New Talisman Gold Mines : Notice of General Meeting/Proxy Form

For personal use only

New Talisman Gold Mines Limited ("NTL" or the "Company") gives you notice that a Special Meeting of Shareholders will be held online Wednesday 29 June 2022 commencing at 2pm

Details of how to participate in the Special Meeting virtually are described below. The business of the Special Meeting of Shareholders will be:

SPECIAL MEETING BUSINESS

RESOLUTIONS

To consider and, if thought fit, pass the following ordinary resolutions of the Company:

1. Approval of issue of Convertible Notes and Shares on conversion
   "That, for the purposes of NZX Listing Rule 4.1.1 and ASX Listing Rule 7.1, and for all other purposes, shareholders approve the issue of Convertible Notes of up to NZ$3.5 million principal amount including the issue of NZ$1 million principal amount of Convertible Notes to Mr Hamish Brown, and shares on conversion of Convertible Notes, on the essential terms described in the notice of meeting."
   Implementation of this resolution is conditional upon resolution 2 also being approved by shareholders of the Company.
2. Issue of Convertible Notes to Hamish Brown
   "That, for the purposes of NZX Listing Rule 5.2 shareholders approve the issue of Convertible Notes to Hamish Brown, having a principal amount of NZ$1,000,000."

Implementation of this resolution is conditional upon resolution 1 also being approved by shareholders of the Company.

Virtual Webcast meeting

Shareholders can only participate in the special meeting virtually through our online webcast, further details of how to participate are described at the back of this notice. To participate, shareholders will need their CSN or security holder number which can be found on their Voting/Proxy Form. Shareholders will be able to view presentations, ask questions and cast their vote from their own computers, mobiles or similar devices.

Independent Appraisal Report

As required by the NZX Listing Rules, the company has arranged for Armillary Limited to prepare an Appraisal Report in relation to the issue of Convertible Notes to Hamish Brown (the Armillary Report). A copy of the Armillary Report accompanies this notice of meeting.

While shareholders are encouraged to read the Armillary Report in full, it is noted that in section

3.2 Armillary Limited concludes as follows:

In our opinion, after having regard all the relevant factors, the overall terms and conditions of the Notes Placement are fair to the Non-Associated Shareholders.

We consider that the Terms and Conditions of the Notes Placement are in line with market terms and conditions and that if the Notes Placement proceeds that the Non-Associated Shareholders will, at worst, be no worse off than they are currently.

Voting restrictions / ASX voting exclusion statement

Hamish Brown and any "Associated Person" (as that term is defined in the NZX Listing Rules) are not entitled to vote on either resolution.

For the purposes of the NZX Listing Rules, persons subject to a voting restriction may not be appointed as a discretionary proxy (but can be appointed as a non-discretionary proxy and expressly directed how to vote if appointed by a person who is not disqualified from voting). Discretionary proxies given to persons disqualified from voting will not be valid.

For personal use only

For the purposes of the ASX Listing Rules, the Company will disregard any votes cast in favour of resolution 1 by or on behalf of a person who is expected to participate in, or who will obtain a material benefit as a result, of the proposed issue of the Convertible Note securities (except a benefit sole by reason of being a holder of ordinary shares in NTL), including Mr Hamish Brown or any "Associate" (as that term is defined in the ASX Listing Rules). However this does not apply to a vote cast in favour of resolution 1 by:

• a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with the directions given to the proxy or attorney to vote on the resolution in that way; or
• the Chair as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or
• a holder acting sole in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:
  o the beneficiary provides a written confirmation to the holder that the beneficiary is not excluded from voting and is not an associate of a person excluded from voting on the resolution; and
  o the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

Proxies and representatives

You may exercise your right to vote at the meeting either by being present at the virtual meeting or by appointing a proxy to attend and vote in your place. A proxy need not be a shareholder of the Company. A body corporate shareholder may appoint a representative to attend the meeting on its behalf.

A proxy form is enclosed with this Notice of Special Meeting of Shareholders. If you wish to vote by proxy you must complete the form and produce it to the Company's Share Registrar, Computershare Investor Services Ltd, either by mailing to Computershare Investor Services Ltd, Private Bag 92119, Auckland 1142 New Zealand, or lodge your proxy appointment online at www.investorvote.co.nz(in each case), so as to be received no later than 48 hours before the meeting is due to begin, that is, before 2pm on Monday 27 June 2022.

If, in appointing a proxy, you have inadvertently not named someone to be your proxy, or your named proxy does not attend the meeting, the Chairman of the meeting will be your proxy and will vote in accordance with your express direction.

A proxy will vote as directed in the proxy form or, if voting is left to the proxy's discretion, then the proxy will decide how to vote on the resolutions (or on any motions from the floor moved at the meeting). The Chairman and other directors intend to vote any discretionary proxies in favour of the resolutions.

By order of the Board

Jane Bell

Company Secretary

9 June 2022

EXPLANATORY NOTES

Both resolutions are ordinary resolutions and require approval of a simple majority of votes cast at the meeting by shareholders entitled to vote and voting. Hamish Brown and any Associated Person are subject to the voting restrictions described above.

Resolution 1 - Approval of issue of Convertible Notes and Shares on conversion

On 27 April 2022, the Company announced it had completed its assessment of the pathway to production from its core asset the Talisman mine, and outlined its strategic plan and funding intentions. The funds, which are intended to be raised by the issue of Convertible Notes, are intended to be used to enable the Company to implement its strategic plan, which includes:

• recommencing underground activities at the mine, including developing the required Second Egress;
• advancing the Mystery Vein shaft;

For personal use only

• advancing the Mystery Vein will trigger the existing 2 year bulk sampling consent;
• opening a second face on the Mystery vein once the second egress is complete;
• funding the implementation of the traffic management plan; and
• funding the resource consent application for full mining consent.

In that announcement, the Company advised that it had engaged corporate advisors Campbell MacPherson to seek eligible and wholesale investors for a private placement of Convertible Notes to help fund that strategic plan. The Company will pay Campbell MacPherson a maximum total fee of NZ$132,500, to be paid in cash.

Prior to makings the announcement on 27 April 2022 members of the Board had considered other capital raising options, and canvassed the market. The Convertible Note is considered to be the best option (if not the only option), available to NTL. Pages 22-23 of the Armillary Report discusses alternatives to the Convertible Note issue. The Armillary Report concludes that, in summary, Armillary agree with the Board and do not consider any other possible funding options are realistic alternatives at this time.

The issue of the Convertible Notes, including the issue of NZ$1 million principal amount of Convertible Notes to Mr Hamish Brown, along with their terms and any potential issue of shares on conversion, (the Issue) are subject to shareholder approval under NZX Listing Rule 4.1.1 and ASX Listing Rule 7.1.

Broadly speaking, and subject to a number of exceptions, NZX Listing Rule 4.1.1 and ASX Listing Rule 7.1 limit the amount of equity securities that a listed company can issue without the approval of its shareholders over any 12 month period to 15% of the fully paid ordinary shares it had on issue at the start of that period.

The Issue does not fall within any of these exceptions and exceeds the 15% limits in NZX Listing Rule 4.5.1 and ASX Listing Rule 7.1. It therefore requires the approval of the Company's shareholders under NZX Listing Rule 4.1.1 and ASX Listing Rule 7.1.

Resolution 1 seeks the required shareholder approval to the Issue under and for the purposes of NZX Listing Rule 4.1.1 and ASX Listing Rule 7.1.

If resolution 1 is passed, NTL will be able to proceed with the Issue and apply the proceeds towards its Strategic Plans. In addition, the Issue will be excluded from the calculation of the number of equity securities that NTL can issue without shareholder approval under ASX Listing Rule 7.1.

If both resolutions are not passed, NTL will not be able to proceed with the Issue and there would be increased uncertainty around the financial position of the Company and its ability to implement its Strategic Plans. If alternative funding was not available this would likely lead to NTL ceasing operations and attempting to sell its assets. Such moves could be expected to have a negative impact on NTL's prospects and share price.

At the date of this notice of meeting, NTL has confirmed that substantial security holder Hamish Brown will participate in the Issue for NZ$1 million principal amount of Convertible Notes. Resolution 2 specifically deals with his participation, as required by the NZX Listing Rules. Other investors are still being confirmed. Mr Hamish Brown is not considered an ASX Listing Rule 10.11 party for ASX purposes because Mr Brown has not nominated a director to the NTL Board under any agreement that gives him the right or expectation to do so. Accordingly, approval is not required to be sought under ASX Listing Rule 10.11, but is only required and being sought under resolution 1 for the purposes of ASX Listing Rule 7.1 and resolution 2 applies solely because of the provisions of the NZX Listing Rules.

A maximum of 3.5 million of Convertible Notes of NZ$1.00 principal amount each are the subject of the Issue. As required by the ASX Listing Rules, all Convertible Notes must be issued within 3 months of shareholder approval. NTL will receive NZ$1.00 cash per Convertible Note issued.

The essential terms of the Convertible Notes are as follows:

1. Investment Amount Minimum NZ$100,000; Total issue size up to NZ$3.5 million
   / Face Value

For personal use only

Under the terms of the Convertible Notes described above the notes may convert into ordinary shares in the company at a 15% discount to the preceding 20 business day volume weighted average price (VWAP) of the ordinary shares of the Company, or at the discretion of the Company repaid in cash on the 18 month anniversary of drawdown, with no additional fees.

As at 31 May 2022 the VWAP of the Company's ordinary shares through NZX is NZ$0.002.

By way of illustration, if the VWAP of the Company' shares at the time of conversion was also NZ$0.002 per share, noteholders could be issued 2,058,823,529 shares (NZ$3.5m / (85% X NZ$0.002). This number represents 64.55% of the 3,189,305,438 shares currently on issue.

If the VWAP of the Company' shares at the time of conversion was NZ$0.001 (half the current price per share), noteholders could be issued 4,117,647,059 shares (NZ$3.5m / (85% X NZ$0.001). This number represents 129.11% of the 3,189,305,438 shares currently on issue.

If the VWAP of the Company' shares at the time of conversion was NZ$0.004 (twice the current price per share), noteholders could be issued 1,029,411,765 shares (NZ$3.5m / (85% X NZ$0.004). This number represents 32.28% of the 3,189,305,438 shares currently on issue.