Talon Metals Corp has announced the closing of its previously announced bought-deal public offering which saw the issue of 38,200,000 shares at a price of $0.72 each for aggregate gross proceeds of $27,504,000.
Concurrently with the closing of the offering, Talon completed a non-brokered private placement of 8,953,013 shares at the same issue price with Pallinghurst Nickel International Ltd for aggregate gross proceeds of $6,446,169.36. The private placement was completed to enable Pallinghurst to maintain its ownership of approximately 19% in the corporation.
The corporation said it intends to use the net proceeds from the offering and the private placement for advancing work related to its planned exploration and development program at the Tamarack North Project in Minnesota, and for general working capital purposes.
READ: Talon Metals shares fly after landmark agreement with Tesla to supply nickel concentrate from its flagship Tamarack project in Minnesota
The offering was conducted by a syndicate of underwriters led by TD Securities Inc and including Paradigm Capital Inc., BMO Capital Markets (NYSE:BMO), and Sprott Capital Partners LP under the terms of an underwriting agreement entered into between the corporation and the underwriters on January 24, 2022.
Talon Metals has granted the underwriters an over-allotment option to purchase up to an additional 5,730,000 shares at the issue price, exercisable in whole or in part at any time up to 30 days after the closing of the offering.
Should the offering's over-allotment option be exercised, Pallinghurst shall have the option to purchase such additional shares under the private placement as to allow it to maintain its approximate 19% ownership of shares of the corporation following the exercise of the over-allotment option.
The shares issued under the private placement are subject to a restricted hold period of four months and one day following the closing of the private placement.
No commission or other fee will be paid to the underwriters in connection with the sale of shares under the private placement, however, a 3% finders fee was paid by the corporation to certain finders in connection with the offering.
The offering and the private placement remain subject to final approval of the Toronto Stock Exchange (TSX).
The securities issued under the offering were qualified for distribution under a prospectus supplement dated January 24, 2022, filed in each of the provinces of Canada other than Quebec under Talon's base shelf prospectus dated December 7, 2021, and were sold in the United States to Qualified Institutional Buyers by way of private placement pursuant to an exemption from the registration requirements of the 1933 Act. The securities have not been and will not be registered under the 1933 Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.
Talon is a TSX-listed base metals company in a joint venture with Rio Tinto on the high-grade Tamarack Nickel-Copper-Cobalt Project located in central Minnesota. The Tamarack Nickel Project comprises a large land position (18 kilometres of strike length) with high-grade intercepts outside the current resource area. Talon has an earn-in right to acquire up to 60% of the Tamarack Nickel Project, and currently owns 51%.
Talon is focused on expanding and infilling its current high-grade nickel mineralization resource prepared in accordance with NI 43-101 to shape a mine plan for submission to Minnesota regulators, following up on additional high-grade nickel mineralization in the Tamarack Intrusive Complex, and exploring the prospects for significant carbon storage in the ultra-mafic rocks that comprise the Tamarack Intrusive Complex through carbon mineralization.
The company has an agreement with Tesla Inc (NASDAQ:TSLA) to supply it with 75,000 metric tonnes (165 million lbs) of nickel in concentrate (and certain by-products, including cobalt and iron) from the Tamarack Nickel Project over an estimated six-year period once commercial production is achieved. Talon has well-qualified experienced exploration, mine development, external affairs and mine permitting teams.
Contact the author at jon.hopkins@proactiveinvestors.com