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There were those who wrote AIM and ASX listed gold miner Norseman Gold (LSE:NGL) off as an investment. That may still prove to be accurate. This has been a sorry tale and one which has made many of us, myself included, look like total prats. But we are not at write-off as yet as a statement of 20th February made clear.
You may remember that the operating unit has been run by the administrator for a few months leaving shares in the PLC which is owed A$100 million by the operating unit suspended. The situation is explained in full HERE in case you have forgotten
Today in Australia the diverse groups of creditors will vote on various proposals made by the administrator. The likely outcome is that unsecured creditors will get 5 cents in the Aussie dollar, employees will be paid in full ( as naturally will the administrator) and that those owed money (the PLC and Tulla – the largest shareholder) will agree to a deferral of the debt.
At that point the operating business ( which right now is not mining anything will be handed back to the PLC. But sadly that will not be the end of it. For the shares to be relisted AIM and the ASX will insist that the company is recapitalised so that it has enough cash to put its latest business plan into operation. My guess is that Tulla will pony up either via debt or via equity dilution.
Then all that Norseman need to do is deliver. Get some of its 3.4 million ounces of gold out at less than it can sell them for. This company has been hugely profitable in the past. In theory it should be so again but like everyone else I would not bet on it.
So there are still several hurdles left to clear. If the shares are unsuspended they will be hammered on day one of trading. But total write off? We are not there yet. And there may be light at the end of the tunnel.
Over 12 year at t1ps.com Tom Winnifrith’s average gain per tip was 42.7% over 241 tips. Norseman was a total disaster which pulled that average down. Tom writes for 10 UK and US websites and you can find links to all of his work at www.TomWinnifrith.com and you can follow him on twitter @tomwinnifrith
Tom, its not your fault, as you only went by what the company said and they were totally inaccurate. Their statements about targets and everytinh turned out to be false. The opposite of the truth is falsehood. The opposite of been told th truth is been told a lie.
Were all of is lied to?