New Talisman Gold Mines Limited: Woodstock Resource Upgrade

Auckland, New Zealand - New Talisman Gold Mines Ltd. (ASX:NTL) (NZE:NTL) today announced a substantial upgrade to its gold resources after the completion of the second module pertaining to the Talisman Deeps project in the Coromandel region of New Zealand.

HIGHLIGHTS

- WOODSTOCK RESOURCE INCREASE 25%

- WOODSTOCK GRADES INCREASE BY 70%

- BONANZA/TALISMAN RESOURCES MODULES NEAR COMPLETION

- PROGRESS UNDERGROUND PASSES 300M

As previously announced the deeps modules are near completion with a total of three modules, covering the Dubbo, Woodstock and Talisman/Bonanza Zones of the Maria load due for completion by the by 31 July. Once these are complete work will commence on upgrading the Mystery and Crown vein estimates to achieve JORC 2012 reporting compliance.

Charbel Nader Chairman of New Talisman stated "The work on the New Talisman Deeps resource modules has been an exciting and promising development for the company. As the results are exceeding original expectations the company may potentially review the manner and or timing of the exploitation of these resources. Once all the modules are complete we will review the options available with a view to maximising shareholder value and delivering benefits to all our stakeholders and the broader community. We are very grateful for the continued support of the community, the regulatory authorities and local businesses in the continued development of this world class asset."

This announcement pertains to the second module of the Talisman deeps Resource upgrade and is reported in compliance with the 2012 version of the JORC Code. The remaining Bonanza Module is on target for completion in the coming days.

The Woodstock Zone is the smallest resource with sparse sampling coverage in the deeper areas of the mine. The zone lies within metres of the portal opening and has multiple open faces in the mine and through a second portal. Access to this part of the orebody is thus relatively easy and further work will be undertaken to prospect the area underground.

Previous estimates were carried out without application of a cutoff grade. The 2013 Pre-Feasibility study determined that a cutoff grade of 2.5 g/t would be applicable to the Woodstock area. Application of this cutoff grade has seen the average grade of resources in the Woodstock Zone increase from 3.7g/t to 6.3g/t. This makes economic exploitation of the area a possibility and further work will be carried out to ascertain possible mining configurations and economics.

This is the second module of the Talisman deeps Resource upgrade and is reported in compliance with the 2012 version of the JORC Code.

The prospecting phase currently well underway at the Talisman site has established the site and the refurbishment of underground areas is providing access to the Mystery Vein. The underground team are now some 300 Metres inside the mine and are near completion of attachments for water and compressed air hoses to allow specialist equipment needed install robust ground support.

The resource upgrade at Woodstock and the any further resource increases at Talisman Deeps in its entirety will be included in an updated pre-feasibility study and ore reserve statement in due course. Where possible, areas identified will be prospected and tested for inclusion into the body of works during Bulk sampling.

The updated resource table for the Woodstock Zone is shown in the link below.

A lower cut-off grade of 2.5g/t Au Eq (previously 0g/t) was applied to reflect the mine cut-off grade estimated for the financial modelling in the 2013 prefeasibility study. This is 0.5g/t lower than that applied at the Dubbo Zone as the costs of mining this area No top cut to the data was applied.

Gold equivalents have been used due as the historic data is expressed in bullion values. These have been converted to gold equivalents based on the gold price during the main historic mining period to 1919 where gold price was a constant GBP4.25 or USD20.47. All more recent exploration data has been converted to gold equivalents at the same metal prices for consistency of resource estimation and reporting. A more detailed explanation of the methodology can be found in the technical summary at the end of this announcement.

A further area of 206,000m2 on the plane of the orebody has been identified as a Exploration Target. Information available indicates that this area is likely to yield a vein width of between 1.6m to and 2.4m (827296 to 1,240,944 tonnes) with AuEq grades ranging between 2.70g/t and 5.35g/t. This target constitutes a global Exploration Target as defined in the 2012 JORC Code. The potential quantity and grade is conceptual in nature and there has been insufficient exploration to estimate a Mineral Resource. It is uncertain if further exploration will result in the estimation of a Mineral Resource. On completion of the current prospecting programme the company will focus on developing an exploration programme to investigate the exploration targets.

BONANZA/TALISMAN RESOURCES MODULES NEAR COMPLETION

With modelling of the first two zones now complete the company is now focused on completion of the Talisman/Bonanza estimate where the historic databases acquired in 2015 have shown potential to increase the current resources to JORC 2012 compliance, which would further enhance the overall mineral resource estimate.

It is important to note that the Talisman and Bonanza Zones have not been included in previous resource estimates. However, evaluation of the historic channel sampling and considering recorded production and stope volumes there are a number of areas where there are unmined blocks of potentially economic grades remaining. NTL's engineering team is currently evaluating the ability to access these areas during prospecting and bulk sampling.

The entire Talisman Deeps project including all known data is expected to be finalised by 31 July. It is intended to have results peer reviewed before final release to the market.

Replacing the JORC 2004 Dubbo Resource and Woodstock estimates with the new estimate for both zones, and converting the remaining JORC 2004 resources from Crown and Mystery to gold equivalents gives total measured, indicated, and inferred resources of 396,000 Oz Au_Eq prior to the resource modelling underway on Talisman/Bonanza.

Technical summary

1. Regional Geology

The Talisman mining permit is located within the southern part of the Coromandel Volcanic Zone (CVZ), a north-northwest trending zone of Miocene to early Quaternary sub-aerial calc-alkaline volcanics (see figure 1 in the link below). The permit area covers part of the Karangahake gold-silver deposit, one of the major deposits of the Hauraki Goldfield, a 200-km long metallogenic zone of epithermal gold-silver and porphyry copper-gold mineralisation that extends from Great Barrier Island in the north to as far south as Te Aroha and Te Puke.

The volcanic rocks have been grouped into andesite and dacite, with associated intrusive rocks of the Miocene to Pliocene aged Coromandel Group and rhyolite of the late Miocene to Quaternary aged Whitianga Group. A north-northwest trending, block faulted basement of Mesozoic greywacke underlies the volcanic rocks. This basement only crops out in the northern part of the CVZ although reports from early 20th century deep drilling at Karangahake mention intersecting greywacke beneath the No 16 level of the Talisman Mine.

Ash and pumice that erupted from the Taupo Volcanic Zone and Mayor Island over the last 100,000 years blanket much of the permit area to a depth of up to 8m, which is an impediment to exploration.

2. Project Geology

The area is dominated by andesite and dacite of the Miocene aged Waipupu formation, part of the Coromandel Group, and the lithologies that host most of the known mineralisation. They consist of phyric plagioclase two-pyroxene andesites and dacites that are frequently autobrecciated and in places columnar jointed.

At Mt Karangahake, the Coromandel Group rocks are overlain by a 200m thick rhyolite cap, correlated with the Maratoto Rhyolite and the Rahu Formation to the north. These rocks are younger than the andesitic Waipupu Formation, but are correlated with the Waiwawa Sub-group. The local basement is Mesozoic aged greywacke.

At Rahu, which represents the northern strike extent of the Karangahake mineral deposits, Coromandel Group rocks are exposed in the southern and central parts, but much of the prospect is blanketed by rhyolitic volcanics and lake sediments of the Rahu Formation. The elevation of the contact between Coromandel Group andesites and the rhyolitic rocks at Karangahake and Rahu indicates that Rahu may have been relatively downthrown by about 200m by a fault through the Karangahake Gorge. Unaltered flows of the Whakamoehau Andesite of the Omahine Sub-group are exposed in the northeast, where they overlap some of the rhyolitic Rahu Formation.

The project lies within a major north-northeast trending structural corridor that hosts several other epithermal gold deposits including Golden Cross, Komata, Owharoa, Wharekiraponga and Onemana.

The main fault trends, as mapped from crush zones, underground mapping and air photos, are northwest, north-south, north northeast and east-west. The north-south and north-northeast faults and associated quartz veins are earlier than the east-west and northwest faults, with the latter usually displacing the major quartz veins by no more than a few metres (but up to 15 m has been observed). It has been postulated that the northwest structures, where the most recent movement is post mineral, may have been active before and during mineralising events, and provided the structural regime for the north to northeast emplacement of the mineralised quartz veins in dilatant zones.

3. Mineralisation

The Karangahake deposit is an epithermal quartz vein system, hosted mainly in andesite, and comprises two major known (Maria and Welcome/Crown) vein zones and a number of other vein zones, including the Mystery Vein and Rahu Ridge, within a 4km x 3km area of hydrothermal alteration.

The quartz vein system comprises a set of steeply to moderately west dipping, north-south to north-east trending, extensional quartz filled fissures. Mining has largely been confined to the Maria and Welcome/Crown veins, the most persistent of the fissure veins.

There is an extensive quartz vein stockwork developed in the silicified and clay altered rhyolitic cap on Mt Karangahake that predates the main gold mineralising event associated with the quartz fissure veins. The silicified and quartz veined rhyolitic tuff of the Rahu Ridge area to the north is interpreted as the strike extension of the mineralised system and has recently been shown to have significant gold/silver mineralisation.

The veins are reportedly deeply oxidised down to about the level of the Waitawheta River (40m RL) and contain bands and impregnations of limonite and manganese oxides.

The primary quartz sulphide mineralisation occurs in the lower levels of the Maria vein (below 0m RL) and the Welcome vein (below -90m RL) as banded quartz-rhodochroisite-calcite-sulphide vein filling. The sulphide bands are composed of sphalerite, galena, pyrite, chalcopyrite and electrum, and display the typical crustiform textures of epithermal ores.

3.1. Maria Vein

The Maria Vein has the largest recorded production. It has a known strike length of 1300 m, averages 2m to 3m wide and has a depth extent exceeding 700m. Its dip varies from 45oW to near vertical (80o W). In longitudinal section, there are four distinct ore shoots - Woodstock, Talisman, Bonanza and Dubbo. Historically, most of the ore came from the Talisman and Bonanza Shoots.

Further north in Taukani Hill, the Maria vein was worked to a limited extent in the Ivanhoe workings in the near surface oxidised zone. Low grade sections of vein, between and within the ore shoots were not stoped. Some of the ore shoots are bounded by post vein east-west faults.

In the upper levels of the mine (above 120m RL, No10 level), the vein is leached and completely oxidised, consisting of banded quartz with limonite and manganese oxides.

The average Au:Ag ratio of the oxidised ore is 1:4 and the gold and silver occur as electrum associated with goethite. A zone of partly oxidised sulphide ore, with Au:Ag ratios between 1:10 and 1:20, extends over a vertical interval of about 150m from No10 level to No13 level. The ore consists of sphalerite-galena-pyrite-chalcopyrite-electrum, with or without acanthite, as primary sulphides with minor amounts of goethite and manganese oxides. There are patches of very rich secondary ore, especially around No11 level. Silver values are very high in this ore (up to 2.4% Ag). In the primary sulphide ore zone below No13 level (-80m RL), the minerals are sphalerite-galena-pyrite-chalcopyrite-electrum with quartz and rhodochroisite. No acanthite is seen and this is reflected in higher Au:Ag ratios of between 1:3 and 1:1.

Below No14 level, the quartz sulphide mineralisation appears to decrease in electrum content, and a 1973 drill hole intersected the zone at -190m RL, below the Waitawheta River.

4. Sampling Techniques

4.1. Historic sampling

The historic channel sampling that has been captured off stope plans on the Maria Vein from the Talisman Gold Mining Company all have grades expressed as bullion value in pounds shilling and pence and sample intervals in feet and inches.

These are plotted on long section where stopes are dated as at 1919.

It is not possible to know exactly how these were taken however classical gravimetric fire assay techniques and channel sampling technics were well established by this time and on the balance of probability these are considered valid having been plotted on maps signed by the mine management of the day.

4.2. Pre-2003 sampling

Sampling by NTL predecessor company Heritage Gold was mainly on a reconnaissance basis and included surface and underground channel and continuous chip samples. These have not been used for resource estimation.

Channel sampling by NZ Gold Fields, Cyprus Mines Corp, Freeport, Homestake and Southern Gold have not been used in the resource estimation.

Much of the underground drilling was carried out under the Cyprus/NZ Goldfields joint venture. Cyprus at the time had a well-established sampling protocol with use of standards and duplicates as was used by them at the Golden Cross mine in the nearby Waitekauri Valley.

4.3. Post-2003 sampling

NTL completed a programme of channel sampling of accessible areas to establish resources remaining in the 7, 7A, 8 Level of the Talisman Mine and the 5A level of the Crown Mine. This work was done using handheld electric powered diamond saws and resulted in around 920 channels samples being collected.

Channel samples were taken at a nominal 5m spacing along strike of veins where exposed. Sample widths across veins were determined by the geology of the vein width. Where vein width is less than 1 metre samples were restricted to actual vein width. Where greater than a metre sample widths generally are 1 metre and no more than 1.4 metre sample width.

Channels were cut to nominal dimensions of 5cm by 10cm to resemble half HQ diamond drill core to provide similar sample support for resource estimation purposes.

Sample size was generally 5kg and collected in bins by chipping out each sample with a small pneumatic drill and by hand with cold chisels. The bins were cleaned between each sample to reduce chance of contamination.

To ensure representivity, care was taken to ensure equal-mass extraction along the entire channel.

Diamond core sampling, based on determination of mineralization from logging, all core halved using diamond saw, mineralized intervals sampled on nominal 1m lengths or to geological boundaries. Remainder of non-mineralised material sampled on 2m intervals.

4.4. Drilling techniques

An underground Longyear LM55 electric wireline rig was used, with a LM75 power pack, to drill 18 holes.

Diamond coring was all triple tube HQTT with a 1.5m core barrel to target depths. In rare instances where ground conditions dictated the drill diameter was reduced to NQ and core size was NQTT.

All core was oriented using plasticine and holes surveyed with Eastman multi or single shot cameras every 25m and at end of hole.

Some 5 holes were drilled using a small conventional Kempe rig in the Woodstock section. Core size was LTK60 core which is larger than NQTT core and slightly less than HQTT drill core. This core was not oriented and only collar positions were surveyed as holes were generally less than 15m.

4.5. Sample recovery

Diamond core was measured by drillers on site on a run by run basis and again by site geologist who recorded run length, measured core recovered and calculated recovery. These data then entered into spreadsheets and the drill database.

Use of triple tube coring maximizes core recovery and ensures maximizing core integrity. In the case of the conventional core from the Kempe rig, core was carefully extracted from the core barrel to maximize core integrity.

No known sample bias is likely to have occurred using the sample techniques employed.

Core recovery for the Kempe rig holes averages 92.8% (55.55m total metres).
Core recovery for the 18 wireline holes averages 96.43% (1058.55m total metres)

5. Geological modelling

There is enough continuity based on drill hole geology, surface and underground mapping, geophysics and geochemistry to have confidence in the continuity of the geology for areas estimated.

Geological interpretation of the Maria Vein and the ore zones within it have been determined by compiling all mapping and drill hole data completed by NTL and by detailed digitizing of georeferenced historic mine plans including vein positions and mapped widths, including faults on a level by level basis.

The geology has formed the basis to create domains to constrain the MRE process.

Vein positions and variability were checked against several of the levels where NTL had its own data to check consistency as a back-up against the historic mapping and more recent mapping by modern explorers.

This was used as the basis for constructing sections at 10m and 20m intervals along strike interpreting the position and vein thickness of the Maria Vein along its known strike length of 1300m.

These were then wireframed to and verified to form enclosed vein models suitable for estimation purposes.

6. Estimation

The wireframe models of the Maria Vein were filled with 10m by 10m by vein width blocks utilizing sub-cell splitting.

Variography determined that that an anisotropic semi variogram model with a range of 12m along strike and 36m on the dip of the vein was appropriate. The search ellipsoid was best oriented at -60 degrees +/- 20 degrees. This corresponds to visually determined trends in the orientation of known high grade shoots.

An overall wireframe model for the Maria Vein was produced but, based on geology, has been subdivided into 3 separate geological domains that correlate with the Dubbo Zone, the Talisman-Bonanza Zone and the Woodstock Zone. These domains were constructed and estimated separately.

The estimation was initially carried out using Ordinary Kriging and then Inverse Distance Squared as a check estimate. This was found to be within 2% of each other in terms of total ounces of gold.

Historic mine plans give a detailed view of areas stoped. Wireframe models of the stopes were produced and the gold content in them interrogated. The estimated gold mined from these stopes was subtracted from the overall resource gold equivalent content.

7. Classification Criteria

Only current sampling and drill hole data where verifiable QA/QC protocols were in place were used for estimation Measured and Indicated Resources, while the entire database, inclusive of historical data was included for the estimation of Inferred Resources.

The following classification criteria were applied:

Measured Resources - 3 samples within 1 variogram range

Indicated Resources - 3 samples within 2 variogram ranges

Inferred Resources - 3 samples within 3 variogram ranges.

8. Cut Off Grades

Cut off grades were based on a preliminary assessment of the likely direct mining costs. A grade/tonnage curve was used to estimate the likely applicable cut-off grade to achieve the required ROM grade. This was determined as a 3g/t Au for the Dubbo and Talisman Zones and 2.5g/t for the Woodstock Zone.

9. Metallurgical Recovery

Detailed metallurgical studies to date show that expected recoveries are likely to equal or exceed 95%.

The deposit is typical of the low sulphidation deposits in the Waihi Gold District which are by and large amenable to direct cyanidation, gravity separation of free gold and/or flotation concentrate.

Full details of the methodology and approach taken to the resource modelling can be found in the accompanying Table 1 (see the link below) to this release.

To view tables and figures, please visit:
http://abnnewswire.net/lnk/E37VM6LU

About New Talisman Gold Mines Limited:

New Talisman Gold Mines Ltd. (NZE:NTL) (ASX:NTL) is a dual listed with over 2,300 shareholders who are mainly from Australia and New Zealand. It is a leading New Zealand minerals development and exploration company with a mining permit encompassing the Talisman mine one of New Zealand’s historically most productive gold mines. Its gold properties near Paeroa in the Hauraki District of New Zealand are a granted mining permit, including a JORC compliant mineral resource within the original Talisman underground mine, and a Heads of agreement with Newcrest on an adjacent exploration permit along strike from the mine. The company is now advancing its plans to develop the mine, and advance the exploration project.

More about New Talisman Gold at www.newtalisman.co.nz



Contact:

New Talisman Gold Mines Ltd.
T: +64-27-5557737
E: info@newtalisman.co.nz
www.newtalisman.co.nz