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New Talisman rights issue underwriter picks up half stock after shortfall

Shareholders of New Talisman Gold Mines applied for only 52% of shares on offer under its renounceable rights issue, leaving the underwriter to make up the balance.

New Talisman, formerly known as Heritage Gold NZ, had offered about 119.9 million shares at 1 Australian cent or 1.3 New Zealand cents apiece to raise up to $A1.2 million to develop the Talisman mine in the Hauraki District. The rights offer was one new share and an attached option for every three shares held.

The company got applications for 62.5 million shares from 379 of its 1800 shareholders, leaving a shortfall of 57 million shares, it says in a statement to the NZX. Total funds raised from the rights issue, including the underwritten shortfall and before expenses was $NZ1.5 million.

The offer was underwritten by Canaccord Genuity (Australia).

The capital raising follows a share purchase plan started in April that raised $NZ306,000.

New Talisman also owns 21.7%of Broken Hill Prospecting, which is planning to develop a cobalt project at Thackaringa near Australia's Broken Hill.

The dual-listed shares last traded at 0.8 Australian cents on the ASX, valuing the company at about $A4.1 million, and have fallen by about a third this year. The NZX-listed stock was last at 1.1 cents and has dropped 46% this year.


Comments and questions

The track record of this company does not stand out, and the response to the rights issue tells the story as to how investors feel. One positive could the shareholding in Broken Hill Prospecting due to the tightly held scrip and the advancement of the cobalt project. Time will time.

A 52% takeup in the current market is a tremendous success. I can't see another NZ junior with such a solid uptake in the current market fully underwritten by a tier-1 broker. Most other NZ miners seem to be downsizing or closing mines and scrambling for cash.

Clearly shows the commercial confidence in the company and its project and huge support by the shareholders.

Looks like exciting times ahead for New Talisman.

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