TORONTO, ONTARIO--(Marketwire - June 7, 2011) - Crocodile Gold Corp. (News - Market indicators)(OTCQX:CROCF)(FRANKFURT:XGC) ("Crocodile Gold" or the "Company") today announces its financial and operating results for the three months ended March 31, 2011. All figures are in U.S. dollars, unless otherwise stated.

Production from Crocodile Gold's Northern Territory Australian operations saw good ore grades and excellent recoveries from the processing plant, but the exceptionally heavy record (1,686 mm of rain in the 1^st quarter) monsoonal rains during the recent wet season that ended mid-April led to lower than forecast production of 14,682 ounces of gold.

In releasing this information, Mike Hoffman, President and Chief Executive Officer of Crocodile Gold commented, "The first quarter of 2011 was challenging as our operations in the Northern Territory experienced one of the worst wet seasons since records have been kept. Fortunately, we had no damage to infrastructure and operations very quickly returned to normal when the wet season ended in mid-April. We are pleased to say that production is proceeding normally and the underground development at our main asset, the Cosmo underground mine, is proceeding on schedule. The ramp up of our exploration program is well underway with drilling underground ongoing at Cosmo and on surface at Union Reefs with a comprehensive airborne geophysical survey expected to begin in mid-June. Exploration results are expected to be shortly forthcoming."

Chantal Lavoie, the President and CEO Designate of Crocodile Gold commented, "I am looking forward to begin adding value for our shareholders when I begin work at Crocodile in mid-June. I have had an opportunity to meet and discuss the opportunities at Crocodile Gold with our senior management and Board of Directors. The more I review the information and discuss the assets of Crocodile Gold the more excited I become to be joining the Company at this point in time. During the next few months, I expect to announce positive exploration results and the projected production at Cosmo will transform the Company. I plan to host a conference call in early July to update shareholders on progress after I visit the minesite in late June."

Highlights include:

• During the three months ended March 31, 2011, a total of 315,010 tonnes of ore was processed at an average head grade of 1.55 grams per tonne ("g/t") and a recovery rate of 93.2% to produce 14,682 ounces of gold.

• In the three months ended March 31, 2011, the Company recorded gold sales revenue of $19,858,346 on the sale of 14,300 ounces of gold, for an average realized price of $1,389 per ounce.

• Despite the lower gold production due to the abnormal monsoonal wet season cash utilized to support operating activities was only $2,365,816 in mine operating losses and $2,399,146 in other activities (total $4,764,962).

• During the three months ended March 31, 2011, the Company recorded a net loss of $7,009,449, or $0.03 per share.

• Cash cost per ounce sold during the three months ended March 31, 2011 was $1,540 on 14,300 ounces of gold (see Non-GAAP Measures below).

• On March 24, 2011, the Company closed a prospectus offering issuing 81,000,000 units at a price of C$1.05 per unit for net cash proceeds of $82,319,794. As at March 31, 2011, the Company had net working capital of $90,010,613, which included cash and cash equivalents of $88,191,145.

• On May 17, 2011, Crocodile Gold announced the appointment of Chantal Lavoie as President and Chief Executive Officer, effective June 17, 2011.

Financial Discussion

During the three months ended March 31, 2011, Crocodile Gold recorded a net loss of $7,009,449, or $0.03 per share. Gold sale revenue of $19,858,346 was recorded on the sale of 14,300 ounces of gold, for an average realized gold price of $1,389 per ounce.

Operating expenses during the three months ended March 31, 2011 were $22,331,553, while depreciation, depletion and amortization expense amounted to $1,873,011, resulting in a loss from mine operations of $4,238,827.

The Company incurred care and maintenance costs in the three months ended March 31, 2011 of $132,216, related to properties that have not yet been put into production, and exploration expenses of $355,709 on properties in respect of which a production decision has not yet been taken. Corporate general and administration expenses of $1,301,431 were comprised mainly of salaries and consulting fees, professional fees, shareholder communications and travel expenses, while the share-based compensation expense of $1,125,428 relates to the vesting of share options granted between July 10, 2009 and March 31, 2011. During the first quarter of 2011, 750,000 (year ended December 31, 2010: 6,700,000) share options were granted. Options typically vest over a two-year period with 1/8^th of the grant vesting each quarter.

Cash Flow

During the three months ended March 31, 2011, cash flow from operating activities utilized $4,764,962, including $2,365,816 in mine operating losses.

Investing activities during the three months ended March 31, 2011 used $13,333,372. Capitalized development activities included all of the work currently being undertaken the Cosmo underground mine, including the Cosmo pit dewatering and the mobilization of a new underground contractor, as well as the costs associated with accessing new ore at Howley. Additions to property, plant and equipment relate primarily to the construction of the Cosmo dewatering pipeline and improvements at the Union Reef's mill.

On March 24, 2011, the Company closed a prospectus offering issuing 81,000,000 units at a price of C$1.05 per unit for net cash proceeds of $82,319,794. Each unit consisted of one common share of the Company and one-half of a common share purchase warrant. Each whole common share purchase warrant entitles the holder thereof to acquire one common share of the Company at an exercise price of C$2.25 per warrant on or before March 24, 2016. The Company granted the underwriters an over-allotment option to purchase up to an additional 12,150,000 common shares and/or 6,075,000 common share purchase warrants and in April 2011 the underwriters exercised their over-allotment option with respect to the common share purchase warrants. An additional $97,735 was raised upon the exercise of share options.

Financial Position

As at March 31, 2011, the Company had net working capital of $90,010,613, which included cash and cash equivalents of $88,191,145, restricted cash of $1,214,192, amounts receivable of $2,981,072, prepaid expenses of $1,272,240 and inventories of $11,378,978, partially offset by current liabilities of $15,027,014.

Outlook

Priorities for the Second quarter and the remainder of 2011 include the following:

• The development of Cosmo is Crocodile Gold's main priority. During the Second quarter, plans are to complete the Cosmo optimization study, which is intended to optimize the maximum production in a cost efficient manner moving forward and also incorporate future expansion potential. The key development priorities are to drive the main ramp further to depth, to establish permanent ventilation underground and to continue the dewatering of the Cosmo open pit, which is proceeding as planned
• Profitable open pit production is currently taking place at the Howley area from Mottrams and the Howley pits. Princess Louise and North Point deposits will contribute open pit production in the Second quarter. Production from the open pits will be accelerated both to maximize throughput and production through the mill and also to begin establishing stockpiles for the upcoming wet season.
• The exploration program is well underway with drilling currently at Cosmo and Union Reefs, our two most important priorities. The objective at Cosmo is to upgrade existing resources on the Eastern Lode of Cosmo and also to extend the known resource on the Western Lode, both on strike and to depth. The priority at Union Reefs is to extend known high grade mineralization at the Prospect and Lady Alice deposits and to explore the extent of the Crosscourse deposit mineralization to depth. Crocodile Gold technical staff believe that the extension of the Crosscourse mineralization to depth offers the potential of a "Cosmo scale" mineral resource to be established¹. In addition, a comprehensive 3,500 line km VTEM geophysical survey will be flown over priority exploration areas including Iron Blow/Mt Bonnie, Maud Creek, Moline, Cosmo, Howley Trend North and other parts of Burnside in June/July of this year. Further drills continue to be mobilized to site and it is expected that other areas such as Iron Blow/Mt Bonnie, Howley Trend, etc. will be drilled.
• Mill optimization studies for Union Reef's are underway. In the short term it is expected there will be some improvements in crushing and screening to allow the mill to be more efficient and in the longer term other improvements are being studied including the potential of additional mill capacity.
• Work continues on investigation of onsite natural gas power generation.

Further details regarding the Company's operations are available on the Company's website at www.crocgold.com and also www.sedar.com where the Crocodile Gold annual information form, annual financial statements and managements' discussion and analysis (MD&A) are posted.

Chantal Lavoie, the new President and CEO of Crocodile Gold will host a conference call in early July updating shareholders on the operation and developments at Crocodile Gold. Details of the conference call will be sent out approximately a week before the call.

About Crocodile Gold

Crocodile Gold is a Canadian company with operating gold mines in the Northern Territory of Australia and a land position of over 2,700 km². Crocodile Gold is currently mining from the Howley, Mottrams, North Point and Princess Louise open pit mines and is developing the Cosmo underground mine. Ore is processed at the 2.4 million tonne per year Union Reef's Mill. Crocodile Gold has 3.175 million ounces of NI 43-101 compliant measured and indicated mineral resources (51.85 million tonnes at an average grade of 1.9 g/t gold) and 2.14 million ounces of inferred mineral resources (36.35 million tonnes at an average grade of 1.8 g/t gold). The Company has an exploration program in place with a main focus on the Union Reef's Project and the Cosmo Howley Mineral Corridor, which covers a strike length of over 25 kilometres and includes other deposits such as Bons Rush and Bridge Creek.

Qualified Person

David Keough, MAusIMM of Crocodile Gold Australia Operations is a "qualified person" as such term is defined in National Instrument 43-101 and has reviewed and confirmed the technical information and data included in this press release.

Cautionary Notes

Non-GAAP Measures

Crocodile Gold believes that investors use certain indicators to assess gold mining companies. The indicators are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with International Financial Reporting Standards.

"Cash cost per ounce" is a non-GAAP performance measure which could provide an indication of the mining and processing efficiency and effectiveness at the operations. It is determined by dividing the operating expenses, excluding stock-based compensation allocated to operating expense and net of silver revenue, by the number of ounces of gold sold. There are variations in the method of computation of "cash cost per ounce" as determined by the Company compared with other mining companies. The following is a reconciliation of the cash cost per ounce of gold sold, to the reported operating expenses for the three months ended March 31, 2011:

Forward-Looking Information

Certain information set forth in this press release contains "forward-looking statements", and "forward-looking information under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements which include management's assessment of Crocodile Gold's financial results, operations and mineral resource estimates and are based on Crocodile Gold's current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by words such as "expects" "anticipates", "believes", "projects", "plans", and similar expressions. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Crocodile Gold's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: liabilities inherent in mine development and production; geological, mining and processing technical problems; Crocodile Gold's inability to obtain required mine licenses, mine permits and regulatory approvals required in connection with mining and mineral processing operations; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; changes in commodity prices and exchange rates; currency and interest rate fluctuations; various events which could disrupt operations and/or the transportation of mineral products, including labour stoppages and severe weather conditions; the demand for and availability of rail, port and other transportation services; the ability to secure adequate financing and management's ability to anticipate and manage the foregoing factors and risks. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Crocodile Gold undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.