Heritage Gold seeks up to $27M for Talisman project

Heritage Gold seeks up to $27M for Talisman project

April 16 (BusinessDesk) - Heritage Gold NZ’s approximately 1,800 New Zealand and Australian investors are to be offered a share purchase plan on a non-pro rata basis to raise as much as $27 million, if all shareholders agree, to capitalise the promising Talisman gold mine project.

Some $15,000 of shares will be offered at a price of 1.9 cents a share (A$11,800 at A1.5 cents) to provide capital for New Talisman Gold Mine Ltd, the company to be formed from a break-up of Heritage Gold assets, to develop a gold mine with a potential net present value of A$150 million. The fourth year is projected to see the largest capital outlay, at $20 million.

Heritage shares fell to 2 cents today, a drop of 16.7 percent on their most recent previous trade.

The resource has yet to gain Australian VALMIN certification, but a scoping study to justify VALMIN testing found the mine robust in the price range of A$1,200 to A$2,000 per ounce of gold and has a break even gold price of under A$1000 per ounce.

“Using the base case assumed gold price of Australian $1,600 per ounce and silver price of A$30 per ounce (close to current values), the review gives an internal rate of 5eturn of over 70%,” the study concluded.

Assets worth a little over $2 million in other prospects, including a cobalt prospect in New South Wales, will be shuffled into a new company, Coromandel Gold Ltd.

The share purchase plan will only be open to New Zealand or Australian resident shareholders and subscriptions can also be made in lots of 1,000 and A$800.

The issue price has been calculated by taking the volume weighted average price of Heritage shares traded on the NZSX over the five trading days prior to the record date and discounting this price by 10%, the company said in a statement.

Documents for the offer will be mailed to shareholders on April 16, with the offer closing on May 9.

Shareholder information on the Heritage website, dating from 2007, indicates the share is widely held in small parcels by around 1,800 shareholders, of whom 459 owned 89.4 percent of the 342.8 million shares on issue at that time.

(BusinessDesk)

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