Norseman Gold Regulatory News (NGL)

ASX: NGX

AIM: NGL

14 December 2012

Norseman Gold plc

Company Update - December 2012

The Directors of Norseman Gold plc ("Norseman" or "Company") wish to provide a further update to shareholders following the announcement of 3 October 2012 relating to the appointment of an Administrator to Norseman's principal operating subsidiary Central Norseman Gold Corporation Limited (Administrator Appointed) ("CNGC").

Administration of CNGC

The voluntary administrator of CNGC, Ron Dean-Willcocks of Dean-Willcocks Shepard, has released to creditors an interim report dated 10 December 2012.

The preliminary report does not include any proposed Deed of Company Arrangement ("DOCA") or any recommendations by the Administrator as to the future of CNGC.

The report to creditors which is required pursuant to section 439A of the Act ("439A Report") will now be issued no later than 26 February 2013.

The Administrator has stated that, in the event of liquidation, absent recoveries from matters arising from the administrator's/liquidator's investigations, there will be insufficient moneys to pay any dividend to employee priority creditors and unsecured creditors and likely a shortfall to secured creditors.

The voluntary administrator was appointed on 3 October 2012 pursuant to a resolution of the board of directors of the Company on that date. By orders granted in the Federal Court, the convening period was extended to 10 December 2012 with the meeting of creditors pursuant to section 439A of the Act to be held no later than 17 December 2012.

The Administrator, with the support of the Committee of Creditors, approached the Federal Court for orders to further extend the convening period until 28 February 2013. Those orders were granted on the 4 December 2012. Consequently now the meeting of creditors to be held pursuant to section 439A of the Act is to be held no later than 7 March 2013.

Summary of process and status

The purpose of the appointment of an administrator is to allow for an independent insolvency practitioner to take control of and investigate the affairs of an insolvent company. During the period of administration creditors' claims are put on hold. At the end of that period the administrator is required to provide creditors with information and recommendations to assist creditors to decide upon the company's future.

In addition to reviewing CNGC's business operations and financial position, the investigation by the voluntary administrator considers whether all assets of CNGC have been accounted for, examines the relationship between CNGC and related persons and entities and considers whether CNGC officers have committed any offences in relation to the management of the company. The purpose of the investigation is also to determine whether there are any transactions where money, property or other benefits could be recoverable by a liquidator (in the event a liquidator is appointed).

Since the appointment, the Administrator has undertaken the following investigations to prepare his report:

·; Conducted a review of CNGC assets available including land and buildings, plant and equipment, mine infrastructure and mining and exploration tenements. The Administrator has obtained the following independent valuations:

(i) O'Mara's Valuers and Auctioneers - Plant and equipment, motor vehicles, infrastructure assets.

(ii) SRK Consulting (Australia) Pty Ltd ("SRK") has prepared an independent asset valuation of the mineral resources and ore reserves held by CNGC ("Resources Valuation").

(iii) Mera Corporate Finance Pty Ltd has prepared an independent valuation of goodwill and intangible assets and reviewed the Resources Valuation prepared by SRK against probable market value under a sale transaction, based on publicly available information on market transactions and discounted cash flows.

(iv) Opteon have provided an independent valuation of CNGC's land and buildings.

·; Conducted a review of CNGC books and records

·; Analysed historical CNGC financial accounts

·; Reviewed security documents

·; Reviewed transactions between CNGC and related entities

·; To the extent possible conducted a review of likely creditors

·; Considered breaches of director's and officer's duties

·; Considered potentially voidable transactions including unfair preferences

·; Considered a possible date of insolvency and considered potential insolvent trading claim

·; Considered the possibility of offences committed by directors and officers

·; Obtained two Critical OHS Audit reports from Rightway Training & Safety and implemented the majority of the recommendations contained therein.

The Administrator has continued to trade the operations of CNGC and has been provided with an indemnity from Tulla Resources Group Pty Limited ("Tulla") and Farrer Place Holdings Pty Limited ("Farrer") (a company associated with Tulla). Cash losses have been significant in the administration to date. Pursuant to current budgets prepared by CNGC those losses are likely to continue for some time, however are projected to significantly reduce.

Tulla and/or directors of CNGC confirm that they are likely to propose a DOCA, however, they wish to consider actual results of CNGC for December to February. Significant retrenchments have now been effected and it is likely CNGC will proceed for the foreseeable future on the basis that it will mill tailings only and maintain relevant tenements plus care for and maintain the mine site generally. In addition, Tulla and the Directors of CNGC and Norseman Gold plc are continuing their discussions with several interested parties in relation to recapitalisation of the ultimate holding company, Norseman Gold plc and/or possible farm in or joint venture arrangements in CNGC.

Norseman will continue to provide updates to shareholders when further information is available and a summary of the status when the Administrator provides the report as required under Section 439A of the Corporations Act.

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For further information visit www.norsemangoldplc.com, email investors@ngold.com.au or contact:

David Steinepreis Norseman Gold Plc. Tel: +44 (0) 7913402727

William Vandyk Northland Capital Partners Ltd Tel: 020 7796 8800

Guy Wilkes Ocean Equities Ltd Tel: 020 7786 4370

Susie Geliher / Hugo de Salis St Brides Media & Finance Ltd Tel: 020 7236 1177