Analyst viewAsa Bridle at Seymour Pierce commented: "We move our...

Analyst view

Asa Bridle at Seymour Pierce commented: "We move our full-year 2011 estimates into line with guidance (production 57.5koz, pre-tax profit AU$6.4 million).

"Our full-year 2012 and 2013 estimates will be reassessed once the company's review has been concluded, but there is clearly downside risk to the 130-140koz/year core assumption at present.

"Our 'buy' recommendation is maintained as we believe the situation is redeemable. While recent mine performance has been weak, the property still boasts a 3.8Moz resource, a proven mill and a production track record that has made the mine world famous."

Sam Spring, analyst at Ocean Equities, added: "It will be critical for the company to see its production profile finally turn around in the next quarter with the market previously largely willing to look through the last three quarters of under-performance (~11,000-12,500 ounces per quarter) to the expected growth that would be achieved from Norseman filling its mill.

"The company's revised full-year production guidance of 55,000-60,000 ounces implies a significant improvement in production in the June 2011 quarter in the order of +20,000 ounces (previous target was ~26,000oz) that would return Norseman to being cash flow positive."

link: http://www.iii.co.uk/articles/15142/norseman-sinks-lower-expected-output