Crocodile Gold farms out assets

Crocodile Gold released it's second quarter results about a month ago and it had solid results.It's production was ahead of the same quarter in 2013.While  production expenses were  reduced.Consequently it showed  a net income of $4 million.The first in several quarters.It says that it is on track for guidance for 2014 that was given previously(200,000 to 210,000 ounces).It also spent $15 million on resource definition at their Cosmo mine and their Fosterville mine.Both have large deposits but they need to know how large in order to plan capital expenditures,drilling equipment and processing capacity at their mill.
  Gold production has levelled off in 2014.That is because
  (a) production at the Cosmo mine has stabilized
  (b) the Fosterville deposit seems huge but has not been developed, and
  (c) production at the Stawell mine has slowed until the Big Hill project comes onstream
         New Agreements
 On August 28 Crocodile announced three new agreements with Phoenix Copper.The first agreement is for the Iron Blow and Mount Bonnie property.There is a 2% royalty on any gold and silver  production.Also there is a buy-back agreement if gold or silver is found.Lastly there will be cash compensation if a bankable feasibility study is produced for base metals.
 There is a similar agreement for their Maud Creek property.There is a buy-back agreement for properties around Maud Creek while Crocodile Gold retains 100% ownership of the Maud Creek property itself. Crocodile Gold states that there are 900,000 ounces of Indicated Resource and 350,000 ounces of gold of Inferred Resource here .The gold is low to medium grade of ore.There is no mention of Proved and Probable Resources.But this blog believes it to be significant .Also Phoenix Copper may enter into agreements with third parties such as BHP or Freeport-McNamara.The Maud Creek deposit looks sizeable and this should speed up development.But there will not likely be any production before 2016.
    The rest of 2014
   Crocodile expects to meet it's guidance of 200,000 to 210,000 ounces of gold.But it also expects the Stawell mine to drop in production before their Big Hill project comes onstream.They have a tremenduous resource in their Fosterville mine that is not being exploited.Possibly there is not enough equipment in place but it seems that drilling could be  taking place in both the Upper and Lower Phoenix deposits and then a more likely target would be 250,000 to 275,000 ounces of total annual production.In addition, they have just ended their milling agreement with Thor mining so they can increase their own processing at the mill. 
Their agreement with Phoenix Cooper is a good one and will speed up development of the sizeable Maud Creek deposit  but no production will be coming onstream in 2014.Crocdile must buy extra equipment and even increase milling capacity to produce another 50,000 to 60,000 ounces from their Fosterville mine.