Crocodile meets guidance
Crocodile Gold released it's second quarter results last week.It showed that production was up 12% over the same quarter last year.It is on track to meet guidance of 200,000 to 210,000 ounces for 2014.Cosmo their newest mine had a 22% increase while the other two mines were stable.They also made significant investments in the mine infrastructure.For example, they advanced excavations at a rate of 630 metres per month in the Fosterville mine but production did not increase over Q1.They are trying to advance the mine in the Phoenix Decline to access higher grade of ore but do not have access yet.Crocodile continues to get progress on their Big Hill project which is a part of the Stawell mine;they are expecting ministerial approval in 2014.
From the Crocodile website
Crocodile Gold is still discovering the size of the Cosmo ore body.It appears to go under the Howley deposit and if so would extend the strike of the Cosmo mine.It also is still discovering the size of the larger Fosterville mine.The total size of the ore body is not yet known.That depends on the size of the ore body in the Lower Phoenix structure and the average grade of the ore.But it is possible that the Fosterville mine, when it extends into the Phoenix and Lower Phoenix structures, can be as large as 3 to 5 million ounces of gold.
More equipment
A 12% increase in production would be good for most gold miners but it is not satisfactory for Crocodile.They have a large mill at Union Reefs but that is not cost-effective for the Fosterville mine and not too useful to the Cosmo mine.The mill at Fosterville will process 2500 tonnes of ore per day but the mine will eventually be too large to handle this.It should be enlargened.Also Crocodile contracts out all it's excavating, hauling and drilling.This makes it hard to increase and decrease capacity.Down the road they will need to look at owning their own equipment or at least getting more equipment under contract.With a deposit the size of the Phoenix and Lower Phoenix, Crocodile needs to increase production and that means more equipment.
The price in rest of 2014
Crocodile Gold trades at $.023 per share.This is well below the price of stocks like Endeavour Mines and Lake Shore Gold.Lake Shore operates from a known and close to home jurisdiction and so gets a "Canadian premium".Endeavour Mines has a larger and faster growing production and so it also gets a price premium.But it is clear that Crocodile Gold is moving up in production and stable gold processing and the price will soon reflect that.But Crocodile has quite a ways to go to match the price of companies like B2 Gold and Aurico Gold.Increasing production and a stable processing environment will surely help and fairly soon.
From the Crocodile website
Crocodile Gold is still discovering the size of the Cosmo ore body.It appears to go under the Howley deposit and if so would extend the strike of the Cosmo mine.It also is still discovering the size of the larger Fosterville mine.The total size of the ore body is not yet known.That depends on the size of the ore body in the Lower Phoenix structure and the average grade of the ore.But it is possible that the Fosterville mine, when it extends into the Phoenix and Lower Phoenix structures, can be as large as 3 to 5 million ounces of gold.
More equipment
A 12% increase in production would be good for most gold miners but it is not satisfactory for Crocodile.They have a large mill at Union Reefs but that is not cost-effective for the Fosterville mine and not too useful to the Cosmo mine.The mill at Fosterville will process 2500 tonnes of ore per day but the mine will eventually be too large to handle this.It should be enlargened.Also Crocodile contracts out all it's excavating, hauling and drilling.This makes it hard to increase and decrease capacity.Down the road they will need to look at owning their own equipment or at least getting more equipment under contract.With a deposit the size of the Phoenix and Lower Phoenix, Crocodile needs to increase production and that means more equipment.
The price in rest of 2014
Crocodile Gold trades at $.023 per share.This is well below the price of stocks like Endeavour Mines and Lake Shore Gold.Lake Shore operates from a known and close to home jurisdiction and so gets a "Canadian premium".Endeavour Mines has a larger and faster growing production and so it also gets a price premium.But it is clear that Crocodile Gold is moving up in production and stable gold processing and the price will soon reflect that.But Crocodile has quite a ways to go to match the price of companies like B2 Gold and Aurico Gold.Increasing production and a stable processing environment will surely help and fairly soon.
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