NGL Norseman

 

TIDMNGL 
 
RNS Number : 9313S 
Norseman Gold PLC 
20 September 2010 
 

 
                                NORSEMAN GOLD PLC 
                       ('Norseman Gold' or 'the Company') 
                               North Royal Update 
 
Norseman Gold, the AIM-listed and ASX-listed Australian gold production and 
exploration company is pleased to announce an update on progress at the North 
Royal Open Pit, the Company's proposed fourth mine at its Norseman Gold Project, 
located in the Eastern Goldfields of Western Australia. 
Highlights 
 
·     Pit optimisation has identified 85,000 ounces of resource capable of being 
mined in the initial Main Pit area 
 
·     Dewatering has progressed to 54% complete 
 
·     Sterilisation drilling continues with initial assays returning no 
significant results 
 
·     In-pit resource drilling commences 
 
·     Regulatory approvals received 
 
·     Mining tendering underway 
 
·     Commencement of mining anticipated in December 2010 
 
 
The Company has made positive progress with its plans for developing the North 
Royal Open Pit in a number of areas which are outlined below.  Significantly, 
progress has been made with regulatory approvals for the commencement of mining 
which had previously been identified as a time risk to the project.  Further 
access into the open pit has also been achieved due to the dewatering progress 
which has allowed resource drilling to commence that will further confirm the 
current mining study. 
 
In-pit and sterilisation drilling coupled with final mining tenders is expected 
to see Board approval for the project at the end of October 2010, with mining 
commencement expected in December 2010.  Progress to date has confirmed the 
Company's confidence that the North Royal Open Pit will become the fourth mine 
at the Norseman Gold Project and will result in the existing Phoenix Treatment 
Plant operating at 100% capacity (currently 50%), allowing grade optimisation 
through the mill and stockpiling, supporting the Company's medium term goal for 
production of 140,000 ounces per annum. 
 
The North Royal Open Pit lies 10km from the Phoenix Treatment Plant and has 
historically produced 3.5 million tonnes of ore at a grade of 16 g/t for 1.8 
million ounces of gold produced from both open pit and underground mining.  The 
Company has been working on converting the current 600,000 ounce resource to 
reserve, that could be mined by either open pit or underground methods.  Initial 
focus has been on the potential of open pits and this update outlines progress 
on the first stage of the re-commencement of mining at North Royal.  Follow up 
drill programmes on extensional reef targets adjacent to the open pit are 
expected to support a significant extension to North Royal's mine life beyond 
the proposed initial Main pit area. 
 
Drilling Progress 
Sterilisation drilling has commenced on the proposed waste dump area, with the 
first 30 holes now completed.  Assays have been received from 16 holes with no 
significant results.  The results of the sterilisation programme will be 
analysed once all assays are received. 
 
Drilling has also commenced on resource holes that are accessed from within the 
current pit, with 13 of these 50 holes now able to be drilled.  The aim of this 
programme is to increase the confidence in the current resource and assay 
results are still pending.  As the dewatering continues more of these holes will 
become available for drilling. 
 
Drilling of geotechnical holes is expected to commence shortly following the 
site visit by the Company's geotechnical consultant in early September. 
 
Regulatory Approvals 
The Company has submitted various documents to the relevant statutory 
authorities for approval, including a Project Management Plan ('PMP') with the 
Department of Mines & Petroleum ('DMP'), a Mining Proposal and a Permit to Clear 
with the DMP Environmental Division. 
 
To date the Company has received approval from the DMP to commence surface 
infrastructure works and has received a bond request from the DMP relating to 
the mining activities proposed.  Full approval to commence mining is expected 
following submission of final pit designs, geotechnical reports and lodgement of 
the requested environmental bond.  The Company has also received the Clearing 
Permit from the DMP. 
 
The Department of Environment & Conservation ('DEC') has also determined that 
the resumption of mining at North Royal and the proposed activities will not 
cause a change in the nature of the waste or emissions from the project and as 
such do not require a Works Approval. 
 
A presentation to the Dundas Shire Council was given in July 2010 and the 
council have raised no objections to the project proceeding. 
 
 
Dewatering Progress 
Dewatering of the pit continues with the pit now 54% dewatered and the 
performance of the in-pit pumps nearing their optimum with peak flow rates of 
over 550 litres per second being achieved when both pumps are operating.  The 
water levels have dropped now to such a level that the north and south pits are 
separated from the Main pit area by unmined bars of material although the pits 
are still hydraulically linked by the deeper underground workings. 
 
Dewatering has now progressed to such a stage that it will not restrict the 
commencement of mining operations. 
 
Pit Optimisation, Scheduling and Mining Tender Progress 
Initial optimisations of an updated resource have been completed.  The initial 
optimisation calculated at a gold price of A$1,000 per ounce of gold has 
indicated that there is potentially 85,000 ounces of resource that can be mined 
within the current pit shape, within the initial Main pit area.  Further review 
and re-design will be required, at various gold price and mining scenarios, 
following the infill drilling that is to be conducted as the dewatering 
progresses as outlined in the drilling commentary above.  Further work is 
required on the southern, eastern and northern sides of the pit shape to test 
possible extensions to the reef in those directions.  These other areas are able 
to be mined as separate stages of the pit development, as the drilling is 
completed and the information analysed. 
 
Expressions of interest have been sought from mining contractors for the 
provision of mining equipment, manpower and drill & blast services.  A site 
visit has been conducted for the interested parties with a second site visit to 
be conducted in the coming weeks.  Tender documents have been dispatched to 
interested parties with initial submissions due late September 2010. 
 
The progress to date has confirmed the Company's confidence that the North Royal 
Open Pit will become the fourth mine at the Norseman Gold Project. 
 
It is anticipated that a final document for Board approval to commence the 
project will be submitted towards the end of October 2010, with commencement of 
mining anticipated for December 2010. 
 
The Company forecast for the 2010/11 financial year remains at 105,000 to 
110,000 ounces recovered at a cash cost of between A$670 to A$730 per ounce of 
gold. 
 
The development of the North Royal Open Pit is expected to result in the 
existing Phoenix Treatment Plant operating at 100% capacity (currently 50%), 
allowing grade optimisation through the mill and stockpiling, supporting the 
Company's medium goal for production of 140,000 ounces per annum. 
 
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, CEO of Norseman Gold Plc, 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 
Guy Wilkes                  Ocean Equities Ltd 
Tel: 020 7786 4370 
Nandita Sahgal             Seymour Pierce Ltd                              Tel: 
020 7107 8000 
Jeremy Stephenson       Seymour Pierce Ltd                              Tel: 020 
7107 8000 
Hugo de Salis               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 oz of gold.  The mine is currently producing from 
three high-grade narrow-vein underground mines - the Bullen, the Harlequin and 
the OK Declines.  Currently, it has a total resource inventory of 3.8 million oz 
of gold at an average grade of 5.3 g/t. 
 
The tenements cover a 2,180 sq km area centred on the Norseman Township.  The 
landholding comprises 221 tenements consisting of 16 Exploration Licences, 107 
Mining Licences, 64 Prospecting Licences, 15 Miscellaneous Licences, 5 
Exploration Licence Applications, 13 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 a 
fourth and subsequent 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 
 
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