Norseman Gold to raise $9m in sparse IPO market

PERTH miner Norseman Gold is shaping up to be the second Western Australian company to list on the Australian Securities Exchange this calendar year.

The company, which is listed on London's Alternative Investment Market, is seeking a dual listing and has this week launched a $9 million initial public offer.

The funds will predominately be used to expand the Norseman gold mine, an operation the company bought from collapsed Croesus Mining.

Norseman Gold, formerly Davos Resources, paid around $71 million in cash and scrip for key Croesus assets including the mine, which is the longest running gold operation in Australia.

Norseman Gold has been operating the mine since early 2007.

The company aims to increase gold production at the operation by opening a third mine, with gold to be processed at the Pheonix treatment plant, which has a capacity to process 700,000 tonnes each year.

Currently the plant is processing 400,000t/year.

Norseman also plans to reduce cash operating cost at the mine.

In the six months to the end of December 2008, Norseman produced 38,838 ounces of gold at a cost of $773 an ounce.

During the March quarter, cash costs have fallen 10 per cent to $693/ounce.

Norseman aims to spend $11.7 million over the next two years on exploration and development programs. The company currently has $17.18 million cash on hand.

Sitting on the company's board is non-executive chairman Vincent Pendal, chief executive Barry Cahill, executive directors David and Gary Steinepreis and non-executive director Michael Villiers.

The company is offering a maximum 20 million shares at 45 cents each to raise $9 million in its IPO, and has set a minimum subscription target of $4.5 million.

The offer is scheduled to close on June 11.

Nedlands-based Dragon Energy is the only other WA company to list on the ASX this year after it raised $1.5 million in its IPO.

Miner Kagara plans to vend its gold assets into a new subsidiary, with an IPO to come to the market in July.