Trans-Tasman listed mining company Heritage Gold (ASX: HTM | NZX: HGD) is struggling to raise up to $5 million capital for its project at the historic Talisman gold mine in the Coromandel and has turned to projects with better investment prospects in Papua New Guinea, Chile and Australia.

Located on Department of Conservation (DOC) land in the Karangahake Gorge near Waihi, the project (including the Talisman and Dominion Knoll exploration prospects) has an estimated commercial value based on a potential 1 million ounce resource.

A mining permit application was filed with the Ministry of Economic Development (MED) around a year ago and the company said it was confident of achieving it by the end of the year.

It hoped to then apply for resource consent on a non-notified basis for the under ground project.

At the company’s AGM this morning, chairman Geoff Hill told shareholders that overseas groups were reluctant to consider New Zealand as a mining and resource friendly environment.

He said Chinese groups had expressed interest and the price of gold in New Zealand dollars was helping, but regulation posed a barrier.

“Memories of past regulatory intransigence and a very lengthy process to get mining to continue to influence overseas investors’ attitudes. The new government has stated its intent to fast track processes in the resources sector. We hope these essential changes occur soon.”

Heritage Gold has a portfolio of gold, base metal and uranium tenements in Australia and New Zealand. The 133-year-old Talisman mine has produced more than 28 tonnes of gold and 85 tonnes of silver.

It was initially targeted for further exploration in 2004, when Heritage raised $1.22 million from Australian investors to develop it, claiming that it could contain up to 5.8 tonnes of gold and 22.6 tonnes of silver.

Mr Hill said as a New Zealand explorer, Heritage Gold attracted little interest in mining orientated markets such as Australia and Canada. “In New Zealand the lack of interest in mining shares is also a limitation.”

Capital of between $4 million and $5 million was needed, he said. “This is a significant amount for a small company – it’s big company territory.”

The company was actively seeking participation in “regions which seem to be able to attract investor interest” including several gold projects in Papua New Guinea, Chile and Australia.

Otherwise, it may be forced to seek other various fund raising options, including turning to shareholders.

One shareholder asked if the company’s financial structure would hold up long enough, but directors said the company was not about to disappear.

“We’ve been hanging out for a joint-venture but we do have fall-back plans in place and we will go to market if we have to, but we don’t want to dilute value for our shareholders.”

The shareholder said it could not get more diluted.

Another shareholder asked if offshore projects were a distraction, but Mr Hill said the projects already had established resource, with a similar style of deposit to the Coromandel and investor interest.