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 unveils £12mln funding package; appoints new NOMAD and director
Norseman Gold (LON:NGL) said this morning it is raising £12 million in total via a placing of shares and convertible loan notes.
The AIM and ASX-listed gold miner said the new funds will provide the working capital required until the North Royal open pit turns cashflow positive.
In the same announcement the group also announced the appointment of David Steinepreis, the managing director of North River Resources, to the board as a trustee for the loan note holders.
Northland Capital Partners has been appointed nominated advisor and joint broker to the company.
In a production update the group revealed that in the three months to September 30, output from its operation in Western Australia was 11,631 ounces of gold at a cash cost of A$1,600 an ounce.
Norseman said the North Royal open pit has continued to ramp up and produce ore “broadly in line with schedule”.
It said the problems lie with the underground mines - Bullen, Harlequin and OK – which have failed to achieve forecast tonnage and grade levels.
“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 company told investors.
“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, the stockpile of lower grade ore awaiting treatment through the plant had increased to around 66,000 tonnes at 1.7 grams per tonne, Norseman added.
The group is attempting to increase production levels from the underground mines to “more normalised levels” by changing remuneration packages and introducing personal incentive bonus schemes, it revealed.
It also wants its workforce to be more mobile with development crews able to 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 company went on.
The loan notes will carry a 10 per cent coupon paid quarterly in arrears, while the stock is being issued in the share placing at 1.25 pence a share.
The company owns the Norseman Gold Project, Australia's longest continually running gold operation.
It is located in the Eastern Goldfields of Western Australia in the highly prospective Norseman-Wiluna greenstone belt, 725 kilometres east of Perth and 186 kilometres 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 the precious metal.
The mine is currently producing from three high-grade narrow-vein underground mines - the aforementioned Bullen, the Harlequin and the OK Decline.
And it is also mining the historic 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 grams per tonne.
