Crocodile Gold bolsters resources at Fosterville and Cosmo
Crocodile Gold bolsters resources at Fosterville and Cosmo mines
10:06 am by Deborah Bacal
In a statement released last night, the company told investors that measured and indicated mineral resources at its Fosterville gold mine jumped 30% to 2.1 million ounces of gold, or 16.6 million tonnes at a grade of 3.87 grams per tonne (g/t). Corp. (TSE:CRK)(OTCQX:CROCF), which has three operating mines in Australia, has increased measured and indicated resources at its Fosterville and Cosmo gold mines on the back of infill and exploration drilling programs as part of its efforts to support sustainable production.
In a statement released last night, the company told investors that measured and indicated mineral resources at its Fosterville gold mine jumped 30% to 2.1 million ounces of gold, or 16.6 million tonnes at a grade of 3.87 grams per tonne (g/t).
The gold miner said that results from exploration drilling at the site show significant potential for further mineral resource growth through ongoing drilling from both surface and underground. Drilling throughout 2013 was focused on near term targets in the Central and Harrier areas of the mine, which largely accounted for the increase in resources.
Fosterville added 39,000 gold ounces of proven and probable mineral reserve, after mining depletion of 68,500 ounces on the back of the mineral resource expansion in the Central area of the mine, according to the company statement.
In 2014, a significant amount of the company’s capital budget will go towards maintenance at the Fosterville mine, including a ventilation system upgrade and a tailings dam lift – necessary work to maintain the mine’s existing profile.
Meanwhile, its Cosmo gold mine increased measured and indicated mineral resources to 500,000 ounces of gold, up 4% from the previous statement. This amounts to 4.5 million tonnes at 3.43 g/t gold. The company said that Cosmo remains open at depth, with the exploration campaign for this year to focus down plunge of the deposit for further resource growth potential.
The increases were seen as part of updates on the reserve and resource statements for each mine, with separate technical reports being prepared, which will be filed with regulatory authorities within 45 days, Crocodile said.
"The substantial increase in mineral resources at Fosterville has extended the current life of mine plan and provides for potential mineral reserve increases as infill drilling continues," said president and CEO Rodney Lamond in the release.
"At Cosmo, the exploration drilling programs have focused on near term targets and have significantly increased the measured mineral resource category. This increase provides greater confidence in the resource and in Cosmo's mine plans."
The company also said Tuesday that changes in the mineral reserves estimate for Cosmo showed a slight reduction, mainly tied to the mining depletion since the last report was effective in June 2013. Other changes that impacted the estimate included mining recovery and dilution assumptions, Crocodile said.
Earlier this year, the company was granted approval for a resource definition program to develop the down plunge extension of the Cosmo deposit, which it believes holds significant potential. The drilling has started, and is expected to wrap up in the first quarter of next year.
The Australia-focused gold miner posted first quarter results earlier in May, showing an increase in production and improved cash costs, in spite of a tougher precious metals price environment, generating $12.46 million of cash from operations. Crocodile said it remains on track to meet its annual guidance of 200,000 to 210,000 ounces.
As Crocodile's third mine, Stawell, ramps down, the company is working on another to take its place. It is currently looking to permit the surface extension of the current underground mining operations at Stawell, known as the Big Hill project, which is slated to release a final feasibility study shortly. The project took a significant leap during the latest quarter with the release of the environmental effects statement in for public review.