Ann: MINE: NTL: Talisman Prefeasibility Study Sup

• Release Date: 18/04/13 15:52
• Summary: MINE: NTL: Talisman Prefeasibility Study Supports Robust Gold Project
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NTL
18/04/2013 13:52
MINE

REL: 1352 HRS New Talisman Gold Mines Limited

MINE: NTL: Talisman Prefeasibility Study Supports Robust Gold Project

18th April 2013
ANNOUNCEMENT BY NEW TALISMAN GOLD MINES LIMITED (NTL and NTLOA or NTLO)
FOR IMMEDIATE RELEASE
Talisman Pre-Feasibility Study Supports Robust Profitable Gold Project
o Phase 1 development of Talisman mine to deliver cash surplus of NZ$23.4
million
o Robust C1 cash cost of US$588/oz and C3 Cash cost of US$1075/oz - well
below current prices
o Flexible mine plan offers resilience in the event of ongoing price
volatility
o Initial 5 year start up project forecast to generate NZ$68.2 million in
revenue
o Start up capital requirement of NZ$5.4 million
o Peak annual gold output of 12,115 oz Au and 36,000 oz Ag
o Progression to larger, long term operation subject to resource proving
o Phase 1 surplus to provide funding for Phase 2 resource proving and mine
expansion
New Zealand gold mine developer New Talisman Gold Mines Ltd (NZX: NTL)
announced today that a Pre-Feasibility Study of the Talisman project near
Waihi, ("the Study") has identified the potential to develop a robust and
profitable mining operation.
The Study found that a first-stage development of an underground mine could
deliver a cash surplus of NZ$23.4 million during its five-year life. It also
concluded that the mine would have an all in cost, inclusive of capital (C3
cost) of US$1075 per ounce.
New Talisman's executive director Matt Hill said: "This finding is a very
positive step for the company's plan to re-open the Talisman mine in the
world class Waihi Gold District. The pace of work has stepped up so that the
project can get underway once detailed mine planning and permitting has been
concluded. The development initially of a small low impact high grade gold
mine sets the platform for the exploitation of target areas for future phase
2 developments".
Previous underground drilling and sampling has delineated a Mineral Resource
of 204,760 oz gold at a grade of 6.9 g/t and 798,840 oz silver at a grade of
27 g/t. The mining operation examined in the Pre-Feasibility Study would
involve only part of this resource, generating income with an aim to develop
an extended operation.

Resource Category Tonnes Au Grade Au Oz Ag Grade Ag Oz
Measured 212,500 5.0   34,000 27.5 187,900
Indicated 197,690 5.0 31,660 26.5 168,140
Inferred 507,500 8.5 139,100 27.2 442,800
Total  204,760  798,840
Work completed by NTL has identified several additional target areas
contained in both remnant areas within existing workings and strike and dip
extensions of the Maria and Crown/Welcome veins. Of particular interest is
the newly discovered Mystery vein, which has not previously been mined and
which lies between the Maria and Crown/Welcome vein systems.
Establishing that the new target areas contain economic mineralisation will
require opening up of existing tunnels and new development within the
underground mine as well as further exploration. The company intends to fund
this work with a small scale mining operation, focussed on the immediately
available, Measured and Indicated resources to ensure that the project is
self-funded.
Initial mining would produce a projected cash surplus of NZ$23.4 million from
total ore milled of 106,500 tonnes at a recovered grade of 9.4g/t Au and
30.0g/t Ag.  A total of 32,200 ounces of gold would be recovered along with
102,800 ounces of silver.
The Study found that the new mine plan is conservative and achievable with
relatively low risk for a mining project at this stage of development. It
would generate an internal rate of return of 83% and the payback period would
be 2.5 years.
Gold was initially found in alluvial material at Karangahake, near the
Talisman mine workings, in 1875. Shortly after, a gold vein was found at
nearby Mt Karangahake and ore was being removed from the Talisman, Woodstock
and Crown mines by 1880.  Crown, the last of the three mines to remain in
operation, closed in 1928. About 37km of mine tunnels are present at
Talisman, and 3.5km have been recently explored.
The new operation at Talisman would remove gold/silver ore from the Maria,
Mystery and Welcome/Crown gold veins, which are contained in four distinct
blocks of mineralisation.
NTL said that work was still being conducted on the metallurgy of the
orebody, and that permitting issues are being given a priority. The mine is
currently covered by a Mining Permit (MP) 51-326.
Chairman Murray McKee said the board welcomed the findings and
recommendations of the report. "We consider the mine development strategy
set out in the report makes very sound sense. Targeting the resources that
have the highest level of confidence and are closest to the existing
underground access reduces risk and enables early cash flows to be applied to
proving further resources.  We are confident we have identified a development
pathway that makes eminent commercial sense in itself while at the same time
opening the gateway to potentially very much larger and more valuable
resources in the future".
Mr McKee noted the report represented another significant milestone in moving
the company from explorer to producer.  "We are now focused on the next
steps on the critical path to production and will make further announcements
in due course".
Summary of Pre-Feasibility Study
The Pre-Feasibility Study analysed a range of options around the mining
method, materials handling and backup services with a view to identifying the
preferred option to establishing a low impact, small-scale underground mining
operation. The operation would focus on the high confidence resources,
immediately adjacent to the accessible 8 Level drives, delineated during the
2005 exploration program and create the infrastructure necessary to support
further exploration activity. Key findings from the study were:
Mining Method - Ore veins are steeply dipping, from 70? to near vertical,
with widths ranging from ~1.0m in the Welcome/Crown area to >6.0m in the
Woodstock. Preliminary stope designs have been constructed encompassing the
volume of estimated payable ore in each resource block. Analysis indicates
that the geometry of the lodes is potentially suitable for a number of mining
methods. The study recommended that a sub-level stoping design be implemented
to provide the flexibility to switch between hand-held and long-hole drilling
techniques where applicable.
Materials Handling - An option analysis was carried out on the installation
of rail bound transport systems underground compared with the deployment of a
fleet of small, rubber tyred loaders and trucks. Results clearly demonstrated
that the flexibility of a trackless fleet, which would enable extraction of
the resources below 8 Level through a series of small ramp systems, held
significant advantage to the project.
Production Plan - A production plan was developed based on the above
assumptions. It indicated that an initial five-year operation, with peak
production of 35,000 tonnes per annum and 12,000 gold ounces in years 3 and 4
was possible. 65% of the total 106,000 tonnes mined would be derived from the
better understood Woodstock and Dubbo Sections. Production planned from the
Mystery and Welcome/Crown blocks would primarily comprise on-reef development
required to improve and extend the confidence of resource estimates within
these areas.
Services - Systems required to support mining operations, such as power,
water and compressed air reticulation, have been designed to support double
the production rates estimated in the plan. This would permit the possible
future expansion of the mine into newly proven areas.  Considerable
consideration has been given to designing systems that would minimise impact
on the environment.
Processing and Metallurgy - The study evaluated several processing options
including non-chemical gravitation separation, flotation and cyanide
leaching. Historically, cyanide leaching of ore from Talisman achieved a 95%
gold recovery and 70% silver. Costs included in this study reflect the
capital and operating costs for a dedicated CIL plant. NTL is awaiting
results of test-work undertaken by Auckland University and intends to embark
on a bulk sampling program and further metallurgical test-work to inform
detailed design of the ore processing flow-sheet. Additionally the company is
holding discussions with a number of local gold producers to investigate the
potential for a toll treating agreement.
Environmental Management and Permitting - Considerable care has been
exercised during the design process to restrict the mine's footprint to the
existing disturbed areas and to minimise environmental impacts. The company
is in advanced discussions with regulatory bodies regarding the consents
required to begin low impact bulk sampling.
Cost Estimates - Capital and Operating Cost estimates were determined from
supplier quotes and budget prices. The total capital requirement estimated
for the project, including sustaining capital, rehabilitation provision and
contingency was NZ$10.9 million, with an initial drawdown of NZ$4.3m in year
one.  Total operating costs, inclusive of royalties and overheads, amount to
NZ$33.5m over the five-year initial mining period. Maximum cash exposure
amounts to NZ$7.3m incurred during the second year of operation following
which the mine would be completely self-funding.
Project Economics - A Discounted Cash Flow analysis based on a weighted
consensus average gold price forecast of US$1600/oz, a NZ$:US$ exchange rate
of 1:0.8 and a 10% discount rate indicated a net present value (NPV) for the
project of NZ$15.5 million. Unit cash costs were estimated at NZ$692/oz with
an all in cost, including capital expenditure of NZ$1166/oz.
Ore Reserves - The formal documentation and public report pertaining to the
Talisman's JORC compliant maiden Ore Reserve statement are being prepared and
will be released within the coming weeks.

Planned Work
NTL plans to advance the project through the following actions:
o Pursue negotiations for an access arrangement to initiate a bulk sampling
program. This will enable further metallurgical testwork and delineation of
the initial target ore zones. Detailed planning of this program is underway.
o Initiate a Feasibility Study on the Woodstock and Dubbo Zones of the Maria
Vein, which are the initial mining targets. This will include upgrading the
Processing Plant flow sheet and fine tuning associated capital and operating
cost estimates.
o Pursue negotiations with local gold producers with a view to locking in a
toll treatment agreement.
o Compile an Assessment of Environmental Effects to accompany applications
for Resource Consents as required under the Resource Management Act.

Competent Person Statements
The information in this presentation that relates to ore reserve estimates
were prepared by Mr Wayne J Chowles, a registered Mining Engineer and member
of the AusIMM. Mr Chowles is a full time employee of New Talisman Gold Mines
Limited and the author of the Talisman Prefeasibility Study referred to in
this release. He has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity
being undertaken to qualify as a Competent Person as defined in the 2004
Edition of the "Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves". Mr Chowles consents to the inclusion in
this report of the matters based on his information in the form and context
in which it appears.
The information in this report that relates to exploration results,
exploration targets and mineral resources is based on information compiled by
or supervised by Mr Murray Stevens. Mr Stevens is an independent consulting
geologist who is a corporate member of the AusIMM. Mr Stevens has sufficient
experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity being undertaken to qualify
as a Competent Person as defined in the 2004 Edition of the "Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves". The information is extracted from the report entitled "Talisman
Gold Resource Increases to 205,000 oz Au" 11 May 2005. The company confirms
that it is not aware of any new information or data that materially affects
the information included in the original market announcement and that all
material assumptions and technical parameters underpinning the estimates in
the relevant market announcement continue to apply and have not materially
changed. The company confirms that the form and context in which the
Competent Persons findings are presented have not been materially modified
from the original market announcement.
 Disclaimer
Although New Talisman Gold Mines Ltd (NTL) commissioned the geological
information and mining data referred to in this presentation, NTL does not
guarantee or otherwise warrant the accuracy or currency of such information
or data.  Further, no representation is given or warranty is made in respect
of any future performance of the share price of shares in NTL or any company
associated with it. This document is not intended to, and does not, represent
an offer of any securities.
The terms geological potential, potential, exploration target and target
where used in this report do not constitute and should not be interpreted as
Mineral Resources or Ore Reserves under the "Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves" (JORC Code 2004).
The potential quantity and grade is conceptual in nature. There has been
insufficient exploration to estimate a Mineral Resource or an Ore Reserve and
it is uncertain if further exploration will result in the estimation of a
Mineral Resource or Ore Reserve.
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About New Talisman Gold Mines Ltd
New Talisman Gold is a dual listed (NZX Main Board & ASX: NTL) with 1800
shareholders who are mainly from Australia and New Zealand. It is a leading
New Zealand minerals development and exploration company with a portfolio of
high quality mineral interests. Its gold properties near Paeroa in the
Hauraki District of New Zealand are a granted mining permit, including a JORC
compliant mineral resource within the original Talisman underground mine, and
an adjacent exploration permit along strike from the mine. The company is now
advancing its plans to develop the mine, and advance the exploration project.
Through a subsidiary company, New Talisman Gold owns 21.7% of Broken Hill
Prospecting Limited, which is planning to develop a cobalt project at
Thackaringa, about 25 kilometres south-west of Broken Hill in Australia. BPL
is listed on the ASX (Code: BPL). More about New Talisman Gold at
www.newtalismangold.co.nz
End CA:00235336 For:NTL    Type:MINE       Time:2013-04-18 13:52:05