Analysts at Stifel have hailed Talon Metals Corp's latest assay results, noting that the results support expectations of substantial resource growth.
Talon recently reported the discovery of "more thick, high-grade" nickel-copper mineralization in an area outside the main resource at its Tamarack project in Minnesota. The firm unveiled assays from 14 new drill holes in the CGO West area of the property.
One hole hit an impressive interval of 29.39 metres (m), from 180.27m depth, which graded 1.71% nickel, 0.98% copper and 0.05% cobalt. The nickel-equivalent grade was 2.21%.
“With CGO West located outside and adjacent to Talon's existing resource, the results once again support our expectation for substantial resource growth,” said the analysts at Stifel.
“Importantly, we note that while CGO West drilling was previously anticipated to conclude by now, the continued discovery of mineralization has led management to continue with the expansion drilling program to further expand the resource.”
While the feasibility study, due in 2023, remains the most significant near-term catalyst, Stifel continues to look for encouraging results from both infill and expansion drilling, consistent with its thesis that exploration could define a much larger resource than envisioned in the 2021 PEA.
“Management continues to target first production in 2026,” noted the analysts.
Meanwhile, Stifel said that with CGO East “looking good” and district scale exploration ongoing, it was confident resource growth will materialize.
“Given that drilling in CGO East has also intersected nickel sulfide mineralization with grades in-line with those elsewhere on the project, the potential for substantial resource growth is high, in our view,” said the analysts.
“For reference, the existing PEA is based on a nickel grade of 1.4%, with many intercepts in both CGO East and West delivering grades above this, and at shallow depths below ground surface.”
The analysts said that with CGO West showing “promising results” and new district scale anomalies about to be tested, they are confident the Tamarack resource will grow beyond that defined in the 2021 PEA, supporting their assumed mine life of 17 years with nickel equivalent production of 22 kilo-tons per annum (ktpa).
Stifel has an existing “Buy” rating and C$0.49 price target on Talon's shares.
Talon owns a 51% interest in the Tamarack nickel-copper-cobalt project. On completion of the feasibility study and a $10 million payment to Rio Tinto, Talon's ownership of the project will increase to 60%.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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