Norton Gold Fields Limited : Significant Mineral Resource Increase & Development of Enterprise Mine January 17, 2013

ASX/MEDIA ANNOUNCEMENT

17 January 2013

Norton Gold Fields Limited (ASX: NGF) ("Norton" or the "Company") is pleased to announce an 18% increase to its Indicated and Inferred Mineral Resources estimate for Enterprise, and that it has committed A$40 million to commence the immediate development of the Enterprise Open Pit Project.

• Indicated and Inferred Mineral Resource estimate increased to 1,220,000oz of gold

• Probable Ore Reserve of 563,000oz of gold

• Anticipated 5 years higher grade base load ore feed for Paddington Mill

• Net Present Value of A$136.6M (IRR of 66%, using A$1,600/oz gold price)

• Considerable potential for underground operation

• A$40M committed for development

Norton Managing Director and Chief Executive Officer, Dr Dianmin Chen commented that the Enterprise Open Pit Project will be the next base load operation for the Company's Paddington Operations, supplying the bulk of ore to the Company's 3.3Mtpa Paddington Mill.
"With a higher grade than Navajo Chief, the current base load operation, Enterprise will allow us to both increase Paddington's gold production and reduce unit production costs," Dr Chen said.
"Enterprise represents a significant investment in Norton's future, its investors and the Goldfields community, and strongly supports Norton's position as a long term gold miner in Western Australia.
The feasibility study for underground operation in Enterprise is also underway, which we expect will present further opportunities to achieve sustainable growth in gold production."
Funding for the project will be sourced from the previously announced US$105 million credit facility through the Industrial and Commercial Bank of China Limited, operations and working capital.
A financial analysis of the Enterprise Open Pit Project, using assumption including Probable Ore reserves of 563,000oz, capital costs of A$40 million, production of 110,000 oz of gold per year for 5 years, a discount rate of 10% and an assumed gold price of A$1600/ounce, determined a net present value (NPV) of A$136.6 million.

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Key Points

¾ The global Indicated and Inferred Mineral Resource estimate for Enterprise has been increased to:

• 22.5Mt @ 1.69g/t Au (1,220,000oz)

¾ The update represents an increase of 183,000oz (18%), on the previously reported Enterprise

¾ Reverse Circulation and diamond drilling of the Enterprise deposit by Norton during CY2012 comprised 21,535m completed from 130 drill holes at Enterprise, Galactica and Enterprise West.

¾ A Probable Ore Reserve for the Enterprise Open Pit Project has been defined comprising:

• 10.2Mt at 1.72g/t Au (563,000oz)

¾ Anticipated provision of 5 years of ore production for the Paddington mill at around 110,000 ounces of gold per year. Metallurgical recoveries have been determined at 95% for oxide ores and 85% for fresh ores. Opportunity exists to refine the milling process to increase the recovery for fresh ores.

¾ Open Pit operations at Enterprise using an owner-operator mining fleet and existing infrastructure expected to commence April 2013. Full ore production planned for in November 2013 at an average rate of 110,000oz per annum. Enterprise is planned to provide base-load ore supply at higher grades than current ore sources, and is expected to have a significant positive impact on the production profile for the Paddington Operation

¾ A Net Present Value of A$136.6M and an Internal Rate of Return of 66% has been determined for the Enterprise Operation using a gold price A$1,600/ounce.

¾ Considerable potential for an underground operation as beneath the open cut design, a deeper underground Indicated and Inferred Mineral resource component of 3,269,000t @ 3.04g/t Au (319,000oz) has been delineated. Norton has committed A$40 million to the Enterprise Open Pit Project and has also commenced a Definitive Feasibility Study into the Enterprise underground ore body and anticipates completion before the end of calendar 2013.

The Enterprise Deposit is located 38km northwest of the Paddington mill by road, situated within the Ora Banda Project area (Figure 1). Historic open pit mining at Enterprise exploited a small oxide open pit, but a much more substantial primary resource lies beneath the historic pit with oxide expressions locally adjacent to the pit.
The Enterprise gold resource is hosted by dolerite units within the differentiated and layered Enterprise Dolerite Sill. Mineralisation is composed of an upper brecciated zone with an underlying pervasively altered, quartz stockwork zone, and is controlled by the intersection of east-west trending structures with favourable stratigraphic sub-units of the southwest dipping dolerite sequence.
The main lode of mineralisation forms a broad, robust plunging pipe which remains open down- plunge to the west where drilling density diminishes. The shallow west-plunging pipe of mineralisation measures up to 300m x 100m in elliptical plan dimension. East-west and northeast trending structures form a series of narrow sub-vertical mineralised lodes which can extend upwards above the main ore zone into the oxide zone.
Additional mineralisation occurs in nearby positions at the Galactica Prospect located immediately northwest of Enterprise, and at the Enterprise West Prospect located to the southwest of Enterprise.
Reverse Circulation (RC) and diamond drilling of the Enterprise deposit by Norton commenced in earnest during CY2012 with 21,535m completed from 130 drill holes at Enterprise, Galactica and Enterprise West. Programs have targeted:

• Enterprise Deeps down-plunge mineralisation extensions

• Enterprise oxide areas

• Galactica oxide areas

• Enterprise West oxide areas

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Figure 1: Enterprise Deposit - Location and Infrastructure Map

Figure 2: Enterprise Deposit - Othophoto Image

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Figure 3: Enterprise Deposit - Geology Plan

Figure 4: Enterprise Deposit - Schematic cross section

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Figure 5: Enterprise Deposit - Schematic long section

Resource model updates include new drilling comprising 19,044m of RC and diamond drilling from 104 drill holes. Some programs were still in progress at the time of the modelling with 2,491m of RC drilling completed subsequently. More recent results are yet to be incorporated but are not expected to have a material impact on the resource for the main zone of mineralisation, with the exception of a potential classification upgrade and additional potential resource to reserve conversion. In total the resource model for the Enterprise deposit is based on 141,104m of RC and diamond drilling from 968 drill holes. Within the core resource area, mineralisation has been drill delineated to 25m section spacing with a nominal drill hole spacing of 20m. Resource definition includes a large proportion of high quality diamond drilling.
Gold mineralisation at the Enterprise deposit has been modelled using Multiple Indicator Kriging (MIK). The MIK modelling technique is believed to be appropriate for the complex structure and overlapping mineralisation controls which are apparent within the deposit. Geological domaining is modelled on detailed pit structural mapping and drill hole logging. Significant mineralisation extends laterally down-plunge over a distance of 1,000m, and to a vertical depth of 400m from surface.
The Galactica Prospect is situated immediately adjacent to the Enterprise deposit and is included in the global Enterprise resource model. The Enterprise West Prospect also lies adjacent to Enterprise but is modelled separately in a domain which reflects a controlling northeast trending, steeply dipping structure. Resource estimation for Enterprise West has been completed using Ordinary Kriging.
The Enterprise resource is sub-divided (by easting) into a portion which can be exploited via open cut mining, and a deeper portion that can be potentially exploited using underground mining. The extents of these reporting areas are mutually exclusive. The open cut resource is reported at a 0.7g/t Au ore cut-off grade while the underground resource is reported at a 1.5g/t Au ore cut-off grade. These cut-off grades are consistent with results of optimisation and feasibility studies.
The new models report a global Indicated and Inferred Mineral Resource estimate for the Enterprise area of 22.5Mt @ 1.69g/t Au (1,220,000oz) as detailed in Table 1, this figure compares with an Indicated and Inferred Mineral Resource estimate of 15.4Mt @ 2.10g/t Au (1,037,000oz) reported previously as at 30 June 2012, representing a global increase of 183,000oz.

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The global resource total above is composed of:

• An Indicated and Inferred open cut mineral resource for Enterprise (inclusive of Galactica) of

• An underground Indicated and Inferred mineral resource for Enterprise of 3,269,000t @ 3.04g/t

• Enterprise West open cut Inferred mineral resource of 1,715,000t @ 1.09g/t Au (60,000oz) at a
0.7g/t Au ore cut-off grade (Table 4)
The Galactica portion of the Enterprise open cut Indicated and Inferred Mineral resource is 982,000t @

The Indicated portion of the global Enterprise resource has increased from 10,269,000t @ 2.27g/t Au

Table 1: Enterprise Deposit - Global summary inclusive of open pit area, potential underground area, Galactica and Enterprise West (0.7g/t Au & 1.5g/t Au cut-off grades for open cut and underground areas respectively)

*Arithmetic inconsistencies due to rounding

Table 2: Enterprise Deposit (Inclusive of Galactica) - MIK Mineral Resource Estimate Summary, Open
Cut Area (0.7g/t Au cut-off grade)

*Arithmetic inconsistencies due to rounding

Table 3: Enterprise Deposit - MIK Mineral Resource Estimate Summary, Potential Underground Area
(1.5g/t Au cut-off grade)

*Arithmetic inconsistencies due to rounding

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Table 4: Enterprise West Prospect - Ordinary Kriged Mineral Resource Estimate Summary (0.7g/t Au cut-off grade)

*Arithmetic inconsistencies due to rounding

The Enterprise deposit is located close to the Ora Banda town site and ideally situated to utilise existing power, water and haulage infrastructure. Ore material will be treated at the existing Paddington mill.
Whittle optimisation and design studies have been completed on the updated Enterprise resource model (inclusive of Galactica). The studies utilise a gold price of A$1,600 per ounce. Geotechnical studies for the pit design were conducted by SRK Consulting. Mining costs are based on an owner- operator mining fleet - the board of Norton Gold Fields has approved capital investment of A$38M for the acquisition of the mining fleet (ASX announcement 9 January 2013). Equipment selection, mining methodology and mining assumptions are all appropriate for the bulk waste strip and large, robust ore-body evident at Enterprise. Haulage and processing costs are based on current operating costs for Paddington. Metallurgical recovery of 95% has been applied for oxide ore material and 85% for fresh (primary) ore material. Metallurgical testwork is ongoing, and there is some upside to the project if recovery can be improved. No mining dilution or ore loss have been applied - the MIK resource modelling methodology has an adjustment for volume variance and information effect relevant to the smallest mining unit (SMU) assumption, and effectively captures a practical degree of mining dilution within the resource model.
A Probable Reserve of 10,174,000t @ 1.72g/t Au (563,000oz) has been delineated within a three stage pit design (Table 5). An additional Inferred Resource of 2,336,000t @ 1.14g/t Au (86,000oz) is also captured by the final planned pit, and could be converted to reserve with planned grade control drilling during mining. The reserve is reported at an ore-cut off grade of 0.6g/t Au for oxide material, and 0.7g/t Au for transitional and fresh (primary) ore material.
The previously reported Probable Reserve for Enterprise as at 30 June 2012 was 5,550,000t @ 2.52g/t Au (450,000oz), a figure based on a sub-level cave underground mining operation. The latest open cut study increases the reserve by 113,000oz.
Open cut mining will recover oxide, transitional and fresh (primary) ore material, waste to ore strip ratio for the project will be 7.8:1. Modelling for the planned pit indicates a robust financial return (based on a gold price of A$1,600 per ounce) and the project is planned to generate 5 years of base-load open cut feed to the Paddington mill at an average production rate of 110,000oz per annum. Statutory approvals for mining are well advanced, mining is scheduled to commence in April 2013, with full production by the end of CY13.
An underground project is being evaluated to exploit deeper portions of the Enterprise resource beneath the final pit design. The underground project currently has access to an Indicated and Inferred Mineral resource of 3,269,000t @ 3.04g/t Au (319,000oz) at a 1.5g/t Au cut-off grade, an indicative cut-off grade for bulk long hole open stoping.

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Table 5: Enterprise -Ore Reserve Summary

*Arithmetic inconsistencies due to rounding

Competent Persons Statement

The information in this report that relates to Mineral Resources is based on information compiled by Peter Ruzicka and Andrew Bewsher. The information in this report that relates to Mineral Reserves is compiled by Ian Paynter. In some instances material relating to historical resource models is reported, these models have been reviewed and validated by Peter Ruzicka.
Ian Paynter and Peter Ruzicka are members of the Australasian Institute of Mining and Metallurgy, and full-time employees of Norton Gold Fields Limited. Andrew Bewsher is a member of the Australian Institute of Geoscientists and a full-time employee of BM Geological Services PL, a consulting group to Norton Gold Fields Limited.
Messrs. Ruzicka, Paynter, and Bewsher all have sufficient experience relevant to the styles of mineralisation and types of deposits which are covered in this report, and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Peter Ruzicka, Ian Paynter and Andrew Bewsher all consent to the inclusion in this report of matters based on their information in the form and context in which it appears.
ENDS

For further information please contact:

Richard Jones 61 (0) 8 9263 9724

Leni Stanley 61 (0) 7 3221 6022

Company Secretary

Norton Gold Fields Limited

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