Funds will enable the company's final transition to gold producer through the commencement of bulk sampling (trial mining) at the Talisman underground gold mine in New Zealand.
This ore is planned to be sourced from two of the mine's most promising resource blocks namely the Mystery and Dubbo blocks.
The company intends to begin construction in the September quarter. It is expected to take 6 months of refurbishment and equipping to reach the working face.
Matthew Hill, CEO, commented: "Following the most successful fundraising in the company's recent history the bulk sampling programme is now fully funded and has been initiated.
"The completion of the rights issue cements the company in its transition to developer and allows us to begin the necessary works to bring this historically productive Talisman mine back into production."
Path to production
With funding for the project now secured the company has initiated the first steps towards extracting ore from the underground workings of the mine.
These first steps involve ensuring safe access for vehicles and personnel to the mine site.
Once site access is complete, the company will equip the site and install accommodation.
Construction of the ventilation lock and primary fan installation will follow along with fit out of the explosives magazine and construction of surface ore handling facilities.
Refurbishment of the mine's tunnels and installation of underground services will then take an estimated 6 months.
Following this, production will commence from the Mystery vein through drill and blast methods.
New Talisman retains a 100% interest in the Talisman Mine and Rahu Project which is immediately to the north of the Talisman mine in New Zealand.
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.
The company's recent rights issue was designed 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.
Rights issue shortfall
At the discretion of the board, the shortfall consisting of 1.54 billion shares may be placed within 3 months of the closing data of the rights issue.
By securing funding through the completion of a rights issue, New Talisman is able to begin its bulk sampling phase, which has the potential to generate revenues of up to NZ$30 million per annum.
New Talisman has already received necessary permits and regulatory requirements to restart production at one of New Zealand's largest historically producing gold mines.
The NZD gold price is currently trading at NZ$1,865 per ounce.
Updates regarding the progress of the bulk sampling phase will be highly anticipated.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.