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

Crocodile Gold Corp.

May 17, 2010 07:50 ET

Crocodile Gold on Track to Produce 200,000 Ounces Gold in 2011-Targeted Levels Now Consistently Being Achieved-Commercial Production to Be Declared June 1, 2010

TORONTO, ONTARIO--(Marketwire - May 17, 2010) - Crocodile Gold Corp. (TSX:CRK)(OTCQX:CROCF)(FRANKFURT:XGC) ("Crocodile Gold" or the "Company") is pleased to confirm that it continues to anticipate production of 200,000 ounces of gold in 2011 from its operations in the Northern Territory of Australia (refer to Figure 1 below for location map).

Crocodile Gold has been working towards achieving commercial production as it resolves challenges that are to be expected during start up of an operation. The Company anticipates declaring commercial production as of June 1, 2010 as throughput levels, grades and recoveries are now consistently reaching targeted levels.

A conference call to discuss the operations to date and forecasts has been scheduled for Tuesday, May 18, 2010 at 10.00 am (ET). Call-in details are provided at the end of this press release.

The bulk of Crocodile Gold's 2010 production is expected to be processed in the 2.4 million tonne per year Union Reefs mill. Ore fed to this mill will be sourced from the Howley and North Point open pit mines and the higher grade Brocks Creek underground mine. The Tom's Gully underground mine is currently being developed and ore from this mine will be directly fed to the 240,000 tonne per year Tom's Gully mill located adjacent to the mine late in the third quarter of this year.

Since taking control of the assets, and restarting operations in November 2009, production has come from the Howley open pit and Brocks Creek underground mine. 13,661 ounces of gold were produced during the first quarter, which was below target. Challenges are commonly encountered during the start up of an operation and Crocodile Gold has had to resolve maintenance issues in the crusher as well as the gravity and leach circuits, in addition to developing adequate grade control practices.

The Company is very pleased to report that it is successfully resolving these issues and will now be able to declare commercial production on June 1, 2010 as targets are now being met on a consistent basis. As examples of some of the progress being made, mining grade has dramatically improved due to improved grade control and mining practices, and changes to the milling circuit are expected to improve recoveries and potentially exceed targeted levels. In order to maintain the long term targets, the Company is planning a number of scheduled maintenance activities to the end of May, which will include the installation of new mill liners. As a result, the production forecast for 2010 has been reduced to 100,000 ounces of gold at a higher cash cost of approximately US$700 per ounce. However, it is anticipated that costs will decrease in addition to production increasing to 200,000 ounces during 2011.

In releasing this information, President and CEO, Mike Hoffman, stated "We continue to be extremely excited about the long term future of Crocodile Gold. The start up of operations clearly provided us some challenges, which our team is resolving such that we will be in a position to announce commercial production shortly. The short term pain we are taking with respect to lowering our 2010 forecasts will ensure our long term future. We are expanding the resource at Cosmo/Howley and are currently focused on a strike length of only 5 kilometres which lies within an overall 25 kilometre mineralized trend. The very real potential exists for this to be a substantially larger resource supporting a larger than forecast production base."

Project Update

The feasibility study for a proposed new processing facility in the Cosmo/Howley area is expected to be completed in June. In anticipation of the study completion, a new grinding mill has been purchased for use at Cosmo/Howley and condemnation drilling has occurred at the proposed milling site. The new processing facility will have an initial nameplate capacity of 1.5 million tonnes per year with a number of components such as the crushing circuit sized larger so that minimal capital will be required to complete a potential future expansion to 3.0 million tonnes per year capacity.

The proposed new processing facility at Cosmo/Howley offers the following advantages:

    Production from the Howley and North Point open pits and the Brocks Creek underground mine are currently being trucked approximately 80 kilometres to the Union Reefs mill. The trucking cost represents close to 20% of the current operating costs. Having a processing facility located within 15 kilometres offers the opportunity to substantially reduce operating costs.
       
    Current resources located to the north of Cosmo/Howley and lower grade mineralized material become more economic with lower transportation costs.
       
    Continued exploration success and existing development plans in the Cosmo/Howley corridor offers the potential of a long life production centre with the existing Union Reefs mill available to further expand production from other ore sources such as Iron Blow, Maud Creek, Pine Creek/Union Reefs or the Burnside area.
       
    The long term goal is to develop a production facility capable of producing in excess of 200,000 ounces of gold annually.

The Cosmo open pit has been dewatered to the point where the Cosmo portal excavation is expected to begin in June with the goal of initial production from the Cosmo underground mine in mid-2011.

Further details are available on the Company's website at www.crocgold.com and also www.sedar.com where the Crocodile Gold financial statements and management discussion and analysis (MD&A) are posted.

Notice of Conference Call and Audio Webcast

Crocodile Gold will hold a conference call and audio webcast on Tuesday, May 18, 2010 at 10:00 a.m. (ET) prior to the Annual General Meeting.

Conference Call Information:

Toronto: 416-340-2216
North America Toll Free (Canada & US): 1-866-226-1792
International Toll Free (Outside of Canada & US): 1-800-9559-6849*

*Please note extra digit required

Conference Call Replay Information:

Toronto & International (Outside of Canada & US): 1-416-695-5800
Passcode: 5422756
Followed by #
North America Toll Free (Canada & US): 1-800-408-3053
Passcode: 5422756
Followed by #
Replay Availability: 2:00 p.m. ET on Tuesday, May 18, 2010
to
11:59 p.m. ET on Tuesday, May 25, 2010

Audio Webcast:

The conference call can also be accessed on a listen-only basis via audio webcast through our website at www.crocgold.com. The webcast will be archived on our website following the conference call.

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 second half of 2011. Crocodile Gold has two mills, including the 2.4 mtpy Union Reefs mill and the 240 ktpy 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 Annual Information Form dated March 31, 2010 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.

Qualified Person

Alfred John Gillman of Odessa Resources Pty Ltd and Heath Gerritsen of Crocodile Gold are each 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.

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, please visit the following link: http://media3.marketwire.com/docs/northern-territory.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