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Fourth Quarter Activities Report

Document date:  Tue 21 Jul 1998
Published:  Tue 21 Jul 1998 00:00:00
Document No:  119072
Document part:  C
Market Flag:  Y
Classification: 

NORMANDY MINING LIMITED                       1998-07-21  ASX-SIGNAL-G

HOMEX - Adelaide                                                      

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MANAGEMENT DISCUSSION & OPERATIONAL ANALYSIS

GOLD

Attributable production was a record 371,650 ounces at a total cash 
cost of $311 per ounce (US$189/oz).

GOLD PRODUCTION ('000oz)
periods ended 30 June 1998

                               3 mths       12mths

Western Australia             195.8          781.3

Northern Territory             76.5          292.6

Queensland                     70.0          234.6

International                  29.4          125.4

Total Attributable            371.7        1,433.9


AUSTRALIA

At Kalgoorlie Operations, gold production exceeded 205,000 ounces. A
higher Super Pit head grade and Gidji roaster cyclone convertor clean
out offset reduced throughput due to SAG mill girth gear problems.

Five production days were lost due to remedial work, with the mill
currently operating at reduced power draw which may restrict
throughput by up to 10 percent. Temporary and permanent cast girth
gears have been ordered with 26 week and 42 week deliveries
respectively. The effect on Normandy attributable production, after
allowance for measures to alleviate the impact, is estimated at 800
ounces per week.

Super Pit head grade is expected to average 2.4g/t in the September
quarter.

A seismic event at Mt Charlotte affected production for two days late
in June, with some interruptions to normal production anticipated in
July.

At Boddington, throughput was maintained despite normal June quarter
wet weather, with stockpiles used as supplementary feed. Overall head
grade was lower, as predicted, contributing to a 12 percent decrease
in gold production. Improvements in mining, milling and
administration costs contained total cash cost increases to 4.8
percent. Hydraulic mining commenced at period end, with slurried feed
expected to represent approximately 25 percent of mill feed during
the trial.

At Big Bell, throughput was maintained despite 13 days downtime for
SAG mill reline, pinion and girth gear replacement. The Great Fingall
open pit haulage contractor was demolished and the ore stockpile
almost depleted at a cash flow cost of $248 per ounce.

The adjacent Cuddingwarra deposit was acquired for $18 million and
ownership of Big Bell Consolidated reverted to a 100 percent
interest. Initial pit design and sterilisation drilling commenced.
Mining is scheduled in the December quarter.

At Kaltails, throughput and gold production were similar. Cash costs
were 10 percent higher reflecting the more difficult metallurgy of
the remaining dumps and 3.5 percent higher unit cost due to
maintenance.

At Tennant Creek, production was higher and costs lower reflecting an
increased percentage of higher grade White Devil ore. Warrego
tailings production was the second highest on record.

At Pajingo Operations, improvements to tonnes milled, head grade and
recovery lead to record production and the lowest cash cost per ounce
to date. The Vera Decline was completed and Nancy North development
advanced 959 metres.

At Tanami Operations, lower throughput and grade reflected a
transitional quarter ahead of treating Callie Underground ore.
Commissioning of an additional ball mill and leach tanks lifts The
Granites treatment plant capacity to 2Mtpa.

At Mt Leyshon, production was a record and 15 percent higher than
last quarter. Simultaneous mining of sections of both higher grade
orebodies led to a higher head grade, improved recovery and lower
total cash cost.

INTERNATIONAL

At Martha, throughput and production were similar. Stockpiles
provided mill feed during June ahead of the July commencement of the
new mine earth moving contract. Cost increases reflected leach tank
and conveyor maintenance.

African mine production was 56,136 ounces (Normandy LaSource share
24,006 ounces) at a cash operating cost of US$166 per ounce (plus
US$19 per ounce royalties). Lero was sold effective 31 May 1998.

At Ariab, full year production was 17 percent above the previous year
at a record 163,381 ounces. As mining reached lower levels of the
Hadal Auatib East and Baderuk deposits, the Talaiderut deposit was
into production. Stacking rates were maintained at 600,000tpa.

At Ity, production improved as predicted to a record 43.711 ounces
for the year. Water drainage tests confirmed a conventional
excavator/truck system to be appropriate when mining reaches below
the water table toward the end of 1998.

INDUSTRIAL MINERALS

Earnings before interest and tax were 18 percent above the previous
quarter and 12 percent lower than the corresponding quarter last
year.

Larvik Pigment recorded a 14 percent sales increase, with stronger
demand for zinc dust in Europe, agricultural products in Australian
and some recovery in Asian markets. The new Larvik furnace in
Australia is fully operational.

Commercial Minerals Division (formerly Industrial Minerals Group)
continued to record low overall product demand.

Magnetite sales improved marginally with resolution of some
industrial disputes in the coal industry. Omya sales were down
marginally, with higher agricultural sales offset by a decline in
exports.

MORE TO FOLLOW

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