TORONTO, ONTARIO--(Marketwired - April 23, 2014) - Crocodile Gold Corp. (TSX:CRK)(TSX:CRK.DB)(TSX:CRK.WT)(OTCQX:CROCF)(FRANKFURT:XGC) ("Crocodile Gold" or the "Company") reports on its production results for the first quarter of 2014. Related financial details for the first quarter are planned for release in May.
First Quarter Production Highlights
- Consolidated operations achieved gold production of 53,583 ounces with 678,821 tonnes of ore processed in the first quarter - a 9.5% increase in gold production when compared to Q1 2013.
- Gold production is on track to meet guidance of 200,000 to 210,000 ounces for 2014.
- The Cosmo Gold Mine successfully completed the previously announced change over to the new underground mining contractor in late March.
- The Stawell Gold Mine's Big Hill Enhanced Development Project has taken a significant step forward with the release the related Environmental Effects Statement (EES) in for public review.
- The Company ended the quarter with a preliminary cash balance of $38.0M and working capital of approximately $28.3M. The Company also fully settled its outstanding credit facility with Credit Suisse during Q1.
Consolidated Operational Summary
|Ore Milled (t)
|Average Recovery (%)
|Average Grade (g/t Au)
|Ounces Produced (oz)
Rodney Lamond, President and CEO of Crocodile Gold, commented: "Crocodile Gold has started the year continuing the positive trends that were established in 2013 with production of over 53,000 ounces of gold in the first quarter of 2014. With these results, I am pleased to report that we are well on our way to meeting our 2014 guidance of between 200,000 and 210,000 ounces of gold. We ended the quarter with a strong cash balance and were able to settle our remaining outstanding facility with Credit Suisse." Mr. Lamond continued: "I would like to highlight the work of our team at the Cosmo Gold Mine and that the transition to our new mining contractor was a success. The team continued operations and moved a significant amount of ore in light of a mining contractor transition. At our Fosterville Gold Mine, I am very encouraged by the exploration results that will ensure the extension of the mine life for the operation and the Company continues to work on an updated mineral reserve and resource estimate for the site. In addition, the Big Hill Enhanced Development Project took a significant step forward with the release the related Environmental Effects Statement (EES) in for public review. The Company is committed to moving Big Hill forward as one of our most important growth projects for 2014 and the release of the EES is a key milestone."
Cosmo Gold Mine
In late March 2014, the Cosmo Gold Mine transitioned its mining contractor to Downer EDI (see news release from February 3, 2014). All critical gear and staffing are now in place and operating at targeted levels, and while there were some operational challenges in the early part of the transition which impacted mine productivity, the new contractor has quickly met or exceeded performance indicators with target run rates achieved by the third day after changeover. The Cosmo Gold Mine continued to operate at a consistent level posting underground ore production of 180,047 tonnes of ore during Q1 at an average grade of 3.36 g/t Au. Development during the quarter advanced at an average rate of 398 metres per month.
Tonnes milled in the first quarter were 230,815 tonnes of ore at an average grade of 2.79 g/t Au and recovery rate of 85.9%, for total gold production of 17,841 ounces of gold. Underground ore was supplemented with approximately 55,500 tonnes of lower-grade oxide material from an exploration property for reclamation purposes. The stockpile had a lower than estimated grade, which also impacted the recovery rate. The material was fully processed in Q1, and the related potential environmental liability has been reduced.
Fosterville Gold Mine
The Fosterville Gold Mine had a strong start to the year with underground ore production of 206,540 tonnes at an average grade of 3.76 g/t Au, with higher tonnes offsetting lower grades. Fosterville drew on higher grade stockpiles to process 220,379 tonnes of ore at a grade of 4.32 g/t Au with a recovery rate of 84.3%, resulting in gold production of 25,786 ounces in the first quarter. Mine development continued at an average advance rate of 618 metres per month with a strong advance of 662 metres in March as the site pushes to open up more mining fronts. Exploration on the Phoenix and Central ore bodies had encouraging results (see news release of March 12, 2014) and the Company is preparing a Mineral Resource and Reserve Estimate with the anticipation that additional mineral resources identified will continue to extend the mine life of Fosterville.
Stawell Gold Mine
The Stawell Gold Mine continues to focus on the upper levels of the mine, accessing remnant mining areas supplemented with stockpiled oxide materials. During the quarter Stawell mined 141,126 tonnes of underground ore at an average grade of 2.49 g/t Au. The Stawell Mill processed a total of 227,627 tonnes at an average grade of 1.71 g/t Au, as underground ore was supplemented by lower grade surface oxide stockpiles. An average recovery rate of 79.4% resulted in gold production of 9,956 ounces for the quarter.
Update on the Big Hill Project
In April 2014, Crocodile Gold released the Environmental Effects Statement (EES) for the Big Hill Enhanced Development Project (the "Project"). The EES is a significant part of the permitting process and will form the basis of the Ministerial assessment of the Project expected later in 2014. The EES is available for public review and comment; access to the complete document has been made available on the Company's website at www.crocgold.com.
Cash Balance and Working Capital Position
At the end of the first quarter of 2014, Crocodile Gold had a preliminary cash balance of $38.0 million and working capital of approximately $28.3 million. In February 2014, the Company fully settled its outstanding credit facility with Credit Suisse.
As disclosed in the December 31, 2013 audited annual financial statements, the Company and AuRico Gold Inc. engaged an independent expert to determine the treatment of certain financial transactions in the net free cash flow sharing arrangement that exists between the two parties. On April 14, the independent expert concluded that such items were to be included in the calculation of contingent payments. The Company has reviewed the report and determined that no contingent payments are currently payable under the agreement and that based on current plans and gold prices, no portion of the contingent consideration will be classified as current.
About Crocodile Gold
Crocodile Gold is a Canadian gold mining and exploration company with three operating mines in Australia, in the State of Victoria and the Northern Territory. The Company also has a combined land package in excess of 4,000 sq. km. Crocodile Gold is focused on sustainable production from its three operating mines, Cosmo, Stawell and Fosterville, while also exploring and developing the Company's assets to ensure continued production in the future. For additional information, please visit our website www.crocgold.com.
Follow us on Twitter @crocgold_crk or on Facebook at /CrocodileGoldCorp.
F. W. Nielsen, P.Geo., a technical consultant to 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.
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.