The Cosmo/Howley corridor is the highest priority area for Crocodile Gold. The Cosmo/Howley corridor consists of several deposits including the proposed Cosmo underground mine and the Howley open pit mine. There are additional deposits extending between Cosmo and Howley. The deposits are located within the Burnside tenement package approximately 150 kilometres south of Darwin, Australia. A 200 person mining camp is located adjacent to the Cosmo/Howley deposits.

Geology

The Cosmo/Howley deposits are situated on the Howley Anticline which plunges northwest and southeast, and is a tight to inclined antiform that extends northwest along strike from the Cosmo mine for approximately 25 kilometres. The corridor containing the known deposits at Cosmo and Howley extends approximately five kilometers along strike. At Howley, drilling to date has only extended to approximately 100 metres depth, so there is significant potential at depth and along strike.

Structurally, it appears that the Cosmo structure continues under Howley but further exploration is required to test this theory and prove that the structure contains economic mineralization.

The majority of drilling at Cosmo has been focused on the eastern limb of the anticline structure, however, most of the drilling at Howley has been on the western limb of the anticline.

Cosmo
The Cosmo lodes are hosted within the Upper to Middle Koolpin Formation, which consists of interbedded siltstones, carbonaceous mudstones, banded ironstone, phyllites, dolerite sills and greywacke units. Gold mineralization is closely associated with sulphides, which in the weathered zone were
altered to limonite, goethite and hematite.

The main sulphide minerals are pyrite and arsenopyrite, with traces of sphalerite and chalcopyrite. Pyrrhotite occurs below depths of approximately 300 metres.

Most of the gold mineralization at Cosmo is associated with quartz veins, breccias and shears, with higher grades commonly hosted by banded iron formations adjacent to discordant structural positions. Lower gold grades occur in the mudstone in similar positions. Ore grade intercepts are closely related to areas of elevated pyrite, pyrrhotite and arsenopyrite within the greywacke units.

Key features of the Cosmo lodes are their consistency of grade, geological continuity and generally wide true thicknesses in the higher grade parts of the resource.

The Cosmo resource model encompasses the Cosmo Eastern Lodes down to a vertical depth of approximately 655 metres below surface and the Western Lodes down to a vertical depth of approximately 350 metres below surface. The strike length of each of the parallel Eastern Lodes is approximately 440 metres, and of the Western Lodes is approximately 260 metres.

Howley
The most southern Howley gold deposit is located approximately two kilometres northwest of the historical Cosmo open pit mine in an area where the old mineralization is developed in both the hinge zone and steeply dipping flanks of a shallow north-plunging anticline within rocks belonging to the Proterozoic Gerowie Tuff Formation. Gold mineralization extends in a northwesterly trending corridor for approximately four kilometres, encompassing numerous deposits.

These separate deposits form part of a larger, more continuous gold mineralized system open along strike and at depth. Future exploration drilling in the prospective ground between Cosmo and the Howley area gap will target both near surface mineralization and deeper mineralization that may be associated with the northern extensions of the Cosmo gold system.

Exploration Potential

Mineralization has been intersected for approximately five kilometers along strike of the Cosmo/Chinese corridor and the entire corridor extends for approximately 20 kilometres.

Cosmo is one of the single largest undeveloped gold deposits in the Northern Territory. The known resource is most notable for its consistency of grade and continuity along strike as well as true widths of up to 10 metres. Future exploration will be designed to test the mineralization at depth on the flanks of the fold and also to the north towards Chinese, following the plunging hinge zone. Several historic holes in this position have confirmed that the structures and mineralization continue in this direction. Future exploration will also test the theory that the Cosmo structure extends beneath Howley, which could potentially lead to significantly increasing the strike length of Cosmo.

The Howley deposit is a large low grade open pit resource. To date, the average depth of drilling is only to 100 metres at depth. Future drilling is to extend the drill coverage down the flanks of the anticline and to focus on shallow plunging high grade shoots.

Plan view of the Cosmo/Howley corridor

Cosmo/Howley longitudinal section showing current resources

Cosmo Drill Plan - Holes CP006, CP007 and CP009 (September 2010)

Cosmo Section - Hole CP006 (September 2010)

Cosmo Section - Hole CP007 (September 2010)

Cosmo Section - Hole CP009 (September 2010)

Mining Methods

Cosmo comprises three main mineralized lodes which are considered independently for determining appropriate mining methods. Two mining methods have been considered for Cosmo. They are down hole stope and fill (Modified Avoca), which will be the main stoping method and uphole bench stoping which will be used for isolated stopes.

The Howley area is expected to be mined using standard open pit mining techniques. The blasted ore will be excavated, loaded onto trucks and hauled to a nearby ore pad where it will be stockpiled until being transported for processing or sent to the relocated mill at Cosmo.

Processing

The expected gold recovery from Cosmo/Howley is 90%.

History

Gold was discovered in the Cosmo/Howley region in 1873 during the construction of the Adelaide to Darwin overland telegraph line. This was the prelude to an extended period of alluvial mining by Chinese miners and lode mining by English companies and Chinese tributers until 1914. An estimated 71,000 tonnes of ore was mined along the Howley Line during this period producing about 24,000 ounces of gold at a recovered grade of about 10 g/t gold.

Exploration and mining declined in the mid 1910s and there was little activity in the area for the next 60 years apart from limited small scale mining and minor exploration. The Howley area was explored for gold and base metals during the 1970s and 1980s by numerous mining and exploration companies. Most of these companies carried out extensive drill testing of various costean intercepts, IP geophysical and soil geochemical anomalies. Several small alluvial showings in the Howley area were mined between 1986 and 1990.

Dominion Mining produced approximately 470,000 ounces of gold from 6.9 million tonnes of ore grading 2.1 g/t gold between 1987 and 1995. Ore was produced from Cosmo Howley, Phantom, Chinese South, Chinese Howley and Big Howley pits, as they were named at the time.

Northern Gold commenced exploration in the area in 1996. During 2002, exploration activities focused on geological modeling of the Cosmo Deeps mineralization. In 2004, infill drilling was undertaken to define high grade mineralized zones within the Cosmo Deeps deposit. Subsequently, a scoping study was initiation evaluating the potential for Cosmo Deeps to be mined as an underground gold operation. In early 2005, further resource definition drilling including eight reverse circulation and diamond drill holes was completed.

In 2007, GBS Gold drilled in the area with the aim of extending the mineralization along strike. Production was sourced from the Howley open pits. They completed a feasibility study for the Cosmo underground mine with expected annualized production of 75,000 to 100,000 ounces per year. The resources were expanded in the region until GBS Gold was placed in administration.

Brocks Creek

The Brocks Creek underground mine is located within the Burnside tenement package approximately 150 kilometres south of Darwin.

Geology

Brocks Creek is a stratiform, meta-sedimentary hosted quartz-vein type gold deposit, formed in the steeply southeasterly plunging hinge of a tight anticline. The mineralized sequence consists of argillite, often highly carbonaceous near its base, with variable proportions of interbedded greywacke, chert and tuff. There are thin banded iron formation beds near the top of the sequence.

Gold mineralization occurs within a number of bands of quartz as well as some bedding concordant quartz veins, along vein margins and within graphitic shears, and has a close affinity with pyrite and arsenopyrite. Ore zones may have up to 10% pyrite and 5% arsenopyrite and small grains of visible gold are a relatively common feature of higher grade zones.

Four lode zones have been identified at Brocks Creek. The lodes are folded and plunge southeast at approximately 40°. The orebody is near two faults named the North Slide Fault and South Slide Fault. These two slide faults determine the extent of mineralization of the lodes. The intersection of the slides with the axial fold plane splits the mineralization into three identifiable units, these being the Fissure Lode, Main Lode and Central Lode from south to north, respectively.

The Main and Fissure Lodes strike east-west and dip southwards at approximately -55° to -60°, in parallel with the bedding direction. The Central Lode is located along the hinge zone of the anticline.

Mining Method

The mining method at Brocks Creek is longhole stoping and uphole retreat at 15 metre lifts. An intermediate sill pillar is left and then recovered at the end of mining for regional stability.

Brocks Creek has been mined previously to a depth of approximately 340 metres below surface.

Processing

The expected gold recovery from Brocks Creek is 90%.

History

Gold was discovered at Brocks Creek in 1871 during the construction of the Adelaide to Darwin overland telegraph line. This was the prelude to a period of mining by English companies and Chinese tribute miners until 1914. Field work subsequently declined and there was little activity in the area for the next 60 years.

The Brocks Creek area was explored for gold and base metals during the 1970s and 1980s by numerous mining and exploration companies. Homestake Gold Mining and Dampier Mining, through a joint venture, conducted the first major assessment of the property in 1977 to 1978.

Northern Gold commenced exploration in the Burnside area in 1996 and engaged in extensive preproduction activities within the Burnside area which were halted in March 2003 pending an improvement in the gold price. Among the work completed, the decline into the Brocks Creek underground deposit was suspended at a vertical depth of approximately 125 metres below surface.

In 2004, further underground and surface infill drilling of the Main and Central Lodes at Brocks Creek was completed. GBS Gold recommenced operations at Brocks Creek in late 2006, progressing to a depth of approximately 340 metres below surface before the operation was put on care and maintenance in September 2008. Historical production from Brocks Creek is approximately 230,000 ounces. GBS Gold produced approximately 75,000 ounces of gold from Brocks Creek primarily from the Main Lode.

Brocks Creek Section

Fountain Head/Tally Ho

The Fountain Head and Tally Ho deposits are located within the Burnside tenement package located approximately 150 kilometres south of Darwin and are east of the Cosmo/Howley corridor. Previous drilling has resulted in some significant intersections and warrants future detailed exploration. Open pit mining has occurred at Fountain Head/Tally Ho.

Geology

Gold mineralization in the Fountain Head deposit is hosted by units of the Mount Bonnie Formation of the South Alligator Group and is associated with quartz-pyrite-arsenopyrite veins. These occur in dilatant zones in the axis of a shallow southeast plunging asymmetric anticline fold. Mineralization is hosted by sub-vertical shear related stockworks, fracture zones in greywackes and saddle reefs at lithological contacts over a strike length of 420 metres. Most of the resource is in the hinge zone of the anticline with the gold grade rapidly tapering off down dip on the limbs. Fracture zones within the hinge zone lie parallel to the axis of the fold and have acted as a focus for fluid channelling.

Exploration Potential

Studies to date have highlighted the potential for a much larger pit on the Tally Ho lodes. Additional drilling is required, but results suggest that a pit push-back may be possible.

Drill results to date are considered significant in that they support an increase in grade with depth of the Tally Ho lode system.

In addition to the extended open pit potential there may also be mineralization that would be amenable to underground mining. The Tally Ho lodes are open down dip and along strike. Further drilling is planned to test this zone in the future and to further define the resources.

Mining Method

Fountain Head and Tally Ho are expected to be mined by conventional truck and excavator open pit methods. Potential underground operations will be based on decline development from near the base of the final Tally Ho pit.

Processing

The expected gold recovery from Fountain Head/Tally Ho is 90%.

History

Widespread historic alluvial mining has taken place at the Fountain Head area which later led to systematic exploration drilling campaigns. Zapopan NL recovered approximately 10,000 ounces of gold from alluvial deposits at Fountain Head between 1985 and 1989. Dominion Mining purchased Fountain Head in 1993 and developed a small trial open pit in 1995.

The Tally Ho lodes were discovered in late 2006 through an initial reverse circulation drilling program and subsequent diamond drilling program. The deposit was quickly expanded and brought into production.

GBS Gold produced approximately 60,241 ounces of gold from the area from 1,131,665 tonnes of ore grading 1.65 g/t gold in 2007 and 2008.

Fountain Head/Tally Ho Section

North Point/Princess Louise

The North Point and Princess Louise deposits lie within the same corridor as Tally Ho and Fountain Head within the Burnside tenement package approximately 150 kilometres south of Darwin.

Geology

The host rocks of North Point and Princess Louise comprise silt-greywacke-mudstone sediments of the South Alligator Group (Lower Mount Bonnie Formation). These are overlain by the Finniss River Group, comprising greywacke (flysch) sediments of the Burrell Creek Formation. The underlying Gerowie Tuff and local sills of Zamu Dolerite are exposed in the south of the area in the core of the fold. The dominant mineralized structural feature in the area comprises the west limb of the Yam Creek anticline that dips west at 50° to 60°. The east limb is steep to overturned and the axis plunges north at 10° to 30°.

The majority of mineralization is associated with quartz-filled tension gash veins within the greywacke, controlled by the refracted cleavage pattern. The veins are best developed near the hanging wall (western) contact of greywacke and mudstone, occurring as an echelon vein sets, vein thickness varying from stringers to over one metre.

Mining Method

North Point and Princess Louise are expected to be mined using conventional open pit mining methods.

Processing

The expected gold recovery from North Point/Princess Louise is 90%.

History

The area was historically one of the better known gold regions in the late 1800s, and was known for its large gold nuggets, the largest recorded at 700 ounces.

By 1901, a three compartment shaft had been sunk at North Point with two cross-cuts driven west at 42 metres and 62 metres as a prospecting exercise. The lodes in the 62 metre cross¬cut were reported to average 5 g/t gold over a width of 20 metres.

Further south at Princess Louise, 2,422 tonnes grading 51 g/t gold was reported as having been produced in 1891. Gold was recovered from east-dipping, at approximately 50°, quartz-sulphide veins within a west-dipping greywacke unit, four metres in thickness. The shoots were reported to plunge northerly at 30°.

GBS conducted exploration work in 2007 to expand the resource at North Point and Princess Louise.

Iron Blow/Mt Bonnie

The Iron Blow and Mt Bonnie projects are polymetallic prospects and are located 12 kilometres to the east of Brocks Creek in the Burnside tenement package located approximately 150 kilometres south of Darwin. Encouraging drill results have shown the potential for polymetallic mineralization on Crocodile Gold's properties, such as at Iron Blow and Mt Bonnie.

Geology

Iron Blow and Mt Bonnie are polymetallic massive sulphide deposits with mineralization including gold, silver, lead, zinc and copper. The deposits are developed within a folded Proterozoic sedimentary sequence. The mineralization occurs within lodes oriented in a north-south direction steeply dipping at approximately 70° to the east.

Both deposits have had small scale underground and open pit production.

Exploration Potential

Crocodile Gold completed an inferred resource estimate at Iron Blow in September 2009. The estimate included 3,174,876 tonnes at a grade of 2.08 g/t gold, 100.9 g/t silver, 3.28% zinc, 0.76% lead and 0.19% copper. The estimate was based on six diamond drill holes totalling 1,803.3 metres of HQ-diameter diamond drill core with mineralization ranging from 60 metres to 230 metres below surface occurring within six distinct lodes.

History

Iron Blow was first discovered in the late 1800s and was in production between 1898 and 1906. Several companies explored the property through the early 1900s and Geopeko completed a historical resource estimate in the late 1970s of 942,000 tonnes at a grade of 1.86 g/t gold, 97.3 g/t silver, 6.8% zinc, 0.8% lead and 0.4% copper. In 1984, contractor Henry Walker produced approximately 50,000 tonnes from the upper 40 metres of the deposit.

Mt Bonnie was first discovered in the early 1900s and was developed as an underground mine between 1912 and 1916. It was then dormant until 1973 when Geopeko drilled the property. Geopeko completed a historical resource estimate of 480,000 tonnes at a grade of 1.5 g/t gold, 186 g/t silver, 7.7% zinc, 1.8% lead and 0.4% copper.

GBS Gold completed the first phase of exploration drilling at Iron Blow and Mt Bonnie since the mid 1970s between June and August 2008. The program included six holes at Iron Blow and two holes at Mt Bonnie to test the down-dip continuity of the mineralization and to verify the historical data. The six diamond drill holes at the Iron Blow project totaled 1,803.3 metres. The two diamond drill holes at Mt Bonnie totaled 286.8 metres.

Iron Blow Long Section

Iron Blow Cross Section 9950N

Mt Bonnie Cross Section MB2