ASX/MEDIA ANNOUNCEMENT

 

15 August 2008

 

 

Maiden profit follows Paddington acquisition

Results for Announcement to the Market

Key points

w    EBITDA for FY2008 of $26.5M on revenue of $115M at average A$911 per oz

w    NPAT of $9.2M for FY2008

w    2.9 cents earnings per share for FY2008

w    June cash balance $27M; cash flow from operations of $35.1M

w    Total assets (excl. Hedge tax adj and net of rehabilitation) of $137.6M

w    Project pipeline set to unlock shareholder value:

o        Mount Morgan Mine Project: approval pending

o        Homestead underground development: approval pending

o        Paddington: 10-year Life of Mine Plan

o        Sienna Coal Project: 60-hole drilling program underway to define Resources

w    FY2009 a development year providing the basis for 250,000 oz production in FY2010

 

Norton Gold Fields Limited (Norton), one of the largest ASX-listed (ASX: NGF) Australian gold producers, posted a net profit after-tax of $9.238M for the financial year ending 30 June and represents a turnaround of some $14M on the previous financial year.

 

The maiden profit marked Norton?s first year of production from its strategically located Paddington Gold Mine in the Kalgoorlie region of Western Australia. Importantly, this profit was against a backdrop of substantial challenges in the Australian gold mining industry including strong cost pressures and energy supply issues from the Varanus Island gas explosion.

 

In addition to $16M on deposit which secures Norton?s environmental obligations, the Company had $27M cash at bank as of 30 June.

 

?The Company?s fast track into the black since acquiring the Paddington Gold Mine, is a credit to the capability and efforts of the Company?s executive team and staff,? said Jon Parker, the Managing Director.

 

?Shareholders can see that the board and management have not only recognised assets with substantial potential but also successfully transformed Norton through to profitable production.

?Acquiring Paddington was the second step in Norton?s strategy of becoming a major gold company following the acquisition of the Mount Morgan Mine Project in Queensland.

 

 ?Norton?s Mount Morgan Mine Project is progressing on track. In July, the Board approved the refurbishment and relocation of the Company?s Kundana plant to the Mount Morgan site in anticipation of final Queensland Government approvals.

 

?Mount Morgan is planned to produce an initial 35-40,000 oz per year from FY2010 to augment Norton?s current annual production of 150,000 oz.

 

?We have also made significant progress in our planning towards commencing underground operations at Paddington in FY2009 which will help us ramp up production to 250,000 oz in FY2010.

 

Mr Parker said Norton expected to increase its landholding in the Gold Fields region with the acquisition of the Bellamel gold assets.

 

?I am confident we can apply to the Bellamel assets the same combination of management and technical expertise now in use at Paddington. Bellamel shareholders will benefit from Norton?s organisational, management and financing capabilities through Norton?s mining and production business at Paddington. The combined entity will have significant JORC Code-compliant Reserves and Resources in one of the world?s foremost gold provinces, together with a major low cost processing plant.

 

?We are very happy with the level of acceptances which as of today is 22.64%. Norton?s offer of four (4) Norton shares for every five (5) Bellamel shares is open to Bellamel shareholders until 29 August, unless extended,? Mr Parker concluded.

 

The accounts and Appendix 4e (Rule 4.2A) Preliminary Report are attached.

 

About Norton Gold Fields

Norton Gold Fields Limited is Australia?s fourth largest ASX-listed Australian gold producer. It also has active gold, copper, and coal exploration projects.

 

Norton?s all-share offer to acquire Bellamel Mining Limited will, if accepted, add 1.68 Moz of gold to the Paddington Resources, and further extend the life of the Paddington Mine. Bellamel also has the potential to develop a 40-50,000 oz per year gold heap leach operation. Additionally, the Bellamel properties are highly prospective for underground development.

 

The Company operates the Paddington Gold Mine near Kalgoorlie in Western Australia and is planning to develop the Mount Morgan Mine Project in Queensland. Paddington has a 5Moz resource and a 3 Mtpa CIP plant capable of producing more than 150,000 oz of gold per year. With the planned addition of underground operations in FY2010, production is expected to lift to 250,000 oz of gold per year.

 

Norton plans to augment this with up to 40-50,000 oz of gold annually from the Mount Morgan Mine Project.

For further information

Jon Parker                                                          Warrick Hazeldine

Managing Director                                            Director

Norton Gold Fields Limited                                 Purple Communications

+61 (0) 408 921 551                                             +61 (0) 417 944 616      

jparker@nortongoldfields.com.au                     whazeldine@purplecom.com.au

 

Visit us at www.nortongoldfields.com.au

 

Competent Person?s Statement

The Mineral Resource statement, with the exception of the Mt Pleasant Mineral Resource estimate, has been compiled by Mr Ian Copeland who is a Member of the Australasian Institute of Mining and Metallurgy, and qualifies as a Competent Person as defined in the 2004 Edition of the ?Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves?. Mr Ian Copeland is a full time staff member of Norton Goldfields and consents to the inclusion in the release of the matters based on the information in the form and context in which it appears.

The Mt Pleasant Mineral Resource estimate, with the exception of the Homestead Mineral Resource estimate, has been compiled with the consent of Mr David Williams, who is a Member of the Australasian Institute of Mining and Metallurgy, and qualifies as a Competent Person as defined in the 2004 Edition of the ?Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves?. Mr David Williams is a full time staff member of CSA Australia Pty Ltd and consents to the inclusion in the release of the matters based on the information in the form and context in which it appears. The Homestead Mineral Resource estimate was compiled with the consent of Mr Ian Copeland.

The Mineral Resource estimate is tabulated inclusive of Ore Reserves. Cut-off grades used to estimate the Mineral Resource vary by deposit, ranging from 0.7g/t Au up to 1.0g/t Au. Note rounding errors may occur in the tabulation of the Mineral Resource estimate.

Measured Resources are 0.65Mt at 1.7 g/t for 35,000 oz, Indicated Resources are 41.66Mt at 2.0 g/t for 2,720,000 oz and Inferred Resources of 29.64Mt at 2.2 g/t for 2,070,000 oz. Proven Reserves are 0.12Mt at 1.2 g/t for 4,700 oz, and Probable Reserves are 17.74Mt at 1.8 g/t for 1,007,700oz.

The information in this report that relates to the Mineral Resources of Bellamel Mining Limited is based on information provided by Mr Matthew Wood who is a Member of the Australian Institute of Mining and Metallurgy. Mr Wood is the Chairman of Bellamel Mining Limited. Mr Wood has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ?Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves?. Mr Wood consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Measured Resources are 9.137Mt at 1.13 g/t for 331,075 oz, Indicated Resources are 12.54Mt at 1.41 g/t for 567,040 oz and Inferred Resources of 22.30Mt at 1.10 g/t for 784,265 oz

Appendix 4E (Rule 4.2A)

Preliminary Final Report

For the year ended 30 June 2008

 

 

Results for announcement to the market

(all comparisons are to the year ended 30 June 2007)

 

 

Notes

1. The NPAT of $9.238M represents a movement up of $14.395M.  Since the movement was from a loss a percentage calculation cannot be reliably calculated.  There are no minority interests.

Audit

This report is based on the consolidated financial report which has been audited.

Acquisitions and disposals

Details of acquisitions are provided in the attached Annual Financial report

Commentary on results for the period

The company acquired and operated the Paddington Gold Mine from 25 August 2007, producing 125,526 oz of gold.  A detailed summary of the years operations is provided in the June quarterly report released on 1 August 2008.

 

Commentary on the results is also provided in the ASX release accompanying this statement.

Dividends

The Directors do not recommend payment of a dividend. No dividend was paid during the year or the corresponding period. Consequently there is no record date.

Net tangible assets per share (fully diluted)

The net tangible assets per share were 5.75 cents for 2008 and 4.76 cents for 2007. The relevant numbers excluding the accounting for the hedge position are 12.23 cents for 2008 and 4.76 cents for 2007.

Additional 4E disclosures

Additional disclosures requirements can be found in the Directors Report and consolidated financial report attached to this report.

 

 

Norton Gold Fields Limited ? 79 Hope Street, South Brisbane, Queensland 4101?Australia
ACN 112 287 797 ? Tel +61 (7) 3846 9200 ? Fax +61 (7) 3846 9232 ? www.nortongoldfields.com.au

 

Issued by

Purple Communications

Level 3, 28 Kings Park Road, WEST PERTH WA 6005

Ph: 08 9485 1254     Fax: 08 6263 0455

purple@purplecom.com.au