Annual exploration report MLN's 809, 884-892; 993, 1000, 1027, 1053, 1062, MCN's 1014-1015; 1231-1232; 3422; 4299; 4860-4861 on the Howley Tenement Group for period ending 31 December 2009

Abstract

The Howley Group of tenements is one of the most significant projects within Crocodile Gold Australia's port folio. It is located approximately 140km SSE of Darwin, NT. Territory Goldfields NL (a Northern Gold subsidiary) purchased the Howley Group of tenements from Dominion Gold Mining in late 1990's. On 4 April 2002, the 'Burnside Joint Venture' was formed between Territory Goldfields NL and Buffalo Creek Mines. The JV parent companies were 50% Northern Gold NL, 50% Harmony Gold. In 2005, GBS made a successful takeover of Northern Gold, and entered an agreement to purchase Harmony's 50% share of the Burnside JV, giving GBS 100% control of the project. GBS Gold Australia went into voluntary administration on 15 September 2008 and all assets including Howley Group of tenements were liquidated. On 9 November 2009, Crocodile Gold Australia purchased all assets held by GBS Gold Australia in the Northern Territory. The tenements cover the southern sector of the Howley Anticline, an economically important fold structure that hosts many gold mines and prospects. These include the important Cosmopolitan Howley mine (Cosmo Deep) and its satellites including the Phantom, Chinese No. 1, Chinese No. 2, Mottrams, Chinese South and Big Howley. Most have been the subject of historic underground and more recently, open pit mining. During the year under review, geological interpretation/modelling, drilling, assaying and resource update on the Howley project area was undertaken. It involved 81 RC drill holes for 12013.7 metres and a diamond hole for 680.3 metres. This program was complemented by assaying of 12200 samples retrieved during drilling program. This program was complemented by assaying of 12200 samples retrieved during drilling program. The resource update resulted an increase of 29% (indicated resources) to previously announced in June 2009. Mineralisation occurs within a corridor which is almost 600 metres wide and in excess of 3 kilometres long and which remains underexplored. It remains open in all directions. In 2010, drilling, assaying, geological modelling, ore reserve estimates, data base population and further extension of mining operation will take place. Crocodile Gold Australia also intends to start de-watering the Cosmo Deep open pit, which is prelude to underground mining of rich gold resource.