Crocodile Gold becomes Newmarket Gold
This website has made many blogs relating to Crocodile Gold.In fact at various times I have owned shares in Crocodile.It had 3 mines in Australia.But it no longer exists;it has now merged into Newmarket Gold.Their press releases say that they merged but in fact Newmarket was almost a shell.Newmarket Gold had a smaller market capitalization but now it has a "cap"of about $130 million.This is more than the combined capitalization of the old Crocodile Gold and the old Newmarket Gold.What accounts for this increase in value?
Extensions to existing mines
Both Blogdaleupsome and Workathon(another website on Blogger) have discussed the tremenduous increase in the expected size of the ore body at their Fosterville mine.Now they have (with new drilling) found new deposits at their Cosmo mine and their Stawell mine.But the main incease in it's orebodies is at Fosterville.Last year they found two new faults here;one is called Phoenix and one the Lower Phoenix structure.It was thought at first that the Phoenix structure could almost double the size of the original Fosterville deposit.And it did.Crocodile's last estimate of the ore body is about 2.5 million ounces of gold.They have since found new ore in the Phoenix structure.But now it is clear that the main extension to the Fosterville deposit will be in the Lower Phoenix structure.They have (in 2015) found 4 or 5 new structures to the west.And recently they found a new major structure called Eagle Fault.My other website called Workathon predicted that because of these extensions there could be 4 to 5 million ounces at the Fosterville mine.But that was before the discovery of the Eagle Fault.Now 5 million ounces is taken as a minimum.Fosterville could hold 6.5 million ounces.
Crocodile also reports that they recently found new orebodies at their Cosmo mine and their Stawell mines.They are not continuous with the existing mines but they may be joined underground;both are close to the existing mine.The Cosmo mine has a new orebody called Western Lodes that may be adjoined to Cosmo.The Stawell mine has a new and separate mine opening near Stawell but it is not a large deposit.Now they have discovered a new ore body called Aurora B East.All past discoveries have been in Aurora West and now they find new ore in Aurora East.This will make the Stawell mine (with extensions) very profitable also.
Is Newmarket Gold worth $1.00 a share?
Crocodile Gold just had a second quarter report and production is up by only 4%.Before the merger Crocodile traded around $.25 per share.So is it now worth $1.00 per share because it is now called Newmarket Gold?Production has increased by 4% so the price should only be 4% higher.Perhaps but the difference in price can be more easily explained by the increase in the orebody by 6 times from the original mine site.Crocodile believed that Fosterville had about 1 million ounces and maybe a 2 to3 year mine life.It now looks like closer to 6.5 million ounces and a lot of high grade ore which is easier to process.This is why Newmarket Gold is more likely to see $1.50 per share than go back to $.25 per share.This blog is glad to see (the new) Newmarket Gold headquartered in Vancouver than in Sydney.
Extensions to existing mines
Both Blogdaleupsome and Workathon(another website on Blogger) have discussed the tremenduous increase in the expected size of the ore body at their Fosterville mine.Now they have (with new drilling) found new deposits at their Cosmo mine and their Stawell mine.But the main incease in it's orebodies is at Fosterville.Last year they found two new faults here;one is called Phoenix and one the Lower Phoenix structure.It was thought at first that the Phoenix structure could almost double the size of the original Fosterville deposit.And it did.Crocodile's last estimate of the ore body is about 2.5 million ounces of gold.They have since found new ore in the Phoenix structure.But now it is clear that the main extension to the Fosterville deposit will be in the Lower Phoenix structure.They have (in 2015) found 4 or 5 new structures to the west.And recently they found a new major structure called Eagle Fault.My other website called Workathon predicted that because of these extensions there could be 4 to 5 million ounces at the Fosterville mine.But that was before the discovery of the Eagle Fault.Now 5 million ounces is taken as a minimum.Fosterville could hold 6.5 million ounces.
Crocodile also reports that they recently found new orebodies at their Cosmo mine and their Stawell mines.They are not continuous with the existing mines but they may be joined underground;both are close to the existing mine.The Cosmo mine has a new orebody called Western Lodes that may be adjoined to Cosmo.The Stawell mine has a new and separate mine opening near Stawell but it is not a large deposit.Now they have discovered a new ore body called Aurora B East.All past discoveries have been in Aurora West and now they find new ore in Aurora East.This will make the Stawell mine (with extensions) very profitable also.
Is Newmarket Gold worth $1.00 a share?
Crocodile Gold just had a second quarter report and production is up by only 4%.Before the merger Crocodile traded around $.25 per share.So is it now worth $1.00 per share because it is now called Newmarket Gold?Production has increased by 4% so the price should only be 4% higher.Perhaps but the difference in price can be more easily explained by the increase in the orebody by 6 times from the original mine site.Crocodile believed that Fosterville had about 1 million ounces and maybe a 2 to3 year mine life.It now looks like closer to 6.5 million ounces and a lot of high grade ore which is easier to process.This is why Newmarket Gold is more likely to see $1.50 per share than go back to $.25 per share.This blog is glad to see (the new) Newmarket Gold headquartered in Vancouver than in Sydney.
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