Crocodile Gold Corp.

Crocodile Gold Corp.

July 15, 2013 07:00 ET

Crocodile Gold Posts Production of 48,261 Ounces in the Second Quarter of 2013

Company Maintains 2013 Production Guidance

TORONTO, ONTARIO--(Marketwired - July 15, 2013) - Crocodile Gold Corp. (TSX:CRK) (OTCQX:CROCF) (FRANKFURT:XGC) ("Crocodile Gold" or the "Company") produced 48,261 ounces of gold in the second quarter of 2013 as it continues to progress towards the Company's 2013 production guidance of 170-180,000 ounces. Related revenue and cost per ounce details will be included in the Q2 2013 financial results which will be released mid-August.

Production Summary

(2013 Guidance)
Second Quarter 2013 First Quarter 2013 Total
(80-85,000 oz)
Ore Milled (t ) 197,769 190,026 387,795
g/t Au 4.32 4.74 4.53
Recovery 85.5 % 81.4 % 84 %
oz 23,470 23,556 47,026
(25,000 oz)
Ore Milled (t ) 238,344 213,132 451,476
g/t Au 1.20 2.06 1.63
Recovery 76.5 % 86.5 % 81.5 %
oz 7,085 12,228 19,313
(65-70,000 oz)
Ore Milled (t ) 175,708 152,128 163,918
g/t Au 3.50 3.12 3.31
Recovery 89.5 86.4 % 88 %
oz 17,706 13,169 30,875
Total Au Produced oz 48,261 48,953 97,214

Crocodile Gold is pleased to report that all assets continue to perform according to plan though challenging markets have prompted a detailed review of all mine plans and expenditures. The Company expects to provide more detailed guidance as part of its second quarter financial reporting. Crocodile Gold maintained consistent gold production compared to the first quarter with lower average grades largely attributable to the treatment of oxide stockpiles at the Stawell Gold Mine. Crocodile Gold is also proud to announce that the Stawell Gold Mine has recently achieved two continuous years of Lost-Time Injury Free operations.

Rodney Lamond, the newly appointed incoming President and CEO of Crocodile Gold, commented: "It is encouraging to see that Crocodile Gold is well on its way to meeting the Company's 2013 production objectives. In the coming weeks, I will be in Australia reviewing the operations and working with management to identify areas of opportunity in this difficult gold market."

Operational Updates

Fosterville Gold Mine (FGM)

  • The Fosterville Gold Mine (FGM) produced 195,686 tonnes from the Harrier and Phoenix zones during the second quarter at an average grade of 4.39 g/t Au. The operation processed 197,769 tonnes of ore at a grade of 4.32 g/t Au with a recovery rate of 85.5%, resulting in gold production of 23,470 ounces for the second quarter.
  • Mine development continued at an average advance rate of 597 metres per month during the quarter.

Stawell Gold Mine (SGM)

  • The Stawell Gold Mine (SGM) continues to transition from its underground mining activities and is now focused on the upper levels of the mine to access remnant ounces. During the quarter it mined 94,541 tonnes of underground ore at an average grade of 2.66 g/t Au which it supplemented with surface oxide material for a total of 238,344 tonnes processed at an average grade of 1.20 g/t Au. SGM achieved a recovery rate of 76.5%, which resulted in gold produced of 7,085 ounces. SGM expects to complete underground mining in the third quarter 2013, however, a significantly reduced cost structure has prompted a review of the upper level resource with potential to identify further profitable ounces from the underground operation.

Northern Territory Operations

  • The Cosmo Mine continues to ramp-up to full production levels, producing 176,110 tonnes of ore during the quarter at an average grade of 3.63 g/t Au out of which approximately 23,000 tonnes was left to be processed as of June 30, 2013. The Union Reefs mill processed 175,708 tonnes during the quarter at an average grade of 3.50 g/t Au and at a recovery rate of 89.5%, resulting in gold production of 17,706 ounces. Recovery issues experienced at the end of Q1 were quickly addressed by site management with recoveries now returning to expected levels around 92%.
  • The Cosmo Mine achieved an average development rate of 449 meters in the quarter, in line with operational requirements while continuing to minimize capital expenditure.

Divesting of Non-Core Assets

In June 2013, the Company completed the sale of the non-core Tom's Gully and Mount Bundy properties to Primary Gold. As a result, A$3M in security bonds were released into the Company's available cash balance and the related rehabilitation liabilities were transferred to Primary Gold. A total of 786km2 were included in the land package.

On May 29, 2013, the Company signed a definitive agreement with Pitchblack Resources Ltd. ("Pitchblack") for the option to acquire a 90% interest in a package (260km2) of non-core base metal properties in the Northern Territory in exchange for cash consideration of $500,000 and a 10% common share interest. The option is also contingent on C$4M in exploration expenditures within 4 years of the date of the agreement. Closing of this transaction is subject to Pitchblack receiving approval from the TSX Venture Exchange and certain other conditions.

Company Outlook

The Company is currently undergoing a detailed review of all costs and projects and will adjust its plan accordingly to ensure conservation of cash and optimal use of capital. With the significant reduction in debt as a result of unwinding the gold swap contracts earlier this year, Crocodile Gold has significantly strengthened its balance sheet which will allow it to react to changing market conditions. The Company has a positive working capital balance of approximately $20M, which includes a cash balance of approximately $29 M as of June 30, 2013.

As a result of the significant decrease in the price of gold, management is assessing the carrying value of its mine properties and property, plant and equipment as the recoverable amount at lower prices may exceed the carrying amount of those assets, which would result in an impairment charge. This assessment is currently ongoing and will be finalized as part of the Company's Q2 financial statements.

Conversely, as a result of the lower gold price environment, management also expects to record a decrease in the Company's contingent liabilities, which would result in a gain to the consolidated statement of operations. A significant gain on the unwinding of the gold swap contracts will also be recognized in the Q2 financial statements.

About Crocodile Gold

Crocodile Gold is a Canadian gold mining and exploration company with three operating mines in the Northern Territory and the State of Victoria, Australia. The Company has a combined land package in excess of 4,000 sq. km. The objective of Crocodile Gold is to continue production from its three operating mines, Cosmo, Stawell and Fosterville, while also advancing development programs to further organic growth. For additional information, please visit our website

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Qualified Person

F. W. Nielsen, P.Geo, V.P. Exploration 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.

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 the Company's expectations for future performance based on current drill results and past production, expected gold prices, 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 licences, 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 that 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, and 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.

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