Norseman Gold PLC (LON:NGL, ASX:NGX) has quantified the loss it expects to incur in the full year to end-June 2011 at between A$13 million and A$14 million, before tax and exceptional items, and gold production for the year has come in at 50,173 ounces.
The group had already flagged in April that it expects to see a full-year loss because the underground workings at the Norseman mine in Western Australia were making slower progress than forecast.
It had also cut the full-year production forecast to between 55,000 and 60,000 ounces from a previous figure of 65,000 ounces.
While today’s confirmation of production being below the April forecast will disappoint investors, the group pointed out that he fourth quarter saw ore production from the four mines - the North Royal open pit and the Harlequin, Bullen and OK declines - increase on previous quarters by some 16 percent and gold production increase by 27 percent.
In addition, 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.
Norseman currently expects the fourth quarter to 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 – when it launched a major review of the mining operations, including resourcing and mining schedules and programs, as well as job cuts.
“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,” Norseman said.
The finance facility refers to a deal the company struck earlier this month with EXP T1, part of metals-focused investment group Red Kite Group. Red Kite secured an offtake deal for up to 300,000 ounces and granted Norseman a working capital facility of up to A$15 million.
Norseman will publish an update on fourth-quarter performance before the end of July and will release full-year results on or before August 31.