New Talisman seeks legal advice after no-show by Chinese investor who was to buy up to 25%
By Jonathan Underhill
Sept. 29 (BusinessDesk) - New Talisman Gold Mines is seeking legal advice after a Chinese investor failed to settle on the purchase of about 183 million shares in a transaction that would have provided $1.46 million toward the development of the Talisman gold mine project in New Zealand’s Hauraki district.
Auckland-based New Talisman first flagged the sale at 0.8 cents a share in June, when it announced it had signed what it termed a binding term sheet with potential investor Yang Xia. The money raised was to have been used to fund a bulk sampling project at the Talisman mine and would have resulted in Xia taking direct interest in the company of as much as 25 percent in two tranches.
Xia had carried out a detailed review of NTL plans and a site visit at Talisman during due diligence, Talisman said at the time. The company had been approached by an advisory group working with Chinese investors on New Zealand investments and Xia had indicated he had potential co-investors he could bring in.
However on July 1, the Chinese investors sought a 45-day extension on the settlement date for its investment.
Today the company said Xia had failed to settle and it had sent him a letter of demand while taking legal advice and considering its options.
Talisman shareholders approved the transaction at their recent annual meeting. The shares fell 12.5 percent to 0.7 cents today, valuing the company at about $5.6 million, and have dropped 45 percent in the past 12 months.