Talon Metals Corp. agreed to cofund a US$3.5 million winter exploration program with Rio Tinto-backed Kennecott Exploration Co. at the Tamarack nickel-copper project in Minnesota.
The two companies put in place an amending agreement that will see subsidiary Talon Nickel (USA) LLC responsible for 18.45% of the cost of the exploration program, according to a Dec. 19 statement.
The amendment also gives Kennecott the right to grant Talon Nickel the option to purchase its 81.55% interest in the Tamarack project at any time up to and including Sept. 25, 2017, or proceed with the original mining venture agreement.
To cover the exploration costs, Talon secured an additional US$2.0 million from Resource Capital Fund VI L.P., which takes the company's total unsecured loan amount to US$16.0 million.
In exchange for the extra cash, the company will issue Resource Capital 15.0 million warrants, each exercisable for one Talon share at 11 Canadian cents within four years.
Talon struck the deal to earn an initial 30% interest in the Tamarack project in mid-2014.