Junior explorer New Talisman Gold Mines has pulled out of a deal which would have allowed Chinese investors to finance the reopening of its Talisman mine near Waihi.
In December, New Talisman (NTL) signed a heads of agreement with St Albans, a special purpose vehicle for the Langfang Group.
Under the deal, the group would inject $10.9 million into NTL in return for 65 per cent after costs of all the gold and silver extracted from the mine's pre-feasibility reserves.
Executive director Matthew Hill said St Albans was unable to do on-site due diligence within the agreement's timeframe and although discussions continued in good faith, talks began to move away from direct investment in NTL.
''It just wasn't going to give our investors the kind of certainty of funding we needed,'' he said.
NTL also turned down a proposal from the Langfang Group to send its own people in to extract the ore in exchange for a percentage of the project.
Hill said NTL was negotiating an alternative financing arrangement and hoped to update shareholders within weeks.
''We have made excellent progress towards reopening the Talisman Mine and we are still on track to enter and upgrade access in preparation for gold production,'' he said.
Shares in NTL have fallen from 2.2c to 1.2c per share in the last year.
- Fairfax Media