Talon Metals plummets as it prices financing at discount to fund nickel project
Talon Metals (TSX: TLO) announced on Monday it plans to raise approximately C$24 million ($17.6 million) to fund the development of its Tamarack nickel-copper-cobalt project in Minnesota. Its shares, however, plummeted as investors digested its pricing.
The fundraising will be conducted via two separate financings: the first being a bought-deal private placement led by Canaccord Genuity for C$10 million, and the second a non-brokered placement for C$13.7 million.
The Canaccord-brokered financing will see Talon issue 45.46 million units priced at C$0.22 each, while the non-brokered offering comprises approximately 62.22 million units, to be issued under the same terms. Each unit contains one common share and one-half of a warrant, with each full warrant exercisable at $0.28 per share for a period of three years.
Talon Metals plunged 15.4% or C$0.04 at Monday’s open, taking its stock price to C$0.22, the same as the offering price. The move sent Talon’s share price back toward the levels seen last Thursday, when the stock spiked as much as 50% from C$0.20 to C$0.30.
The Toronto-based company has a current market capitalization of approximately C$197.4 million ($144.3 million).
Tamarack project
The funds will be used to support Talon’s ongoing work on the Tamarack project, which it is developing under a joint venture with Rio Tinto (ASX: RIO) as the project’s operator and 51% owner.
Currently, Talon’s team is looking to expand the Tamarack resource ahead of a feasibility study, part of the project’s environmental permitting process.
The last resource estimate in 2022 revealed 8.6 million tonnes grading 1.73% nickel and 0.92% copper in the indicated category and 8.5 million tonnes grading 0.83% nickel and 0.55% copper in the inferred category.
This resource will likely see a large increase following the high-grade discoveries made by Talon from infill drilling over the past few months, the company has said. The most recent, announced last month, was a “historic” discovery that broke the record for the longest intercept ever recorded at Tamarack.
