Operational Update-Northern Territory
-- At the Cosmo Mine, development and production ramp-up continued with an average of 575 meters of development per month. Stoping activities continued to increase during the quarter. Cosmo produced an average of 35,000 tonnes a month through the quarter and achieved over 48,000 tonnes of ore production in December. Mill production was supplemented by lower grade stockpiles available from various projects in the Company's Northern Territory holdings. In total, an average of 73,000 tonnes per month was treated at the Union Reefs mill, producing 12,829 ounces for the quarter.-- In late December, commercial proposals were received for the mining of the International open pit deposit. After review of the proposals, which are more expensive than previously estimated, the Company believes it must reassess whether the project meets its internal return hurdle or if capital is better spent on other of the Company's growth projects in 2013. As such, mining will not commence on International until the Company finalizes its three-year plan and determines its optimal use of capital in 2013.
Exploration and Advanced Projects - Update
-- In the Northern Territory, the Exploration team worked on a review of various properties and has prepared drill programs for 2013. Revised resource and reserve calculations for a number of deposits have been initiated with a plan to produce updated estimates by the end of Q1 2013.-- At Union Reefs, compilation of the 2012 drilling program results was completed and is being incorporated into a revised resource estimate. Desktop study work was completed and a decision on the next phase of work will be communicated upon the Company finalizing its three-year plan.-- At Maud Creek, a revised resource estimate is in the process of being calculated. Desktop study work was undertaken in 2012 and was essentially completed by year end. A decision on the next phase of the project will be communicated upon the Company finalizing its three-year plan.-- Building off exploration success announced by the Company in the third quarter of 2012, FGM began drill programs in the Harrier and Phoenix ore bodies with the aim of extending known reserves.-- At SGM, as the mine continues to ramp down the underground mining environment in 2013, the Company has undertaken a detailed review of the known deposit extension on the existing mining lease with the potential to extend SGM's mine life. The Company expects to make decisions concerning such projects shortly and will be communicated upon the Company finalizing its three-year plan.
Additional details of the fourth quarter will be provided in the Management Discussion and Analysis report, which will be released in conjunction with the Company's annual financial statements by the end of March.
The Company is presently finalizing its three and five-year Strategic Business Plan. The Strategic Business Plans aim to prioritize those growth initiatives with the highest return on invested capital. The Company is in the final stages of analyzing each of its growth projects and expects to communicate its longer-term capital allocation strategy, including which projects the Company will advance and when, with the release of fourth quarter earnings.
About Crocodile Gold
Crocodile Gold is a Canadian company with operations in the Northern Territory of Australia and operating mines in the State of Victoria with a land package of over 4,000 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. The Northern Territory ore production is processed at the Union Reefs Mill with a capacity of 2.4 million tonnes per year.