Crocodile Gold has a secret
On March 12,2014 Crocodile Gold made a press release showing new reserves in two parts of the Fosterville gold mine.Early results for the Fosterville mine showed the mine had gold that measured 2.20 grams per tonne(2013).Their latest quarter showed results of 3.76 grams per tonne.Their production for 2013 was 210,000 ounces of gold.Their guidance for 2014 is for 200,000 to 210,000 ounces of gold.That is, almost no increase for 2014.But using information in their March 12 press release we think that Crocodile will likely have greater production in 2014 than guidance.Possibly with luck and if they work at it they will have almost 250,000 to 260,000 ounces of gold.Crocodile generated $12.5 million in cash flow in Q1 2014 and seems to be on track to generate up to $15 to $20 million for the next quarter(even at today's gold price).That is because they are keeping a secret.
The new Fosterville Mine
The Fosterville mine has two largely unexplored areas,that is, the Phoenix and Lower Phoenix structures.The Phoenix structure is divided into the Central and the Phoenix structure.Both the Central and the Phoenix structures have higher grade ore than in the old Fosterville mine.The Central structure has ore that grades at 3 to 6 grams per tonne and the Phoenix structure has ore that grades at 6 to 12 grams per tonne.Last quarter Fosterville processed 206,000 tonnes of ore and produced 26,000 ounces of gold.If the grade goes up to(on average) 4.5 to 5.0 grams per tonne then Fosterville might go up to 40,000 to 45,000 ounces of production.
Crocodile Gold says in their press release that they are excavating about 600 metres each month.This means that they must be now in the Central structure and in the Phoenix structure soon.It is not clear at this time how deep the strike is, but early measurements look like at least 100 metres.So this could delay drilling in the Phoenix structure to focus on the Central area or they could redeploy one of their three drilling rigs.They have three rigs drilling full time now.The possibility of drilling both structures is not out of the question.But not likely in the second quarter.We need to see the second quarter results before predicting annual production more accurately.One thing is certain- Crocodile Gold will almost certainly produce at least 230,000 ounces of gold in 2014.
The new Fosterville Mine
The Fosterville mine has two largely unexplored areas,that is, the Phoenix and Lower Phoenix structures.The Phoenix structure is divided into the Central and the Phoenix structure.Both the Central and the Phoenix structures have higher grade ore than in the old Fosterville mine.The Central structure has ore that grades at 3 to 6 grams per tonne and the Phoenix structure has ore that grades at 6 to 12 grams per tonne.Last quarter Fosterville processed 206,000 tonnes of ore and produced 26,000 ounces of gold.If the grade goes up to(on average) 4.5 to 5.0 grams per tonne then Fosterville might go up to 40,000 to 45,000 ounces of production.
Crocodile Gold says in their press release that they are excavating about 600 metres each month.This means that they must be now in the Central structure and in the Phoenix structure soon.It is not clear at this time how deep the strike is, but early measurements look like at least 100 metres.So this could delay drilling in the Phoenix structure to focus on the Central area or they could redeploy one of their three drilling rigs.They have three rigs drilling full time now.The possibility of drilling both structures is not out of the question.But not likely in the second quarter.We need to see the second quarter results before predicting annual production more accurately.One thing is certain- Crocodile Gold will almost certainly produce at least 230,000 ounces of gold in 2014.
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