Talisker unveils US$31.2 million Sprott royalty deal

Talisker Resources Ltd. [TSX-TSK, TSKFF-OTCQB] on Monday announced a US$31.25 million financing deal with Sprott Resource Streaming and Royalty Corp. for its 100%-owned Bralorne gold project in British Columbia.

Talisker said the financing takes the form of a royalty agreement, under which Sprott will pay Talisker up to US$31.25 million for a net smelter return royalty covering all minerals produced from the project.

Talisker shares advances on the news, rising 4.54% to 11.5 cents in light trading volume. The shares are currently trading in a 52-week range of 24.5 cents and $0.095.

“This non-dilutive funding package delivers a major catalyst to Talisker, providing the necessary capital for the pathway to long term production at Bralorne,’’ said Talisker President and CEO Terry Harbot. “The flexible deal provides the necessary upfront funds for infill drilling and development while protecting the project’s considerable resource and exploration upside with buyback and capping optionality,’’ he said. “Following on from our strong resource statement earlier this year, we look forward to advancing Bralorne to the next stage.’’

Highlights of the royalty transaction include a maximum of US$31.25 million with a minimum consideration of US$18.75 million, payable as to:

• An initial grant of a 1.12% royalty for a draw of US$7 million for drilling, detailed engineering and working capital.
• A further 1.88% royalty for a subsequent draw of US$11.75 million, among other things, the signing of a toll milling agreement for mobilization, site infrastructure, resource conversion drilling and working capital.
• Up to a further 2.0% royalty, to a maximum of 5.0%, for US$12.5 million available as needed for site infrastructure, mine start-up capital and working capital.
• The deal gives the Talisker the option until December 31, 2028 to repurchase 50% of the royalty.
• The residual royalty will be reduced by an additional 50% for no additional consideration following 1.5 million ounces of gold production. Closing of the initial 1.12% royalty is expected to occur by mid-June, 2023.

Talisker is engaged in gold exploration at two advanced gold projects in British Columbia with significant exploration potential and historic high grade gold production. They are the Bralorne Gold Complex and Ladner project.

Another key asset is an 85% interest in the Spences Bridge Gold Belt and several other early stage greenfield projects.

The Bralorne mine complex was one of the highest-grade and longest producing gold mines in British Columbia. It operated for over 50 years. The complex consisted of three mines – Bralorne, Pioneer, and King – which produced 4.2 million ounces of gold at an average recovered grade of 17.7 g/t.

Production ceased in 1971 due to the low gold price at the time.

Bralorne is estimated to contain an indicated resource of 33,000 ounces of gold, and an inferred resource of 1.6 million ounces.