Tamarack Nickel Project

Tamarack is a nickel-copper-cobalt project progressing towards feasibility studies. The project is located in the US state of Minnesota.

Talon Metals Corp, the operator of Tamarack, holds a 51% stake in the project. The company also has the option to increase the stake to 60% by completing a feasibility study and paying $10m to joint venture (JV) partner Rio Tinto.

Tamarack is one of the three high-grade nickel sulphide deposits in the world on infrastructure that were discovered in the 21st century. The other two are Eagle Mine in the US and Nova-Bollinger in Australia.

The project is expected to begin production in 2026.

Location and site details

The Tamarack project is located in central Minnesota. The site is situated in Aitkin County around 210km north of Minneapolis.

Overall, the project comprises Tamarack North and Tamarack South projects, with approximately 31,000 acres of private and state leases. The Tamarack Nickel Project is the only known undeveloped high-grade nickel deposit in the US.

The site can be accessed using an existing road which connects to the Minnesota State highway network.

Geology and mineralisation

The site hosts resources on less than 1km of 18km Tamarack Intrusive Complex (TIC). It also has multiple high-grade intercepts outside the resource area.

The TIC is an ultramafic to a mafic intrusive complex containing nickel (Ni)-copper (Cu) sulphide mineralisation. It also hosts cobalt (Co), platinum (Pt), palladium (Pd) (PGEs) and gold (Au).

As a multi-magmatic phase intrusion, TIC includes two pulses- The fine-grained olivine (FGO) and the coarse-grained olivine (CGO) intrusion.

According to drilling data, the Tamarack South Project FGO intrusive is identical to the FGO found within the Tamarack North Project. The magmatic layering also appeared to be continuous.

An 800m area of the 18km strike length hosts 3.639 Mt of 1.83% Ni, 0.99% Cu, and 0.05% Co in the indicated category, and 4.382 Mt at 1.58% Ni, 0.92% Cu, and 0.04% Co.

In July 2022, Talon announced drill results from the CGO East target area, a large stretch outside the Tamarack Project’s resource area. The drilling results confirmed that the area contains wide sheets of shallow mineralisation.

In September 2022, Talon reported assays from 17 drill holes demonstrating the continuity and thickness of the high-grade nickel and copper massive sulphide zone and the separate semi-massive sulphide zones.

Mining method and infrastructure

Talon plans to use underground mining methods for Tamarack and employ the best available technologies (BATs) to achieve efficiency and reduce environmental impact.

The recovery of Ni Concentrate and Ni Sulphate will use the same mining methods and infrastructure.

Bulk and selective mining methods (long hole stoping and drift and fill respectively) will also be used.

A decline ramp from the surface will be used by personnel to access the mine. This ramp will also be used to transfer material and supply the main fresh air for the mine.

A multi-purpose shaft near the processing mill will operate as the main exhaust for the mine. It will also include a vertical conveyor to serve as the primary materials handling system, secondary egress and redundant services.

Tamarack will use a full battery/electric fleet for mining operations, while lateral development will be predominantly done using a continuous miner.

A Jumbo will be utilised for traditional drill or blast mining, where the ground conditions and logistics obstruct effective mining.

The estimated production rate of the Tamarack project is approximately 3,600 tonnes per day (tpd) or 1.3 million tonnes per annum (Mtpa).

All major infrastructures including maintenance and storage facilities will be located on the surface.

Costs

According to the Annual Information Form 30 March 2021, the total estimated capital cost for each of the Nickel Powder Scenario or the Nickel Concentrate Scenario is $394.99m.

Talon is expected to spend $315.8m during the initial period of three years including the first production year.

For Nickel Sulphate Scenario, the total estimated capital cost is $646.44m including $552.61m for the first three years.

The estimated average operating cost for the nine-year mine life is $48.15/tonne of mill feed in the Nickel Powder Scenario, $75.99/tonne of mill feed in the Nickel Sulphate Scenario and $56.54/tonne of mill feed in the Nickel Concentrate Scenario.

Supply agreement

On 10 January 2022, US automotive and clean energy company Tesla entered into an agreement to purchase nickel concentrate to be produced from the Tamarack Nickel Project.

Under the agreement terms, Tesla will buy 75,000 metric tonnes (Mt) of nickel concentrate over six years. Tesla also has a preferential right to negotiate the purchase of additional nickel concentrate above the initial 75,000 Mt commitment.

Carbon storage potentiality

In February 2022, the US Department of Energy allocated $2.2m funding to a Rio Tinto-led team to explore carbon storage potential at the Tamarack project.

Separately, Rio Tinto has committed $4m for the three-year project.