Profit Update (8795K)

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RNS Number : 8795K

Norseman Gold PLC

22 July 2011

Norseman Gold plc / Epic: NGL / Index: AIM & ASX / Sector: Mining & Exploration

22 July 2011

Norseman Gold Plc. ('Norseman Gold' or 'the Company')

Profit Update

Norseman Gold, the AIM-listed and ASX-listed Australian gold production company provides the following guidance on its anticipated profit for the year to 30 June 2011, which is currently expected to show a loss of between A$13m and A$14m before tax and abnormal items, with full year gold production of 50,173 ounces. Preliminary results for the full year will be published on or before 31 August 2011.

The fourth quarter of the year saw ore production from the four mines during the quarter increase on previous quarters by some 16% and gold production increase by 27%. The quarter's results were impacted by weather conditions particularly during the last week of the month of June which restricted haulage ability and hence milling throughput and gold production.

It is anticipated that the fourth quarter will show a loss of between A$1.5 million and A$2.5 million, a significant improvement over the previous two quarters, which reflects the improved gold production achieved and the impact of the operational changes flagged in April. Free cash flow (cash generated from operations less capital expenditure), while still negative, improved by approximately 65% on the previous quarter.

At the end of the year, the Company estimates that it had approximately 2,000 ounces of gold sitting in ore stockpiles, of which 1,600 ounces is in North Royal oxide ore that requires blending, and the remaining 400 ounces is in ore from other sources which is available for immediate processing once it can be transported to the mill.

With the improved ore production from the three underground mines, plus the continued good progress with the North Royal open pit, the Company is confident that the finance facility announced on 4 July 2011 will provide sufficient funds if necessary to carry the Company through until North Royal comes into full production, and the fill the mill strategy is realised.

Further details of the full quarter's production and mine development progress will be set out in the Company's June quarterly update report, which will be released before the end of July 2011.

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 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 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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