Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

New Talisman Gold Mines Ltd Attracts Fortune Global 500 Company

New Talisman Gold Mines Ltd (ASX:NTL, NZX:NTL) has accepted a signed non-binding terms sheet from Amer International Group of Shenzhen to invest in New Talisman.

Amer International Group is a diversified industrial and high-technology group, and is currently ranked 247 in the Fortune Global 500.

The signed term sheet proposes Amer acquire a controlling stake of around 70% in New Talisman in return for a cash subscription and guaranteed cash profit underwrites over a 3-year period.

Given the size of interest that Amer seeks to acquire, the transaction is subject to completion of due diligence, detailed agreements being signed, and shareholder approval under the New Zealand takeovers code, listing rules of the ASX and NZX and any other regulatory approvals.

Amer has agreed to contribute a non-refundable $50,000 contribution towards New Talisman's transaction costs of progressing to the next stage.

New Talisman assets

New Talisman retains a 100% interest in the Talisman Mine and Rahu Project which is immediately to the north of the Talisman mine.

A pre-feasibility study for underground mining at the Talisman confirmed an initial phase one life of mine of 5 years to generate NZ$68.2 million in revenues and a cash surplus of NZ$23.4 million.

New Talisman has successfully processed ore samples from the mine under a toll treatment agreement and the gold and silver was profitably extracted and sold.

Bulk sampling

The company is currently in the process of raising up to NZ$12.3 million through a rights issue to fund the Talisman gold mine into the bulk sampling phase.

Bulk sampling will see the company extract on average 650 tonnes per month for a period of 18 months to 24 months.

Based on the average ore reserve grade of 10.8 g/t gold, a 90% recovery and US$1,300 per ounce gold price, revenues of NZ$30 million could potentially be generated.

Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.