- Talon Energy (TPD) taps private investors for $12 million to support its acquisition of a 33 per cent interest in TMK Energy’s (TMK) Gurvantes XXXV project in Mongolia
- TPD has exercised its earn-in option over the project and has committed to funding the first $4.6 million of expenditure for a stage two pilot well program with TMK
- Talon has now received commitments from institutional and sophisticated investors to place just under 86 million shares at 14 cents per share to raise the $12 million
- Talon shares closed 3.23 per cent higher at 16 cents, and TMK shares closed 5 per cent lower at 1.9 cents
Talon Energy (TPD) has tapped private investors for $12 million to support its acquisition of a 33 per cent interest in TMK Energy’s (TMK) Gurvantes XXXV project in Mongolia
TPD has exercised its option to acquire a 33 per cent interest in the project, committing to funding the first US$3.15 million (A$4.6 million) of expenditure for a stage two pilot well program with TMK.
Under the agreement, TPD will also need to pay US$809,333 to TMK based on the recent contingent resource of 1.2 trillion cubic feet at the project.
Additionally, TPD will fund 33 per cent of the ongoing expenditure at Gurvantes.
To fund its earn-in commitments, Talon has launched a $12 million capital raise for which it received firm commitments from new and existing institutional and sophisticated investors.
The company will issue around 85.7 million new shares at 14 cents each to raise the funds, marking a 14.5-per-cent discount to its five-day volume-weighted average price.
Talon’s Managing Director and CEO, Colby Hauser, said the raise would provide a “sound financial footing” as the company moved into its next phase of growth.
He added that the company looked forward to advancing the project with TMK as the new JV worked towards the pilot well program scheduled for the start of the new year.
“The initial exploration program has yielded enormous success, and we are pleased for Talon and its shareholders to ratify our exposure in this exciting project,” Mr Hauser said.
“To have received independent certification of a gross around 1.2 trillion cubic feet of 2C Contingent Resource from an initial exploration capital outlay of just US$1.85 million is simply extraordinary.”
Talon first entered a binding agreement over the project with TMK’s subsidiary, Telmen, back in February 2021 and has since satisfied the initial funding commitment of US$1.85 million (around A$2.7 million).
Talon also holds a three-year pre-emptive right over the sale by Telmen of its retained interest in the project, providing TPD a first right of refusal over Telmen’s interest.
Mr Hauser also said the fresh capital would remove uncertainty around funding for the coming months as the company finalised negotiations for a debt facility to fund the development of the Walyering project in Western Australia’s Perth Basin.
If secured, this facility would only become available to draw on following the achievement of near-term project milestones.
Talon is aiming to begin commercial production at Walyering in the first quarter of 2023.
Talon shares closed 3.23 per cent higher at 16 cents, and TMK shares closed 5 per cent lower at 1.9 cents.