Talon Metals Corp. (TSX:TLO, OTC:TLOFF) told investors that its US subsidiary Talon Nickel (USA) LLC has entered into a definitive agreement with the US Department of Defense (DoD) to support domestic exploration for nickel, sending its shares higher on Tuesday.
The company said in a statement that the agreement with the DoD’s Office of Manufacturing Capability Expansion and Investment Prioritization would accelerate and expand its efforts to discover and secure additional supplies of nickel for the growing US battery manufacturing base and defense-related supply chains.
Talon said the DoD will contribute US$20,607,146 and Talon will contribute US$21,783,150 in matching funding on a cost-share basis — including the use of existing equipment and current employee cost — over a period of 39 months.
The funds will go towards Talon’s in-house drilling and geophysics teams to purchase more equipment, hire additional employees and accelerate its efforts to discover and delineate more high-grade nickel deposits within the Midcontinent Rift geology of the US.
"This funding makes clear that domestic supply of nickel is a national security priority," Talon CEO Henri van Rooyen said.
"Congress and the Biden Administration have created powerful new tools to build up domestic supply of critical minerals required for clean energy systems and national defense. With this funding, Talon will be able to accelerate our efforts to discover domestic sources of battery-grade nickel and help ensure that the United States is not dependent on Russia, China or Chinese companies operating in countries like Indonesia for nickel that is needed in both defense platforms and clean energy systems.”
Talon noted that it is currently exploring the Tamarack Intrusive Complex (TIC) in central Minnesota on a 24-hour-a-day basis with significant recent success.
The company also recently acquired the mineral rights contained in the historic Henry Ford Land package in the Upper Peninsula of Michigan proximate to the only operating nickel mine in the US.
Talon is one of the few exploration and mine development companies that has its own in-house teams conducting drilling, geophysical analysis and geologic planning. With its fleet of five drill rigs and in-house geophysicists, Talon said it is well-positioned to use the funding from the Department of Defense to expand and accelerate its exploration activities in Minnesota and Michigan.
The company's shares rose 3.9% to C$0.27 by 1pm in Toronto.
Contact the author at stephen.gunnion@proactiveinvestors.com