Pallinghurst Group has agreed to acquire a 19.2% stake in electric-vehicle (EV) battery metal miner Talon Metals for $80.2m, through Pallinghurst Nickel International.
The deal comes as Pallinghurst seeks to capitalise on the surging demand for EVs to reduce carbon emissions.
This has subsequently led to increased prices and demand for battery metals such as nickel, lithium, cobalt and copper.
Under the binding private agreement, Pallinghurst will buy 133.6 million shares of Talon Metals from Resource Capital Fund VI (RCF), at 60 cents apiece.
The transaction is planned to be completed on or around 22 October 2021.
Upon deal completion, Pallinghurst will have 19.2% of the issued and outstanding shares on a non-diluted basis in Talon.
Subsequently, Pallinghurst will sign an ancillary rights and relationship agreement with RCF to outline the basis to seek common ground for a potential financing strategy for Talon.
Moreover, the two firms will agree to not sell, transfer or otherwise dispose of any of their Talon shares for 12 months from the closing of the deal.
Pallinghurst stated that it has no future or current plans to acquire additional securities of Talon or dispose of its securities.
The company said: “Subject to the terms and conditions of the relationship agreement, as applicable, depending on market conditions and other factors, including Pallinghurst’s view of Talon’s prospects, business and financial condition, Pallinghurst may acquire additional securities of Talon from time to time in the future, in the open market or pursuant to privately negotiated transactions, may sell all or a portion of its securities of Talon, or may enter into derivative or other transactions with respect to such securities.”
The firm also intends to have one representative on Talon’s board of directors.
Pallinghurst currently hold stakes in Nouveau Monde Graphite and the Nemaska lithium project in Quebec, Canada.