Ann: WAV/RULE: NTL: NTL - Waiver from NZSX Listin

• Release Date: 24/10/12 15:06
• Summary: WAV/RULE: NTL: NTL - Waiver from NZSX Listing Rules 9.2.1 & 7.10.5
• Price Sensitive: No
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NTL
24/10/2012 13:06
WAV/RULE

REL: 1306 HRS New Talisman Gold Mines Limited

WAV/RULE: NTL: NTL - Waiver from NZSX Listing Rules 9.2.1 & 7.10.5

NZX Regulation Decision
New Talisman Gold Mines Limited
Application for Waiver from NZSX Listing Rules 9.2.1 & 7.10.5

Background

1. New Talisman Gold Mines Limited ("NTL") is an Issuer with ordinary shares
("Shares") Quoted on the NZX Main Board as its Home Exchange and is subject
to the NZSX Listing Rules ("Rules"). NTL also has Shares Quoted on ASX.

2. NTL proposes to raise approximately AU$1.1 million to AU$1.2 million via a
pro rata renounceable rights offer of one new Share ("New Share") for every
three Shares in NTL held by eligible Shareholders ("Eligible Shareholders")
on the record date in accordance with Rule 7.3.4(a) ("Rights Offer"). In
addition, NTL plans to issue one bonus option ("Bonus Option") to acquire a
Share in relation to each New Share allotted under the Rights Offer to the
holders of those New Shares.

3. The Rights Offer will be fully underwritten by Canaccord Genuity
(Australia) Limited ("Underwriter"), a non-related party of NTL, on
arm's-length terms. The Underwriter will receive an underwriting fee of an
amount equal to 7% plus GST of the gross proceeds of the Rights Offer.

4. The Underwriter intends to limit its underwriting exposure by entering
into sub-underwriting arrangements, for which it will pay a sub-underwriting
fee of up to 4%. It is very likely that the Underwriter will enter into
sub-underwriting arrangements with International Pacific Securities HK
Limited ("IPS"), a Related Party of NTL.

5. NTL wishes to offer Eligible Shareholders who accept their entitlement in
full the option to apply for additional New Shares under the Rights Offer to
the extent of any shortfall in the Rights Offer ("Oversubscription
Facility").

6. The allocation of New Shares under the Oversubscription Facility will
occur as follows:

a) Applicants will be allocated the lesser of:

i. the number of additional New Shares applied for by the applicant under the
Oversubscription Facility; and

ii. 200,000 New Shares (being approximately the average shareholding block in
NTL);

b) any additional New Shares which remain unallocated following the
allocation set out above will be allocated amongst the remaining unsatisfied
applicants pro rata to the applicants' respective shareholdings in NTL as at
the record date for the Rights Offer;

c) in the event of a remaining shortfall, applications will be scaled pro
rata amongst remaining unsatisfied applicants, unless the NTL Board
determines that to do so would materially affect "effective control" (as
described in Rule 7.5) of NTL;

d) if the number of shortfall New Shares available is less than the aggregate
of oversubscription allocations to be allocated in accordance with the first
step above, NTL would reserve the right to ballot, reduce the upper limit of
New Shares allocated or scale the applications in any other manner it deems
appropriate; and

e) in the event of any remaining shortfall, New Shares will be allocated to
the Underwriter (and in turn, the sub-underwriters) on the terms described
above.

7. NTL seeks waivers from Rule 9.2.1 and 7.10.5 in connection with its Rights
Offer.

Application One

8. Rule 9.2.1 prohibits an Issuer from entering into a Material Transaction
if a Related Party is, or is likely to become, a direct or indirect party to
the Material Transaction, or to at least one of a related series of
transactions of which the Material Transaction forms part, unless the
Material Transaction is approved by an ordinary resolution of the Issuer.

9. The Rights Offer is a Material Transaction for the purposes of Rule 9.2.1
and the underwriting agreement and sub-underwriting arrangements form part of
a related series of transactions with the Rights Offer for the purposes of
that Rule.

10. Geoffrey Hill is a current director of IPS and was a Director of NTL
until 26 April 2012. Therefore, IPS is a Related Party of NTL within the
meaning of Rule 9.2.3 because IPS is an Associated Person of a Director of
NTL (Geoffrey Hill) within the six months before the Rights Offer.

11. NTL seeks a waiver from Rule 9.2.1 to allow IPS to act as a
sub-underwriter in relation to the Rights Offer.

12. In support of its application, NTL submits that:

a) NTL requires certainty in respect of the success of the proposed capital
raising, which the underwriting agreement would provide;

b) The Underwriter has indicated that it will not provide the necessary
underwriting commitment without securing the appropriate sub-underwriting
support from IPS;

c) NTL will assist the Underwriter with its efforts to secure
sub-underwriting commitments from shareholders and investor groups by way of
introduction to the Underwriter;

d) The Underwriter and IPS have each confirmed that they have no association
with the other;

e) The terms of the underwriting arrangements to be entered into between the
Underwriter, IPS and any other sub-underwriters have been negotiated on an
arm's-length commercial basis, reflecting market fee structures in the
circumstances (including the low liquidity of NTL's Shares) and standard
market precedents for termination events relative to the underwriting and
will reflect the terms of the underwriting agreement (which has been
negotiated between NTL and the Underwriter on an arm's-length basis);

f) If the waiver from Rule 7.10.5 (described below) is granted, all
Shareholders will have had the opportunity to participate in the Rights Offer
to the extent they wish to do so (meaning that the sub-underwriter does not
obtain a benefit in terms of access to additional New Shares in priority to
existing NTL Shareholders);

g) There are already constraints on IPS increasing its shareholding in NTL.
Importantly, no waiver is sought from Rule 7.5, and the Takeovers Code would
also regulate IPS and its associates in relation to holding or controlling
20% or more of NTL's voting securities;

h) The policy of Rule 9.2.1 is to avoid diversion of value from a company to
a related party as a consequence of a non-arm's-length transaction. NTL
considers the terms of the proposed Rights Offer do not create such a
diversion of value because the underwrite and sub-underwrite will be on arm's
length terms, which involve counterparties to those arrangements effectively
taking on risk associated with the Rights Offer; and

i) The waiver sought is similar to the waivers provided by NZX to Skellerup
Holdings Limited's February on 11 February 2008, Pike River Coal Limited on
20 April 2010, Hellaby Holdings Limited on 23 August 2010 and Tower Limited
on 19 August 2009.

Application One - Rules

13. Rule 9.2.1 provides:
"An Issuer shall not enter into a Material Transaction if a Related Party is,
or is likely to become:

(a) a direct or indirect party to the Material Transaction, or to at least
one of a related series of transactions of which the Material Transaction
forms part; or

(b) in the case of a guarantee or other transaction of the nature referred to
in paragraph (d) of the definition of Material Transaction, a direct or
indirect beneficiary of such guarantee or other transaction,

unless that Material Transaction is approved by an Ordinary Resolution of the
Issuer."

14. Footnote 1 to Rule 9.2.1 provides:

"NZX may waive the requirement to obtain the approval of a resolution for the
purposes of Rule 9.2.1 if it is satisfied that the personal connections with,
or involvement or personal interest of a Related Party are immaterial or
plainly unlikely to have influenced the promotion of the proposal to enter
into the transaction or its terms and conditions."

15. Rule 9.2.3 provides:

"For the purposes of Rule 9.2.1, "Related Party" means a person who is at the
time of a Material Transaction, or was at any time within six months before a
Material Transaction:

(a) a Director or executive officer of the Issuer or any of its Subsidiaries;
or

(b) the holder of a Relevant Interest in 10% or more of a Class of Equity
Securities of the Issuer carrying Votes; or

(c) an Associated Person of the Issuer or any of the persons referred to in
(a) or (b), other than a person who becomes an Associated Person as a
consequence of the Material Transaction itself (or an intention or proposal
to enter into the Material Transaction itself); or

(d) a person in respect of whom there are arrangements other than the
Material Transaction itself, intended to result in that person becoming a
person described in (a), (b), or (c), or of whom the attainment of such a
status may reasonably be expected, other than as a consequence of the
Material Transaction itself;..."

Application One - Decision

16. On the basis that the information provided to NZXR is complete and
accurate in all material respects, NZXR grants NTL a waiver from Rule 9.2.1
so that IPS may act as a sub-underwriter in relation to the Rights Offer.

17. This waiver is granted on the conditions that:

a) the Directors of NTL certify to NZXR that:

i. the terms of the underwriting agreement between the Underwriter and NTL
were negotiated on an arms' length basis; and

ii. the terms of the underwriting agreement between the Underwriter and NTL
are fair and in the best interests of NTL shareholders;

b) the Underwriter certifies to NZXR that the sub-underwriting arrangement
with IPS was negotiated on an arms' length basis; and

c) the offer documents for the Rights Offer record that a waiver from Rule
9.2.1 has been granted by NZXR and details the conditions of this waiver.

Application One - Reasons

18. In coming to the decision to grant the waiver in respect of Rule 9.2.1,
NZXR has considered that:

a) the purpose of the prohibition in Rule 9.2.1 is to ensure that undue
influence is not exercised by a Related Party to cause a transfer of value to
a Related Party or to cause entry into transactions on terms that are
unfairly favourable to those Related Parties without scrutiny by, and
approval of, minorities or other shareholders;

b) the granting of a waiver from Rule 9.2.1 will not offend the policy behind
Rule 9.2.1 because it is a condition that:

i. the Directors of NTL certify to NZX that the Underwriting Agreement was
negotiated on an arm's-length basis and is fair and reasonable to all
shareholders and in the best interests of NTL; and

ii. the Underwriter certifies to NZXR that the sub-underwriting arrangement
with IPS was negotiated by the Underwriter on an arm's-length basis;

The above conditions provide comfort that the terms and conditions of the
Underwriting Agreement (and accordingly, the sub-underwriting arrangements)
have been set on an arm's-length basis, between NTL and the Underwriter, and
the Underwriter and IPS respectively such that there has been no ability for
IPS to influence NTL;

c) the Underwriter has indicated that it was unwilling to underwrite the
Rights Offer without IPS support; and

d) there is precedent for waivers of this type, including those referred to
in paragraph 12(i) above.

Application Two

19. NTL has also approached NZXR for a waiver from Rule 7.10.5, to the extent
necessary to enable Eligible Shareholders to make applications in excess of
their pro-rata entitlement in accordance with the Oversubscription Facility.

20. In support of its application, NTL submits that:

a) the Oversubscription Facility will assist the Underwriter, by potentially
reducing the call on its commitments, but without risk to any shareholder
materially increasing its ability to exercise effective control of NTL.
Importantly, Rule 7.5 will still apply, and shareholders will not be able to
game the Oversubscription Facility, by submitting inappropriately large
applications, in an effort to increase their shareholding;

b) the Oversubscription Facility should also have the effect of reducing the
need to call on the sub-underwriting arrangements in the event of a
shortfall; and

c) NTL is aware of a number of precedents for granting a waiver from Rule
7.10.5,  including the waivers granted to Skellerup Holdings Limited on 11
February 2008, Pike River Coal Limited on 14 January 2007, Wellington Drive
Technology Limited on 11 November 2005 and ICP Biotechnology Limited on 3
July 2007.

Application Two - Rule

21. Rule 7.10.5 provides:

 "Renounceable Right shall not entitle the holder of the Right to apply for
more than the entitlement of Securities except to enable acquisition of the
number of Securities needed to give that holder a Minimum Holding."

Application Two - Decision

22. On the basis that the information provided to NZXR is complete and
accurate in all material respects, NZXR hereby grants NTL a waiver from Rule
7.10.5 so that NTL may offer the Oversubscription Facility in respect of the
Rights Issue, subject to the following conditions:

a) that additional New Shares are allocated to applicants under the
Oversubscription Facility in accordance with the procedure set out in
paragraph 6 of this decision;

b) NZXR is satisfied that the terms of the Oversubscription Facility,
including the terms set out in paragraph 6 of this decision, are sufficiently
disclosed in the Prospectus for the Rights Offer; and

c) the Prospectus states that NZXR has granted a waiver from Rule 7.10.5 and
details the conditions of the waiver.

Application Two - Reasons

23. In coming to the decision to grant NTL the waiver from the requirements
of Rule 7.10.5, NZXR has considered that:

a) the terms of the allocation of New Shares offered via the Oversubscription
Facility will ensure that, to the greatest extent possible, New Shares are
allocated in proportion to the number of existing shares held by the
applicants at the Record Date;

b) Rule 7.5 continues to apply and specifically restricts the issue of any
shares that could be significantly likely to result in any person or group
materially increasing their ability to exercise effective control of an
Issuer;

c) the provision of the Oversubscription Facility will increase the
likelihood of NTL raising the necessary capital sought, and will ensure that
existing shareholders obtain any benefit through the Rights Issue to the
fullest extent possible; and

d) there is precedent for waivers of this type, including those referred to
in paragraph 20(c) above.
Confidentiality

24. NTL has requested that this application and the decision of NZXR remain
confidential until the announcement of the Rights Offer.

25. In accordance with Footnote 1 to Rule 1.11.2, NZXR grants NTL's request.

ENDS.
End CA:00228800 For:NTL    Type:WAV/RULE   Time:2012-10-24 13:06:39