03/07/2008 - 11:37

Norton drops Alinta litigation

03/07/2008 - 11:37

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Gold miner Norton Gold Fields Ltd will drop its litigation claims against Alinta for lost production arising from the gas crisis, as power prices agreed to by both companies return to normal levels.

Norton drops Alinta litigation

Gold miner Norton Gold Fields Ltd will drop its litigation claims against Alinta for lost production arising from the gas crisis, as power prices agreed to by both companies return to normal levels.

Norton said today the original electricity supply agreement with Alinta had been re-instated, with forecasts from last month of additional electricity costs of $1.6 million per month would no longer be incurred.

"Norton has agreed to release Alinta from any claims for lost production resulting from its purported Force Majeure," the company said.

The gold miner, which operates the Paddington gold mine in Western Australia, said the impact of the power supply interruption over 10 days was around 3500 ounces of gold.

Below is the full announcement.


Key points

Re-instated power supply agreement returns pricing to normal

June power costs based on normal contract terms

Impact of power supply interruption to Norton is limited to lost production over 10 days of approximately 3,500 ounces

Norton agrees not to pursue claim for lost production

Bidders Statement for Bellamel merger due for release late July.

Norton Gold Fields Limited ((Norton) (ASX code: NGF)) today announced a re-instatement of the original Electricity Supply Agreement with its power supplier Alinta that returns all power pricing to pre-interruption levels. This means that the incremental costs identified in Norton's announcement of 16 June 2008 will not be incurred.

Norton has agreed to release Alinta from any claims for lost production resulting from its purported Force Majeure. Given the cost and time-loss associated with litigation, Norton believes this agreement represents the best outcome for shareholders.

On the date of announcement of the Bellamel merger (29 May 2008) Norton indicated an early release of the Bidders Statement. The directors of Norton have decided to allow some time for the uncertainty regarding electricity and general market turbulence to abate and accordingly to release the Bidders Statement by 29 July 2008.

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 recently made an all-share offer to acquire Bellamel Mining Limited which, if accepted, will 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.

Further strategic acquisitions of new resource projects are planned in order to build a major diversified mining group.

The Company operates the Paddington Gold Mine near Kalgoorlie in Western Australia and is planning to develop the Mount Morgan Gold Project in Queensland. Paddington has a 4.8M oz 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 per year.

Norton plans to augment this with up to 50,000 oz of gold annually from a tailings re-treatment operation at Mount Morgan.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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