The Pallinghurst Group, through Pallinghurst Nickel International, on October 18 agreed to acquire 133.61-million common shares of Talon Metals at a purchase price of $0.60 apiece and an aggregate value of $80.16-million.
The acquisition follows a binding private agreement with Resource Capital Fund (RCF) and is expected to close on or about October 22.
As a result of the transaction, Pallinghurst will own about 19.2% of the issued and outstanding Talon shares on a non-diluted basis.
At conclusion of the transaction, Pallinghurst and RCF will enter into an ancillary rights and relationship agreement, which among other things, will set out the basis on which Pallinghurst and RCF intend to seek common ground as to Talon’s potential financing strategy and certain corporate governance matters.
Following the relationship agreement, Pallinghurst and RCF will also agree to not sell, transfer or otherwise dispose of any of their Talon shares for a 12-month period following closing of the transaction without the prior written consent of the other party.
In a statement, Pallinghurst says it has no current plans or future intentions to acquire additional securities of Talon or dispose of securities of Talon; however, it may acquire additional securities of Talon in the future.
In addition, Pallinghurst will seek to have one representative on Talon’s board of directors with the consent of the board.
TSX-listed Talon is involved in a joint venture with diversified miner Rio Tinto on the high-grade Tamarack nickel/copper/cobalt project, in Minnesota, in the US.