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3 Mar 2009 07:00
Norseman Gold plc / Epic: NGL / Index: AIM / Sector: Mining & Exploration
NORSEMAN GOLD PLC
('Norseman Gold' or the 'Company')
Redemption of Convertible Loan Notes at Discount
Private Placement raising £5,000,000
Conversion and Repayment of Directors' Loans
Norseman Gold, the AIM-listed Australian gold production company, is pleased to announce that it has, via its wholly owned subsidiary Central Norseman Gold Corporation Limited (CNGC), reached an agreement with the current holder of the Norseman Gold Convertible Loan Notes to purchase all of the issued Convertible Loan Notes with a face value of A$15,000,000 at a price of A$10,000,000, including accrued interest.
In order to effect this agreement, the Company has completed a private placement of 62,500,000 new ordinary shares ("Placing Shares") at a price of 8 pence per Placing Share to raise £5,000,000 (approximately A$11,100,000) before expenses. It is the intention of the Directors to apply A$10,000,000 from the funds raised to complete the purchase of the Convertible Loan Notes as soon as possible. The remainder of the funds will be used for ongoing working capital purposes.
Under the terms of the Convertible Loan Notes, Norseman Gold would have been required to repay A$5 million on 30 April 2009, A$5 million on 20 April 2010 and A$5 million on 30 April 2011, together with interest at 7% p.a. quarterly in arrears. By acquiring the Convertible Loan Notes for A$10,000,000, a 33% discount to par value, Norseman Gold is saving over A$6.3m in capital repayments and interest.
Conversion and repayment of director loans
As announced on 22 October 2008, to supplement the Company's funding and to allow it to continue on with its capital programmes, the Company and CNGC entered into loan facility agreements with Wildpark Nominees Pty Ltd and Ascent Capital Holdings Pty Ltd, companies associated with three directors of the Company, being Barry Cahill, David Steinepreis and Gary Steinepreis, whereby these companies made available a A$1,500,000 loan facility to CNGC. This facility has since been fully drawn.
In addition to the Placing, Wildpark Nominees Pty Ltd has advised the Board that it wishes to transfer all of its A$500,000 loan to the Company in consideration for the issue of 2,850,000 new ordinary shares in the Company ("Conversion Shares") at a price of 8 pence per share. Following this conversion, Barry Cahill will be interested in 2,950,000 ordinary shares in the Company, representing approximately 2.02 per cent of the enlarged share capital.
The A$1,000,000 loan from Ascent Capital Holdings Pty Ltd is to be repaid from existing cash resources.
Following the completion of the private placement and purchase of the Convertible Notes by CNGC and, the conversion and repayment of director's loans, Norseman Gold will have no outstanding loan facilities (other than finance lease facilities within CNGC relating to the Company's mining fleet), enabling all cash generated from the Norseman Gold Project to be applied to production and further development.
Application has been made to have the Placing Shares and the Conversion Shares admitted to trading on AIM. Trading is expected to occur on 9 March 2009.
Following the issue of the Placing Shares and the Conversion Shares, Norseman Gold's capital will consist of 146,040,000 ordinary shares with voting rights.
* * ENDS * *
For further information visit www.norsemangoldplc.com or contact:
David Steinepreis Norseman Gold Plc Tel: 44 7913 402 727
Guy Wilkes Ocean Equities Ltd Tel: 020 7786 4370
Olly Cairns Blue Oar Securities Plc Tel: +61 (0) 8 6430 1631
Romil Patel Blue Oar Securities Plc Tel: 020 7448 4400
Hugo de Salis St Brides Media & Finance Ltd Tel: 020 7236 1177
Note to editors:
Norseman Gold plc is an AIM 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 gold mines - the Bullen and the Harlequin. Currently, it has a total resource inventory of 21.0 Mt at a grade of 5.4 g/t gold for 3.6 Moz of gold.
The tenements cover a 745 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 re-treatment of tailings or acquisitions of alternative sources of ore.
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.
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