ORONTO, ONTARIO--(Marketwire - Nov. 8, 2010) - Crocodile Gold Corp. (TSX:CRK)(OTCQX:CROCF)(FRANKFURT:XGC) ("Crocodile Gold" or the "Company") today announces its financial and operating results for the third quarter ended September 30, 2010. All figures are in U.S. dollars, unless otherwise stated.

Highlights include:

--  Net earnings of $2.4 million, or $0.01 per share, and cash flow from

    operations, before working capital adjustments, of $7.9 million in the

    Company's first full quarter since the declaration of commercial

    production. 

    

--  Revenue of $30.6 million and an average realized gold price of $1,223

    per ounce sold. 

    

--  During the quarter, processed 557,189 tonnes of ore at an average head

    grade of 1.58 grams per tonne ("g/t") and at a recovery rate of 92.4% to

    produce 26,138 ounces of gold with mill availability during the quarter

    of 95% at the Union Reefs mill. 

    

--  During the four months of production since commercial production was

    declared on June 1, 2010, processed 731,524 tonnes of ore at an average

    head grade of 1.58 g/t and at a recovery rate of 91.9% to produce 34,060

    ounce of gold. 

    

--  During the nine months ended September 30, 2010, processed 1,337,705

    tonnes of ore at an average head grade of 1.58 g/t and at a recovery

    rate of 87.5% to produce 59,443 ounces of gold. 

    

--  Began excavation at the new Cosmo underground mine with the first blast

    on the portal occurring on May 30, 2010. Underground development through

    September 30, 2010 was 372 metres from the portal. Commercial levels of

    production from Cosmo are expected to begin late in the second quarter

    of 2011. 

    

--  Cash cost of $942 per ounce on 25,002 ounce of gold sold (See Non-GAAP

    Measures below). 

    

--  Completed 32,409 metres of exploration and definition drilling at Brocks

    Creek, Howley, Cosmo and Princess Louise during the quarter. 

    

--  In September, Crocodile Gold was added to the S&P/TSX SmallCap Index. 

    

In releasing this information, Mike Hoffman, President and Chief Executive Officer of Crocodile Gold commented, "Our third quarter results continue to show the steady progress we are making at our operation since we began commercial production on June 1st of this year. Our team is focused on optimizing all operational areas including tonnage mined and milled, grade and dilution control, and metallurgical recovery and costs. We expect these improvements to be realized in the coming quarters through an increase in production in 2011 and lower cash costs. Our priority remains focused on bringing the Cosmo underground mine to production by mid-2011."

Operations Discussion

Crocodile Gold remains on track to produce 85,000 ounces of gold in 2010. Production will come from the Howley, North Point and Princess Louise open pit mines and the Brocks Creek underground mine for the remainder of the year.

During the third quarter of 2010, the Company milled 557,189 tonnes of ore at a head grade of 1.58 g/t and a recovery rate of 92.4% to produce 26,138 ounces of gold at the Union Reefs mill. Since the declaration of commercial production on June 1, 2010, the Company milled 731,524 tonnes of ore at a head grade of 1.58 g/t and a recovery rate of 91.9% to produce 34,060 ounces of gold. During the nine month period ended September 30, 2010, Crocodile Gold milled 1,337,705 tonnes of ore at an average head grade of 1.58 g/t and a recovery rate of 87.5% to produce 59,443 ounces of gold.

Mill availability and throughput have increased steadily year-to-date. Mill availability during the quarter and in the four month period since the declaration of commercial production was 95% which is at the target level. During the quarter, the Union Reefs mill processed an average of 186,000 tonnes of ore per month up from an average of 108,000 tonnes per month during the first quarter and 152,000 tonnes per month during the second quarter of 2010.

During the quarter, 609,000 tonnes of ore was mined at the Howley, North Point and Princess Louise open pit mines at an average grade of 1.25 g/t, containing an estimated 24,462 contained ounces of gold. During the same period, 25,000 tonnes of ore was mined at the Brocks Creek underground mine at an average grade of 7.06 g/t, containing an estimated 5,685 ounces of contained gold. During the quarter, the Company's mining activities included a focus on continuing to develop and improve grade control and mine planning processes. The tonnes ore mined during the quarter exceeded the tonnes milled as the Company is building an ore stockpile in advance of the wet season which begins in November/December and lasts through April. At September 30, 2010, the Company had 162,000 tonnes of ore stockpiles at an average grade of 1.02 g/t for approximately 5,300 contained ounces of gold. Production from both Princess Louise and North Point in 2010 is expected to cease sometime between late November and early December as the seasonal rains will make the public unsealed dirt roads to those open pits inaccessible.

The focus at the Union Reefs mill during the quarter was on increasing recovery rates and throughput and achieving cost reductions. The recovery rate during the third quarter of 92.4% was up from 85.1% during the second quarter and up from 82.3% during the first quarter. The targeted recovery rate is 90% on mixed oxide and fresh ore and 86% on 100% fresh ore. Steps taken to improve recovery rates included allowing for increased residence time, improvements to the gravity circuit process and a focus on ore blending to achieve desired grind size. A number of recovery initiatives are underway to increase the recovery on 100% fresh ore. During the quarter milling costs were approximately A$17 per tonne, continuing to trend lower, compared with approximately A$23 per tonne during the second quarter.

The cash cost for the third quarter of 2010 was $942 per ounce on 25,002 ounces of gold sold. The cash cost for the four month period following the declaration of commercial production on June 1, 2010 was $971 per ounce on 33,904 ounces of gold sold (See Non-GAAP Measures below). The cash costs were higher than expected due to the processing of the higher cost pre-commercial production ounces in opening inventory at the commencement of commercial production and lower head grade. In addition, the Australian dollar has strengthened since the beginning of 2010 and since the date commercial production was declared, June 1, 2010. The cash costs are also high due to the lack of capitalized waste stripping and waste development in the short life mines at North Point, Princess Louise, Brocks Creek and, to a lesser extent, at Howley. Crocodile Gold expects the cash costs per ounce to gradually decrease moving forward with a larger decrease in overall cash costs as mining begins in the Pine Creek/Union Reefs area and as Cosmo reaches commercial production levels in 2011.

During the third quarter of 2010, Crocodile Gold spent approximately $2.5 million on exploration expenditures, completing 7,190 metres of drilling, including 2,472 metres of diamond drilling. In addition, the Company completed 25,219 metres of definition drilling in the third quarter of 2010 at the mining operations. Crocodile Gold's exploration team continues to evaluate and analyze drill results and are also focusing on the very large historical geological database to not only guide current exploration activities but to also identify and rank new exploration targets.

Financial Discussion

During the third quarter of 2010, Crocodile Gold's first full quarter of commercial production, net earnings of $2.4 million were recorded. For the nine months ended September 30, 2010, the Company recorded a loss of $5.1 million, or $0.03 per share.

Crocodile Gold's operations have been in commercial production since June 1, 2010. Prior to June 1, 2010, all operational activity and related revenue and costs were treated as capitalized development. During the three months ended September 30, 2010, the Company's first full quarter of commercial production, gold sale revenues of $30.6 million was recorded on the sale of 25,002 ounces of gold, for an average realized gold price of $1,223 per ounce. During the four month period since the declaration of commercial production, the Company recorded gold sale revenue of $41.6 million on the sale of 33,904 ounces of gold, for an average realized gold price of $1,224 per ounce.

Operating expenses during the quarter were $23.7 million. Depreciation, depletion and amortization expense of $3.9 million, or $154 per ounce of gold sold, was recorded during the quarter. During the quarter, the Company generated an operating profit of $2.8 million (profit after operating and royalty expenses, depreciation, depletion and amortization, and reclamation accretion expense).

With the strengthening of the Australian dollar vis-a-vis the U.S. dollar, the Company recorded gains of $1.8 million on the currency forward contracts it had in place to buy the Australian dollars and sell the U.S. dollar during the quarter.

Cash Flow

During the third quarter of 2010, cash flow from operating activities, before changes in non-cash working capital, provided $7.9 million (See Non-GAAP Measures below). For the nine months ended September 30, 2010, cash flow from operating activities, before changes in non-cash working capital, provided $5.6 million.

Investing activities during the three and nine months ended September 30, 2010, used $17.1 million and $76.1 million, respectively. Investing activities during these periods consisted of capitalized exploration costs, development on the Cosmo underground mine, and development costs at Brocks Creek, Howley, Tom's Gully and at the Union Reefs mill. Investing activities during the nine month period also included the capitalization of pre-commercial production activities.

Financial Position

As at September 30, 2010, the Company had net working capital of $10.8 million, which included cash and cash equivalents of $9.5 million, amounts receivable of $2.7 million, prepaid expenses of $1.1 million and inventories of $11.6 million, partially offset by current liabilities of $14.1 million.

On November 2, 2010, the Company announced that it had entered into an agreement with a syndicate of underwriters to issue, on a bought deal basis, 20,000,000 common shares at a price of C$1.40 per share for aggregate gross proceeds of C$28,000,000. The Company has agreed to grant the underwriters an over-allotment option to purchase up to an additional 3,000,000 common shares at C$1.40 per share, exercisable in whole or in part, at any time on or prior to the date that is 30 days following the closing of the offering. If this option is exercised in full, an additional C$4,200,000 will be raised bringing the aggregate gross proceeds to C$32,200,000. The proceeds of the financing will be used for the development of the Cosmo underground mine and working capital and general corporate purposes.

Projects Discussion

Crocodile Gold plans to advance development of the Cosmo underground mine in the fourth quarter of 2010 with commercial production from Cosmo remaining on track for mid-2011. Ramp development will continue along with dewatering of the existing Cosmo open pit to be completed by the end of the wet season.

In addition, Crocodile Gold is accelerating permitting and development activities on certain deposits within the Union Reefs and Pine Creek area as previously disclosed (refer to Crocodile Gold press releases dated September 8, 2010 and October 14, 2010) with production expected in the first quarter of 2011. The close proximity of the deposits to the Company's Union Reefs mill relative to the Burnside deposits (Howley, North Point, Princess Louise and Brocks Creek) where the Company's current production is being sourced has the benefit of lower haulage costs.

Further details are available on the Company's website at http://www.crocgold.com and also http://www.sedar.com where the Crocodile Gold financial statements and management's discussion and analysis (MD&A) are posted.

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 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 which 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 for) 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. 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 periods following the Company's declaration of commercial production on June 1, 2010:

                                              Three months       Nine months

                                                     ended             ended

                                            Sept. 30, 2010    Sept. 30, 2010

                                           ---------------   ---------------

                                                                            

Operating expenses per consolidated                                         

 statement of income (loss) and                                             

 comprehensive income                      $    23,736,800   $    33,152,972

 By-product silver sales credit                   (74,345)          (98,632)

 Non-cash stock option expense charged to                                   

  operating expenses                             (113,589)         (146,435)

                                           ---------------   ---------------

Operating cash costs                            23,548,866        32,907,905

                                                                            

Divided by ounces of gold sold                      25,002            33,904

                                           ---------------   ---------------

                                                                            

Cash cost per ounce                        $           942   $           971

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