Talon Metals Corp. (TSX:TLO) provided an update on the Tamarack nickel-copper-PGMs project located in Minnesota, US. The Tamarack project comprises the Tamarack north project and the Tamarack south project.
As quoted in the press release:
Talon and Kennecott Exploration Company (“KEX”) have made certain amendments to the Exploration and Option Agreement and the Mining Venture Agreement to allow for a 2018 winter exploration program at the Tamarack Project. In order to allow for the 2018 winter exploration program to proceed, certain amendments were required under the agreements between Talon and KEX. Under the Exploration and Option Agreement, Talon and KEX have agreed that the Mining Venture Agreement will be entered into with immediate effect, rather than in February 2018; and under the Mining Venture Agreement, Talon and KEX have agreed to accelerate the timing for the approval process of the 2018 winter exploration program, so that the program is approved with immediate effect.
After an analysis of the potential impact of the 2018 winter exploration program on a future mine at the Tamarack Project, Talon has advised KEX that it has elected to not financially participate in the 2018 winter exploration program. Consequently, in return for KEX’s further expected investment of US$5.4 million, Talon’s interest in the Tamarack Project will be diluted by a maximum of approximately 1.48%, from 18.45% to 16.97% (note that dilution may be less if KEX elects to spend less money during the 2018 winter exploration program).
Sean Werger, president of Talon, commented:
Talon’s 1.48% expected dilution in return for an additional US$5.4 million (approximately C$6.7 million) investment at Tamarack is akin to Talon raising money in the capital markets at a substantial premium to its current share price. To be clear, our decision not to participate in the 2018 winter exploration program has no bearing whatsoever on future decisions we make as to whether to participate in future exploration programs. We remain focussed on the strategy of further developing the known mineralized Tamarack and 138 zones, as we believe this is what will create near term value for Talon shareholders.