Bullish on New Talisman GoldStarted to take a position in NTL in 2022, so was holding the bag for over two years. In 2024, decided to add to my position instead of take a 60% loss. Firstly, because they got a new CEO that appears reasonably competent, and seemed actually focussed of getting the mine into production - which I came to doubt was actually the focus for the previous Management. Then came a trickle of good news;
New Government, open to being more supportive of extractive industries,
New gravity mill was on order from Canada (no harmful chemicals used to extract the gold. There is deep-rooted anti-mining sentiment in NZ but I feel that the "small footprint" above-ground and the fact that they are not using harmful chemicals to extract the gold should make them less of a protest target),
Then the gravity mill was in the country and being assembled (price still hadn't moved yet),
Mill has a 100ton ore processing capacity (probably will need to be expanded at some point - but it is a start - at 4g/ton = NZD66,000 a day in revenue at current prices),
New fast-track mining laws from Government issued, then clarified as also applying to gold mining,
Then some big news; a new exploration permit was granted that is adjacent to the existing claim - and lies in the direction of the known gold strikes. There will be gold there, but the grades, locations, and depths are still an unknown. At least NTL will soon be adding a cash-flow to finance additional exploratory drilling.
So, my 3x estimation is based on;
No additional gold strikes in the new Rahu exploration area.
No additional ore processing capacity being brought online (additional to the 100 ton capacity gravity mill that is; which isn't quite online as yet).
So, in my eyes there was a significant margin of safety being created that could turn a good investment into a great one. We must always guard against excessive optimism, and I have defined "take profit" points identified already as mining can be a bit "boom-and-bust." In my opinion, since this share / stock was such a poor performer for so long, there is significant up-side.
One of my major concerns is that such a large percentage of the indicated and inferred gold resource is of the less certain "inferred" variety. Will be hoping for additional positive news about this over the coming weeks and months. I have a reasonable time-horizon on this. Looking for a 200% gain in the next 3 to 5 years, although it may be much earlier than that. Best of luck everyone.
