TIDMNGL
RNS Number : 8394Q
Norseman Gold PLC
26 October 2011
Norseman Gold plc. / Epic: NGL / Index: AIM / Sector: Mining
& Exploration
NORSEMAN GOLD PLC
('Norseman Gold' or 'the Company')
Company Update
Norseman Gold, the AIM-listed and ASX-listed Australian gold
production and exploration company is pleased to announce:
-- The appointment of Northland Capital Partners Limited as its
Nominated Adviser and joint Broker with immediate effect;
-- A placing of convertible loan notes to raise approximately GBP5.1 million
-- A proposed placing of new ordinary shares to raise approximately GBP6.9 million; and
-- The appointment of Mr. David Steinepreis to the Board of Directors
In addition, the Company is pleased to provide an update on
production from and developments in respect of the Norseman Gold
Project.
Appointment of Nominated Adviser
The Company is pleased to announce the appointment of Northland
Capital Partners Limited ("Northland") as its Nominated Adviser and
joint Broker with immediate effect. As a result of this
appointment, trading in the Company's share capital on AIM is
expected to resume at 7.30 am on 26 October 2011.
Fund Raising
The Company has raised GBP5,087,000 through a placing
("Convertible Loan Note Placing") of secured Convertible Loan Notes
(the "Convertible Loan Notes") and a conditional placing of up to
138,260,000 new ordinary shares of GBP0.0125 each in the capital of
the Company (the "Placing Shares") at a price of 5p per share to
raise an additional GBP6,913,000 ("the Equity Placing").
The Convertible Loan Notes will bear interest at a rate of 10%
payable quarterly in arrears (with the first payment due on 31
December 2011), have a duration of 24 months from the date of
issue, be convertible by the holder into up to 84,783,333 ordinary
shares of GBP0.0125 each in the capital of the Company ("Ordinary
Shares") ("Conversion Shares") at a price of 6 pence per Ordinary
Share, and carry a share purchase warrant ("Warrant") entitling the
holder (initially being the original holders of Convertible Loan
Notes in proportion to their original holdings thereof) to acquire
a further Ordinary Share at a price of 12 pence per Ordinary Share
for every Conversion Share (calculated by reference to the nominal
amount of the Convertible Loan Notes) at any time within 24 months
from the date of issue of the Convertible Loan Notes (giving an
aggregate of up to 84,783,333 Ordinary Shares arising on exercise
of the Warrants). It is anticipated that the Convertible Loan Notes
will be issued on or about 26 October 2011 and will not be admitted
to trading on AIM.
The conversion rights applicable to the Convertible Loan Notes
and the grant of warrants are conditional on receipt of shareholder
approval at the Company's Annual General Meeting which is expected
to take place on or about 9 December 2011. If such approvals and
any necessary waivers from ASX (or failing such waivers, further
shareholder approvals) are not obtained, the interest rate on the
Convertible Loan Notes will increase to 20% per annum and each
Convertible Loan Note holder will be entitled to require redemption
of his Convertible Loan Notes at any time after 31 January
2012.
The Convertible Loan Notes will be secured by a second ranking
fixed and floating charge and a second ranking mining mortgage over
certain mining leases and other assets relating to the Norseman
Gold Project, each granted by the Company's subsidiary Central
Norseman Gold Corporation Limited and ranking behind the security
granted to (and subject to a priority deed with) EXP T1 Ltd, a
subsidiary of RK Mine Finance Trust 1, a member of the Red Kite
group of funds, as announced on 4 July 2011. Mr David Steinepreis
will act as security trustee on behalf of the Convertible Loan Note
holders.
The Equity Placing is conditional upon, inter alia: the approval
of the Company's shareholders at the Annual General Meeting; the
placing agreement made between the Company and Ocean Equities
becoming unconditional and not being terminated in accordance with
its terms; and Admission (as defined below) becoming effective on
or before 30 December 2011.
The Company will apply for admission of the Placing Shares,
which represent approximately 62.9 per cent of the Company's
existing issued ordinary share capital, to trading on the AIM
market of the London Stock Exchange ("Admission"). It is expected
that Admission will take place and that trading will commence on or
around 12 December 2011.
The combined proceeds of the Equity Placing and the Convertible
Loan Note Placing will amount to up to GBP12 million and will
provide additional working capital required to see the Company
through to the point where production from the North Royal Open Pit
is anticipated to turn the operation into a cash flow positive
position.
Production Update
Gold production from the Norseman Gold Project for the 3 month
period ended 30 September 2011 totalled approximately 11,631 ounces
at cash costs in the region of A$1,600 per ounce.
While the North Royal Open Pit has continued to ramp up and
produce ore broadly in line with schedule, the underground mines,
Bullen, Harlequin and OK have underperformed during the quarter and
failed to achieve forecast tonnage and grade levels as a result of
production falling behind schedule. One of the key issues affecting
production has been a general lack of experienced underground
operators, support staff (such as engineers and geologists with
underground experience), and mechanical fitters.
The underperformance of the underground mines has resulted in
reduced volumes of hard-rock ore with which softer oxide ore from
North Royal can be blended. As a result, at the end of September
2011, the stockpile of lower grade ore awaiting treatment through
the plant had increased to approximately 66,000 tonnes at 1.7
g/t.
Management are currently seeking to increase production levels
from the underground mines to more normalised levels by changing
remuneration packages and introducing personal incentive bonus
schemes, and having a more mobile workforce where development crews
move between mines to where the priority headings and budgeted
areas are scheduled. Talks are also taking place with underground
development contracting companies to assist in increasing overall
development rates.
The Company is continuing to focus on training new entrants to
the mining industry, and training its current employees to improve
their skills and capabilities to further relieve the operator
shortage and to assist with retention.
The North Royal Open Pit continues to progress. Mining at the
northern end of the pit has reached the 235m RL, and is expected to
reach the 225m RL within the current quarter, where models show the
first 4,500 tonnes of hard rock will be mined at a grade of 3.0 g/t
and then in the next flitch a further 5,500 tonnes of hard rock ore
at a grade 7.6 g/t. Once development has reached this level, it is
anticipated that production from the North Royal Open Pit will
start to provide a steady supply of hard rock ore to the treatment
plant. As a result, gold production for the quarter to 31 December
2011 is expected to increase significantly, and annual production
is still expected to be within guidance of approximately 100,000
ounces for the year ending 30 June 2012.
Further details on the Company's current production and
operating results will be provided in the Company's Quarterly
Report for the period which will be released by the end of October
2011.
Appointment of Director
The Company is pleased to announce the appointment of Mr David
Steinepreis to the Board of Directors with immediate effect.
David Christian Steinepreis (aged 54) is a Chartered Accountant
and a former partner of International accounting firm, KPMG, where
he specialised in strategic corporate advice and taxation for
listed companies. In 1987, Mr Steinepreis entered commerce as a
director, adviser and shareholder of a number of ASX listed
companies in the gold, diamonds, oil and new mining technology
sectors and since that time he has gained a reputation in the
junior mining sector for building a series of successful
enterprises in Australia and the UK.
Mr Steinepreis, a UK resident since 2006, is Managing Director
of AIM listed North River Resources Plc and was formerly a director
of Norseman Gold Plc, having resigned on 30 July 2010 to pursue
other interests.
In addition to his directorship with the Company, Mr Steinepreis
holds or has held the following directorships/partnerships within
the five years immediately prior to the date of this
announcement:
Current Directorships/Partnerships Past Directorships/Partnerships
----------------------------------- --------------------------------
North River Resources plc Davos Resources Pty Ltd *
----------------------------------- --------------------------------
NRR Mozambique Limited Monto Minerals Ltd *
----------------------------------- --------------------------------
Pelamis Investments Limited Agri Energy Ltd *
----------------------------------- --------------------------------
N&J Mitchell Holdings Pty Ltd* Norseman Gold plc
----------------------------------- --------------------------------
NRR Energy Minerals Limited Norseman Gold Pty Ltd *
----------------------------------- --------------------------------
West Africa Gold Exploration Imperial Petroleum Limited
(Namibia) (Proprietary) Limited^
----------------------------------- --------------------------------
Namib Lead and Zinc Mining Central Norseman Gold Ltd*
(Proprietary) Limited^
----------------------------------- --------------------------------
North River Resources (Namibia) Leopard Minerals Limited
(Proprietary) Limited^
----------------------------------- --------------------------------
Ascent Capital Pty Ltd *
----------------------------------- --------------------------------
Avalon Minerals Ltd *
----------------------------------- --------------------------------
Black Fire Minerals Ltd *
----------------------------------- --------------------------------
Cetacean Petroleum Pty Ltd
*
----------------------------------- --------------------------------
Croesus Mining Pty Ltd *
----------------------------------- --------------------------------
Elixir Petroleum (Australia)
Pty Ltd *
----------------------------------- --------------------------------
Excelsior Gold Limited *
----------------------------------- --------------------------------
Lachlan Star Limited *
----------------------------------- --------------------------------
Laguna Resources NL*
----------------------------------- --------------------------------
Mansmar Investments Pty Ltd
*
----------------------------------- --------------------------------
Monitor Energy Limited *
----------------------------------- --------------------------------
North River Resources Pty Ltd
*
----------------------------------- --------------------------------
RMG Limited *
----------------------------------- --------------------------------
Signature Metals Limited *
----------------------------------- --------------------------------
Sirius Resources NL *
----------------------------------- --------------------------------
Sundance Gold Ltd *
----------------------------------- --------------------------------
Toodyay Uranium Pty Ltd *
----------------------------------- --------------------------------
WAG Limited *
----------------------------------- --------------------------------
Ascent Capital Holdings Pty
Ltd*
----------------------------------- --------------------------------
All companies listed above are registered in the UK save for
those marked with an asterix which are registered in Australia and
those marked with a ^ are registered in Namibia.
The following additional information on Mr Steinepreis is
disclosed pursuant to Schedule Two paragraph (g) of the AIM
Rules:
David Steinepreis was a director of Ascent Capital Holdings Pty
Ltd ("Ascent"), a company formed to pursue, amongst other things,
the reconstruction and recapitalisation of existing stock exchange
quoted companies. From its formation, Ascent successfully
recapitalised and relisted 23 Australian companies on the ASX. Each
of the 23 companies recapitalised by Ascent was placed under
external administration either prior to Ascent recapitalising the
company or as part of Ascent's recapitalisation of the company. As
a consequence, Mr Steinepreis was appointed a director of companies
in administration or placed companies into administration. Mr
Steinepreis was a director of the following Australian and UK
registered companies in administration, all of which have been
successfully released from administration.
Company
Copperco Limited
Imugene Limited
Synergy Metals Ltd
View Resources Ltd
Resonance Health Ltd
Extract Resources Ltd
Salus Technologies Ltd
Medivac Limited
Service Stream Ltd
IM Medical Limited
Mobi Limited
OBJ Limited
Monitor Holdings Limited
Black Range Minerals Limited
Deep Yellow Limited Western Metals Ltd
Toodyay Resources Limited
RMG Limited
Signature Brands Limited
WAG Limited
Southern Pacific Petroleum NL
Croesus Mining Ltd
Monto Minerals Ltd
Agri Energy Ltd
Save for the above, there is no further information to be
disclosed in relation to Mr Steinepreis in accordance with the
requirements of Schedule Two (g) of the AIM Rules.
Management participation
There is no Board participation in the Equity Placing.
Board participation in the Convertible Loan Note Placing is as
follows:
Party Amount of Convertible Loan
Notes
Pelamis Investments Limited GBP250,000
David Steinepreis is a director
and shareholder
Ascent Capital Holdings Pty GBP250,000
Ltd,
Gary Steinepreis is the sole
director of the Company and
the family interests of Gary
and David Steinepreis each
own 50% of the issued ordinary
share capital
Participation by the directors of the Company ("Directors") in
the Convertible Loan Note Placing is classified as a related party
transaction under the AIM Rules for Companies. The Directors, with
the exception of those involved in the transaction as noted above,
having consulted with Northland, consider that the terms of the
Convertible Loan Note Placing are fair and reasonable insofar as
the Company's shareholders are concerned. The participation by the
Directors requires shareholder approval in accordance with the ASX
Listing Rules.
Mr Steinepreis will receive a fee of GBP20,000 from Ocean
Equities Limited for his services in connection with the
Convertible Loan Note Placing and the Equity Placing.
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 28 July 2011 and as tabulated below.
TABLE 1: March 2011 Open Pit & Underground Resource and
Reserve Summary
Summary for Open Pit - 31 Mar Underground - 31 Total
Norseman 2011 Mar 2011
---------------- ----------------------------- ------------------------------- -------------------------------
Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces
g/t gold g/t gold g/t gold
gold gold gold
---------------- ----------- ------ -------- ----------- ------ ---------- ----------- ------ ----------
Reserve -
Proved 13,000 1.8 760 320,000 8.3 85,000 330,000 8.5 90,000
---------------- ----------- ------ -------- ----------- ------ ---------- ----------- ------ ----------
Reserve -
Probable 1,000,000 3.1 99,000 990,000 7.2 230,000 2,000,000 5.1 330,000
---------------- ----------- ------ -------- ----------- ------ ---------- ----------- ------ ----------
Total Reserve 1,000,000 3.1 100,000 1,300,000 7.7 320,000 2,300,000 5.7 420,000
---------------- ----------- ------ -------- ----------- ------ ---------- ----------- ------ ----------
Resource
- Measured 5,000,000 0.7 110,000 580,000 12.3 230,000 5,600,000 1.9 340,000
---------------- ----------- ------ -------- ----------- ------ ---------- ----------- ------ ----------
Resource
- Indicated 4,100,000 2.7 360,000 2,600,000 9.0 750,000 6,700,000 5.1 1,100,000
---------------- ----------- ------ -------- ----------- ------ ---------- ----------- ------ ----------
Resource
- Inferred 3,200,000 2.8 290,000 6,900,000 7.7 1,700,000 10,000,000 6.2 2,000,000
---------------- ----------- ------ -------- ----------- ------ ---------- ----------- ------ ----------
Total Resource 12,000,000 1.9 760,000 10,000,000 8.3 2,700,000 22,000,000 4.7 3,400,000
---------------- ----------- ------ -------- ----------- ------ ---------- ----------- ------ ----------
Notes:
1. 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.
2. Resources are inclusive of reserves.
3. 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: 020 7786 4370
William Vandyk / Rod Venables Northland Capital Partners Ltd
Tel: 020 7796 8800
Susie Geliher St Brides Media & Finance Ltd Tel: 020 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 3.4 million ounces of gold at an average
grade of 4.7 g/t.
The tenements cover a 2,360 sq km area centred on the Norseman
Township. The landholding comprises 221 tenements consisting of 85
Exploration Licences, 108 Mining Licences, 3 Prospecting Licences,
15 Miscellaneous Licences, 5 Exploration Licence Applications, 4
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
MSCUVUBRANARUAA
Norseman Gold (LSE:NGL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Norseman Gold (LSE:NGL)
Historical Stock Chart
From Jul 2023 to Jul 2024