Pallinghurst raises ownership in Nouveau Monde; takes stake in Talon Metals

The Pallinghurst Group is raising its stake in Nouveau Monde Graphite (TSXV: NOU; NYSE: NMG) and taking an initial stake in Talon Metals (TSX: TLO).

Pallinghurst’s graphite subsidiary is increasing its interest in Nouveau Monde Graphite to 21% from 15.2% with the conversion of the outstanding $15 million principal amount of Nouveau’s convertible bond to common shares.

Pallinghurst, a global investor in metals and mining with a focus on battery metals, converted the bond in two tranches, the first for 1.9 million shares and the second for about 5.6 million shares. It was also issued about 220,500 Nouveau Monde shares in lieu of unpaid interest on the bond.

Nouveau has started construction at the wholly owned Matawinie graphite project 120 km north of Montreal. A 2018 feasibility study outlined  an after-tax net present value of $751 million, at an 8% discount rate, and an internal rate of return of 32.2%. The initial capital expenditure was pegged at $276 million for an open pit mine with a life of 25.5 years. Matawinie is expected to produce 100,000 tonnes of graphite concentrate a year. The deposit has 120.3 measured and indicated tonnes grading 4.26% graphitic carbon (Cg) plus 4.5 million inferred tonnes grading 4.43% graphitic carbon.

In addition, Pallinghurst’s nickel subsidiary is investing $80 million in Talon Metals to acquire 133.5 million common shares. This represents a 19.2% ownership position in Talon, and it is the first time Pallinghurst  has invested in the Canadian miner. It also says it has no further plans to increase its share ownership.

Talon’s flagship property is its 51% ownership of the Tamarack nickel-copper-cobalt project in Minnesota. Kennecott Exploration, a division of Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO), holds the balance. The deposit contains an indicated resource of 3.9 million tonnes grading 1.91% nickel, 1.02% copper and 0.05% cobalt, plus an inferred resource of 7.2 million tonnes grading 1.11% nickel, 0.68% copper and 0.03% cobalt.