RECORD production and recovery rates at its three Australian mines have led Crocodile Gold to significantly increase its production guidance. These results along with quickening ramp-up of its Cosmo mine, its new Big Hill project and non-core asset divestiture plans mean that the TSX-listed company is poised for an even better 2014.
In the September quarter Crocodile Gold produced 55,206 ounces from its Fosterville mine and Cosmo mine in the Northern Territory and Stawell in Victoria, a 14% increase on the second quarter. Operating cash costs decreased to $924 per ounce, down from $1101 in the second quarter as a result of higher and sustainable ounce production at Cosmo, productivity gains at Fosterville and a continued focus on cost reduction across all operations.
Based on consistent and sustainable production rates, Crocodile increased its production guidance for 2013 to 200,000-205,000 ounces from previous guidance of 170,000-180,000. Increasing production from Cosmo is offsetting reduced ounces from Stawell as it winds down underground operations.
The third quarter at Cosmo saw record result in all areas, transitioning into a sustainable operation under a revised mine plan focused on quality tonnes and higher cut-off grades. The updated mine plan also incorporates resource development and exploration to ensure sustainable production in the future.
During the quarter Fosterville produced 210,360 tonnes @ 4.61 grams/tonne as a result of continued productivity improvements. Mine development continued at an average advance rate of 604 metres/month during the quarter, with 65% relating to sustainable capital development.
Stawell mine is now focused on the mid and upper level zones while reviewing the upper level mineral resources for remnant ounces with the aim of further extending underground mine life. As a consequence, Stawell has been able to extend its underground mining schedule into 2014, with other opportunities being investigated through focused diamond drill programs.
Stawell commenced operations in 1981 with first gold pours in 1984 and since then, about 2.3 million ounces have been poured. As well as the upper level review, Crocodile is focusing on an extension to an area called the Mariner’s Lode. A small diamond drill program is under way to explore the extension of known mineralization. This program has built confidence in understanding of the area and has added a small reserve base that Crocodile is building on.
The Big Hill project area is adjacent to the Stawell mine. The Big Hill Enhanced Development Project is a 4-5 year project that will create 80 to 100 jobs and produce 2.3 million tonnes of ore. The company is progressing with the permitting process and aims to fund this expenditure from cash flow.