Friday 29th January 2021
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As announced at the half year the company recently undertook an internal review of the New Talisman business the initial stage of which was completed late last year. During the quarter the Company took steps to further implement initial recommendations of separating exploration and production/development opportunities from the group by way of a listing of subsidiary Coromandel Gold Limited on the NZX and or ASX. Through the separation of exploration assets in this way New Talisman continues to maintain a primary focus on development and production assets.
During the quarter the Company negotiated two acquisitions. The first being a binding term sheet to acquire the Vanuatu assets of Canterbury Resources Limited ASX:CBY, a highly prospective exploration project which was purchased for a combination of cash and shares (in either NTL or Coromandel Gold shares subject to due diligence). These assets will form part of the planned Coromandel Gold exploration asset “spin-off “.
The second negotiation which was completed after the close of the quarter was a binding term sheet to acquire the Assets of Broken Hills Historic Mine Ltd a privately owned producing gold mine and exploration project held by the Rabone family see https://www.nzx.com/announcements/366790
One of the previously identified options to process ore underground has identified risks of a single operational entry 2m x 2m addit system at Talisman has been the risks associated with any disruptions to operations and the potential ‘idling’ of any plant throughout such disruption. This ‘single source’ interruption risk makes the financing of any plant or the entering into of processing arrangements with third parties challenging.
In addition operating in New Zealand, which has some of the most stringent Health and Safety regulations in the world, and a complex system for consenting, permitting and undertaking mine activities through multiple stakeholders, means that the fixed initial costs can be significantly higher than most other comparable countries for this type of mining. As a result of this ‘initial fixed cost hurdle’ right sizing the scale of operations needs to be managed carefully to ensure operation at an economic scale.
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