TORONTO, ONTARIO--(Marketwire - Aug. 14, 2012) - Crocodile Gold Corp. (News - Market indicators)(OTCQX:CROCF)(FRANKFURT:XGC) ("Crocodile Gold" or the "Company") is pleased to announce its financial and operating results for the three months ended June 30, 2012. All figures are in U.S. dollars, unless stated otherwise.

Financial Discussion

Crocodile Gold milled a total of 471,056 tonnes of ore and produced 36,481 ounces of gold in the three months ended June 30, 2012. The Company sold 35,665 ounces of gold in the second quarter at an average cash cost of $1,167 per ounce of gold sold (see non-GAAP Measures below). Cash costs in the quarter saw a significant decrease with the addition of the Fosterville and Stawell Gold Mines. The Company expects further reductions with the suspension of the low grade, high cost open pits in June 2012 and efforts in the Northern Territory are now focused on the Cosmo Underground Mine.

In reporting these results, Chantal Lavoie, Chairman, President and Chief Executive Officer, commented: "Our Company has seen significant growth through the second quarter as we establish ourselves as a mid-tier Australian based gold producer. The Fosterville and Stawell Gold Mines have made a solid contribution while we focus our efforts on Cosmo in the Northern Territory. Excellent progress was made in integrating the new operations and sharing best practices. We now have in place a strong operational and technical team that will allow us to maximize the value of our assets". 

Crocodile Gold recorded a net loss of $7,225,054 or $0.02 per share for the quarter compared to $20,289,927 or $0.06 per share in the three months ended March 31, 2012. The net loss was impacted by the following significant non-cash transactions:

• On May 4, 2012, the Company acquired the Stawell and Fosterville Gold Mines through the acquisition of all of the issued and outstanding shares of Northgate Australian Ventures Corporation Pty Ltd ("Navco"). The purchase consideration has been valued and allocated on a preliminary basis to the fair value of the assets acquired and liabilities assumed as at May 4, 2012, which resulted in the Company realizing a gain of $27,157,009.
  
  
• On June 12, 2012, the Company, through its Australian subsidiaries, drew down on a four-year prepaid gold swap credit facility with Credit Suisse AG ("Credit Suisse") whereby Credit Suisse advanced A$75 million against the sale of future gold production and certain cash repayments. The cost of establishing these gold swap agreements, and subsequent mark-to-market thereof, was $5,743,856 in the quarter.
  
  
• With the suspension of open pit mining in the Northern Territory, approximately 11,000 ounces of high cost gold ounces will no longer be mined. It was determined that the associated carrying costs of Howley/Mottrams should be treated as impaired and $28,240,427 was written off in the second quarter of 2012.
  
  
• Depletion and depreciation amounted to $9,148,495 and share-based payments amounted to $636,641 in the three months ended June 30, 2012.
  
  

The mine operating earnings in the three months ended June 30, 2012 were $5,949,787 compared with a loss of $5,771,042 for the three months ended March 31, 2012. The cash cost per ounce of gold sold in the three months ended June 30, 2012 was $1,167 per ounce, compared to $2,028 per ounce in the three months ended March 31, 2012 (refer to non-GAAP measures below). The cash cost per ounce of gold sold is expected to be reduced further with the closure of the low-grade, open pit operations in the Northern Territory in June 2012.

The net loss includes exploration expenditures of $294,541 for the three months ended June 30, 2012 (March 31, 2012: $309,448), in respect of properties where mineral resources have not yet been identified or the Company has not yet made a development decision. Care and maintenance expenses included were $501,092 and included rehabilitation costs associated with historic operations in the vicinity of ongoing mining activities (three months ended March 31, 2012: $519,870).

In the three months ended June 30, 2012, Crocodile Gold earned interest income of $435,397 (March 31, 2012: $379,872) on the cash and cash equivalents and restricted cash on hand. Professional, consulting and management fees, and general corporate and administration expenses amounted to $3,536,02. Professional, consulting and management fees included $1,939,325 related to the acquisition of Navco, including C$1,200,000 to be paid to the Company's financial advisor in common shares.

Cash Flow

Cash provided by operating activities in the three months ended June 30, 2012, of $4,853,865, included cash provided by mine operations of $15,098,282, general and administrative type costs (including finance income and costs) of $7,575,283, exploration and care and maintenance costs of $795,633, and a net increase in working capital of $1,873,501.

Investing activities used $83,041,603 in the three months ended June 30, 2012 compared to $20,656,726 in the quarter ending March 31, 2012. Investments included:

• Acquisition of the Fosterville and Stawell gold mines for approximately $45 million;
  
  
• Development of the Cosmo underground mine for approximately $22 million;
  
  
• Exploration approximately $6 million; and
  
  
• $6 million to fund the creation of the debt service reserve account, as required in terms of the Credit Suisse facility agreement.
  
  

The significant financing activity in the quarter was the drawdown of $77,391,720 on the credit facility arranged with Credit Suisse.

Financial Position

As of June 30, 2012, the Company had net working capital of $9,509,683, including cash and cash equivalents of $24,924,898.

Outlook

With the completion of the acquisition of the Fosterville and Stawell Gold Mines on May 4, 2012, the Company has seen a significant increase in its gold production. Integration of the three business units is progressing well and includes: the integration and alignment of financial reporting; review and integration of all key corporate policies, including those associated with Occupational Health/Safety & Environment; and the introduction of mobility of employees between the Victoria and Northern Territory properties to create synergies and address vacancies and redundancies. The Company completed operational reviews and made the decision to initiate the ramp down of the Stawell Gold Mine, which will see underground mining activities being completed by the end of 2013.

Northern Territory Operations

At Cosmo, the Company completed 1,212 metres of capital development and 408 metres of operating development in the underground mine. In the three months ended June 30, 2012, four stopes in a lower grade area of Zone A were extracted and hauled, with 24,908 tonnes of stope ore being produced. Underground drilling continues and results to date confirm the ore zones are wider than expected in several locations, which will require adjustment to the mining method and sequence. In conjunction with this confirmation, development rates have been lower than expected. Remedial plans are being developed with the main contractor. Trial mining in Zone A has been successful, with lower than expected dilution, and grades and metallurgical recoveries as per plan. Crocodile Gold has successfully re-negotiated the ore haulage contract, which will see a significant reduction in associated costs over the next two years. With the completion of surface mining, and the associated reduction in production tonnage, milling activities were put on a single operating shift, starting in early May, concentrating on the treatment of Cosmo ore and the remaining surface ore stockpiles.

Cosmo is still expected to reach commercial production in the fourth quarter of 2012. Development delays have reduced the ounces originally expected to be produced from Cosmo in the first nine months of the year. Crocodile Gold expects to produce 40,000 to 45,000 ounces of gold in 2012 in the Northern Territory.

The Company continues to work with the various government agencies and local community leaders to finalize permits for the mining of the International open pit, which is located adjacent to the town of Pine Creek.

Fosterville Operations

Production levels from underground mining at Fosterville are expected to remain relatively stable compared to recent quarters as it continues to mine in the Phoenix and Harrier ore bodies. The proportion of ore to be sourced from Harrier is expected to increase in coming months as this area matures in terms of development. Ore production from the O'Dwyers South Pit is anticipated to commence in July 2012 and contribute to the overall production profile for approximately five months. Crocodile Gold expects to produce 56,000 to 61,000 attributable ounces of gold from the Fosterville gold mine in 2012. Including production prior to May 4^th, when the mine was acquired, Fosterville is expected to produce 82,000 to 87,000 ounces of gold in 2012.

Stawell Operations

Stawell underground ore is being sourced predominantly from the Golden Gift and Magdala ore bodies, with remnant mining in the upper levels of the mine also contributing to production. Crocodile Gold expects to produce 47,000 to 52,000 attributable ounces of gold from the Stawell Gold Mine in 2012. Including production prior to May 4^th, when the mine was acquired, Stawell is expected to produce 69,000 to 74,000 ounces of gold in 2012.

Exploration

The Union Reefs project area has been prioritized by the Company to define additional sources of high-grade mill feed that can be mined from underground, with the near term priorities being the Prospect and Crosscourse deposits. Revised mineral resource estimates will be prepared and a scoping study defining the economic viability of the Prospect deposit is expected to be completed in the third quarter of 2012. An exploration ramp is planned, with the objective of obtaining a bulk sample and defining the optimal mining method. Permits to establish the ramp have been received and, should the next phase of the project be approved, the start of ramp development is expected to occur in the first half of 2013.

The Maud Creek project will undergo a re-calculation of resources based on the limited drilling completed in 2011 and a re-interpretation of the model based on an improved understanding of the mineralization system. The ultimate objective is to complete a robust scoping study defining the economic viability of mining the Maud Creek Deposit by open pit and underground mining methods. Should the scoping study be positive, then a prefeasibility study will be implemented. It is envisaged that additional drilling will be required to further define the deposit with respect to designing underground mine plans.

About Crocodile Gold

Crocodile Gold is a Canadian company with operating gold mines in the Northern Territory of Australia and in the State of Victoria with a land package of over 3,900 square kilometres. Crocodile Gold is currently mining at the Fosterville and Stawell mines in the State of Victoria. In the Northern Territory, the Company continues to develop its Cosmo underground mine and is continuing with the permitting processes for the International open pit mine. The Northern Territory ore production is processed at the Union Reefs Mill, which has a capacity of 2.4 million tonnes per year.

At its Northern Territory properties, the Company has 3.175 million ounces of NI 43-101 reported 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); see the NI 43-101 compliant technical report entitled "Report on the Mineral Resources and Mineral Reserves of the Northern Territory Gold and Base Metals Properties for Crocodile Gold Corp." by Fleur Muller, Mark Edwards and Heath Gerritsen dated April 4, 2011, filed under Crocodile Gold's profile on SEDAR. These resources are inclusive of mineral reserves. At the State of Victoria properties, the Company has an additional 1.216 million ounces of NI 43-101 reported Measured and Indicated mineral resources (15.26 million tonnes at an average grade of 2.48 g/t gold) and 0.622 million ounces of Inferred mineral resources (6.00 million tonnes at an average grade of 3.22 g/t gold). These are exclusive of mineral reserves, which total 0.472 million ounces (3.38 million tonnes at an average grade of 4.34 g/t gold).

Crocodile Gold has an extensive exploration program in place in the Northern Territory and is exploring on several key properties on its expansive land package. With production commencing at the Cosmo Mine, Crocodile Gold's main exploration focus is at the Union Reefs and Maud Creek project areas. In the State of Victoria, the Company has exploration programs in place designed to expand the resource base of each mine property. For additional information, please visit our website www.crocgold.com. Follow us on Twitter (@crocgold_crk) or Facebook (www.facebook.com/CrocodileGoldCorp).

Qualified Person

David Keough F.AusIMM of Crocodile Gold is a "qualified person" as such term is defined in National Instrument 43-101 and has reviewed and approved 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 that 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 expenses 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 June 30 and March 31, 2012:

Forward-Looking Information

Certain information set forth in this press release contains "forward-looking information" under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements, which include the Company's expectations for future performance based on current drill results and past production, expected gold prices, 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, and 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.