Crocodile Gold Corp.
TSX : CRK

Crocodile Gold Corp.

December 22, 2009 08:45 ET

Crocodile Gold Provides Exploration Update on Chinese Pit Area: Historic Grades Include 1.8 g/t Au Over 22 M and 14.52 g/t Au Over 5 M

TORONTO, ONTARIO--(Marketwire - Dec. 22, 2009) - Crocodile Gold Corp. (TSX:CRK) ("Crocodile Gold" or the "Company") is pleased to provide an update on the exploration program currently underway on its Chinese project, in the Northern Territory of Australia (refer to Figure 1 for location map). The project is currently the site of an ongoing 40,000 metre reverse circulation drill program which is part of the previously announced US$8.4 million exploration program being conducted on the Company's extensive landholdings in the Northern Territory (see Crocodile Gold press release dated November 12, 2009).

Background

The Chinese project is located 130 kilometres southeast of the city of Darwin (Figure 1). The project consists of seven shallow open pits, being the Chinese South, Chinese South Extension, Chinese 1,2, and 3, Mottrams and Big Howley (Figure 2).

The project is one of the Company's most important, accounting for 12% of its reserves, 15% of the measured and indicated resources and 11% of the inferred resources. Reserves and resources are summarized in Table 1 below. The majority of the drilling to date has been shallower than 100 metres vertical depth. Mineralization remains open along strike and at depth (Figure 3).

Gold mineralization at Chinese is developed in tension-gash quartz vein arrays within both the hinge zone and steeply dipping flanks of a shallow north-plunging anticline comprising folded dolerites and Proterozoic sediments. The anticlinal structure comprises a relatively gently westward dipping west limb, and a sub vertical east limb (Figure 4). The current resources are almost entirely within the west limb of the anticline. To date the resources have been developed around a number of parallel planar lenses (or lodes). These can be relatively wide and lower grade of, for example, 1.8 g/t gold over 22 metres. They can also be narrower but higher grade with intersections of, for example, 6.2 g/t over 9 metres and 14.52 g/t gold over 5 metres. These lenses are contained within a wider corridor of mineralization which is known to average at least 400 metres wide. The mineralized corridor extends for at least five kilometres north of the Cosmo project. Many of the past holes have ended in mineralization.

The current mining plan is to selectively mine the resource lodes as currently defined, focusing initially on the Chinese South Extension pit. However, with exploration success the potential exists to develop a larger scale operation that bulk mines the overall mineralized package.

In releasing this information, President and CEO, Mike Hoffman, stated, "The Chinese open pit area is at the beginning of its life. We believe that since the mineralization is open at depth, along strike to the north and south and laterally to the east and west, the potential exists to outline a substantially larger system. Our goal is to complete sufficient drilling to identify the potential for mineralization being extensive enough to link the current pits together in one larger pit. We hope to provide the first exploration results in the near future."

Table 1: Chinese Reserves & Resources

  Reserves   Probable Mineral Reserve
  Deposit   Cut-off (g/t)   Tonnes   Gold Grade (g/t)   Contained oz Gold
 Chinese South Extension   1.4   1,000,000   2.1   68,000
  Gold Price $US 775/oz; $A:$US 0.80
Resources   Indicated Resources   Inferred Resources
       Deposit  Cut-off (g/t)   Tonnes  Gold Grade (g/t)   oz Gold   Cut-Off   Tonnes   Gold Grade (g/t)   oz Gold
  Chinese South Extension   0.7   3,621,000   1.6   184,800   0.7   1,579,000   1.3   65,000
  Mottrams   0.7   2,236,000   1.2   87,300   0.7   574,000   1.1   20,900
  Chinese 1, 2, 3   0.7   3,342,000   1.4   153,300   0.7   1,979,000   1.4   88,800
  Big Howley   0.7   299,000   1.5   14,400   0.7   348,000   1.8   19,800
  Total Chinese Open Pits   0.7   9,498,000   1.43   439,800     4,480,000   1.36   194,500
                   

*Resources include reserves

Objective of Current Drill Program

The long term objective is to establish a ten year reserve life, and an additional equal amount of resources for the area. To reach this goal, the current program is focused on the following main areas:

  1. Upgrading the confidence level in resources and increasing reserves in the Chinese South Extension Pit area;
  2. Testing for continuity of mineralization between the existing pits;
  3. Exploring for mineralization to a vertical depth of at least 200 metres;
  4. Testing for mineralization in the gap between the Chinese South Pit and the Cosmo Pit, which is a distance of approximately two kilometres;
  5. Testing for mineralization to the north of the Big Howley Pit;
  6. Testing for additional mineralization to the west of the known resources; and
  7. Testing for mineralization on the east limb of the anticline.

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 core was assayed at Northern Australia Laboratories (NAL).

About Crocodile Gold

Crocodile Gold is a Canadian company that has completed the acquisition of recent past producing gold assets in the Northern Territory of Australia. The assets comprise an area greater than 3,500 square kilometres and are located approximately 90 to 285 kilometres south of the capital city, Darwin, and include the Burnside Project, Tom's Gully Project and Maud Creek Project. The property contains 3.0 million ounces of NI 43-101 compliant measured and indicated resources (40.9 million tonnes at an average grade of 2.3 g/t gold), and 1.8 million ounces of inferred resources (25.9 million tonnes at an average grade of 2.3 g/t gold) (See Management Information Circular dated October 5, 2009 and Crocodile Gold Press Release dated September 8, 2009). The Burnside Project includes the Brocks Creek underground mine, the Chinese open pit mine and several additional deposits along the Cosmo/Chinese corridor, including the undeveloped Cosmo underground deposit. The Tom's Gully Project includes the Tom's Gully underground mine and the former Mt Bundy (Rustler's Roost) Mine. Crocodile Gold owns the 8,000 tpd Union Reefs mill and the 800 tpd Tom's Gully mill. Crocodile Gold trades under the symbol CRK on the Toronto Stock Exchange.

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 (Crocodile Gold Northern Territory Location Map), Figure 2 (Chinese Plan View), Figure 3 (Chinese Sectional View) and Figure 4 (Composite Cross Section of Chinese showing resource blocks), please visit the following link:

http://media3.marketwire.com/docs/crocodile_gold_maps_dec_22.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
    www.crocgold.com