Tamarac, Minnesota–(Newsfile Corp. – July 5, 2024) – Talon Metals Corp. (TSX: TLO) (OTC Pink: TLOFF) (“Talon” or “company) has acquired Talon Nickel (USA) LLC (“Talon Nickel“,” a wholly owned subsidiary of Talon, has agreed to grant additional net smelter revenue royalties to a subsidiary of Triple Flag Precious Metals Corporation (“Triple Flag Precious Metals Corporation”).Triple Flag“), Triple Flag USA Royalties Limited (“Triple Flag US” ) in exchange for a payment of US$8 million (approximately Canadian $10.9 million) (the “Triple Flag US Trade().
The key terms of the Triple Flag US Transaction are as follows: Proceeds from the Triple Flag US Transaction are expected to be used to support the continued advancement of the Tamarack Nickel Project in Minnesota, USA, and the Michigan Nickel-Copper Project in the Upper Peninsula of Michigan, USA, and for general working capital purposes.
Talon CEO Henri Van Rooyen commented: “Triple Flag has been a long-time partner with Talon and knows our projects and team well. We welcome this vote of confidence in our plans to discover, identify and produce nickel and other critical minerals in the United States. Proceeds from this fund, along with Talon’s two major U.S. government grants, are valuable non-dilutive sources of funding to support our operations in Minnesota, North Dakota and Michigan through 2025.”
Triple Flag US Trade
Key terms of the Triple Flag US deal include:
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In exchange for the cash consideration of US$8.0 million (approximately C$10.9 million), (a) Triple Flag, through its subsidiary Triple Flag US, received an additional 1.67% net smelter revenue royalty on its interest in the Tamarack Project (subject to the Talon Buy-Back Right, which is described in more detail below) (the “New royalty(b) The Company has issued 8,000,000 common share purchase warrants, each exercisable to acquire one common share of the Company at an exercise price of C$0.20 per share for a period of two years from the closing date of the Triple Flag U.S. Transaction.
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Talon has a repurchase right (“Repurchase Rights”), exercisable for up to two years from the closing date of the Triple Flag US Transaction and which may be accelerated under certain circumstances.Talon Repurchase RightsThe Company will exercise its Talon repurchase right in the amount of US$5.0 million, which represents 0.67% of the New Royalty, thereby reducing the New Royalty to 1.0%. The exercise of the Talon repurchase right is at the Company’s discretion. In the event that a change of control transaction occurs with respect to Talon during the two-year period, to the extent not exercised, the Talon repurchase right will be terminated earlier 25 days after the completion of such change of control transaction.
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Triple Flag US will have the right to increase the designated percentage of new royalties by an additional 0.50% for any additional US$2 million payments if our cash balance decreases to below US$2 million and the decrease is not remedied within 60 days. In such circumstances, the Talon repurchase right will also terminate. Triple Flag US’s right to increase the designated percentage will terminate with respect to the applicable decrease in cash balance if the right is not exercised within an additional 60 days following the expiration of our remedy period.
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The Company, together with its other wholly owned subsidiaries, Cloudmine Holdings Limited and Talon Metals (USA) Inc., have agreed to guarantee Talon Nickel’s payment and performance obligations under the royalty agreements entered into in connection with the Triple Flag US transaction, and Talon and its subsidiaries have provided collateral to Triple Flag US to support the payment and performance obligations related to the new royalties and guarantees.
About TALON
Talon is a TSX-listed base metals company working in a joint venture with Rio Tinto on the high-grade Tamarack Nickel-Copper-Cobalt Project in central Minnesota. Talon’s shares also trade on the U.S. OTC market under the symbol TLOFF. The Tamarack Nickel Project consists of an extensive tract of land (18 km strike length) that contains additional high-grade intercepts outside the current resource area. Talon has the right to acquire up to 60% of the Tamarack Nickel Project and currently owns 51%. Talon’s focus is (i) expanding and replenishing the current high-grade nickel mineralized resource prepared pursuant to NI 43-101 to develop a mine plan for submission to Minnesota regulators, and (ii) following up on additional high-grade nickel mineralization in the Tamarack intrusive complex. Talon has entered into a neutrality and workforce development agreement with the United Steelworkers union. Talon’s Battery Mineral Processing Facility in Mercer County was selected by the U.S. Department of Energy for a $114.8 million grant under the Bipartisan Infrastructure Act, and the U.S. Department of Defense awarded Talon a $20.6 million grant to support and accelerate Talon’s exploration activities in both Minnesota and Michigan. Talon has an experienced and talented team in exploration, mine development, external relations and mine permitting.
For additional information about Talon, please visit the company’s website at www.talonmetals.com or contact:
Sean Wager
1 (416) 500-9891
Email: werger@talonmetals.com
About Triple Flag
Triple Flag is a specialist precious metals focused streaming and royalty firm. Triple Flag provides bespoke finance solutions to the metals and mining industry with a primary investment focus in gold and silver in the Americas and Australia, with a total of 234 assets including 15 streaming and 219 royalties. These investments are tied to mining assets at various stages of the mine lifecycle, including 32 producing mines and 202 development and exploration stage projects. Triple Flag is listed on the Toronto Stock Exchange and the New York Stock Exchange under the ticker “TFPM”.
Forward-Looking Statements
This news release contains certain “forward-looking statements.” Any statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or projects will occur in the future are forward-looking statements. These forward-looking statements reflect the Company’s current expectations or beliefs based on information currently available to the Company. Such forward-looking statements include statements regarding the intended use of proceeds received from the Triple Flag U.S. Transaction and other available funds, plans for the discovery, definition and production of nickel and other significant minerals in the United States, future exploration, drilling and results, and the potential for high-grade mineralization. Forward-looking statements are subject to significant risks, uncertainties and other factors that may cause actual results to differ materially from those described in the forward-looking statements. Also, no assurance can be given that such actual results, even if realized or substantially realized, will have the expected consequences or effects on the Company.
Forward-looking statements speak only as of the date on which they are made, and, except as required by applicable securities laws, the Company disclaims any intention or obligation to update any forward-looking statements, whether as a result of new information, future events or results, or otherwise. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance, and therefore, undue reliance should not be placed on such statements due to the inherent uncertainties therein.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/215520
