A look at Crocodile Gold, Eastern Platinum, and Endeavour Mining news

POSTED ON April 10, 2015 BY James Fraser
CATEGORY Crocodile Gold, Eastern Platinum, Stories,

Gold is on the move this morning last at $1207 up $9 as short covering is occurring. Physical demand is also seeing being helped by the upcoming Hindu festival in India. The yellow metal is now up 2.3% year to date.

Here are some press releases that caught my eye yesterday afternoon and this morning.

Crocodile Gold - (CRK:TSX) - A strong first quarter out of Australian gold producer Crocodile Gold. Crocodile produced 59,676 ounce of golds in the quarter and is on track to hit the high end of 2015 guidance. The 3 mines (Foster,Cosmo, and Stawell) all appear to be operating efficiently and had close to record production in the quarter.

Crocodile Gold is generating net cash flow and reports an AISC of $1020 per ounce with a strong balance sheet of $27.7 million in cash (preliminary) at the end of Q1. A solid resource and reserve base of over 7 million ounces in all categories at a grade above 2.5 g/t will allow for continued production of between 200-225,000 ounces for years to come. Management has stated they will look for potential acquisitions in the future.

Rodney Lamond, president and chief executive officer, commented: "We are very pleased with the strong operating results accomplished during the first quarter of 2015. We continued to build on the momentum we experienced throughout 2014 and successfully increased first quarter 2015 consolidated production by 11.4 per cent to 59,676 ounces of gold compared with the prior year. The quarter also marked a seventh consecutive quarter of gold production above 53,000 ounces as we executed on our strategy for sustainable production and clearly demonstrated our ability to deliver consistent physical performance. Our strategy for sustainable production, which starts with a fundamental understanding of our geological models, aims to extend the reserve mine life at all of our operations by replacing depleted mineral resources in a timely manner through the execution of targeted exploration programs. As a result of our strong start to 2015, the company is on track to meet the top end of our full-year 2015 production guidance of 220,000 ounces and the lower end of our AISC cost guidance of $1,020 per ounce."

I have been watching Crocodile as a turn around story and everything appears to be on track. The company reminds me of Lake Shore Gold (LSG:TSX). When companies turn operations around the stock can react in a big way in the gold space (Lake Shore went up 3X). Crocodile Gold has doubled to 26 cents since the start of 2015 but looks like it potentially has more room to go after being $1.50 in 2010 .

Read: Crocodile Gold Announces Strong Start to 2015 Producing 59,676 Ounces of Gold in Q1; On Track to Achieve Top End of 2015 Production Guidance

Eastern Platinum - (ELR:TSX) - Eastern Platinum released news that both parties have placed the break fees into escrow yesterday afternoon. The break fees will be payable if either party defaults under the current SPA.

Eastern Platinum agreed to a $225 million dollar buyout from Hebei Zhongbo Platinum Co. Ltd for $225 million on November 7th,2014. On January 6th, Eastern Platinum release a press release stating the net proceeds to shareholders would be $175.5 million USD.

The stock is up 6 cents today to $1.75 giving the company a market cap of 162.4 million CAN $. Audited Annual Financials at the end of December 31,2014 show ELR with a current cash position of ~$75 million (USD). If the deal does go through ELR would be sitting on $250 million USD and the market is giving them a CA $162.4 million dollar cap.

Plenty of opportunity for a re-rating here as the market is currently heavily discounting the odds of the deal going through. Harrington Global Opportunities Fund has placed a bet that the deal will go through acquiring 2,683,800 at an average price of $1.5446 per share in the open market. Harrington now owns 10,652,300 common shares or ~11.5% of ELR.

Closing of the acquisition remains subject to the necessary regulatory approvals from South Africa, and is expected to occur during the second quarter of 2015. When the deal was originally announced in November ELR management stated the deal was expected to close in 3-6 months. The end of April would be 6 months so they are at the end of this time frame and it looks like it will be a little longer.

"Both Hebei and Eastplats have put significant effort into complying with the contractual terms and working through the specific conditions that Hebei has had to comply with in China. As a result of the break fees being placed into escrow, both parties can now concentrate on obtaining the remaining South African approvals for the transaction," said Ian Rozier, president and chief executive officer of Eastplats.

Read: Break Fees Placed Into Escrow By Hebei Zhongbo And Eastplats

Endeavour Mining (EDV:TSX) - Endeavour is out with first quarter production results which include 123,743 ounces with an expected AISC of between $930 and $980 per ounce. The first quarter has EDV on track to reach guidance of 475,000-500,000 ounces in 2015. Endeavour operates 4 mines in Mali, Ghana, Burkina Faso, and Côte d'Ivoire.

Investors will want to see if EDV made a net profit when financials are released. Management stated as part of its 2015 goals were to be to be profitable and to use a portion of free cash flow to reduce debt.

Haywood Securities is out with a $1.30 target on EDV with a high risk rating in a research note this morning.

Neil Woodyer, chief executive officer, stated: "We are still finalizing our costs for [first quarter] 2015, but the current AISC per ounce estimate for the group is near the middle of the $930 to $980 guidance range. Our best performance comes from the Agbaou mine with mine-level AISC per ounce estimated below $600 during [first quarter] 2015, which compares to $621 during 2014. Our most important cost improvement is at the Tabakoto mine with mine-level AISC per ounce estimated at approximately $1,150 during [first quarter] 2015, which compares to $1,335 during 2014. Over all, we are very pleased with the production of 124,000 ounces, the continued outstanding performance at Agbaou and the downward AISC trend at Tabakoto as it moves toward its guidance range for the year."

Read:Endeavour Mining Produced 124,000 oz in Q1 2015 at Mid-Point of AISC Guidance

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This is not investment advice.All facts are to be checked and verified by reader. As always please do your own due diligence.

James Fraser

Mr. Fraser joined CEO.ca in October 2014. He is passionate about the mining industry. His passion led to co-authoring the e-book "Mining Stocks Investor Guide: A Guide to Investing in Mining Companies." He has a finance background and has completed his Canadian Securities Course (CSC) and Conduct and Practices Handbook (CPH). When Fraser is not "digging" up the latest mining stock, he can be found enjoying a wide variety of sports or travelling the world. More →

Twitter: @miningstocks

james@miningstocksguide.com

James Fraser

Twitter: @miningstocks

james@miningstocksguide.com

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