Lundin Mining set to negotiate Talon Metals properties deal

Lundin Mining Corp. [LUN-TSX; LUMI-Sweden] has gained the exclusive option to negotiate an earn-in agreement with Talon Metals Corp. [TLO-TSX, TLOFF-OTC Pink] for the right to acquire up to a 70% ownership interest in the Boulderdash exploration properties, which are adjacent to Lundin’s Eagle mine in Michigan. The Boulderdash target is located approximately 12 killometres from the Eagle mine, the only operating nickel mine in the United States. A maiden drill hole at Boulderdash announced in October 24, 2024, intersected 00.92 metres of grade 0.41% nickel and 0.35% copper starting at 9.14 metres depth.  More recent drilling has intercepted 2.35 metres of nickel-copper massive sulphide mineralization assaying 2.33% nickel and 2.95% copper.

Concurrently with the execution of the exclusivity agreement, Lundin Mining has advanced US$5 million, to among other things, commence drilling at Boulderdash. If the parties do not execute the option agreement, Talon will either repay such advance or issue shares to the company with an aggregate subscription price equal to such advance based on the five-day volume weighted average price of Talon shares on the TSX at the time of issuance.

It is anticipated that under the terms of the option agreement, Lundin Mining will agree to finance up to 30,000 metres of Talon’s drilling campaign at Boulderdash in exchange for a 44.6% interest in the properties. The drill campaign will be completed in 10,000 metre tranches at the election of Lundin Mining. Following the completion of 30,000 metres of drilling, the company may finance a feasibility study at Boulderdash in exchange for an additional 25.3% stake in the property, for a total ownership interest of 70%, as well as the potential for a 90% interest in certain properties adjacent to Boulderdash.

Talon shares were unchanged at $0.085 and trade in a 52-week range of 19.5 cents and $0.075.

Lundin is a diversified Canadian base metals mining company with operations or projects in Argentina, Brazil, Chile, Portugal, Sweden and the U.S., primarily producing copper, zinc, gold, and nickel

Talon Metals, through its Talon Nickel (USA) LLC unit, was recently awarded a research and development contract from the U.S. Department of Defence’s Defense Logistics Agency. The DLA will provide funding in the fixed amount of US$2.47 million to finance scientific research on new approaches for extracting nickel, cobalt and iron from domestic nickel sulphide ores and tailings. The funding will be provided over a 15-month period for a project titled “Building a Domestic Supply Chain of +99% Pure Nickel Powders and Value-Added Products for Clean Energy and Defense Related Manufacturing through a Novel Flowsheet to Process Domestically Sourced Polymetallic Sulphide Ores.’’

The company said funding underscores the long-term strategic importance of nickel for defense platforms, electric batteries, and other clean energy systems.

“China is executing a long-term strategy to control the global nickel market through investing billions of dollars in Indonesian nickel mining and refining,’’ said Talon CEO Henri van Rooyen. “Today, over half of the world’s supply of nickel is produced by Sino-Indonesian firms and funded by Chinese state banks,’’ he said.