www.norsemangold.com
Norseman Gold plc is an AIM and ASX listed gold production and exploration company. Its key asset is the Norseman Project, which lies at the southern extent of the Norseman-Wiluna Greenstone Belt in the Eastern Gold fi elds Province of the Yilgarn Block, Western Australia. The Norseman Project is operated and managed by resource specialist, Tulla Resources Group Pty Ltd, which is focussed on producing 100,000 ounces of gold per annum by 2014 and increasing the resource base, currently standing at 3.4 million ounces of gold at an average grade of 4.7g/t. A review of operations is currently underway aimed at maximising future production and reducing costs.
Norseman Gold Prospects Underrated by the City, says Seymour Pierce
Broker Seymour Pierce has repeated its buy advice after a positive update from Norseman Gold (AIM:NGL).
Mining analyst Asa Bridle reckons the mining junior is currently trading on a ‘weighted average resource metric’ of just US$34 an ounce of gold, compared with the sector average of around US$100 an ounce.
Applying the ‘weighted average’ to Norseman would give a share price of 117p a share, compared with 42.5p currently, Bridle concludes.
‘So the valuation anomaly in the share price on this measure (and in fact on all other metrics we use in gold company valuation) is clear to see,’ he adds.
Yesterday, Norseman announced an upgrade in both reserves and resources at it Western Australia mine.
It is the third consecutive year the company has increased the resource estimate for the Norseman Gold Project in the Eastern Goldfields and the second time reserves have gone up.
The Aim listed digger, which is also quoted on the Australian Stock Exchange, said its reserves increased by 5 per cent to 420,000 ounces of gold from 1.7 million tonnes at 7.7 grams of gold per tonne.
The resource base, meanwhile, creeps up 3 per cent to 3.8 million ounces of the precious metal from 21 million tonnes at 5.3 grams per tonne.
Of the total Reserves, 330,000 ounces of gold are located within the Bullen, Harlequin and OK declines.
The inclusion of ounces from the North Royal open pit optimisation should see the project grow further, while the results of drilling programme should also unearth more resources, the firm said.
‘With ongoing drilling and the upgrade of the 520koz Inferred resource at North Royal to come, the potential for further increases in the reserve/resource base looks likely despite the rising annual production rate,’ Seymour Pierce’s Bridle adds.
A gold price of A$1,200 per ounce has been used to assess the economic viability of Norseman’s resource and reserve.
