Based on the ruling nickel price the deal is nominally worth more than $1.5 billion. Any iron and cobalt by-products at the proposed mine are also part of the deal. Tamarack is currently the only high-grade development-stage nickel project in the US.
Talon needs to start commercial production at Tamarack by the end of 2025, which may be extended by the agreement of the parties for up to 12 months “following which Tesla has a right to terminate the agreement and Talon may elect to sell to other parties.”
Talon, for its part, undertakes to earn a 60% interest in Tamarack, a joint venture with Rio Tinto. Talon already owns 51% with an option to add another 9%. To earn the maximum interest, it must make staged payments totalling $22.5 million in cash and shares to Rio Tinto, spend $10 million on exploration and development, and complete a feasibility study on the project.
The Tamarack project, located 210 km north of Minneapolis and 89 km west of Duluth, is comprised of the Tamarack North and Tamarack South projects, with approximately 31,000 acres of private land and state leases.
Shares in Talon trended lower on the Toronto Stock Exchange on Monday ahead of the announcement and subsequent halt in trading. The company has a market capitalization of C$418 million ($329m).
