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Crocodile Gold looks to extend mine life at Fosterville with drilling

Published: 09:29 13 Mar 2014 EDT

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Crocodile Gold Corp. (TSE:CRK)(OTCQX:CROCF) has drilled high grades at its Fosterville gold mine in Australia, the company said late Wednesday, as part of its plan to extend the mine life of the property and support sustainable production. 

The company, which has three operating mines in Australia, is in the process of updating its mineral reserve and resource estimate at Fosterville, which will include the most recent drilling results obtained throughout last year. 

The work is expected to be finalized in the second quarter, Crocodile said, with management optimistic that additional mineral resources identified will continue to extend the mine life of Fosterville. 

Of the highlights from the latest drilling completed on the Phoenix and lower Phoenix structures, hole UDH0501 intersected 12.66 grams per tonne (g/t) gold over 6.9 metres at the Phoenix structure, and hole UDE110 hit 24 g/t gold over 33.8 metres at the lower Phoenix. 

Also at the lower Phoenix, hole UDH0755 returned 122.35 g/t gold over 6.8 metres. 

"The company continues to focus its exploration strategy on near-term drilling targets as part of our planning for sustainable production and I am very encouraged with the recent drilling results from the Phoenix exploration program," said president and CEO of Crocodile, Rodney Lamond, in the release.

"The results confirm the down plunge extension of the Phoenix orebody and suggest that we may be able to extend our current Life of Mine (LOM) plans. In addition, the mineralization appears to separate into two distinct mining zones: the Phoenix and Lower Phoenix ore zones. 

"As the mining focus moves towards these new ore zones, the company has already commenced a $4.5 million underground ventilation upgrade that will service the growing Phoenix orebody and facilitate the increased mining activity on the two new mining horizons."

The 2013 campaign was designed to target known mineral resources associated with these two structures, as well as opportunities to extend mineralization. At lower Phoenix, drilling confirmed that gold mineralization is continuous over a 1km strike length, while results also showed good continuity at the Phoenix structure, Crocodile said. 

The company is planning further drilling at both structures this year, as it currently has three underground diamond drill rigs conducting work at various targets on Fosterville. 

Crocodile said that modeling and mining studies on both the Phoenix and the lower Phoenix structures have resulted in the development of two independent mining areas at the mine, Central and Phoenix, the latter of which began development in February last year.

Shares of the Australian-focused gold miner have more than doubled year-to-date, with the company recently in the news after it closed an $18 million Sprott-backed financing late last month. The funds will be used for growth projects, such as its Big Hill property, which is the surface extension of the current underground mining operations at its Stawell mine.

The company is looking to permit the Big Hill project as Stawell ramps down, with a final feasibility study for Big Hill slated for release later this quarter. Crocodile is forecasting overall gold production in the range of 200,000 to 210,000 ounces this year.

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