CAPITAL MARKETS

Norseman to be suspended

NORSEMAN Gold says its namesake operations will be put on care and maintenance next month as doubts continue over the company’s ability to survive.

Kristie Batten
Norseman to be suspended

Contract miners have been engaged for remnant mining at the Bullen and Harlequin underground mines, as well as to remove the pillars at North Royal via open pit mining.

Mining at Bullen and Harlequin was allowed to restart after a worker was killed in a rockfall on February 15.

Despite the Department of Mines and Petroleum lifting the prohibition notices, the scene of the accident remains under control of authorities.

Norseman said the fatality had resulted in a delay to production and significant additional costs.

Mining at Norseman is set to be completed by June 30 and the company will place the operation on care and maintenance on July 1.

The mine has produced just 11,387 ounces of gold between July 2013 and the end of March, with around 6000-8000oz expected to be produced before the operation is suspended.

In the same period, the company posted an unaudited earnings before interest, tax, depreciation and amortisation loss of $A3.2 million.

Just 33 employees remain at Norseman after the company slashed the workforce earlier this year.

Norseman is reliant upon major shareholder Tulla Resources Group for financial support but the terms and conditions of a loan facility and convertible notes have been breached.

The company put forward a proposal to UK noteholders to purchase their notes but the proposal did not find support at a February meeting.

“In the circumstances, there can be no guarantee or certainty Tulla will continue to provide the required funds or that its secured loan facility and secured convertible loan notes will not be called,” Norseman said.

“Material uncertainties therefore exist that cast doubt on the group’s ability to continue as a going concern and meet its financial commitments in the normal course of business without the ongoing support of Tulla.”

The company believes the Norseman operation is unviable without the discovery of a new orebody and has appointed Noel Archer as chief exploration geologist ahead of an exploration program.

An internal pre-scoping study is also underway on processing the Phoenix Tails, as well as looking at possible waste dump processing or third party toll treating.

Shares in Norseman have been suspended since 2012.

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