Talon Metals to Acquire Lundin Mining’s Eagle Mine and Humboldt Mill Operations

Talon Metals Corp. (TSX: TLO, OTC: TLOFF) has signed a share purchase agreement with Lundin Mining Corporation (TSX: LUN) to acquire 100% of the Eagle Mine and Humboldt Mill operations. The transaction will result in the combination of Lundin Mining’s producing Eagle Mine and associated Humboldt Mill with Talon’s interest in the Tamarack Nickel-Copper-Cobalt Project and a prospective exploration land package of over 400,000 acres in Michigan.

The acquisition is expected to create a unified, multi-asset U.S. nickel platform, with the Eagle Mine and Humboldt Mill providing positive cash flow to fund the development of Talon’s Tamarack Nickel-Copper Project and exploration activities. The transaction highlights include Talon acquiring 100% of the Eagle Mine and Humboldt Mill operations, issuing 275,152,232 common shares to Lundin Mining, and Lundin Mining maintaining all financial assurances for the Eagle Mine and Humboldt Mill reclamation until Talon’s Board approves development of a new mine.

Key Transaction Highlights

The key highlights of the transaction include:

• Talon will acquire 100% of the Eagle Mine and Humboldt Mill operations.
• Talon will issue 275,152,232 common shares to Lundin Mining, representing 18.73% of the Company on a non-diluted basis after the Concurrent Private Placement by the Lundin Family Trust.
• A concurrent Private Placement with the Lundin Family Trust for approximately US$5.6 million in gross proceeds will result in the Lundin Family Trust owning approximately 1.26% of Talon after closing of the Transaction on a non-diluted basis.
• Jack Lundin and Juan Andrés Morel, the CEO and COO, respectively, of Lundin Mining will join the Talon Board.
• Lundin Mining will maintain all financial assurances for the Eagle Mine and Humboldt Mill reclamation until Talon’s Board approves development of a new mine, provided that Talon uses commercially reasonable efforts to amend or replace such financial assurances.

Creating a Unified, Multi-Asset U.S. Nickel Platform

According to Henri van Rooyen, Chief Executive Officer of Talon, “This transaction brings together the positive cash-flow-generating Eagle Mine and Humboldt Mill, the proven operating experience of the Eagle and Humboldt teams, and Talon’s in-house exploration capabilities to create the only operating primary nickel-copper company in the United States with expansion potential.” The unified Talon team will deploy the positive cash flow from the Eagle Mine and Humboldt Mill, together with an estimated US$27 million of cash and cash equivalents, towards extending the Eagle mine life, accelerating exploration in Michigan and in Minnesota, advancing permitting at the Tamarack Nickel-Copper Project and the Beulah Minerals Processing Facility, and progressing engineering towards feasibility study and construction.

About the Transaction

Pursuant to the terms of the Share Purchase Agreement, Talon will acquire 100% of the outstanding shares of Lundin Mining US Ltd., a wholly-owned subsidiary of Lundin Mining, which owns the Eagle Mine and Humboldt Mill, in exchange for 275,152,232 Talon Shares and the grant of a production payment royalty on ore from sources other than the Eagle Mine that is processed through the Humboldt Mill. The Share Purchase Agreement also provides that, concurrently with closing of the Transaction, Talon and Lundin Mining will enter into an investor rights agreement and a lock-up agreement.

Director and Officer Changes

At closing of the Transaction, the Talon Board will be reconstituted to consist of ten directors, including Jack Lundin and Juan Andrés Morel, the CEO and COO, respectively, of Lundin Mining and seven of the eight directors currently on the Talon Board. Darby Stacey, the current Managing Director of Eagle Mine, will be appointed to the Talon Board and appointed as CEO of Talon, overseeing the operations of the combined assets, with Henri van Rooyen being appointed Executive Chairman.

Concurrent Private Placement

Concurrently with the signing of the Share Purchase Agreement, Talon signed a subscription agreement with a trust settled by the late Adolf H. Lundin pursuant to which the Lundin Family Trust agreed to purchase 18,555,783 Talon Shares at a price of C$0.4194 per Talon Share on a private placement basis for gross proceeds of approximately C$7.8 million or US$5.6 million. The gross proceeds of the Concurrent Private Placement will be used to fund transition costs, due diligence costs, acquisition costs, and integration costs.

Forward-Looking Statements

This news release contains certain “forward-looking statements”. All statements, other than statements of historical fact that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to the Company. Such forward-looking statements include statements relating to the Transaction and Concurrent Private Placement, including the impact and anticipated benefits of the Transaction; the anticipated timing of the completion of the Transaction and the Concurrent Private Placement; and future exploration work, including future drill holes, drill results, assays, geophysics and geological interpretations.

Smart Tip for Readers

When evaluating mining companies, consider the potential for diversification and expansion, as well as the company’s commitment to environmental responsibility and community engagement, to make informed investment decisions. For more information on Talon Metals and the acquisition of Lundin Mining’s Eagle Mine and Humboldt Mill operations, visit Here