Norseman Gold announces cost saving shut down

Struggling Australian mining company Norseman Gold is to suspend work at its "OK Decline" site as a cost saving measure.

The move has seen the shares fall 2.61% this morning. Since January the stock is down 93%.

Norseman bought the "Norseman Gold Project" in Western Australia in 2007.

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Today's announcement of a wide ranging review of operations also reveals the firm has reached harder rock ore at North Royal which, it claims, should increase the amount of usable ore.

The review is also considering how profitability at Bullen and Harlequin underground mines can be improved.

Norseman's new Chairman, David Steinepreis, says of the developments: "The cost of production per ounce has been the main issue at Norsemen due to the low number of ounces being produced... While the decision to suspend mining at the OK Decline is regrettable, I believe this will have an immediate positive effect on the Company's profitability."

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