Talon Metals Corp., through its US subsidiary Talon Nickel (USA) LLC, entered into an agreement with Tesla for the supply and purchase of nickel concentrate to be produced from the Tamarack Nickel Project in Aitkin County, Minnesota. The execution of the agreement follows an extensive and detailed due-diligence period performed by Tesla and lengthy negotiations between the parties.

The Talon team has taken an innovative approach to the discovery, development and production of battery materials, including to permanently store carbon as part of mine operations and the investigation of the novel extraction of battery materials. Responsible sourcing of battery materials has long been a focus for Tesla, and this project has the promise to accelerate the production of sustainable energy products in North America.

—Drew Baglino, SVP of Powertrain and Energy Engineering at Tesla

Highlights of the agreement include:

• Tesla has committed to purchase 75,000 metric tonnes (165 million lbs) of nickel in concentrate, representing a portion of the metals projected to be produced from the Tamarack Nickel Project. Tesla also has a preferential right under the agreement to negotiate the purchase of additional nickel concentrate over and above the initial 75,000 metric tonne commitment.

• The term of the agreement is six years or until a total of 75,000 metric tonnes of nickel in concentrate has been produced and delivered to Tesla.

• The agreement is conditional upon: (i) Talon earning a 60% interest in the Tamarack Nickel Project; (ii) Talon commencing commercial production at the Tamarack Nickel Project; and (iii) the parties completing negotiations and executing detailed supply terms and conditions.

• Talon will use commercially reasonable efforts to achieve commercial production on or before 1 January 2026 at the Tamarack Nickel Project, which may be extended by the agreement of the parties for up to 12 months following which Tesla has a right to terminate the agreement and Talon may elect to sell to other parties.

• Talon and Tesla will work together to optimize nickel concentrate grades and metal recoveries.

• The purchase price to be paid by Tesla for the nickel in concentrate will be linked to the London Metals Exchange (LME) official cash settlement price for nickel. The parties have also agreed to share in any additional economics derived from by-products extracted from the nickel concentrate, such as iron and cobalt.

Talon is a TSX-listed base metals company in a joint venture with Rio Tinto on the high-grade Tamarack Nickel-Copper-Cobalt Project located in central Minnesota. Talon currently owns a 51% interest in the Tamarack Nickel Project and has the right to increase its interest by 9% to 60%.

The Tamarack Nickel Project comprises a large land position (18 km of strike length) with numerous high-grade intercepts outside the current resource area. Talon is focused on expanding its current high-grade nickel mineralization resource prepared in accordance with NI 43-101; identifying additional high-grade nickel mineralization; and developing a responsible processing capability in the United States.