Mark Edwards, Crocodile Gold Australia Operations - Crocodile Gold’s operations and project developments
 

Mark Edwards, Crocodile Gold Australia Operations - Crocodile Gold’s operations and project developments

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Mark Edwards, General Manager - Exploration and Business Development, Crocodile Gold delivered the presentation at 2014 Katherine Regional Mining & Exploration Forum. ...

Mark Edwards, General Manager - Exploration and Business Development, Crocodile Gold delivered the presentation at 2014 Katherine Regional Mining & Exploration Forum.

The 2014 Katherine Regional Mining & Exploration Forum featured presentations from explorers active in the region, operating mines, project developers and the many other parties associated with resources projects being developed in the wider Katherine region.

For more information about the event, please visit: http://www.informa.com.au/katherinemining14

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Mark Edwards, Crocodile Gold Australia Operations - Crocodile Gold’s operations and project developments Mark Edwards, Crocodile Gold Australia Operations - Crocodile Gold’s operations and project developments Presentation Transcript

  • Katherine Regional Mining & Exploration Forum – May 2014 TSX : CRK
  • Forward Looking Information 2 This presentation contains forward-looking information under Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the development potential and timetable of the projects; the Company’s ability to raise additional funds as necessary or on commercially reasonable terms; the future price of gold; the estimation of mineral resources and mineral reserves; conclusions of economic evaluation (including scoping studies); the realization of mineral resource and reserve estimates; the timing and amount of estimated future production, development and exploration; costs of future activities; capital and operating expenditures; success of exploration activities; mining or processing issues; currency exchange rates; government regulation of mining operations; and environmental risks. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information is based on the opinions and estimates of management as of the date such statements are made. Estimates regarding the anticipated timing, amount and cost of mining at the projects are based on assumptions underlying mineral resource estimates and the realization of such estimates; results of previous mining activities at the projects, and detailed research and analysis completed by independent of the Company; research and estimates regarding the timing of delivery for long-lead items; knowledge regarding the factors consultants and management involved in building a mine and other factors described in the technical reports and Annual Information Form filed under the profile of the Company on SEDAR. Capital and operating cost estimates are based on results of previous mining activities, research of the Company and independent consultants, recent estimates of construction and mining costs and other factors that are set out in the scoping study. Production estimates are based on mine plans and production schedules, which have been developed by the Company’s personnel and independent consultants. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to risks related to: timing and availability of external financing on acceptable terms; unexpected events and delays during construction, expansion and start-up; variations in ore grade and recovery rates; receipt and revocation of government approvals; actual results of exploration and mining activities; changes in project parameters as plans continue to be refined; future prices of gold; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information except in accordance with applicable securities laws. Investors are advised that National Instrument NI 43-101 of the Canadian Securities Administrators requires that each category of mineral reserves and mineral resources be reported separately. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Due to the uncertainty of measured, indicated or inferred mineral resources, these mineral resources may never be upgraded to proven and probable mineral reserves. Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated or Inferred Resources The information presented uses the terms “measured”, “indicated” and “inferred” mineral resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize these terms. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable. Non-IFRS 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 in accordance with the International Financial Reporting Standards. “Operational Cash Cost per Ounce” is a non-IFRS performance measure which could provide an indication of the mining and processing efficiency at the operations. It is determined by dividing the operating expenses, excluding stock-based compensation allocated to the operating expense and next of silver revenue, by the number of ounces of gold sold. There are variations in the method of computation of “operational cash cost per ounce” as determined by the Company compared with other mining companies. For more detail on the Operational Cash Cost per Ounce determination for Crocodile Gold, please visit www.sedar.com or www.crocgold.com and review the latest Annual Financial Statements issued on March 19, 2014
  • 3 Operations and Projects Northern Territory Operations • Main NT Focus • Cosmo Deeps Mine • Union Reefs (Esmeralda) • Maud Creek • Bon’s Rush Victoria Operations
  • Investment Highlights 4 GROWING GOLD PRODUCTION GENERATING CASH FLOW GROWTH POTENTIAL • Operating cash flow generated in Q1 2014 exceeded $12 million • Total Operating cash flow generated in 2013 exceeded $67 million • Operational Cash Costs for Q1 2014 decreased to $971 per ounce compared to $1,027 per oz in 2013 • All-In Sustaining Cash Costs for Q1 2014 decreased to $1,307 per oz compared to $1,386 in 2013 • Total Production for 2013 was 210,000 oz, up from 155,000 oz in 2012 • Production for Q1 2014 was 53,583 ounces of gold; on track for 2014 production guidance of 200-210,000 oz DECREASING COSTS • Current focus is on underground resource definition to extend mine life at all projects • Further exploration will be based on the value added by the project All within Australia SIZABLE RESOURCES • Proven and Probable Reserves: 0.9 million oz • M+I Resources: 4.8 million oz • Inferred Resources 2.5 million oz
  • 2013/2014 Significant Highlights 5 2013 Q2 • Successfully unwound Credit Suisse gold swap (hedge) position, significantly reducing debt from approximately $70M to $11M Q3 • Cosmo Mine transitioned from ramp-up to sustainable producer with 21,300 ounces produced in Q3 • Increased production guidance to 200,000 – 205,000 oz from 170,000 – 180,000 oz Q4 • Exceeded 2013 guidance with 210,626 ounces produce at an average cash cost of $1,067 • Established 2014 production guidance of 200,000 – 210,000 ounces gold at an average cost between $900 – 950 2014 Q1 • Executed 3 key contracts for Northern Territory Operations, which will yield significant cost savings • Closed an $18 million private placement with Luxor Capital and Sprott Asset Management • Paid out Credit Suisse credit facility ahead of schedule
  • Mineral Resources and Reserves * 6 Tonnes Au Grade Au (MM) (g/t) (Koz) Proven & Probable Reserves Cosmo 1.5 3.79 180 Fosterville 1.8 6.01 342 Pine Creek 1.3 1.55 62 Stawell 1.0 3.40 107 Burnside 0.2 1.93 10 Union Reefs 0.3 4.40 42 Maud Creek 1.0 5.40 185 Reserves 7.0 4.10 928 Measured and Indicated Resources (incl. of Reserves) Cosmo 4.5 3.43 500 Fosterville 16.6 3.87 2,069 Pine Creek 8.4 1.40 380 Stawell 4.7 2.60 399 Burnside 7.6 1.40 336 Union Reefs 3.0 2.40 236 Maud Creek 7.7 3.50 871 M&I Resources 52.6 2.83 4,791 Inferred Resources Cosmo 1.1 2.94 109 Fosterville 6.4 3.78 777 Pine Creek 2.5 2.30 191 Stawell 1.0 4.70 145 Burnside 11.8 1.60 602 Union Reefs 4.3 2.20 305 Maud Creek 4.2 2.50 344 Inferred Resources 31.3 2.45 2,473 *Please refer to cautionary language on page 2 of this presentation Crocodile Gold maintains significant Measured and Indicated Resources of 4.8 million ounces and Inferred Resources of 2.5 million ounces. Reserves for Crocodile Gold’s projects total approximately 0.93 million ounces.
  • 7 2013-14 Operational Summary Crocodile Gold is focused on maintaining sustainable levels of production and managing costs. 2014 Production: 200,000 - 210,000 oz 2014 Operating Cash Cost: USD$900-$950 $1,150 $1,101 $924 $967 $971 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 CASHCOSTUS$/OZ OZPRODUCED Cosmo Gold Mine Fosterville Gold Mine Stawell Gold Mine Cash Cost
  • 8 Gold Production: Fosterville Gold Mine • In Q1 2014, Fosterville continued to demonstrated strong results with over 220,000 tonnes processed for almost 26,000 ounces of gold. • Positive underground definition drilling returned intersections that suggest the Phoenix and Lower Phoenix Zones will extend the mine life past the current 3 years. Highlights include: Fosterville Processing Facility Fosterville 2014 Performance Q1 2014 Q1 2013 Ore Milled (Tonnes) 220,379 190,026 Average Grade (g/t Au) 4.32 4.74 Recovery (%) 84.3 81.4 Gold Produced (oz) 25,786 23,556 Gold Sold (Ounces) 25,809 24,270 2014 Production Guidance: 95,000 – 100,000 Ounces Gold Hole Width (m) ETW* (m) g/t Au Phoenix Zone UDH0501 6.90 5.40 12.66 UDH0503 9.65 7.90 6.40 UDH0505 5.30 3.80 10.41 UDH0750 15.90 11.70 6.00 Lower Phoenix Zone UDE110 33.80 7.00 24.00 UDH0561 3.60 3.00 32.86 UDH0575 14.35 8.00 12.89 UDH0617 6.85 6.30 19.15 UDH0643 11.90 8.60 16.67 UDH0755 6.80 6.60 122.35 *ETW = Estimated True Width. Full details of the definition drilling program, including QA/QC processes, can be found in the Press Release dated March 12, 2014
  • 9 Gold Production: Stawell Gold Mine Stawell Processing Facility • Stawell continues to focus on the upper levels of the Mine, accessing remnant ounces while reviewing the upper level resource to identify further profitable opportunities from the underground. • In Q1 2014, Stawell milled a total of 227,000 tonnes of underground and stockpile ore at an average grade of 1.71 g/t Au. Stawell is to continue underground remnant mining well into 2014. Next Steps • Exploring opportunities within the existing mining lease, including the Big Hill Project, which has reached the feasibility phase. • Engagement continues with local stakeholders and the community. Stawell 2014 Performance Q1 2014 Q1 2013 Ore Milled (Tonnes) 227,627 213,132 Average Grade (g/t Au) 1.71 2.06 Recovery(%) 79.4 86.5 Gold Produced (oz) 9,956 12,228 Gold Sold (Ounces) 9,510 13,141 2014 Production Guidance: ~ 30,000 Ounces Gold
  • 10 Gold Production: Cosmo Gold Mine • In Q1 2014, Cosmo mined 180,000 tonnes of ore and processed 230,000 tonnes with an average grade of 2.79 g/t Au. • In the quarter, the Union Reefs mill treated ore from a lower grade oxide stockpile for environmental reclamation purposes, which affected overall average grade and recovery results • Also during the quarter, Crocodile Gold successfully transitioned in a new mining contractor with minimal disruption to production. • Proven and Probable Reserves* of 1.48Mt at 3.79 g/t Au for 180,000oz • Measured and Indicated Resources* of 4.5Mt at 3.4 g/t Au for 499,700 oz *Please refer to cautionary notes on page 2 of this presentation Cosmo 2014 Performance Q1 2014 Q1 2013 Ore Milled (Tonnes) 230,815 152,128 Average Grade (g/t Au) 2.79 3.12 Recovery(%) 85.9 86.4 Gold Produced (oz) 17,841 13,169 Gold Sold (Ounces) 19,416 12,309 Cosmo Access Portal 2014 Production Guidance: 75,000 – 80,000 Ounces Gold
  • 11 In May 2014 Crocodile Gold announced a Mineral Resource and Reserve up- date for the Cosmo Project: Mineral Resources – Resource Definition drilling in 2013 allowed an increase of 4% in Measured and Indicated Mineral Resources to 4.5Mt @ 3.43g/t for 500,000 ounces Mineral Reserves – Proven and Probable Mineral Reserves have decreased by 24% since the last statement in 2013 including mining depletion. Current drilling programs are designed to target Reserve growth in 2014. Cosmo Resource Up-date
  • 12 During early 2014 Crocodile Gold executed three key contracts for the Northern Territory Operations: Underground Mining Contract – Awarded to Downer EDI Pty Ltd for a period of two years with the option to extend for a third year. Downer EDI mobilized to site in March this year and assisted with minimal disruption to operations. Diamond Drilling Contract – Awarded to Boart Longyear for a period of two years to support the underground drilling necessary for mine planning and resource development. Some deeper exploration drilling will also be completed in the coming 12 months Power Supply Contract – Crocodile Gold negotiated a new electrical power supply contract with the Power and Water Corporation which will cover a term of one year. NT Contract Changes
  • 13 The Cosmo Deeps Project is the core mining project for Crocodile Gold in the Northern Territory. In early 2014 approval was granted for deeper drilling project South Gandy’s Description Unit Amount Drill Holes No. 12 Drill Metres (approx.) metres 5,000 Start Q2, 2014 Finish Q1, 2015 Growth Projects: Cosmo Deeps Drilling Project Plan • Drill diamond holes into down plunge extensions of the Cosmo deposit • Build Mineral Resource and Reserve base close to existing infrastructure • 2 phase program, phase one outlined above, phase two on success of phase 1 Milestones • Drilling for this project commenced with new contractor arriving with 3rd diamond rig in April • Drilling to be completed in conjunction with drilling required for production Target
  • 14 The Esmeralda Project is located around 7km south of the Union Reefs processing plant and is a potential source of oxide ore close to operations. Current Inferred Mineral Resource of 1.1Mt @ 2.06g/t Au for 70,000 ounces of gold South Gandy’s Growth Projects: Esmeralda Project Plan • Mapping project just completed around deposit to identify expansion targets • Drilling to focus on expanding and up-grading current inferred Mineral Resources • 2 phase program, phase one expand deposit the second to upgrade Mineral Resources Milestones • Mapping program completed on ground, finalizing maps and report now • Drill planning and approval to be completed in Q2, 2014.
  • 15 In 2013 Crocodile Gold announced a Mineral Resource and Reserve update for the Maud Creek deposit near Katherine. Indicated Resources of +870,000 oz gold. South Gandy’s Category Tonnes Grade (g/t Au) Ounces Mineral Resources (1g/t cut) Indicated 7,733,000 3.50 871,000 Inferred 4,192,000 2.55 343,600 Mineral Reserves (4g/t cut) Probable 1,055,000 5.40 184,490 Growth Projects: Maud Creek Project Plan • Crocodile Gold is currently reviewing the Maud Creek project to determine how to proceed with updated information. • Other exploration targets exist on site that require follow up work (Red Queen). Milestones • Crocodile Gold announced a Mineral Reserve for the Maud Creek project in 2013. • Resource update was generated using drilling results and reinterpretation of the deposit in 2011.
  • 16 South Gandy’s Growth Projects: Bon’s Rush Project Plan • Use current mapping with regional exploration, including airborne EM and magnetometer results to identify potential to expand Mineral Resources around Bon’s Rush. • Review of historic drilling and sampling to identify potential targets Milestones • Field mapping region around Bon’s Rush showed extensive folding and indicators for mineralization • Mapping being collated and reported now. Bon’s Rush is located 25 km north of the Cosmo Mine on an active Mineral Lease. Current Inferred Mineral Resource of 805Kt @ 2.33g/t Au for 60K oz gold. Potential to expand.
  • 17 During the past few years Crocodile Gold has begun the process of rehabilitating current mining and legacy sites held by the Company South Gandy’s Other Projects: Rehabilitation Works completed 2012 – historic mineralized material rehabilitated at Glencoe and Moline Mining areas 2013 – 34 Ha of disturbed areas rehabilitated at North Point, Princess Louise, Golden Dyke and Brocks Creek 2014 – Golden Dyke area currently being completed, work planned for Howley, Brocks Creek, Princess Louise and North Point Ongoing – CDU conducting grazing study on man made landforms with Crocodile assistance North Point WD Before North Point WD After Princess Louise Seeding
  • 18 Strategic Projects: Non-Core Asset Divestment Non-Core Asset Divestment Crocodile Gold continues to look for opportunities to divest or Joint Venture (JV) non-core assets primarily in the Northern Territory. The benefits include: • Returning upside in the form of Earn-in Rights, Royalties and other similar arrangements • Carrying cost savings • Sharper focus on core producing assets Completed Divestments: Rockland Option Agreement • Crocodile Gold entered into a uranium exploration agreement with Rockland Resources Pty. where Rockland received 100% uranium interest on the Company’s property for a AUD$1 million exploration commitment over 4 years and a 1% net smelter royalty capped at AUD$2.5 million Mt. Bundy Gold Project Divestment to Primary Gold (ASX:PGO) • For the sale of the property, Crocodile Gold received 11.75 million restricted and unrestricted shares (10.5% ownership), a cash payment of AUD$ 3.35 million and a AUD$2.5 million capped royalty • This eliminated the care and maintenance costs on Tom’s Gully Processing plant