ccnm






TORONTO, ONTARIO--(Marketwire - March 31, 2011) -
Crocodile Gold Corp. (TSX:CRK)(OTCQX:CROCF)(FRANKFURT:XGC) ("Crocodile Gold" or the "Company") today announces its financial and operating results for the year ended December 31, 2010. All figures are in U.S. dollars, unless otherwise stated.


Highlights include:

The Company declared commercial production on June 1, 2010, when the Union Reef's mill achieved commercial levels of throughput, grades and recoveries on a sustained basis.
During the year ended December 31, 2010, the Company recorded a net loss of $19,836,004, or $0.10 per share, and cash flow from operations of $6,263,016. The net loss for the year included impairment charges of $8,299,703 to the Brock's Creek underground mine.
In the seven month period since the declaration of commercial production, the Company recorded gold sales revenue of $73,178,056 on the sale of 56,990 ounces of gold, for an average realized price of $1,284 per ounce.
During the seven months of production since commercial production was declared in June 2010, a total of 1,250,000 tonnes of ore was processed at an average head grade of 1.54 grams per tonne ("g/t") and a recovery rate of 91.1% to produce 56,294 ounces of gold and, during the twelve months ended December 31, 2010, the Company processed 1,856,180 tonnes of ore at an average head grade of 1.55 g/t and a recovery rate of 88.4% to produce 81,793 ounces of gold.
Cash cost per ounce sold during the seven months ended December 31, 2010 was $1,109 on 56,990 ounces of gold (see Non-GAAP Measures below).
The Company completed 81,946 metres of exploration drilling at Brock's Creek, Howley, Cosmo, Princess Louise and Tom's Gully during the year ended December 31, 2010.
In September 2010, Crocodile Gold was added to the S&P/TSX Small Cap Index.



In releasing this information, Mike Hoffman, President and Chief Executive Officer of Crocodile Gold commented, "2010 was an important transition year for Crocodile Gold. We ramped up production, declaring commercial production in June 2010, and initiated the development of our most important asset at Cosmo. We are continuing to work on important initiatives in 2011, including bringing the Cosmo underground mine into production; which will have a major impact on increasing overall production and lowering cash costs in the future. In addition, we continue to work on optimizing the operational plan for Cosmo and optimizing the existing Union Reef's mill. Our exploration team will be aggressively exploring our tenement package, with the current priorities being Cosmo, Union Reef's and existing mining areas."



Financial Discussion



During the year ended December 31, 2010, Crocodile Gold recorded a net loss of $19,836,004, or $0.10 per share. The net loss in 2010, included impairment charges against mining and exploration assets of $8,704,929.


Crocodile Gold's operations have been in commercial production since June 1, 2010, prior to which all operational activity and related revenue and costs were treated as capitalized development. During the seven months ended December 31, 2010, gold sales revenue of $73.2 million was recorded on the sale of 56,990 ounces of gold, for an average realized gold price of $1,284 per ounce.


Operating expenses during the period June 1 to December 31, 2010 were $63.7 million. Depreciation, depletion and amortization expense of $9.8 million, or $172 per ounce of gold sold, was recorded during this period. After reclamation accretion and royalty expenses, the Company recorded a loss from mine operations of $953,038 for the year ended December 31, 2010.


The Company incurred care and maintenance costs for the year ended December 31, 2010 amounting to $1.6 million, related to properties that have not yet been put into production. Corporate general and administration expenses of $4.5 million recorded were comprised mainly of salaries and consulting fees, professional fees, shareholder communications and travel expenses. Stock-based compensation expense of $4.2 million was recorded relating to options granted between July 10, 2009 and December 31, 2010. During 2010, 6,700,000 options were granted (2009: 11,160,000). Options typically vest over a two-year period with 1/8th of the grant vesting each quarter.


With the strengthening of the Australian dollar vis-a-vis the U.S. dollar, the Company recorded gains of $1.4 million on the currency forward contracts it had in place to buy Australian dollars and sell U.S. dollars during the year.



Cash Flow



During the year ended December 31, 2010, cash flow from operating activities before changes in non-cash working capital, provided $6.4 million (see Non-GAAP Measures below).


Investing activities during the year ended December 31, 2010 used $94.4 million, consisting of capitalized exploration costs, development on the Cosmo underground mine, and development costs at Brock's Creek, Howley, Tom's Gully and at the Union Reef's mill. Investing activities also included the capitalization of pre-commercial production operating costs of $45.6 million, netted against proceeds on the sale of gold of $26.7 million, and the final deferred payment on the purchase of mining assets of $13.2 million.



Financial Position



As at December 31, 2010, the Company had net working capital of $20.4 million, which included cash and cash equivalents of $22.8 million, amounts receivable of $2.2 million, prepaid expenses of $1.3 million and inventories of $8.8 million, partially offset by current liabilities of $14.8 million.


In June and November 2010, the Company issued 40,710,000 common shares as part of prospectus financings for net cash proceeds of $49.3 million. An additional $31.5 million was raised upon the exercise of share purchase warrants, and $3.1 million on the exercise of options.


On March 24, 2011, the Company closed a prospectus offering, on a bought deal basis, issuing 81,000,000 units at a price of C$1.05 per unit for aggregate gross proceeds of C$85,050,000. Each unit consists of one common share of the Company and one-half of a common share purchase warrant. Each whole common share purchase warrant entitles the holder thereof to acquire one common share of the Company at an exercise price of C$2.25 per warrant for a period of five years from the closing date. The Company has agreed to grant the underwriters an over-allotment option to purchase up to an additional 12,150,000 common shares and/or 6,075,000 common share purchase warrants, or a combination thereof, exercisable for a period of 30 days following the closing of the offering at an exercise price equal to the issue price as allocated and described in the final prospectus to cover over-allotments. The proceeds of the financing will be used for the development of the Cosmo underground mine, improvements to the Union Reef's mill, exploration and working capital and general corporate purposes.



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 Canadian Generally Accepted Accounting Principles ("GAAP").


"Cash flow from operating activities before changes in non-cash working capital" is a non-GAAP performance measure that could provide an indication of the Company's ability to generate cash flows from operations, and is calculated by adding back the change in non-cash working capital to "Cash provided by (used in) operating activities" as presented on the Company's consolidated statements of cash flows.


"Cash cost per ounce" is a non-GAAP performance measure which 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 expense 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 period following the Company's declaration of commercial production on June 1, 2010:




Year ended December 31, 2010








Operating expenses per consolidated statement of loss and comprehensive loss
$
63,726,536




By-product silver sales credit

(173,364)




Non-cash stock option expense charged to operating expenses

(371,518)



Operating cash costs

63,181,654



Divided by ounces of gold sold (commercial production ounces)

56,990



Cash cost per ounce sold
$
1,109






Further details regarding the Company's operations are available on the Company's website at




FOR FURTHER INFORMATION PLEASE CONTACT: Michael Hoffman
Crocodile Gold Corp.
President and CEO
416-861-2964
info@crocgold.com
ORNirupa Maharaj
Crocodile Gold Corp.
Manager Investor Relations
416-861-5899
http://www.crocgold.com/">www.crocgold.com