TIDMNGL
RNS Number : 9449E
Norseman Gold PLC
15 April 2011
Norseman Gold plc / Epic: NGL / Index: AIM & ASX / Sector:
Mining & Exploration
15 April 2011
Norseman Gold Plc ('Norseman Gold' or 'the Company')
Production and Profit Update
Norseman Gold, the AIM-listed and ASX-listed Australian gold
production company provides the following updated forecast of gold
production and full year profit.
Production Update
While the North Royal open pit has continued to ramp up and
produce ore broadly in line with schedule, the OK Decline has
continued to make slow progress in its ramp up, and the existing
underground mines, Bullen and Harlequin, have continued to struggle
to lift production to acceptable and forecast levels with treated
tonnage and grade below expectations.
The underperformance of the underground mines has had the double
headed effect of producing lower tonnes and consequently poured
gold, as well as reduced volumes of hard-rock ore with which softer
oxide ore from North Royal can be blended. As a result, as at the
end of March 2011, Norseman currently has a stockpile of lower
grade ore, approximately 12,000 tonnes at 1.7 g/t gold, from the
North Royal Open Pit awaiting blending material to allow it to be
treated.
The Company has spent considerable time preparing and examining
the latest detailed production schedules from the four mines in the
run up to year end in order to provide a more accurate forecast of
gold production for the year. As a result and based on these latest
mining schedules, gold production for the year is now forecast to
be 55,000 to 60,000 ounces.
Profit Update
The profitability of the Company is inextricably linked to gold
production. During this year, the Company has increased its
resources in anticipation of the increase of gold production from
its four mines.
The fact that production has not achieved anticipated levels,
and is now unlikely to in the remaining months of this financial
year, means that profitability will be impacted. The Company now
forecasts that it will post an operating loss of between
(A$5million) and (A$8million) before tax and abnormal items. This
is against last year's operating profit of A$0.2 million.
The Company is currently undertaking a major review of the
mining operations, including resourcing and mining schedules and
programs, in order to mitigate these anticipated losses to the
fullest extent possible until performance at the underground mines
begins returning to acceptable levels. This review is likely to
include a reduction in manpower. The Board and management have also
made a number of other decisions which are intended to immediately
minimise the costs incurred at the operation in the short term and
preserve cash resources.
Further details of this operational review are expected to be
set out in the Company's March'11 quarterly update report, which
will be released before the end of April.
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 Tel: +61 (0)
Plc 8 9473 2200
Guy Wilkes Ocean Equities Tel: +44
Ltd (0)20 7786
4370
----------------- -------------
Nandita Seymour Pierce Tel: +44
Sahgal Ltd (0)20 7107
8000
----------------- -------------
Jeremy Seymour Pierce Tel: +44
Stephenson Ltd (0)20 7107
8000
----------------- -------------
Hugo de Salis St Brides Media Tel: +44
& Finance Ltd (0)20 7236
1177
----------------- -------------
Susie Geliher St Brides Media Tel: +44
& Finance Ltd (0)20 7236
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 oz of gold. The mine
is currently producing from three high-grade narrow-vein
underground mines - the Bullen, Harlequin and the OK Decline - and
the North Royal open pit. Currently, it has a total resource
inventory of 3.8 million oz 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 a fourth and subsequent mines.
The current treatment plant capacity is 720,000 tonnes per annum
and, at capacity, the treatment plant can produce up to 140,000
ounces of recovered gold.
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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