JOHANNESBURG (miningweekly.com) – Mineral exploration company Talon Metals has secured $15-million in funding from private equity firm Resource Capital Fund (RCF), that will allow it to conduct further exploration at the Tamarack nickel/copper/platinum group elements project, in Minnesota, in the US, to earn an 18.45% interest in the project.
Talon would receive $1-million through a private placement subscription for common shares, at a subscription price of C$0.12 apiece and $14-million through an unsecured convertible loan, which would bear interest of 12% a year.
Meanwhile the company also signed an amending agreement and debt settlement agreement with Rio Tinto subsidiary Kennecott Exploration Company, which owns the Tamarack project.
Under the terms of the agreements, Kennecott agreed to forgive the principal amount, $4.5-million, of a previously granted unsecured loan, while it would also defer $2.5-million and $4-million option payments originally due by Talon in June 2015 and June 2016, respectively, until after the earn-in period.
Kennecott would convert the interest payable thereunder into common shares at a conversion price of C$0.09 a common share, which represented a 25% discount to the RCF subscription price.
Consequently, Talon would no longer have any debts payable to Kennecott.
Once Kennecott had spent the funds advanced by Talon on exploration activities, it would have 180 days to elect whether to proceed with a 81.55/18.45 joint venture on the Tamarack project, or to grant Talon the right to buy Kennecott's interest in the project for $114-million.