Talon Metals

TLO reported assays from small step-out holes in the Vault Zone of its Tamarack Project. Results show that they are methodically following and defining the high-grade Ni-Cu-PGE system at depth. Talon is well-funded, has the backing of the Lundins, and is a "pure-play" on U.S. domestic nickel production. I reduced my position a little more over the last month because I remain wary of the overall market, but overall I like TLO's positioning and future prospects.

TLO consolidated its stock in a 1 for 10 rollback which probably had some people's eyes bugging out when they saw a $6 stock in their account instead of a 60-cent one. The company also provided an incremental update on drilling at the Vault zone, finding more massive and semi-massive sulphides as the company feels its way around at depth. At the grades they are hitting, it doesn't take a lot of tonnage to build a lot of value, so I'm just letting them execute. In the meantime, the news headlines out of Indonesia have been supportive for nickel prices. Indonesia has substantial nickel laterite resources, which come at a high environmental cost when they are mined. Indonesia is starting to realize that the cost is actually "too high" and is scaling back quotas for nickel producers/exporters in the country. With the continued U.S. focus on critical minerals, TLO is looking pretty good as the only game in town for domestic nickel production, with a copper-PGE kicker to boot – potentially making TLO a target for further U.S. government support. I've trimmed my TLO position by about half as part of my broader cash-raising sweep, but I could double down at any time if I saw nickel prices really taking off and/or a big new hit in the Vault zone itself or close to it. The geological system that TLO is drilling in can be thought of as a plumbing system of interconnected/interrelated magma chambers and conduits... following systems like these around can lead to additional pools/pods/sheets of mineralization, which is exactly what I'd expect here as drilling continues.

With drilling ongoing at the Vault Zone using three rigs and loads of cash on hand, I think that this is the time to just sit back and see what TLO finds. Wake me up when the drilling program is over… I'm not going to react to any single drill-hole release here.

Initial drilling results are showing continuity and expansion potential for the stacked massive sulphide zones encountered thus far and only a handful of holes have been drilled. Average thicknesses for the stacked sulphide units and their geometry will become clearer with more drill holes. Drilling results should come more frequently now with multiple rigs drilling and directional tools being used to target conductive zones with wedge holes at depth. By wedging off of "mother" holes TLO can probe the deposit more quickly (and cheaply) at depth.

Remember also that TLO is really the only game in town when it comes to new domestic nickel supply in the U.S. which is not insignificant given the U.S. government's current policy goals with regards to critical minerals.

Late night special addition: TLO released news late Thursday that the Lundins, including Lundin Mining and the Lundin Family Trust will own 19.99% of TLO going forward and that Jack Lundin will join the TLO board. The deal sees Lundin Mining rolling its Eagle Mine complex into TLO where there are potential synergies with TLO's Boulderdash and Tamarack projects. This deal makes TLO a Lundin-backed pure-play on U.S. nickel production which I think will be very well received by investors. I got that giddy feeling when I saw the news, so I take that as a good sign. Let's see what the market thinks.

Talon reported the uphole balance of the exceptionally high-grade 25TK0563 "Vault Zone" hole earlier this month, but it is not material to the thesis here. What is material, to me at least, is that geophysics suggests that the Vault Zone is part of stacked system that extends more than 300 metres below the deepest intersection drilled to date. Think of it like pancakes, or hot dogs, or hamburgers that are poked through with a stick so that the individual items have space between them, each being their own accumulation of mineralization. With three rigs active on pads directly above the Vault Zone, and a flush treasury, TLO is going to drill the snot out of this part of the system and, in my opinion, they are bound to find more goodies. No change in thesis overall, but I see nothing that would stop me from dreaming about this becoming a top-tier nickel asset in the eye of the market, located in the U.S. no less.

Talon is a very unique story in that they are operating in a large magmatic system that is prone to the concentration of economic grades of nickel, copper, and platinum group elements — a rarity in the United States. The company's assets are split between Michigan and Minnesota, but for the purposes of this note I will focus on Minnesota. The project of interest is called Tamarack, and while the geological system at Tamarack has been known for some time, a recent discovery down-dip (deeper than) the existing resource has put a long-tail upside scenario in play. The copper-nickel-PGE grades encountered thus far in the new (aptly-named) Vault Zone are the highest grades I've personally ever seen, and while it's still early days in the discovery, the potential value could ultimately be measured in the billions — or at least that's the dream. Owing to its location, Talon is also prime for the kind of strategic U.S.-government investment/support that has sent several mineral companies rocketing higher in recent weeks, so here's hoping. As it stands today, TLO has all of its drills focused on further defining the Vault Zone at its Tamarack project and it's highly unlikely that they drilled all of it with their first two drill holes, so stay tuned. This is an evolving story, but the nature of the recently encountered mineralization is highly encouraging, so this is a project that should be on the radar of any serious metals investor. Fortunately, you don't just have to take my word for it… the legendary Robert Friedland was named as a participant in the company's recent (and heavily oversubscribed) $41 million financing. Many investors, including myself, have historically shunned TLO because it has over 1.1 billion shares outstanding, but now the potential rewards make that bloated share count less relevant given the potential size of the prize.