Crocodile Gold Options the Mario Property in Peru to Fortuna Silver
TORONTO, ONTARIO -- (Marketwire) -- 05/30/11 -- Crocodile Gold Corp. (TSX: CRK)(OTCQX: CROCF)(FRANKFURT: XGC) ('Crocodile Gold' or the 'Company') is pleased to announce the signing of an agreement with Fortuna Silver Mines Inc. ('Fortuna') (TSX: FVI)(BVLAC: FVI) granting Fortuna the exclusive right and option to acquire a 100% interest in the Mario Property of Crocodile Gold, located in the Department of Junin in central Peru (the 'Option Agreement').
Terms of the Option Agreement
The Option Agreement grants to Fortuna the exclusive right and option to acquire an undivided 100% interest in the Mario Property subject to the following terms:
1. Payment of US$500,000 on signing of Option Agreement
2. Payment of US$500,000 on or before six months from the signing of the
Option Agreement
3. Payment of US$500,000 on or before 12 months from the signing of the
Option Agreement
4. Payment of US$2,500,000 on or before 24 months from the signing of the
Option Agreement
The acquisition of the property by Fortuna is subject to a 1% net smelter return (NSR) royalty on production from the property payable to Crocodile Gold. Fortuna shall have the right to purchase the NSR royalty from Crocodile Gold at any time during the five year period following the final option payment for the sum of US$3,000,000. The property is also subject to a 2% NSR royalty on production payable to Teck Cominco and a 0.5% NSR royalty on production payable to Socrate Capital Inc., with each royalty in turn subject to certain buy-back provisions.
Crocodile Gold is currently ramping up the exploration effort at its property in the Northern Territory of Australia with four drills currently on site drilling priority targets at Cosmo and Union Reefs with further drilling rigs expected in the next few weeks. It is expected that exploration results will be available for release in June. The divestment of the Mario property in Peru allows Crocodile Gold's management to focus exclusively on the Company's Australian operations.
Qualified Person
Mr. Bill Nielsen, P. Geo., is the Company's Qualified Person as defined by the National Instrument 43-101 and has verified the technical information in this news release.
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 mining from the Howley, Mottrams North Point and Princess Louise open pit mines. The Company is currently developing the Cosmo underground mine. Ore is processed at the 2.4 million tonne per year Union Reefs Mill. Crocodile Gold has 3.175 million ounces of National Instrument 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 Reefs 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.
Cautionary Note
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 future plans, 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.
Contacts:
Crocodile Gold Corp.
Michael Hoffman
President and CEO
416-861-2964
info@crocgold.com