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

Crocodile Gold Corp.

February 22, 2012 15:29 ET

Crocodile Gold Extracts 119,000 Tonnes of Ore in January 2012

Cosmo Continues Ramp Up to Full Production

TORONTO, ONTARIO--(Marketwire - Feb. 22, 2012) - Crocodile Gold Corp. (TSX:CRK)(OTCQX:CROCF)(FRANKFURT:XGC) ("Crocodile Gold" or the "Company") is pleased to announce that a 47% improvement in development metres was achieved in the Cosmo underground mine in January 2012 when compared to December 2011. The Company delivered 90 metres of ore development, producing 10,900 tonnes grading 3.0 g/t Au, a monthly underground development record.

For the month of January, Crocodile Gold processed 119,000 tonnes of ore at an average grade of 0.95 g/t Au, with a 90% mill recovery, for gold production of 3,300 ounces. This coincides with the Company's 2012 guidance of 75,000 - 85,000 ounces. Mill feed was predominately sourced from the West Howley pit, with Cosmo underground ore being stockpiled for processing in February as this fresh competent ore type is the ideal material to be processed during the region's wet season. The Company is pleased to report that the rainfall and operational delays experienced during the wet season have been lower than average with occasional outages due to electrical failures from lightning strikes in the area. Operational focus will change to process lower grade, clay rich oxide ore during the dry periods.

David Keough, Crocodile Gold's Chief Operating Officer, commented, "The ore processed at the Company's Union Reefs Mill was 20% above the tonnes processed in January 2011, which reflects measures taken to minimize processing downtime associated with the wet season as well as a lower than normal start to the Monsoons which occur yearly from November to May."

It is anticipated that development metres and Cosmo underground ore production will be at a similar level in February with slot drilling for the first ore stopes completed by February month end. This will enable stope ore production, which is expected to begin in early March. Mill grades and gold production should increase at the Union Reefs mill as underground ore will begin to make up between 10-15% of the mill ore feed. Tonnes processed at Union Reefs in February will be affected by a scheduled major mill shutdown for two days and the short month. The Company expects tonnes of ore processed to be similar to January's results.

Underground Operation - Cosmo

During January 2012, a total of 331 metres of underground development were completed, which was a 47% improvement over December 2011. A total of nine development headings were available at the end of January, with the Company working towards having a minimum of twenty headings available at any one time. A total of 10,900 tonnes of development ore grading 3.0 g/t Au was mined from the Zone A area. (see Figure 1:Cosmo Underground Development Plan). Zone A is a lower grade ore zone identified during early development of the decline. Delineation drilling proved that economic ore was readily accessible in Zone A, close to infrastructure. This zone is being mined as a trial stoping area to identify drilling and blasting parameters and to establish over break and dilution factors prior to production in the Main Eastern Lode.

A total of 1,231 metres of underground delineation drilling occurred in January 2012 on the Cosmo Deeps deposit. The focus was primarily on the Eastern Lodes with several holes drilled into the Western lodes. Drilling on the 1025 targeted the 100 and 200 lode on the Hanging wall and footwall side of the F1 fault. Results from the 1025 drilling continue to be positive, with the high-grade plunging core continuing to be intersected as predicted.

Other capital infrastructure projects completed at Cosmo to date include:

  • the 1020 Pump station and rising main pump line to surface
  • completion of the surface ROM pad for safe separation of road trains and underground haultrucks
  • the establishment of an in-pit sump and pump station

Surface Operations

In January 2012, ore was extracted from both the West Howley pit and Rising Tide. Ore feed to the mill was solely sourced from the lower grade Howley West pit due to the limited wet season access to the Rising Tide operation. Infrastructure, consisting of roads and pumping, established at Howley is constructed to remain operational during the wet season. The ore from Rising Tide is being stockpiled on site for processing when weather conditions improve. Ore tonnes produced from the Open Cut operation were 126,000 tonnes, 6% above budget, due to the concentration on the Howley West pit during the wet.

Exploration

Exploration activities for the month of January 2012 consisted of the continuation of diamond drilling at the Company's Prospect and Crosscourse deposits in the Union Reefs area (See Figure 2).

Highlights of drill holes completed towards the end of 2011 include:

Below Crosscourse Open Pit

  • 5.43 g/t Au over 2.45 metres in hole URNDD03b
  • 15.09 g/t Au over 1.8 metres in hole URNDD03b

Below Prospect Open Pit

  • 7.70 g/t Au over 3.1 metres in hole URNDD30W1
  • 4.83 g/t Au over 3.1 metres in hole URNDD30
  • 12.51 g/t Au over 3.28 metres in hole URNDD28
  • 27.96 g/t Au over 2.05 metres in hole URNDD28
  • 31.27 g/t Au over 0.7 meters in hole URNDD28W1

A 10,000 meter drill program in the Union Reefs area during the first half of 2012 will focus on continuing to define the area below and between the Crosscourse and Prospect deposits. Current drilling is now focused on close spaced in-fill holes along a 200 meter strike length of the Prospect deposit. The objective is to re-calculate resources for the Prospect deposit by the middle of March. A revised scoping study to assess the economic viability of underground mining at Union Reefs will commence in the latter part of March for completion by mid-April. A total of 1,237 metres were drilled in January with two drill rigs utilized.

Assay results from the Company's Maud Creek and base/precious metal sulphide deposits (Iron Blow and Mt. Bonnie) are being compiled and preliminary interpretations completed.

Other Operational Updates

The water treatment plant has been commissioned and has exceeded expectations with discharge being fully compliant with an average of 150 litres per second being treated. The successful commissioning of this plant was the final item of the capital program, at a cost of approximately $8 million, to manage the dewatering of the Cosmo pit and the life-of-mine dewatering requirements of the Cosmo underground mine.

Crocodile Gold also continues to work with the various government agencies and local community leaders to finalize permits for mining of the International Deposit open pit which is adjacent to the town of Pine Creek. Feedback is expected from the Government on the Notice of Intent submitted in December and should be seen in the current Quarter.

Chantal Lavoie, Crocodile Gold's President and Chief Executive Officer, commented "2012 promises to be a very exciting year for the Company on numerous fronts. Cosmo development is ramping up as planned, gold production for the first month of 2012 is in line with guidance for the year, our exploration activities in the Union Reefs area continue to show great promise and our strategic initiatives continue to progress very well. We plan to provide regular production and corporate updates to our shareholders in 2012 and thank you for your continued support."

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 km2. Crocodile Gold is currently mining a number of open pits in the Howley Corridor. The Company is also developing the Cosmo underground mine. Ore is processed at the Union Reefs Mill with a capacity of 2.4 million tonne per year. 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). The Company has an extensive exploration program in place and is drilling on several key properties on its expansive land package. Crocodile Gold's main focus is on the Cosmo Mine, the Union Reefs and Maud Creek project areas.

For additional information, please visit our website www.crocgold.com. Follow us on Twitter (@crocgold_crk) or Facebook (www.facebook.com/CrocodileGoldCorp).

Qualified Person

David Keough F.AusIMM of Crocodile Gold Inc 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.

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 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 Figure 1: Cosmo Underground Development Plan, please visit the following link: http://media3.marketwire.com/docs/crocgf1.jpg

To view Figure 2: 3D View of Crosscourse and Prospect, please visit the following link: http://media3.marketwire.com/docs/crocgf2.jpg

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