Operations Update - March 2010 - Replacement
March 10 2010 - 4:17AM
UK Regulatory
TIDMNGL
RNS Number : 3544I
Norseman Gold PLC
10 March 2010
THE FOLLOWING ANNOUNCEMENT REPLACES RNS 3504I RELEASED AT 8AM TODAY. "OK
DECLINE RESERVE TABLES AND STATEMENTS" NOW INCLUDED.
ALL OTHER DETAILS REMAIN UNCHANGED.
Norseman Gold Plc ('Norseman Gold' or 'the Company')
Operations Update March 2010
Norseman Gold, the AIM-listed and ASX-listed Australian gold production company,
provides an update to its operations at the Norseman Gold Project.
Summary
· The focus on production operations has continued with improvements at the
Harlequin Decline. The Bullen Decline has continued to disappoint and will not
recover its production profile in the current financial year. The OK Decline
continues to be on schedule but cannot be accelerated to make up for the Bullen
production shortfall. As a consequence the Company has revised its production
guidance down to 65,000 ounces for the current 2009/10 financial year. The
production forecast for the financial year commencing 1st July 2010 remains
unchanged at between 105,000 and 110,000 ounces.
· At the OK Decline, the first analysis of the Star of Erin orebody has been
completed. The initial Star of Erin reserve is 17,000 ounces which increases
the OK Decline reserve by over 30%. Drilling into the Star of Erin orebody
continues with more than 10,000 metres of drilling yet to be completed, giving
confidence that further resources will be delineated in this orebody.
· At North Royal, the Company's potential fourth mine, dewatering has
continued with the pit now over one third dewatered. First round drilling on
the southern end of the pit has returned promising results particularly around a
footwall structure. Follow-up extensional and infill drilling will commence
this month. Work will also commence on regulatory approvals in anticipation of
commencing mining by the last quarter of the 2010 calendar year.
· Surface drilling has commenced on Crown Reef, potentially the Company's
fifth mine, with a structure intersected in the expected position in the initial
drill holes. Assay results are pending.
· The Company will continue to invest funds on capital and ore development
and exploration programmes to drill and delineate further resources as part of
its 'fill-the-mill' strategy.
Production
The Company currently has three operating mines, Bullen, Harlequin and the
developing OK Decline. It is also exploring and developing for potential fourth
and fifth mines to fulfil its strategy of filling its treatment plant to
capacity.
The focus on capital and ore development at the Harlequin Decline has had a
positive impact on the production profile of the mine. Capital development has
been completed to the next level and ore development has now exposed both the
Redfin and the Perch Reef with the development faces showing good quartz reef
structure. Further development of the Perch Reef above this level has also
continued to show good structure which was anticipated from drilling results.
Development has continued to delineate stoping panels for airleg and mechanised
mining. Diamond drilling is ongoing and has continued to delineate further
resources for mining.
Development of the OK Decline has progressed on schedule. Refurbishment of the
decline workings has now reached 260 metres below surface, and full-face firing
has commenced at 237 metres below surface. Ore development has continued at the
105m level on the Star of Erin orebody. This drive is developing towards the
high grade blocks delineated in Star of Erin below 105 metres and is currently
15 metres away from the anticipated commencement of the first block.
Refurbishment and capital development will open up other ore development faces
as it progresses deeper from the 260 metre level. Diamond drilling is ongoing
and has continued to delineate further resources for mining.
The Bullen Decline has been disappointing with diamond drilling delineating less
resources than expected, and development and stoping accessing smaller areas of
high grade ore than anticipated. Capital development has recommenced with the
two-boom jumbo returning from Harlequin Decline. The jumbo is currently
developing the decline to the next level of the Bullen Reef and concurrently
developing the incline to the next level of the St Patrick's Reef. The diamond
drill has continued to work through the multiple targets available to generate
additional resources for mining. The Company has purchased its fourth
underground drill rig to enable the drilling of resource targets to be
accelerated.
The Company has been re-allocating its resources of personnel and equipment to
maximise production by relocating resources from Bullen to Harlequin and OK.
The Company is revising its forecast production guidance for the full year to
June 2010 to 65,000 ounces compared to the previous forecast of between 75,000
to 80,000 ounces. The main reason for this revision is that the Bullen Decline
is unlikely to return to its expected production profile prior to June 2010 and
the Harlequin and OK Declines have limited capacity for increasing their
production profiles to make up for the expected Bullen shortfall.
The Company always acknowledged that while there were two mines in operation,
utilising only 60% capacity of the treatment plant there would be the potential
for fluctuations in gold produced on a quarterly basis, as is common with high
grade nuggetty gold orebodies. The focus of the Company therefore remains on
filling the treatment plant by development of the third and subsequent mines
thereby maximising production and providing operational flexibility. The
Company remains committed to this strategy as demonstrated by the successful on
time and on budget commencement of the OK Decline, the continued dewatering and
drilling of the North Royal open pit and the commencement of the initial
drilling at Crown Reef. There has been extensive capital investment in these
prospects and the Company remains confident that there will be a significant
return on this investment well into the future.
Consequently, guidance for the financial year commencing 1st July 2010 remains
unchanged at 105,000 to 110,000 ounces as the Company expects the OK Decline to
ramp up to full production while the Bullen Decline production recovers.
Mine Exploration
Diamond drilling at Harlequin Decline has been focused on the Redfin and Perch
Reef. Significant results have been received as follows:
· 1.9m @ 22.3 g/t gold from 26.5m including
o 0.3m @ 45.6 g/t gold in drill-hole HD1780
· 1.7m @ 9.7 g/t gold from 160.1m including
o 0.5m @ 19.2 g/t gold in drill-hole HD1788
· 1.6m @ 37.3 g/t gold from 35.4m including
o 0.5m @ 105.5 g/t gold and
· 1.3m @ 4.1 g/t gold from 40.3m in drill-hole HD1792
The diamond drill will continue to drill the depth extensions of the Redfin Reef
and the Perch Reef in all directions for the foreseeable future.
Diamond drilling at Bullen Decline has been focused on delineating resources
immediately surrounding the current production centres. Significant results
have been received to the north of the Mt Barker Fault as follows:
· 2.4m @ 10.3 g/t gold from 42.2m including
o 0.8m @ 29.4 g/t gold from 43.8m in drill-hole BN709
Diamond drilling will continue to target areas adjacent to the currently mined
reef, namely Norseman, St Patricks, Mt Barker, Bullen and Mararoa.
Diamond drilling at OK Decline has continued to focus on the Star of Erin
orebody with the following significant results:
· 0.9m @ 42.6 g/t gold from 48.9m in drill-hole OKD247
· 0.4m @ 22.9 g/t gold from 52.0m in drill-hole OKD250
· 1.7m @ 7.8 g/t gold from 45.0m including
o 0.2m @ 40.3g/t gold from 45.3m in drill-hole OKD251
· 1.0m @ 30.2 g/t gold from 41.0m in drill-hole OKD323
There remains over 10,000 metres of drilling to be conducted at the Star of Erin
giving the Company confidence that further resources will be delineated on this
orebody.
Resource and reserve analysis work has been completed on the current Star of
Erin data and has resulted in an initial reserve of 110,000 tonnes at 4.8 g/t
gold for 17,000 ounces of gold. This has resulted in the reserve at OK Decline
being increased by over 30% to 75,000 ounces. Further improvements are expected
as the ongoing drilling programmes are completed.
The OK Decline reserve tables and statements are outlined below;
+-----------+-----------+-------+--------+
| OK -Star | 01-March-2010 |
| of Erin | |
+ +----------------------------+
| | Tonnes | Grade | Ounces |
+-----------+-----------+-------+--------+
| Reserve - | 0 | 0.0 | 0 |
| Proved | | | |
+-----------+-----------+-------+--------+
| Reserve - | 110,000 | 4.8 | 17,000 |
| Probable | | | |
+-----------+-----------+-------+--------+
| Total | 110,000 | 4.8 | 17,000 |
| Reserve | | | |
+-----------+-----------+-------+--------+
+-----------+-----------+-------+--------+
| OK -Total | 01-March-2010 |
+ +----------------------------+
| | Tonnes | Grade | Ounces |
+-----------+-----------+-------+--------+
| Reserve - | 69,000 | 7.2 | 16,000 |
| Proved | | | |
+-----------+-----------+-------+--------+
| Reserve - | 400,000 | 4.6 | 59,000 |
| Probable | | | |
+-----------+-----------+-------+--------+
| Total | 470,000 | 5.0 | 75,000 |
| Reserve | | | |
+-----------+-----------+-------+--------+
Notes: 1. As is required the Reserves are calculated and reported in
accordance with the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves, The JORC Code, 2004 Edition.
2. Resources and reserves are quoted to two significant figures
so inconsistencies may exist within the tables.
The compilation of information in this report, and calculation, or review, of
reserves in this has been undertaken by Mr. Russell McBeathB.Eng (Mining), who
is a member of the Australasian Institute of Mining and Metallurgy, and the
Principal Mining Engineer of the company.Mr McBeath has over 19 years of mining
and evaluation experience in a variety of mineral deposit styles and has
sufficient experience which is relevant to the style of mineralisation and type
of deposit under consideration and to the activity which he is undertaking to
qualify as a competent person as defined in the 2004 edition of the
"Australasian Code for reporting of exploration results, Mineral Resources and
Ore Reserves".Mr McBeath is accepting overall responsibility for this estimate
and is satisfied that the work of other contributors is acceptable. Mr McBeath
consents to the information in this report being used and quoted by the company
for reporting and other purposes in the context in which it appears.
Regional Exploration and Mine Development
North Royal
Dewatering of the North Royal open pit has continued to progress. The programme
has now completed about one third of the dewatering of the open pit. Drilling
has been completed at the southern end of the pit with significant results as
follows:
· 0.6m @ 30.1 g/t gold from 141.7m in drill-hole NRD020
· 1.0m @ 17.9 g/t gold from 144.0m and
· 1.0m @ 6.5 g/t gold from 147.0m and
· 1.7m @ 3.7 g/t gold from 157.0m including
o 0.7m @ 7.4 g/t gold from 158.0m in drill-hole NRD021
· 0.6m @ 17.4 g/t gold from 103.4m in drill-hole NRD024
· 1.0m @ 14.1 g/t gold from 106.0m and
· 0.6m @ 249.0 g/t gold from 111.7m in drill-hole NRD027
· 1.0m @ 363.0 g/t gold from 127.0m in drill-hole NRD029
· 2.0m @ 2.9 g/t gold from 12.0m in drill-hole NRD036
· 0.8m @ 8.3 g/t gold from 142.2m in drill-hole NRD037
The drilling has delineated a potential footwall reef to the south of the North
Royal open pit. This reef appears to have some extent along strike and to come
close to the surface. Follow up extensional (to the south) and infill drilling
(closer to the surface) will be completed on this reef once the initial
programme at the Crown Reef is completed.
Crown Reef
Initial drilling has commenced on Crown Reef, which is the Company's third
resource development target following OK Decline and North Royal open pit. The
programme currently underway is designed to test the higher section of Crown
Reef close to the surface. The initial holes in this programme have intersected
reef structure in the vicinity of the interpreted target area but assay results
are still pending. Further work on Crown Reef will be based around the degree
of success of this initial programme.
Competent Persons - Consent for Release
The information in this report that relates to Exploration Results, Mineral
Resources and Ore Reserves is based on data generated by employees of Central
Norseman Gold Corporation Limited who have the relevant experience and
qualifications to qualify as competent persons.
The parts of this report that relate to Exploration Results, Mineral Resources
and Ore Reserves were compiled by Barry Cahill, CEO of Norseman Gold Plc, using
that data. He is a Member of the Australasian Institute of Mining and
Metallurgy and has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which
they are undertaking to qualify as a Competent Person as defined in the 2004
Edition of the "Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves". He has consented to the inclusion in the report of
the matters based on this information in the form and context in which it
appears.
Forward-Looking Statements
This regulatory news release contains certain forward looking statements, which
include assumptions with respect to future plans, results and capital
expenditures. The reader is cautioned that assumptions used in the preparation
of such information may prove to be incorrect. All such forward looking
statements involve substantial known and unknown risks and uncertainties,
certain of which are beyond the Company's control. Please refer to the
Company's Admission Document available from the Company's web site for a list of
risk factors. The Company's actual results could differ materially from those
expressed in, or implied by, these forward-looking statements and, accordingly,
no assurances can be given that any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of them do so,
what benefits the Company will derive there from. All subsequent
forward-looking statements, whether written or oral, attributable to the Company
or persons acting on its behalf are expressly qualified in their entirety by
these cautionary statements. Furthermore, the forward-looking statements
contained in this news release are made as at the date of this news release.
**ENDS**
For further information visit www.norsemangoldplc.com or contact:
+--------------+------------------------+------------------------+
| Barry Cahill | Norseman Gold Plc | Tel: +61 (0) 8 9473 |
| | | 2200 |
| | | E-mail: |
| | | investors@ngold.com.au |
+--------------+------------------------+------------------------+
| Guy Wilkes | Ocean Equities Ltd | Tel: +44 (0) 20 7786 |
| | | 4370 |
+--------------+------------------------+------------------------+
| Nandita | Seymour Pierce Ltd | Tel: +44 (0) 20 7107 |
| Sahgal | | 8000 |
+--------------+------------------------+------------------------+
| Hugo de | St Brides Media & | Tel: +44 (0) 20 7236 |
| Salis / | Finance Ltd | 1177 |
| Isabel | | |
| Crossley | | |
+--------------+------------------------+------------------------+
Note to editors:
Norseman Gold plc is an AIM listed and ASX listed Australian gold production
company, which acquired the Norseman Gold Project in May 2007, Australia's
longest continually running gold operation. The Norseman Gold Project is
located in the Eastern Goldfields of Western Australia in the highly prospective
Norseman-Wiluna greenstone belt, 725km east of Perth and 186km from Kalgoorlie.
Gold was first found on the Norseman field in 1894 and over the last 65 years it
has produced over 5.5 million oz of gold. The mine is currently producing from
two high-grade narrow-vein underground mines - the Bullen and the Harlequin with
development now commenced at the third mine, OK Decline. Currently, it has a
total resource inventory of 3.7 million oz of gold at an average grade of 5.5
g/t.
The tenements cover a 1,614 sq km area centred on the Norseman Township. The
landholding comprises 179 contiguous tenements consisting of 13 Exploration
Licences, 106 Mining Licences, 45 Prospecting Licences, 15 Miscellaneous
Licences and 29 Mining Lease Applications.
The Company's strategy is focused on extending the mine life through the
conversion of resources into reserves and identifying additional resources and
obtaining additional ore for the operating mill through the development of a
third mine. The Company has fifteen advanced resource projects under review of
which three have pre-development work being undertaken on them. It is
anticipated that at least one if not all the pre-development projects will
develop into mining propositions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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