Tesla Supply Deal Leads to Talon Stocks Experiencing a Peak
F
ollowing earlier news that Talon Metals (TSX: TLO) had inked a nickel supply agreement with Tesla, shares of Talon Metals (TSX: TLO) opened up roughly 41.7 percent (in mid-January), trading around a 52-week high. Tesla has agreed to buy 75,000 tonnes of nickel in concentrate over the next six years as part of the deal. The Tamarack nickel project in Aitkin County, Minnesota, which Talon and Rio Tinto jointly
hold, is expected to yield some metals. Talon owns a 51 percent stake in the Tamarack project, which consists of a significant land position (18 kilometers of strike length) with multiple high-grade intercepts outside of the present resource area. The goal is to build a responsible processing capability in the United States and expand this nickel resource. The Tesla supply deal is contingent on Talon acquiring a further 9% stake in the Tamarack project (bringing its total stake
to 60%) and putting the project closer to commercial production. Over and above the first 75,000-tonne commitment, Tesla has a privileged right to negotiate for the purchase of extra nickel concentrate. By Tuesday's market close, Talon's stock had lost some of its gains, but it was still up 16.6% at C$0.70 a share. The nickel miner's market capitalization is estimated to be around C$418 million.
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