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Talisman Mining advances activities at NSW gold exploration projects

Snapshot

Its portfolio includes the Lachlan copper-gold and Lucknow gold projects.

Talisman Mining Ltd - Talisman Mining advances activities at NSW gold exploration projects

Quick facts: Talisman Mining Ltd

Price: 0.087 AUD

ASX:TLM
Market: ASX
Market Cap: $16.24 m
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  • Further drilling is planned at the Lachlan Copper-Gold Project which the company has been focused on since 2017. 
  • The project is a farm-in with another partner, Bacchus Resources. 
  • Lucknow Gold Project was picked up in August 2019 and is an historical mining area that produced very high-grade gold. 

Our team is adopting a methodical approach to exploration in NSW to ensure targets are identified and properly tested in a cost-effective manner.

Talisman Mining chairman Jeremy Kirkwood

What does Talisman Mining do?

Talisman Mining Ltd. (ASX:TLM) is a Western Australian explorer with copper-gold and gold assets in New South Wales.

The Perth company is intent on growth and improving shareholder value from its cash resources.

Talisman has a long-term strategy to evaluate new gold and base metals project opportunities in Australia that could present it with opportunities.

The explorer’s key assets are two projects in NSW, the Lachlan Copper-Gold exploration project and a more recent pick-up, the Lucknow Gold Project.

Talisman has divested a number of projects in the past year to collect a headline figure of $82.3 million and return $40.8 million to shareholders as fully franked dividends and capital.

The company’s divestments will expose investors to potential future upside with a number of production scenarios and help the company avoid future cost liabilities.

Who leads Talisman Mining?

The company is led by managing director Daniel Madden, a chartered accountant with more than 16 years’ resources industry experience.

Madden has worked with Xstrata Nickel Australasia, Jubilee Mines NL and Perilya Ltd and has held a number of senior management positions, including chief executive officer, chief financial officer and company secretary.

He is joined on the board by a number of directors, including chairman Jeremy Kirkwood.

Kirkwood is the principal of Pilot Advisory Group and was previously a managing director at Credit Suisse, Morgan Stanley and Austock.

He is the chairman of Geelong Grammar School and Nurturecare Pty Ltd and a director of Independent Schools Victoria.

What are Talisman’s plans at Lachlan project?

Talisman embarked on the Lachlan project on the Lachlan Fold Belt of Central NSW two years ago.

The company holds what it considers a dominant position in the underexplored mining district.

Well-developed infrastructure and multiple regional processing facilities are features of the district which also hosts ore reserves of more than 20 million tonnes of copper, 100 million ounces of gold and 1.1 billion ounces of silver.

The Lachlan project area covers an extensive strike extent along the Gilmore Suture, in the mineral-rich Cobar/Mineral Hill region.

Long-life high-grade discoveries have been made in the region, with a variety of deposit styles such as: low sulphidation epithermal gold and base metal deposits like Mineral Hill; structurally-controlled gold deposits like Mt Boppy; structurally-controlled copper deposits; Cobar-style gold and base metal deposits; and skarn deposits.

The company considers the project has “significant potential for the discovery of substantial base metals and gold mineralisation”.

Talisman undertook a review in January 2019 to identify prospective targets and plans to proceed with systematic exploration to test its targets.

Debut target, the Blind Calf prospect at Lachlan, is considered by Talisman as its most advanced target in NSW.

Reverse circulation drilling at Lachlan has returned good widths of high-grade copper and helped prompt a campaign for deeper drilling to extend the known high-grade copper mineralisation at depth and further unlock what the company hopes may be a significant high-grade copper system.

Drilling in the December 2019 half-year will focus on other targets with potential, including targets at new zones with signs of high-grade gold-in-soil.

The drill programs are expected to continue into 2020, as the company steps up efforts at the project.

Talisman has 100%-held and farm-in tenements in the Lachlan portfolio.

Among the farm-in land is exploration licences EL8547, EL8571, EL8638, EL8657, EL8658 and EL8680 held by Bacchus Resources Pty Ltd.

Wholly-owned Talisman subsidiary Haverford Holdings Ltd can earn an 80% stake in the Bacchus tenements by spending $2.3 million in on-ground exploration expenditure over four years.

If Haverford spends the cash in the nominated period and earns into the project, Haverford and Bacchus will form a formal joint venture and Bacchus will be free carried for 10% of its joint venture interest until a decision to mine.

Bacchus can also take a 20% stake in Haverford tenements, EL8615, EL8659 and EL8677.

After a decision to mine, Bacchus can choose whether it will contribute or not.

If Bacchus decides not to contribute, Talisman subsidiary Haverford can grab Bacchus’ interest in venture for 95% of an agreed fair value.

If Haverford opts not to earn into the Bacchus tenements over 4 years, Bacchus can still take a 20% stake in the Haverford tenements.

What are the plans at Lucknow Gold Project?

Talisman also has the Lucknow Gold Project farm-in near Orange in NSW, which the company entered into in August 2019.

Lucknow is one of the earliest goldfields to be mined commercially in Australia after it was discovered in 1851.

The goldfield is in NSW’s Macquarie Arc which hosts extensive gold and copper mineralisation, including the large Cadia-Ridgway copper-gold and McPhillamys gold deposits, and Browns Creek copper-gold and Forest Reefs and Junction Reefs gold deposits.

Incomplete historical gold production records show Lucknow reportedly produced more than 400,000 ounces of gold at very high grades of 100 to 200 g/t.

Talisman considers minimal modern exploration work at Lucknow has been completed outside mine workings such as those that surround its Wentworth Mine.

The company plans to complete a program of geochemical surface sampling and mapping work at Lucknow project.

It then hopes to drill test potential extensions of the high-grade gold shoots and repeat mineralised structures.

Inflection points

  • In-field and laboratory successes from drilling at Lachlan Copper-Gold Project and Lucknow Gold Project in NSW
  • Significant transactions such as joint ventures or new farm-in agreements or project divestments with associated cash injections and net smelter royalty upsides
  • Capital investment opportunities and future dividends
  • A forecast start to 1% net smelter royalty payments from production from broader joint venture ground held in the divested Doolgunna Project Joint Venture, outside the Monty Copper-Gold Project mine plan area in Western Australia
  • A forecast start to 2% net smelter royalty payments from base metal production from Saracen Mineral Holdings Limited’s (ASX:SAR) (FRA:SIH) (OTCMKTS:SCEXF) Waterloo Nickel Project or future metal production from the now divested Sinclair Project tenements in Western Australia
  • Scoping and feasibility study-level commitments and associated financial milestones

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