Crocodile Gold Reports Operating Cash Flow of $11.0 Million on Revenue of $65.6 Million in the Second Quarter of 2013

Company Recognizes $151.6m Impairment Due to Recent Decline in Gold Price and Updated Estimated Mineral Resources

TORONTO, ONTARIO--(Marketwired - Aug 14, 2013) - Crocodile Gold Corp. (TSX:CRK)(TSX:CRK.DB)(OTCQX:CROCF)(FRANKFURT:XGC) ("Crocodile Gold" or the "Company") is releasing its financial and operating results as at and for the three and six months ended June 30, 2013. All figures are in U.S. dollars, unless stated otherwise.

Second Quarter 2013 Financial Highlights

Financial Discussion

The Company produced 48,261 ounces of gold from its three operating mines in the second quarter of 2013, consistent with the 48,953 ounces of production in the first quarter and a significant increase over the 36,481 ounces from the second quarter of 2012, which only included Fosterville and Stawell from May 4, 2012 and where ounces had yet to be realized from Cosmo. Increasing gold production in 2013 from the Cosmo Mine is offsetting the reduced ounces from Stawell as it winds down its underground operations.

While the Company saw operating cash costs decrease to $1,101 in the second quarter from $1,150 in the first quarter of 2013, operating cash flows were impacted by the significant decrease in the Company's average realized gold price, which fell from $1,664 in Q1 2013 to $1,401 in Q2. Consequently, despite similar gold sales, cash generated from operations for the three months ended June 30, 2013 was $11,028,760, down from $17,559,642 in the first quarter of 2013. The Company limited investment to necessary sustainable capital in Q2, investing $19,723,520 into underground development and resource definition at Cosmo and Fosterville and a further $1,026,246 for property, plant and equipment across all sites. In the current gold price environment, each site is optimizing its current equipment fleet and fixed assets and deferring capital expenditures.

The Company posted a net loss in the second quarter of 2013 of $90,402,788 or $0.22 per share compared to a net loss in the corresponding period of 2012 of $7,225,054 or $0.02 per share, and down significantly from Q1 2013 net income of $17,621,570 or $0.04 per share. The net loss was impacted by lower mine operating earnings due to lower gold prices, and an impairment charge of $151,626,275 as at June 30, 2013.

As at June 30, 2013, the Company identified the recent and continued decrease in the price of gold on future cash flows as indicators of impairment and consequently assessed the recoverability of the carrying values of its assets. The Company recorded a non-cash impairment of $13,925,385 for Fosterville, primarily due to the reduction in the Company's estimates of future metal prices. The Company also recorded a non-cash impairment of $137,700,890 against the Northern Territory assets, as the carrying value of the long-lived assets of the Cosmo Mine and other projects exceeded their discounted cash flows over the mine lives. The charge was affected by the reduction in the Company's estimates of future metal prices, as well as the continued ramp-up of the Cosmo operation and the reduction in the estimated Cosmo mineral resource base, which influenced the projected mine life and the costs required to convert future resources. The Company also considered the required investment and return for its various projects in the Northern Territories at current and estimated future gold prices, and the impact on the Northern Territory operations as a whole.

The charge to earnings was partially offset by a $62,937,828 gain on the close-out of the gold swap agreements with Credit Suisse and a gain on the revaluation of the contingent liability of $10,350,757.

Commenting on these results, Rodney D. Lamond, President and CEO of Crocodile Gold, said: "In spite of a softening gold price environment in the second quarter, the Company's mines continued to generate positive operating cash flow. Furthermore, the Company produced over 97,000 ounces of gold in the first half of 2013, giving management the confidence to maintain 2013 production guidance of 170,000-180,000 ounces of gold."

Mr. Lamond continued: "Crocodile Gold has accelerated many sustainable cost reduction initiatives, at Cosmo in particular. In addition, the Company has re-focused the exploration programs on near-term value targets that generate confidence in the mine plans. The recently revised Northern Territory mineral reserve and resource estimate announced on July 24, 2013 dramatically increased the geological and structural understanding of the deposit as well as its gold distribution characteristics, thereby providing significantly more confidence in management's ability to plan and predict the various ore bodies and their value."

Crocodile Gold continues to adapt to the challenging gold price environment by maintaining a strong production base while conserving cash and ensuring optimal use of capital. At this time, only critical and sustaining capital is being spent and all projects have been deferred except for the Big Hill Project, which the Company believes will provide strong returns even in the current gold price environment. All discretionary spending has ceased and hiring freezes have been put in place with allowances for critical roles only. With the significant reduction in debt as a result of unwinding the gold swap contracts earlier this year, the Company has significantly strengthened its balance sheet. The Company has also undertaken a review of its holdings with the aim of divesting non-core assets to realize value and reduce carrying costs. As previously reported, in the second quarter Crocodile Gold completed the sale of the Tom's Gully and Mount Bundy properties to Primary Gold and signed a definitive agreement with Pitchblack Resources for the option to acquire a 90% interest in certain base metal mineral properties owned by Crocodile Gold located in the Northern Territory.

Second Quarter 2013 Operational Highlights

Operational Discussion

Cosmo Mine

The Cosmo Mine continues to ramp-up to full production levels, producing 176,110 tonnes of ore during the quarter at an average grade of 3.63 g/t Au out of which approximately 23,000 tonnes was left to be processed as of June 30, 2013. The Cosmo Mine achieved an average development rate of 449 meters in the quarter, in line with operational requirements while continuing to minimize capital expenditure.

The Union Reefs mill processed 175,708 tonnes during the quarter at an average grade of 3.50 g/t Au and at a recovery rate of 89.5%, resulting in gold production of 17,706 ounces. Recovery issues experienced at the end of Q1 were quickly addressed by site management with recoveries now returning to expected levels around 92%.

Fosterville Gold Mine (FGM)

FGM produced 195,686 tonnes from the Harrier and Phoenix zones during the second quarter at an average grade of 4.39 g/t Au. The operation processed 197,769 tonnes of ore at a grade of 4.32 g/t Au with a recovery rate of 85.5%, resulting in gold production of 23,470 ounces for the second quarter. FGM continues to demonstrate strong improvement in recovery as it develops its strategies to deal with carbonaceous ore. Mine development continued at an average advance rate of 597 metres per month during the quarter, with 60% relating to sustainable capital development.

FGM is currently working through an updated reserve and resource estimate to incorporate drill information obtained through the first half of 2013. The work is expected to be finalized later in August, and initial expectations are that a potential increase in estimated mineral reserves may offset much of the mine depletion from the first half of the year.

Stawell Gold Mine (SGM)

SGM continues to transition from its underground mining activities, completing stoping in the lower areas of the mine and retreating back up the mine to access remnant ounces. Production in the lower areas of the mine such as the GG6 was completed in April. Salvage programs have been completed and the lower half of the underground has now been closed.

During the second quarter, SGM mined 94,541 tonnes of underground ore at an average grade of 2.66 g/t Au, which it supplemented with surface oxide material for a total of 238,344 tonnes processed at an average grade of 1.20 g/t Au. SGM achieved a recovery rate of 76.5%, which resulted in gold production of 7,085 ounces. While recoveries were lower than usual, this was the result of lower-recovery underground ore displacing oxide material during the period.

SGM has reviewed its upper level resource in light of its significantly reduced overhead costs and continues to identify further potential profitable ounces from the underground operation. As a result, the remaining underground production schedule has been extended to Q4 of 2013.

Project Development and Exploration

In light of the recent decrease in the gold price, the Company has undertaken a detailed review of its investment priorities and will defer all project investment and off-lease exploration to conserve cash, unless there is a strong and demonstrated return on investment.

Big Hill Project (Big Hill)

The Big Hill Project is a potential high-return open pit operation with a demonstrated net present value of A$40.0M using a gold price of A$1,400/ounce and a discount rate of 10% on recovered production of 108,000 ounces of gold. In the second quarter of 2013, the State Government of Victoria outlined the requirements for an Environmental Effect Statement (EES) as part of the project permitting process. To support the requirements of the EES and eventual feasibility study, Stawell has commenced geotechnical drilling in the second quarter and has engaged various technical consultants for matters such as air and quality noise monitoring, surface and groundwater assessments, and flora and fauna studies. The Company is working toward a feasibility study for the project which it expects to complete in the first half of 2014. Expenditures are being limited to those required to advance the permitting process and feasibility study.

Financial Position

As at June 30, 2013, the Company held cash and cash equivalents of $28,818,338 and had a working capital balance of $16,697,555, a significant improvement from the working capital deficiency as at December 31, 2012. With the reduction in debt as a result of unwinding the gold swap contracts earlier this quarter, the Company has considerably strengthened its balance sheet.

Management Update

Effective August 1, 2013, Rodney D. Lamond, P. Eng. was appointed to the role of President and Chief Executive Officer, bringing 25 years of operational and technical experience to the Company. Mr. Lamond will spend most of his time in Australia managing the Company's operations.

About Crocodile Gold

Crocodile Gold is a Canadian gold mining and exploration company with three operating mines in the Northern Territory and the State of Victoria, Australia. The Company has a combined land package in excess of 4,000 sq. km. The objective of Crocodile Gold is to continue production from its three operating mines, Cosmo, Stawell and Fosterville, while also advancing development programs to further organic growth. For additional information, please visit our website www.crocgold.com.

Follow us on Twitter @crocgold_crk or Facebook facebook.com/CrocodileGoldCorp.

Qualified Person

F. W. Nielsen, P.Geo, V.P. Exploration of Crocodile Gold Corp. is a "qualified person" as such term is defined in National Instrument 43-101 and has reviewed and approved the technical information and data included in this press release.

Cautionary Notes

Non-IFRS 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 International Financial Reporting Standards.

"Cash cost per ounce" is a non-IFRS performance measure that 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 expenses 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 three months ended:

Forward-Looking Information

Certain information set forth in this press release contains "forward-looking statements", and "forward-looking information under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements, which include the Company's 2013 production estimates, expectations for future performance based on current drill results and past production, expected gold prices, and mineral resource estimates, and are based on Crocodile Gold's current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by words such as "expects" "anticipates", "believes", "projects", "plans", and similar expressions. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Crocodile Gold's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: liabilities inherent in mine development and production; geological, mining and processing technical problems; Crocodile Gold's inability to obtain required mine licences, mine permits and regulatory approvals required in connection with mining and mineral processing operations; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; changes in commodity prices and exchange rates; currency and interest rate fluctuations; various events that could disrupt operations and/or the transportation of mineral products, including labour stoppages and severe weather conditions; the demand for and availability of rail, port and other transportation services; the ability to secure adequate financing and management's ability to anticipate and manage the foregoing factors and risks. There can be no assurance that forward-looking statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Crocodile Gold undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.