Crocodile Gold-hurry up
Crocodile Gold released it's annual and fourth quarter results on March 19.It shows a positive cash flow of $67 million but a net income loss of $92 million.It took a non-cash impairment charge of $177 million because of the price of gold.It also provided guidance for production for 2014.Crocodile Gold expects to have production in 2014 of the same amount as in 2013.This will likely unsettle investors and result in Crocodile being stuck in a range of $.18 to $.24 for the rest of the year.Whereas it needs to catch up to Lake Shore Gold and Endeavour Mines.They are priced at about $.75 to $.80 per share.But in order to do that it needs more production in 2014.
The Phoenix deposit
On March 12 it released a report showing that it had encountered large increases in mineral reserves at the Phoenix structure and Lower Phoenix structure which is an extension of the Fosterville gold mine.It is high grade ore at Phoenix and very high grade ore at the Lower Phoenix structure.Between the existing Fosterville mine and the Phoenix structure is an area called the Central structure.This has apparently low grade ore but must be passed in order to get to the underground Phoenix structure.Crocodile has already put a new vent into the Phoenix structure at a cost of $5 million.It continues to do exploratory drilling on both structures and their extensions.Now is the time to do more development drilling and move through the Central structure.
In 2013 they had a positive cash flow of $58 million and spent $68 million on exploration and development.Now they have positive cash flow of $67 million and need to spend more on the Phoenix structures.They spent $35 million on Fosterville in 2013 and may need to spend another $35 to $40 million in 2014.Especially with the high grade ore in these structures.
Fosterville in 2014
Their guidance for 2014 shows production of 95,000 to 100,000 ounces for the Fosterville mine in 2014.This will keep production at the same level or less than 2013 as there are always unexpected problems or delays.But if they hurry their development of the new structures they can get Fosterville production up to perhaps 125,000 to 150,000 ounces(especially with the higher grades) of gold.This will put total production up to 230,000 to 260,000 ounces.This will show investors that Crocodile has consistently increased production since 2011.With the right decision on the Fosterville and the Phoenix structures it is easier to see Crocodile Gold catching up in price to Lake Shore or Endeavour Gold.So hurry up Crocodile Gold let's get the price up towards $.50 in 2014.
The Phoenix deposit
On March 12 it released a report showing that it had encountered large increases in mineral reserves at the Phoenix structure and Lower Phoenix structure which is an extension of the Fosterville gold mine.It is high grade ore at Phoenix and very high grade ore at the Lower Phoenix structure.Between the existing Fosterville mine and the Phoenix structure is an area called the Central structure.This has apparently low grade ore but must be passed in order to get to the underground Phoenix structure.Crocodile has already put a new vent into the Phoenix structure at a cost of $5 million.It continues to do exploratory drilling on both structures and their extensions.Now is the time to do more development drilling and move through the Central structure.
In 2013 they had a positive cash flow of $58 million and spent $68 million on exploration and development.Now they have positive cash flow of $67 million and need to spend more on the Phoenix structures.They spent $35 million on Fosterville in 2013 and may need to spend another $35 to $40 million in 2014.Especially with the high grade ore in these structures.
Fosterville in 2014
Their guidance for 2014 shows production of 95,000 to 100,000 ounces for the Fosterville mine in 2014.This will keep production at the same level or less than 2013 as there are always unexpected problems or delays.But if they hurry their development of the new structures they can get Fosterville production up to perhaps 125,000 to 150,000 ounces(especially with the higher grades) of gold.This will put total production up to 230,000 to 260,000 ounces.This will show investors that Crocodile has consistently increased production since 2011.With the right decision on the Fosterville and the Phoenix structures it is easier to see Crocodile Gold catching up in price to Lake Shore or Endeavour Gold.So hurry up Crocodile Gold let's get the price up towards $.50 in 2014.
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