Talon Metals Corp. (TSX:TLO) said it has completed the next phase of its agreement with Rio Tinto to become the majority owner and operator of the high-grade Tamarack Nickel-Copper-Cobalt project in central Minnesota.
Talon is in a joint venture with Rio Tinto on the high-grade Tamarack Nickel-Copper-Cobalt project in Minnesota, comprised of the Tamarack North project and the Tamarack South project. Talon has an earn-in to acquire up to 60% of the Tamarack Nickel Project in the US.
In line with a November 2018 agreement between a subsidiary of Talon and a subsidiary of Rio Tinto, Talon said it has now completed a stock-based transaction to earn a 51% interest in the Tamarack Nickel project.
READ: Talon Metals hits highest-ever nickel and copper grades at its Tamarack property in Minnesota
Under the agreement, Talon had until March 2022 to pay US$5 million to Rio Tinto to complete the 51% ownership interest in the Tamarack Nickel Project. Talon has elected to accelerate the transaction, and rather than receiving US$5 million in cash, Rio Tinto has agreed to accept 10,543,333 units of Talon at a deemed issuance price of C$0.60 per unit in full satisfaction of the obligation.
Each unit will be comprised of one Talon share and one-half of one purchase warrant. Each warrant will be exercisable to acquire a Talon share for a period of one year at an exercise price C$0.80 per share, said the company. Going forward, Talon will have until March 2026 to earn an additional 9% interest in the Tamarack Nickel project for a total 60% interest.
"The Talon team is very proud to have reached this milestone and become the majority partner in the Tamarack Nickel Project," Talon CEO Henri van Rooyen said in a statement. "We are also grateful for our strong partnership with Rio Tinto, who has contributed tremendous value to the progress of the Tamarack Nickel Project. The project will be a vital source of nickel and other critical minerals for the US battery supply chain, and we are pleased to continue our partnership with Rio Tinto to advance the project from exploration to production."
Talon is the operator of the Tamarack Nickel project with control over the strategic and operational direction of the project. The company highlighted that to earn the 51% interest, Talon successfully accomplished the following:
- Paid US$6 million in cash and issued US$1.5 million in shares to Rio Tinto in March 2019
- Spent US$10 million on exploration and development expenditures on the Tamarack Nickel project (completed in 2021)
- Issued an additional US$5 million in Units to Rio Tinto (completed in September 2021)
The Tamarack Nickel project comprises a large land position with numerous high-grade intercepts outside the current resource area. Talon has a well-qualified exploration and mine management team with extensive experience in project management.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
Follow her on Twitter: @UttaraProactive