TALON METALS

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ELECTRIC VEHICLE ADOPTION WILL INCREASE THE DEMAND FOR NICKEL

GENERATION AND GRID
INFRASTRUCTURE (kT)

GRID
STORAGE (kT)

CHARGING
INFRASTRUCTURE (kT)

NON-INTERNAL COMBUSTION
ENGINE VEHICLES (kT)

CURRENTLY ONLY CLASS 1 NICKEL IS SUITABLE FOR BATTERIES

THERE ARE DIFFERENT TYPES OF MINES AND PROCESSING PLANTS THAT CAN PRODUCE CLASS 1 NICKEL

TAMARACK HIGH GRADE
Ni-Cu-Co PROJECT

CAPEX

  $17,200*

(Per annual tonne of payable Ni)

OPEX

$2.20/lb*

LARGE TONNAGE, LOW GRADE OPEN PIT
SULPHIDE DEPOSITS

CAPEX

+$40,000**

(Per annual tonne of payable Ni)

OPEX

$4.30/lb**

HIGH PRESSURE ACID LEACHING
(HPAL) PROJECTS

CAPEX

$63,000***

(Per annual tonne of payable Ni)

OPEX

+$4/lb***

* Talon Initial PEA (November 2018) ** Talon calculation based on publicly available information *** Talon Internal Study

AS HIGH GRADE Ni-Cu-Co DEPOSITS CAN PRODUCE NICKEL AT A SIGNIFICANTLY LOWER COST THAN EITHER HPAL OR LARGE, LOW GRADE, OPEN PIT SULPHIDE DEPOSITS, THE INVESTMENT OF CHOICE IS, AND WILL ALWAYS BE, HIGH GRADE Ni-Cu-Co DEPOSITS. THERE ARE TWO CHALLENGES:

TAMARACK IS ONE OF THE WORLD'S ONLY REMAINING UNDEVELOPED HIGH-GRADE Ni-Cu-Co PROJECTS ON INFRASTRUCTURE.

* High grade deposits discovered in 21st Century outside of mining camps and previous discoveries with >0.75% Ni grade. Data shown for latest public domain compliant 43-101 mineral reserve and resource estimates without factoring in material produced since mine start-up. (Data provided by Dr. Peter Lightfoot for Talon Metals, October 2018.)

THE AVERAGE NICKEL GRADE OF GLOBAL PRODUCTION IS HEADING TO 1% NICKEL FOR UNDERGROUND OPERATIONS AND LESS THAN 0.4% FOR OPEN PIT OPERATIONS

TAMARACK, THE RIGHT PLACE
AT THE RIGHT TIME

Class 1 nickel production continues to decline as new capital investment cannot be justified (see quote below).  In the case of Tamarack, high grade means low capital and operational cost: Unlike other undeveloped nickel deposits, Tamarack does therefore not have to wait: With or without the bullish Class 1 nickel demand forecast for EV, Tamarack is a ‘go’.  

Current, low nickel prices, therefore allows Tamarack to move forward now, ahead of other undeveloped deposits who have to wait for EV to impact the demand for Class 1 nickel.

Nonetheless, it does help to know that our planning horizon is designed to ride the predicted, rising Class 1 nickel tide.

Consider: To produce 60kt of Ni per annum from limonite using HPAL requires US$3B to US$4B of capex (see capex per annual tonne of Ni above).

*Source: Glencore Annual Report, 2017, page 14

TAMARACK IS THE ONLY HIGH GRADE Ni-Cu-Co PROJECT ON INFRASTRUCTURE, WHICH RENDERS A ROBUST IRR OF 28% AFTER-TAX  UNDER A PESSIMISTIC CLASS 1 NICKEL MARKET OUTLOOK

"Nickel prices will have to rise dramatically before Vale makes new investments in nickel, reports said Tuesday.  Fabio Schvartsman, the firm’s chief executive, said the Brazilian mining giant is waiting for global prices of nickel to reach $20,000 per tonne [$9.07/lb] from their current price of less than $13,000 per tonne [$5.90/lb]."

- Sudbury Star, Oct 2018