Photo by: Bloomberg
JOHANNESBURG (miningweekly.com) – The share price of ASX-listed junior New Talisman Gold Mines jumped by more than 55% on Friday on news that the company had signed a heads of agreement with a Chinese group to develop the Talisman project, in New Zealand.
Under the heads of agreement, St Albans would fund up to NZ$10.9-million for prefeasibility studies at the Talisman mine in return for 65% of the physical gold and silver produced from the reserves identified in the study.
It also provided that the investor bring gold extraction capabilities and plant and equipment, which would be set up near the Talisman site for ore processing.
The heads of agreement also allowed the Chinese investor the first option to fund any future expansion of the Talisman permit area.
“Following our board’s strategic decision to seek a funding partner, our advisers set it out in October to secure a potential project partner. We welcome the opportunity to work with St Albans and its ultimate parent company in developing this project,” said New Talisman executive director Matthew Hill.
He added that through the proposed funding structure, existing shareholders were not diluted and retained 100% title to the Talisman mine and full rights to the ore once production from the prefeasibility study ore reserve is completed.
“Having a strong partner allows New Talisman to accelerate its path to production and to strengthen its ability to develop its other highly prospective tenements, including Rahu, Golden Valley and Northland.”
The Talisman mine is the second-largest historic gold producer in New Zealand with production of one-million ounces of gold and three-million ounces of silver. Previous underground drilling and channel sampling delineated a Joint Ore Reserves Committee-compliant inferred resource of 205 000 oz gold at a grade of 6.9 g/t and 800 000 oz silver at a grade of 27 g/t.
New Talisman shares were trading at a high of A$0.014 a share on Friday, up from a closing price of A$0.09 the previous day.