News

March 19, 2008

Norseman Gold Has To Rid Itself Of All Memories Of The Past And Avoid Future Blips

By Charles Wyatt

Barry Cahill, managing director of Aim-traded Norseman Gold, sounds a mite depressed on the telephone from Australia - as well he might. Gold has gone through the US$1,000 mark, but it does not make the difference it might to an Aussie gold producer as the Australian lira has risen against the greenback. On top of that, of course, costs in Australia have rocketed, so if a producer reports a slight blip investors tend to interpret it as a disaster. Slight blip was what it was when the company, which has been operating the Norseman Gold mine in Western Australia for only nine months, reported in its quarterly report to the end of January that it had produced 16,111 ounces from 112,601 tonnes treated, with an average grade of 4.71 grammes per tonne. As a result Barry had to reduce his forecast to 75-80,000 ounces for the year to end June 2008 against previous expectations of around 100,000 ounces.

The result has been a fall of around 50 per cent in the share price over the last couple of months and this has coincided with evidence that it was in November and December that the company encountered some temporary problems from which it started to recover in January. Even so it is still capitalised at only £23 million and has the best part of £7 million in the bank. Hands up anyone who can suggest a company producing at a rate of 75,000 ounces of gold – with a profitable turnover of around...