New Talisman Gold Mines (ASX:NTL) is extending its pro-rata 1 for 5 renounceable rights offer to progress its Talisman Mine on New Zealand’s Coromandel Peninsula towards production.
The company is offering 134,396,243 new shares priced at $0.01 each to raise up to $1,343,962.43.
This follows its raising NZ$280,000 (A$250,218.95) earlier this month through a placement to sophisticated investors.
The rights issue will now close on Friday, 14 November 2014.
Talisman Mine
Outlining the potential of Talisman Mine, sampling of about 50 tonnes of stockpiled ore last month revealed an average grade of 1.5 ounces (42.52 grams) of gold per tonne.
This will set the foundation for commercial terms on processing first ore from the mine.
The stockpiled ore is located at Newmont Mining’s (NYSE:NEM) facility at Waihi for processing, which is expected to yield a minimum of 50 ounces of gold in the first batch.
Talisman had previously produced 1 million ounces of gold and 3 million ounces of silver.
It has a current JORC Resource of 205,000 ounces of gold from two separate mines, Talisman and Crown.
The permit area also has the potential to host between 0.55 million to 2 million ounces of gold and between 1.5 million to 6 million ounces of silver.
Bulk Sampling
New Talisman is progressing towards soon starting bulk sampling that will develop and refurbish the drives and extract about 600 tonnes of ore per month at an assumed head grade of 10 grams per tonne gold.
Total capex is estimated at A$1.7 million, which fully funds the project for 18 months including corporate overheads.
This should produce approximately 6 kilograms of gold per month once at a steady state of production is achieved and provides a cash surplus of A$1.3 million at the end of 18 months based on a gold price of US$1200 having paid for all of the infrastructure and development for the full mine.
In addition, the bulk sampling will also carry all the infrastructure and mine upgrades for the fuller mine development and could further increase reserves.
A Pre-Feasibility Study completed in April 2013 for full underground mining at Talisman had confirmed an initial Phase One life of mine of 5 years to generate NZ$68.2 million in revenues for a cash surplus of NZ$23.4 million.
Start-up capital was estimated at NZ$5.4 million.
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