VANCOUVER — Crocodile Gold (CRK-T) is busy spending US$8.4 million exploring the extensive land package it assembled in northern Australia in early 2009 and the results have sent the company’s share price on a sustained climb.
Crocodile was reborn less than a year ago when Franc-Or Resources completed a reverse takeover of the privately-owned company. Franc-Or then changed its name to Crocodile, a nod to its new focus on Australia.
The company’s swath of land in Australia’s Northern Territory came from former TSX-listed GBS Gold International, which went broke in late 2008. Crocodile bought all of GBS Gold’s assets, including two mills, two underground mines, two open-pit mines, and two undeveloped gold deposits, all on 3,500 sq. km of land within 200 km of the port city of Darwin on the Timor Sea.
The Tom’s Gully project, which includes an underground mine and a mill, is 90 km east of Darwin. Contiguous to Tom’s Gully to the south is the Burnside land package, which includes the Brocks Creek project and the Cosmo-Howley projects. Slightly southeast of Burnside, sit the Union Reefs and Pine Creek projects along with another mill. And 100 km southeast of those is the Maud Creek project.
Crocodile is exploring many parts of its land package but has placed highest priority on the Cosmo and Howley projects. The corridor that runs from the historic Cosmo open-pit mine to the series of open pits at Howley contains several deposits. Crocodile is drilling at Cosmo with an eye to initiating underground mining in the second half of 2011.
And initial drill results from Cosmo indicate the deposit is likely to grow. Hole GFG1 returned 22.3 metres grading 5.15 grams gold per tonne at 564 metres depth; part of the intercept is within the defined resource and part extends below.
Hole CP5 hit mineralization 400 metres north of the current deposit, hitting 28 metres of 1.35 grams gold. The hit in hole CP5 is also the deepest Cosmo intercept to date, coming from roughly 850 metres depth. Historic drilling hit mineralization between hole CP5 and the defined resource, including 50 grams gold over 3 metres and 6.1 grams gold over 14 metres.
To help verify these historic intercepts Crocodile collared CP1 100 metres north of the deposit, or 300 metres south of CP5, and it returned a 90-metre mineralized segment carrying short hits such as 2.5 metres of 3.59 grams gold and 2.5 metres of 2.05 grams gold.
Results to date indicate Cosmo mineralization plunges steeply to the north. Crocodile has traced the mineralized system along 800 metres strike; it remains open along strike and at depth.
Crocodile is adding a second drill rig at Cosmo. One rig will continue testing for extensions to the zone while the second will focus on infill work.
Crocodile plans to build an access portal by mid-year. Cosmo currently hosts 4.24 million indicated tonnes grading 4.9 grams gold plus 4.5 million inferred tonnes averaging 3.9 grams gold.
In late January, Crocodile increased the resource at the other end of the Cosmo-Howley corridor. The Howley project is now home to 11.45 million indicated tonnes grading 1.54 grams gold as well as 5.27 million inferred tonnes averaging 1.52 grams gold. Crocodile’s drilling effort at Howley in 2009 increased the tonnage and grades of the resource at Howley.
Howley has been mined via seven small pits but Crocodile believes there is enough gold left at the site to grow the small pits into one large pit. Mineralization at Howley is contained in quartz vein arrays within both the hinge zone and the steeply-dipping flanks of a shallowly- plunging anticline.
The company is already mining from the Howley No. 2 pit, sending the ore to its Union Reefs mill roughly 50 km to the southeast. Union Reefs also processes ore from the Brocks Creek underground mine, which is less than 10 km northeast of Cosmo- Howley.
In addition, much of the historic drilling at Howley only tested to 100 metres depth; Crocodile believes there is potential to chase high-grade shoots to depth.
Crocodile is also joint-ventured on several uranium properties in northern Australia. Thundelarra Exploration (THX-A) has the right to explore for uranium on certain Crocodile tenements; Thundelarra is earning a 30% interest in any uranium discoveries but Crocodile retains full rights to all other metals discovered.
The only uranium prospect identified in the area before the uranium exploration program began was Thunderball. Thundelarra’s work at Thunderball has already returned such intercepts as 1 metre of 20.3% U3O8 within 15 metres of 1.5% U3O8 and 4.6 metres of 8% U3O8.
Grades seem to be improving as drills move north. Uranium mineralization has now been identified along 200 metres strike and remains open to some degree in all directions. Thundelarra will recommence drilling in April and plans to calculate an initial resource for Thunderball before the end of the year.
In mid-February, Crocodile received $32 million from the exercise of warrants and options. Two months earlier the company raised $28 million in a bought-deal financing, selling 22.2 million shares at $1.30 apiece.
The company’s share price has performed remarkably well over the last 12 months, rising steadily from just 15¢ to its current hover around $2. Toronto-based Crocodile has 156 million shares outstanding.
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