com