25th Sep 2009 07:30
Norseman Gold plc / Epic: NGL / Index: AIM & ASX / Sector: Mining & Exploration
Norseman Gold Plc ('Norseman Gold' or 'the Company')
Operations Update September 2009
Norseman Gold, the AIM-listed and ASX-listed Australian gold production company is pleased to announce the completion of a positive pre-feasibility study on the OK decline, commencement of dewatering at the North Royal open pit, and to provide an update to its operations at the Norseman Gold Project.
Summary
Current Operations
Record capital development and ore development will be achieved for the quarter, the highest since the Company acquired the Norseman Project, as the Company has focussed on development to open up more areas for drilling, development and stoping.
The lower grade of the development is likely to result in lower than forecast production, with production for the quarter expected to be in the vicinity of 16,000 ounces of gold recovered.
The Company is maintaining its forecast production guidance for the full year to 30 June 2010 of between 75,000 ounces and 80,000 ounces of gold recovered at a cash cost of between A$720 per ounce to A$780 per ounce.
Third Mine Development
The pre-feasibility study on the OK Decline has demonstrated the ability to support a mining operation over an initial two years, producing 55,000 ounces at cash costs of between A$720 and A$780 per ounce.
A detailed mining study has commenced with a possible project commencement in the December 2009 quarter and first ore in the March 2010 quarter. This production will increase the utilisation of the Company's treatment plant which is currently processing ore from the Bullen and Harlequin Declines.
North Royal dewatering has been successfully commissioned. Pit dewatering will allow infill drilling to be undertaken. This will allow mining studies to be completed in preparation for mining of the resources in the northern end of the pit.
In anticipation of the development of the Third Mine, the Company has committed to the expansion of its mining fleet, with the first item, a new two boom jumbo, delivered in September with the remaining items due to be delivered over the remainder of the current financial year.
Production
During the September 2009 quarter, the Company has focussed on the maximisation of capital development and on ore development. This is to ensure access to drill positions to enable the timely drilling of new resources and reserves (particularly in newer areas such as the Perch Reef at Harlequin), for capital development to access new areas for ore development, and for the ore development to open up the next areas for stoping. In total, it is expected that in excess of 600 metres of capital development and 1,500 metres of ore development will be completed for the quarter, both records for the Project since the Company acquired the Norseman operations.
Production for the quarter is currently estimated to be in the region of 16,000 ounces of gold recovered for the quarter, below the Company's target of producing 6,500 ounces per month, largely as a result of the lower grade development ore processed through the treatment plant. The Company is maintaining its forecast production guidance for the full year of between 75,000 and 80,000 ounces of gold recovered as it is confident that the first quarter short fall can be made up over the next three quarters of this financial year.
Costs
As a result of the lower production profile, the Company expects cash costs per ounce to increase above the forecast range of between A$720 to A$780 per ounce for the September 2009 Quarter. However the Company expects that it will achieve its full year forecast costs as the production profile returns back up to the expected levels. Total operating costs have been maintained at close to budgeted levels.
Capital Expenditure
In anticipation of the development of the Third Mine, the Company placed a major equipment order in June 2009. The order includes a second Two Boom Jumbo, a third Diamond Drill, three large underground loaders and a new underground truck. The entire order has been financed by the equipment vendor over 36 months and represents a further investment of over A$8m in the development of the Norseman operations.
The Company took delivery of the second two boom jumbo in the last weeks of September. The machine has been successfully commissioned and is now operating satisfactorily at the Bullen Decline. The Company also expects the delivery of the third diamond drill rig in the first week of October which will also go into Bullen Decline to commence drilling the resource targets on the Norseman and St Patricks Reef. The underground truck is due to be delivered in November 2009 and the underground loaders in April and May 2010.
The Company has also ordered 10 accommodation buildings of 4 rooms each to be used in the upgrade and expansion of the current single persons camp. This expansion is to allow sufficient accommodation to be available to house the additional operators that will be required when mining at the OK Decline commences.
Mine Exploration
Diamond drilling has been focussed at Harlequin on the HV6 and Harlequin South structures while the development of the Redfin/Perch diamond drill cuddy on the 285m Level was completed.
Significant results have been received as follows;
1.1m @ 85.5 g/t gold from 152.6m in drill-hole HD1806A
0.3m @ 44.5 g/t gold from 102.0m in drill-hole HD1815
The diamond drill has now moved to the completed cuddy on the Redfin 285m Level and has drilled a number of holes that have intersected the Perch Reef, some containing visible gold. However, no assay results have been received to date.
Diamond drilling at Bullen will resume with the arrival and commissioning of the new diamond drill rig in the first week of October.
Regional Exploration and Third Mine Development
North Royal
The Company is pleased to announce that the dewatering of the North Royal open pit has commenced, with the successful commissioning of the pumping infrastructure. This is expected to take approximately four months to complete provided weather conditions are favourable. The resources at the northern end of the pit can then be drilled to allow mining studies to be completed and, assuming a positive outcome to the studies, this will allow mining of this resource to commence.
OK Decline
The OK resource has now been calculated and has resulted in an initial inventory of 122,000 oz of contained gold. This initial resource has been used as part of a preliminary feasibility study into the economics of commencing mining at the OK Decline. The study has returned positive outcomes and shows that the resource can support a mining operation over an initial two years producing approximately 360,000 tonnes at 5 g/t for 55,000 ounces of gold at cash costs for the OK Decline in the order of $720 to $780 per ounce of gold recovered. The Company expects that as the drilling programmes continue this mine life will be extended.
As a consequence of the positive outcomes from the pre-feasibility study, the Company has approved the completion of a detailed mining study and budget, for submission for final approval by the Board by the end of October. When the detailed mining study is complete the Company will release an initial Resource and Reserve Statement. Upon approval it is anticipated that the project could commence in the December 2009 quarter with first ore expected in the March 2010 quarter. The Company has also approved preparation of a detailed Project Management Plan for submission to the required regulatory authorities for approval for mine commencement.
Underground drilling continued into the OK West area with significant results returned to date as listed below;
2.3m @ 2.6 g/t gold from 4.0m and
2.3m @ 6.4 g/t gold from 71.0m includes
1.0m @ 8.3 g/t gold from 71.0m in drill-hole OKD141
0.6m @ 85.6 g/t gold from 67.5m and
0.7m @ 7.3 g/t gold from 75.6 m in drill-hole OKD142
0.6m @ 24.1 g/t gold from 222.4m and
4.0m @ 2.4 g/t gold from 230m in drill-hole OKD143
1.0m @ 8.4 g/t gold from 92.0m and
0.5m @ 11.0 g/t gold from 196.3m and
2.4m @ 47.0 g/t gold from 252.0m in drill-hole OKD148
1.6m @ 3.5 g/t gold from 36.9m includes
0.6m @ 7.6 g/t gold from 36.9m in drill-hole OKD153
1.0m @ 6.7 g/t gold from 60.0m and
1.8m @ 4.3 g/t gold from 192.0m in drill-hole OKD154
1.9m @ 7.5 g/t gold from 202.0m and
0.6m @ 27.9 g/t gold from 223.0m in drill-hole OKD156
0.9m @ 110.1 g/t gold from 197.1m in drill-hole OKD157
4.7m @ 2.7 g/t gold from 231.3m in drill-hole OKD158
0.3m @ 21.2 g/t gold from 161.9m in drill-hole OKD162
33.2m @ 1.0 g/t gold from 158.8m in drill-hole OKD165
Results have been received from Golden Goose drilling, with significant results as listed below;
0.5m @ 14.9 g/t gold from 180.0m in drill-hole GGD016
Results have been received from Royal Coachman drilling, with significant results as listed below;
8.0m @ 0.9 g/t gold from 46.0m includes
1.0m @ 3.3 g/t gold from 51.0m in drill-hole RCD005
The next round of Golden Goose and Royal Coachman drilling will now be undertaken from locations at the OK Decline as part of the underground drilling programmes.
Updated Corporate Presentation
In preparation for a European roadshow being undertaken by the Company between September 28 and October 9, the Company has updated its corporate presentation which is available to view at www.norsemnangoldplc.com.
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.
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 E-mail: [email protected] |
|
Guy Wilkes |
Ocean Equities Ltd |
Tel: +44 (0) 20 7786 4370 |
|
William Vandyk |
Astaire Securities plc |
Tel: +44 (0) 20 7448 4400 |
|
Hugo de Salis / Isabel Crossley |
St Brides Media & Finance Ltd |
Tel: +44 (0) 20 7236 1177 |
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 oz of gold. The mine is currently producing from two high-grade narrow-vein underground mines - the Bullen and the Harlequin. Currently, it has a total resource inventory of 3.7 million oz of gold at an average grade of 5.5 g/t.
The tenements cover a 1,614 sq km area centred on the Norseman Township. The landholding comprises 179 contiguous tenements consisting of 13 Exploration Licences, 106 Mining Licences, 45 Prospecting Licences, 15 Miscellaneous Licences and 29 Mining Lease Applications.
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 a third mine. 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.
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