TIDMNGL
RNS Number : 3148B
Norseman Gold PLC
16 February 2011
Norseman Gold plc / Epic: NGL / Index: AIM / Sector: Mining
& Exploration
Final
16 February 2011
NORSEMAN GOLD PLC
('Norseman Gold' or 'the Company')
Capital Raising and Operational Update
Capital Raising
Norseman Gold, the AIM-listed and ASX-listed Australian gold
production company, announces that it has successfully completed a
private placement of 22,222,222 new ordinary shares ('Placing
Shares') at a price of 45 pence per Placing Share to raise
GBP10,000,000 (approximately A$16,000,000) before costs.
It is the intention of the Directors to apply the funds raised
to bring the North Royal open pit into production, and to provide
additional working capital.
Application will be made to have the Placing Shares admitted to
trading on AIM and trading is expected to commence on 21 February
2011.
Following the issue of the Placing Shares, Norseman Gold's
capital will consist of 219,942,222 ordinary 1.25p shares with
voting rights. This figure may be used by shareholders as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change to their
interest in, Norseman Gold under the FSA's Disclosure and
Transparency rules.
Production Forecast
The Company's efforts to stabilise and improve the production
profile at the existing Bullen and Harlequin Declines is beginning
to have a positive effect, while the new ore sources, OK Decline
and North Royal Open Pit, are poised to make a marked contribution
during the upcoming quarters.
As stated in the December 2010 quarterly results, the Company
has reviewed its forecasts following the establishment of the
production profile of these two major ore sources and after
reviewing the immediate and medium term forecasts from the existing
declines. The Company is now forecasting 2010/2011 full year
production at 65,000 ounces recovered. The reduction in the
forecast production profile is attributable to three main factors:
the decline in performance of the existing operating mines at
Bullen and Harlequin during the first half of the year; the slower
than expected ramp up to full production for the OK Decline due to
various infrastructure and access issues which are now resolved;
and the reduction in available hard rock feed from the North Royal
open pit which has reduced the amount of soft oxide material that
could be treated in the early stages of the mining schedule at the
pit.
The Company continues to make progress in executing its "fill
the mill' strategy with the treatment plant to be initially filled
with lower grade ore and then higher grade ore from July 2011. The
targeted production for the full year 2011/12 is between 120,000
and 140,000 recovered ounces which means the Company is still on
track to meet its medium term production target.
Operational Update
In addition, the Company provides the following update of
progress on the development of its mines at the Norseman Gold
Project.
Bullen Decline
Development at the Bullen Decline has now accessed the upper
levels of the historic Regent shaft, which is to be used for
ventilation and emergency egress, so that there are now no major
impediments to the commencement of stoping at the St Patrick's
reef. The access to this area also opens up the potential for the
mining of remnant stoping blocks, remnant pillars and the recovery
of ore on the floor of old stopes and drives of the historic Regent
underground workings.
Development has also continued towards the O'Brien's reef, the
planned new working area for this mine, with development currently
300 metres from accessing the first ore drive. Once this reef is
accessed in May 2011 it will establish another working area for
Bullen that will further stabilise the production profile.
Delivery has been taken of a new single boom drill rig, which
will increase the productivity of ore development at the mine. The
old drill rig will be converted to a long-hole stoping
configuration and will further increase the productivity of the
mechanised stoping at this mine and at Harlequin Decline.
A crew of miners has been established at Bullen Decline to
commence work on pillar recovery and stope clean-up in the old mine
workings. Towards the end of 2010, the Company commenced a trial of
different methods of recovery of broken ore and remnant pillars
from the extensive mine workings in its underground mines. This
remnant material was left by previous miners and is generally
higher grade material within historic stoping blocks. The Company
has now successfully completed its trials and received positive
geotechnical advice which will allow it to start controlled
extraction of this material and provide high grade resources to add
to the production profile.
The operating performance at Bullen has improved over the last
quarter and the outlook for production remains positive.
Harlequin Decline
The production profile at Harlequin has been unsatisfactory in
recent times, due to personnel shortages and reliability issues
with the underground production loaders. This has been exacerbated
by the heavy reliance on the mine as a production centre for
Norseman Gold and some poor medium and long term planning of the
mine. As a result, the production profile has suffered and the
operational strategy has been re-assessed. The focus at the mine
has been to fill the shortfall in personnel, to mine high grade
ore, and to establish a new mining area to reduce the reliance on
the Perch-Redfin reef as the major production centre.
To date, half the required personnel have been recruited. The
mine has also established a crew of miners to commence the stope
clean-up and ore recovery work similar to that commenced at the
Bullen Decline.
The mine has also commenced re-establishing the HV1 area as an
alternative mining centre with development and stoping to be
undertaken from this area into the HV1, HV1E, HV7 and HV10 reef.
The material to be mined at HV1 has been delineated by diamond
drilling that has been undertaken at Harlequin over the last six
months. It is also intended to drill the Perch-Redfin reef to
delineate and then close off the resource position up and down dip,
as well as along strike.
OK Decline
The ramp up of production at OK Decline has been slowed by the
delay in establishment of emergency egress, changes to the primary
ventilation system associated with ladder way installation and mine
dewatering, and delays in access to high grade areas of the Star of
Erin reef.
As of February 2011 the first two of these issues have been
resolved and stoping has commenced on the next scheduled stopes,
with a total of four stopes now available to be mined in the
schedule. Stoping has improved in tonnages to date and further
improvement is expected over the next few weeks.
The first encounter of high grade material in the Star of Erin
reef is expected in two weeks when the upper ore drive intersects
the zone at the location of a high grade drill hit.
Dewatering has continued in the lower levels of the mine as the
schedule focuses on accessing the deeper, higher-grade stoping
areas below the 22 Level. The decline now has a more complete
management team following the recruitment of a new underground mine
manager, senior mining engineer and project geologist.
North Royal Open Pit
The North Royal Open Pit continued to develop, with oxide ore
being mined and stockpiled for blending and treatment.
Dewatering has continued to proceed at an acceptable rate such
that the portal pillar above the old North Royal portal position
has now been exposed. Initial grade control drilling within this
area has not defined the required hard rock for immediate feed to
the treatment plant. It was expected that this area would provide
early hard rock ore to the treatment plant for blending with soft,
oxide material from higher up in the pit profile which has resulted
in the schedule to "fill the mill" with high grade material being
delayed to July 2011. In the interim, the treatment plant will
receive lower grade material from the North Royal open pit which
will create an associated reduction in ounces recovered for the
2010/11 financial year. Grade control drilling is continuing on the
portal pillar and the final results are expected in a few
weeks.
Overall, the reserve and resource for the initial stage 1 pit
remains unchanged at 51,000 ounces reserve and 100,000 ounces
resource.
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
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.
Significant results for drill-hole intercepts contained in this
report are considered significant because the grade by width total
is equal to or greater than 5.0 gram metres per tonne. That is if
the intercept is 1.0 g/t gold over 5.0 m, 5.0 g/t gold over 1.0 m,
50 g/t gold over 0.1 m etc it is considered significant.
Quoted resources and reserves are as per the Company's market
release of 25 August 2010 and as tabulated below.
TABLE 1: March 2010 Open Pit & Underground Resource and
Reserve Summary
Summary
for Open Pit - 31 Mar Underground - 31
Norseman 2010 Mar 2010 Total
Grade Grade Grade
g/t Ounces g/t Ounces g/t Ounces
Tonnes gold gold Tonnes gold gold Tonnes gold gold
----------- ------ ---------- ---------- ------ ---------- ----------- ------ ----------
Reserve -
Proved 0 0.0 0 230,000 12.0 89,000 230,000 12.0 89,000
----------- ------ ---------- ---------- ------ ---------- ----------- ------ ----------
Reserve -
Probable 440,000 3.2 45,000 1,100,000 7.9 280,000 1,500,000 6.8 330,000
----------- ------ ---------- ---------- ------ ---------- ----------- ------ ----------
Total
Reserve 440,000 3.2 45,000 1,300,000 8.9 370,000 1,700,000 7.7 420,000
----------- ------ ---------- ---------- ------ ---------- ----------- ------ ----------
Resource -
Measured 5,000,000 0.7 110,000 410,000 14.4 190,000 5,400,000 1.7 300,000
----------- ------ ---------- ---------- ------ ---------- ----------- ------ ----------
Resource -
Indicated 3,600,000 2.6 300,000 2,200,000 10.9 770,000 5,800,000 5.9 1,100,000
----------- ------ ---------- ---------- ------ ---------- ----------- ------ ----------
Resource -
Inferred 4,100,000 5.8 760,000 6,200,000 8.0 1,600,000 10,000,000 7.5 2,400,000
----------- ------ ---------- ---------- ------ ---------- ----------- ------ ----------
Total
Resource 13,000,000 2.9 1,200,000 8,800,000 8.9 2,600,000 21,000,000 5.3 3,800,000
----------- ------ ---------- ---------- ------ ---------- ----------- ------ ----------
Notes:
As is required the Resources and 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.
Resources are inclusive of reserves.
Resources and reserves are quoted to two significant figures so
inconsistencies may exist within the table.
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
Guy Wilkes Ocean Equities Ltd Tel: +44 (0)20 7786
4370
-------------------------- --------------------
Nandita Sahgal Seymour Pierce Ltd Tel: +44 (0)20 7107
8000
-------------------------- --------------------
Jeremy Stephenson Seymour Pierce Ltd Tel: +44 (0)20 7107
8000
-------------------------- --------------------
Hugo de Salis St Brides Media & Finance Tel: +44 (0)20 7236
Ltd 1177
-------------------------- --------------------
Susie Geliher St Brides Media & Finance Tel: +44 (0)20 7236
Ltd 1177
-------------------------- --------------------
E-mail investors@ngold.com.au
-------------------------- --------------------
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 ounces of gold. The
mine is currently producing from three high-grade narrow-vein
underground mines - the Bullen, the Harlequin and the OK Declines
and developing the North Royal Open Pit. Currently, it has a total
resource inventory of 3.8 million ounces of gold at an average
grade of 5.3 g/t.
The tenements cover a 2,180 sq km area centred on the Norseman
Township. The landholding comprises 221 tenements consisting of 16
Exploration Licences, 107 Mining Licences, 64 Prospecting Licences,
15 Miscellaneous Licences, 5 Exploration Licence Applications, 13
Prospecting Licence Applications and 1 Mining Lease
Application.
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 additional mines. The Company has
15 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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