PERTH (miningweekly.com) – ASX-listed junior New Talisman Gold Mines on Friday said it was looking at alternative financing arrangements for its Talisman project, in New Zealand, after a hoped-for investment from a Chinese firm fell through.

In December last year, Talisman signed a heads of agreement with Chinese group St Albans to develop the Talisman project. Under the 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.

However, New Talisman said on Friday that St Albans had been unable to start its on-site due diligence within the timeframe set out in the agreement. Despite the agreement lapsing, both parties had continued discussions in good faith.

Ultimately, however, the directors of New Talisman decided that the discussions did not reflect a direct investment into the junior gold developer, and have declined to proceed with the process.

The gold hopeful subsequently received a letter of intent from the Langfang Group, proposing an earn-in arrangement whereby Langfang would provide technical, engineering and specialist ore extraction and treatment services in exchange for a percentage of the project.

The directors of New Talisman decided that the proposal, in its current form, was not acceptable.

As such, the company had now restarted negotiations for alternative financing arrangements for the Talisman project.

“With alternative financing options open to New Talisman, the board felt that the options presented during negotiations were not in the best interest of shareholders,” said executive director Matthew Hill.

He noted that the company had made good progress towards reopening the Talisman mine, and were on track to enter and upgrade access in preparation for gold production.

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.