News: Crocodile Gold hits visible gold at producing Fosterville mine

Crocodile Gold (TSE:CRK)(OTCQX:CROCF) has reported what it says are substantial high grade drill results at its producing Fosterville gold mine in Australia, with visible gold present.

The miner reported results from 138 drill holes, totaling some 31,550 metres completed during a US$5.6 million exploration campaign, which focused on the Phoenix and Lower Phoenix targets.

From the results, Crocodile said 14 of the holes were high grade intercepts, including 55.57 grams per tonne (g/t) gold over 8.5 metres and 12.06 g/t gold over 2.7 metres in the newly identified East Dipping Faults and Kestrel structures.

According to the Toronto-based company, visible gold occurs in addition to the more common disseminated sulphide gold mineralization, with the drilling program also confirming continuous mineralization along the newly identified structures. This is important because these structures have the potential to provide multiple ore sources accessible from the already developed Phoenix decline.

At the high grade Lower Phoenix target, intercepts identified significant gold mineralization over 80 metres vertically, with the most northern hole located about 240 metres along strike from current mineral reserves, Crocodile Gold said.

Highlights of the holes at Lower Phoenix include 123.1 g/t gold over 9.45 metres, 51.34 g/t gold over 6.8 metres and 294.23 g/t gold over 1.85 metres. 

"We are extremely pleased to report high-grade drill results at Fosterville which confirm the continuity of a strongly mineralized system down-plunge of current mineral reserves," said president and chief executive officer Rodney Lamond.

"We are encouraged by the presence of visible gold in 17 drill intercepts with some intercepts exhibiting significantly higher-gold grades than typical intercepts. Furthermore, the presence of visible gold, which appears to represent a second gold event occurring within sulphide-gold mineralized structures, could dramatically increase gold grades."

All the drill results show the potential to extend mineral resources down plunge, the company said.

"With the successful results from our 2014 drill program at Fosterville, we look forward to providing further updates to our mineral resources and reserves by the end of the first quarter of 2015," Lamond added.

The Fosterville mine started commercial production in April 2005, producing a total of some 877,586 ounces of gold as of year-end 2014. The ore is largely refractory, and gold is recovered through a BIOX processing plant that produces 100,000 to 105,000 ounces per year.           

Crocodile Gold, which operates three mines in Australia and reports in US currency, had its highest ever quarterly gold production of 58,796 ounces in the fourth quarter, for its second straight year of record annual production, with 222,312 ounces produced in 2014.  

Its Fosterville gold mine exceeded expectations in 2014, with record annual production of 105,342 ounces, up 7 percent from a year earlier due to a near 3 percent increase in milled tonnes.