Deal overview

Talon Metals Corp (TSX: TLO / OTC: TLOFF) announced on December 18, 2025 the signing of a Share Purchase Agreement with Lundin Mining Corporation (TSX: LUN; Nasdaq Stockholm: LUMI) to acquire 100% of the Eagle Mine and Humboldt Mill operations located in Michigan’s Upper Peninsula¹.

The transaction is structured as an all-stock deal. Talon will acquire 100% of the outstanding shares of Lundin Mining US Ltd. — the Lundin subsidiary that owns the Eagle Mine and Humboldt Mill — in exchange for newly issued Talon shares and a capped production payment royalty.

The deal combines two complementary assets: Lundin’s producing Eagle Mine and its associated processing infrastructure at Humboldt Mill with Talon’s Tamarack Nickel-Copper-Cobalt Project in Minnesota, a 400,000-acre exploration land package in Michigan (including the Boulderdash nickel-copper discovery 8 miles from the Eagle Mine), and Talon’s proposed Beulah Minerals Processing Facility (BMPF) in North Dakota.

“This transaction brings together the positive cash-flow-generating Eagle Mine and Humboldt Mill, the proven operating experience of the Eagle and Humboldt teams, and Talon’s in-house exploration capabilities to create the only operating primary nickel-copper company in the United States with expansion potential,” said Henri van Rooyen, Chief Executive Officer of Talon. “The integration enables our combined team to advance our four strategic priorities in parallel – extending the Eagle mine life, accelerating exploration in Michigan and in Minnesota, advancing permitting at the Tamarack Nickel-Copper Project and the Beulah Minerals Processing Facility, and progressing engineering towards feasibility study and construction.”

Transaction terms

The all-stock consideration consists of two components: 275,152,232 newly issued Talon common shares, and the grant of a Production Payment Royalty payable on ore from sources other than the Eagle Mine that is processed through the Humboldt Mill, at a rate of US$1.00 per tonne up to a maximum aggregate payment of US$20.0 million — representing 20 million tonnes of ore.

The share issuance will result in Lundin Mining increasing its pre-existing 1.57% stake in Talon to 19.99% of the outstanding Talon shares on a non-diluted basis. The 275,152,232 shares issued represent 18.73% of the post-transaction company, with the remainder of Lundin’s stake attributable to shares already held prior to the agreement.

An Investor Rights Agreement will grant Lundin Mining board nomination rights and participation rights in future equity offerings, provided Lundin Mining maintains beneficial ownership of at least 10% of Talon shares. A concurrent Lock-Up Agreement restricts Lundin Mining from selling Talon shares for two years and from acquiring more than 19.99% of Talon shares for one year following closing.

Lundin Mining has also agreed to maintain and bear the cost of all financial assurances for the Eagle Mine and Humboldt Mill reclamation until the Talon Board makes a Positive Final Investment Decision on developing any new mine, provided Talon uses commercially reasonable efforts to amend or replace those assurances.

Strategic rationale

Talon has articulated four parallel strategic priorities that the combined platform is designed to accelerate: extending Eagle Mine’s operational life, expanding exploration across Michigan and Minnesota, advancing environmental review and permitting for the Tamarack project and the Beulah BMPF, and progressing engineering toward a feasibility study and construction decision.

Central to the rationale is operational cash flow. The Eagle Mine generates positive cash flow, which Talon intends to deploy — alongside an estimated US$27 million in combined cash and cash equivalents — to fund exploration and the development pipeline. The Humboldt Mill is positioned as a central processing hub for the Michigan land package, including the Boulderdash nickel-copper discovery located 8 miles from Eagle.

Talon’s in-house exploration team has credited itself with five discoveries in five years across Michigan and Minnesota, and management has signaled that 2026 will represent its most ambitious exploration program to date. The Humboldt Mill’s proximity to these Michigan targets enhances the economic feasibility of future discoveries.

“Over the last decade, American policymakers have recognized that dependence on foreign sources for critical minerals is a national security risk,” said Henri van Rooyen, Talon CEO. “This transaction is a direct response, uniting modern nickel mining and processing operations with the Tamarack Nickel-Copper Project and exploration assets, including the Boulderdash discovery 8-miles from the Eagle mine, to ensure a domestic supply of nickel and other critical minerals for defense, energy and advanced technology manufacturing.”

Talon also holds a pre-existing supply agreement with Tesla Inc. to deliver 75,000 metric tonnes of nickel in concentrate from the Tamarack project over an estimated six-year period once commercial production is achieved. The acquisition strengthens the operating infrastructure needed to advance that commitment.

Management changes

The transaction will trigger significant leadership changes at Talon. At closing, the Talon Board will expand to ten directors. Jack Lundin, CEO of Lundin Mining, and Juan Andrés Morel, COO of Lundin Mining, will join the reconstituted board alongside seven of the eight current Talon directors.

Darby Stacey, the current Managing Director of the Eagle Mine, will be appointed both to the Talon Board and as CEO of Talon, taking responsibility for the combined operations. Henri van Rooyen, the current Talon CEO, will transition to the role of Executive Chairman. Warren Newfield, who serves as the current Executive Chairman of Talon, will step down from the board at closing.

“On behalf of Talon, I would like to sincerely thank Warren Newfield for his many years of support as Executive Chairman, during which Talon achieved numerous important milestones that created significant value for shareholders,” said Henri van Rooyen, Talon CEO.

The appointment of Stacey — the operational architect of the Eagle Mine — as incoming CEO signals a shift in focus toward production execution and operational integration, rather than exploration-stage priorities.

Market context

The transaction occurs against a backdrop of heightened U.S. government interest in securing domestic supply chains for critical minerals. Talon’s Beulah BMPF has been selected by the U.S. Department of Energy for a US$114.8 million funding grant under the Bipartisan Infrastructure Law, and the U.S. Department of Defense awarded Talon a US$20.6 million grant to accelerate exploration in Minnesota and Michigan.

The Eagle Mine, which Lundin Mining acquired as part of its broader portfolio, had faced questions about its standalone strategic fit within the larger Lundin group. For Talon, the acquisition resolves a key constraint: the company now controls producing infrastructure that can generate operating cash flow while longer-dated development projects advance through permitting and feasibility.

The deal also deepens the relationship between the Talon platform and the broader Lundin mining family. With Lundin Mining holding 19.99% of Talon post-closing, and Jack Lundin joining the board, the transaction effectively converts a financial investor into a strategic partner with board representation and long-term lock-up obligations.