Ann: ADDRESS: NTL: Chairman's Address 2014 Annual Meeting

• Release Date: 10/09/14 10:18
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					NTL
10/09/2014 10:18
ADDRESS

REL: 1018 HRS New Talisman Gold Mines Limited

ADDRESS: NTL: Chairman's Address 2014 Annual Meeting

Introduction

The director's report for the year to 31 March 2014 was circulated with the
Annual Report. Before I ask you to formally receive the Annual Report
together with the Financial Statements and the report of the Auditors I would
like to speak to several of the issues raised in the report.

Developer to Producer

At the conclusion of my address to shareholders last year our principal
mining engineer Wayne Chowles presented the detailed project plan for the
Talisman mine development. I am pleased to say that since that time your
company has passed a number of significant milestones.

Late last year the company received the resource consents from the Hauraki
District Council together with the Access Agreement from the Department of
Conservation for the Talisman mine.  More recently we filed our work program
with the Department of Conservation and have now received the formal
authority to Enter and Operate the Talisman mine.

In December last year the Government gazetted the new Health and Safety
regulations covering mining and quarrying operations.  The regulations
represent a completely new prescriptive approach to underground mine safety.
 New Talisman will be New Zealand's first underground gold mine operator to
provide the High Hazards Unit of WorkSafe NZ with its safety management
system. The overall system document includes hazard identifications and risk
assessments together with principal hazard management plans covering such
areas as ventilation and explosives.   As we are the first cab off the rank
it is taking us just a little longer to work through the issues. We now
expect the final document to be filed with the High Hazards unit on 13
October.

Many of you will recall that last year we removed approximately 50 tonnes of
stockpiled ore from the hardstand area at the Talisman mine site to a secure
offsite storage facility for use in preliminary metallurgical tests and
determination of the preferred process route. Earlier this week we
announced that we had removed a further 20 tonnes from the hard stand area
and had crushed and sampled that 20 tonnes along with the 50 tonnes removed
earlier.

Today I am delighted to announce that the 50 tonne batch of ore is now
located at Newmont's ore treatment facility at Waihi ready for processing.
Indicative analysis of the samples taken at the time this ore was crushed
suggests the grade will exceed one ounce of gold per tonne and several ounces
of silver per tonne.  We expect the results of this batch testing will set
the parameters for longer term toll treatment arrangements.   The gold
produced from this batch test will be the first gold produced from Talisman
mine for decades.

Balance Sheet

The Annual Report for the period to March 2014 also reflects the very real
progress the Company has made on its journey from explorer to developer to
producer.  In 2013 the balance sheet reported net tangible assets of $1.384
million. In 2014 the comparable figure was $7.946 million.   This
considerable increase is attributable to the fact that the Talisman mine
development project now meets the strict test for development assets which
are capitalized to tangible assets under the relevant provisions of IFRS.  In
the annual report we referred to other valuation methodologies based on
enterprise value and discounted future cash flows.    Based on these
indicators your directors are confident the company continues to offer good
value for investors.

Coromandel Gold

As part of its 2012 strategic plan the board made a clear decision to
separate the exploration assets into a different legal entity. This has now
been completed and the company has identified key management for the
exploration company. CGL's portfolio of highly prospective gold tenements has
already attracted interest from parties keen to work with the company in
developing these assets.  Whilst at an early stage these discussions are a
positive indication that the market climate for exploration which has been
nearly cold for some time may be starting to warm up.

The External Environment

At the conclusion of my last two addresses to shareholders I referred to
forecasts for the future price of gold.  This time last year there were
indications that the gold price was recovering.   While the price of gold has
not been as volatile over the last year as it was the previous year it has
not strengthened either.  However many of the forecasts remain just as
bullish as they were when gold hit US1800 per ounce three years ago.   I
thought I would share with you one forecast from a reputable international
research house Edison. They predict the price of gold may rise to US$1642
per oz in 2015 and US$2070 by 2020.

 As I noted last year the very high grades contained in some of the seams in
Talisman present an opportunity to mix and match ore grades and production
rates to the price of gold in the market and still generate an attractive
rate of return.    Of course the Talisman project is not insensitive to the
price of gold but the high grades of the reserves at Talisman afford us the
ability to ride out troughs in the price cycle, albeit at lower production
levels.

Capital Raising

This time last year shareholders made the point at the AGM that they wished
to be involved in funding the Talisman mine into production. In recognition
of this the board made a generous issue of shares at 0.8c per share at a time
when the shares were trading well above that level. The issue was reasonably
well supported by New Zealand shareholders and in the context of other
capital raisings by junior miners at the time was well received.
Nevertheless there was a significant shortfall for which the ninety day
placement capability expired last Friday.

The funds raised have been positively applied to progress the bulk sampling
project and the developments I referred to above with respect to ore
treatment speak to that.    The future rate of progress is dependent on our
ability to fund ongoing development work and you will note that there are two
resolutions on the Notice of Meeting that are intended to give your directors
flexibility in this regard.

 That concludes my address.
End CA:00255084 For:NTL    Type:ADDRESS    Time:2014-09-10 10:18:03