Crocodile Gold gives resource update

On February2,2015 Crocodile Gold gave an update on the size of the resource in the Fosterville mine deposit.Back in March 2014 Crocodile Gold revised the size of the resource to about 2.2 million ounces but it also reported extensions from the Phoenix and the Lower Phoenix faults.My blog in Workathon(in Blogger) used their information and concluded that the resource could be as large as 5 million ounces.It really depended on the mineralization in the extensions.Now Crocodile says that they have found three new faults,namely the Lower Phoenix Footwall Fault and the Kestrel Fault and The East Dipping Fault.The grade of the gold in the three new faults is reportedly very high.
    Two Mines or One
 Crocodile Gold says in their update that this"may represent a second gold event".This means that the grade of the ore reported by Crocodile is much higher than that mined in  the Fosterville mine.For example, one of the intercepts in the Lower Phoenix Footwall fault measures 294 grams per tonne over 1.85 metres and also123 grams per tonne over 9.45 metres.This is either a phenomenonal resource or the grade is very inconsistent over the whole strike.But if the grade is consistent over the fault then Crocodile may have two good mines not one Fosterville mine.Crocodile says that they have drilled 490 metres north of  the Lower Phoenix structure and 100 metres south of the Lower Phoenix structure.It would certainly be economical to have two mine entrances ;one in the north and the existing entrance.This ,in theory, would increase production.Secondly it would have production from a new mine entrance and theoretically a new mine.
   The Royalty Agreement
  Crocodile Gold had a net cash flow agreement with Aurico Gold relating to the production from the Fosterville and the Stawell mines.This recently was replaced with a smelter royalty agreement whereby Aurico is paid 2% of production from the Fosterville mine.If these drill intercepts are typical of that in the entire structure then it is possible that the resource in the Fosterville mine could be as  large as 4 to 6 million ounces.However if there are two mines instead of one would the royalty on the second mine be only at .5 or 1% of the production? Perhaps the mine production is not as important as the amount of gold that is produced by the smelter.
    Raising their guidance
Unfortunately for Crocodile Gold investors either seem to not believe them or are not impressed by this update.After all it was released on February 2 and the stock has not reacted to this immense amount of gold  in these extensions that they are calling the Lower Phoenix Footwall fault, the Kestrel fault and the East Dipping fault.In addition,Crocodile Gold has not raised it's guidance from that of 2014.It's guidance is still for 205,000 to 220,000 ounces of gold.If this update was accurate would guidance not be for 250,000 to 300,000 ounces of gold for 2015 and 350,000 to 400,000 ounces for 2016.Investors are either very naiive or very slow to react to this massive gold deposit in these three new faults.