Talon Metals - Capital/Financing Update 2023

A copy of this preliminary short form base shelf prospectus has been filed with the securities regulatory authorities in each of the provinces and territories of Canada, but has not yet become final for the purpose of the sale of securities. Information contained in this preliminary short form base shelf prospectus may not be complete and may have to be amended. The securities may not be sold until a receipt for the short form base shelf prospectus is obtained from the securities regulatory authorities.

This short form base shelf prospectus has been filed under legislation in each of the provinces and territories of Canada that permits certain information about these securities to be determined after this prospectus has become final and that permits the omission from this prospectus of that information. The legislation requires the delivery to purchasers of a prospectus supplement containing the omitted information within a specified period of time after agreeing to purchase any of these securities, except in cases where an exemption from such delivery requirements is available.

No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This short form base shelf prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. These securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), or any state securities laws, and may not be offered or sold within the United States (as such term is defined in Regulation S under the 1933 Act (the “United States”)) or to, or for the account or benefit of, a U.S. person (as such term is defined in Rule 902 of Regulation S under the 1933 Act (a “U.S. Person”)), except in transactions exempt from registration under the 1933 Act and applicable state securities laws. This short form base shelf prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby within the United States or to, or for the account or benefit of, U.S. Persons. See “Plan of Distribution”.

Information has been incorporated by reference in this short form base shelf prospectus from documents filed with securities commissions or similar regulatory authorities in Canada . Copies of the documents incorporated herein by reference may be obtained on request without charge from the Corporate Secretary of Talon Metals Corp. at 161 Bay Street, Suite 2700, Toronto, Ontario M5J 2S1, telephone (416) 361-9636, and are also available electronically at www.sedar.com.

PRELIMINARY SHORT FORM BASE SHELF PROSPECTUS

New Issue and/or Secondary Offering

January 20, 2023

==> picture [217 x 74] intentionally omitted <==

TALON METALS CORP.

$150,000,000 Common Shares Debt Securities Subscription Receipts Warrants Units

Talon Metals Corp. (“ Talon ” or the “ Corporation ”) may from time to time offer and issue the following securities: (i) common shares of the Corporation (“ Common Shares ”); (ii) debt securities of the Corporation (“ Debt Securities ”); (iii) subscription receipts (“ Subscription Receipts ”) exchangeable for Common Shares and/or other securities of the Corporation; (iv) warrants (“ Warrants ”) exercisable to acquire Common Shares and/or other securities of the Corporation; and (v) securities comprised of more than one of Common Shares, Debt Securities, Subscription Receipts and/or Warrants offered together as a unit (“ Units ”), or any combination thereof having an offer price of up to $150,000,000 in aggregate (or the equivalent thereof, at the date of issue, in any other currency or currencies, as the case may be) at any time during the 25-month period that this short form base shelf prospectus (including any amendments hereto, the “ Prospectus ”) remains valid. The Common Shares, Debt Securities, Subscription Receipts, Warrants and Units (collectively, the “ Securities ”) offered hereby may be offered separately or together, in separate series, in amounts, at prices and on terms to be set forth in one or more prospectus supplements (collectively or individually, as the case may be, “ Prospectus Supplements ”). This Prospectus qualifies the distribution of Securities by the Corporation and by selling securityholders, as described below. In addition, Securities may be offered and issued in consideration for the acquisition of other businesses, assets or securities by the Corporation or a subsidiary of the Corporation. The consideration for any such acquisition may consist of any of the Securities separately, a combination of Securities or any combination of, among other things,

Securities, cash and assumption of liabilities. One or more selling securityholders may also offer and sell Securities under this Prospectus.

The specific terms of any offering of Securities will be set forth in the applicable Prospectus Supplement and may include, without limitation, where applicable: (i) in the case of Common Shares, the number of Common Shares being offered, the offering price, whether the Common Shares are being offered for cash, and any other terms specific to the Common Shares being offered; (ii) in the case of Debt Securities, the specific designation, aggregate principal amount, the currency or the currency unit for which the Debt Securities may be purchased, maturity, interest provisions, authorized denominations, offering price, whether the Debt Securities are being offered for cash, the covenants, the events of default, any terms for redemption or retraction, any exchange or conversion rights attached to the Debt Securities, and any other terms specific to the Debt Securities being offered; (iii) in the case of Subscription Receipts, the number of Subscription Receipts being offered, the offering price, whether the Subscription Receipts are being offered for cash, the terms, conditions and procedures for the exchange of the Subscription Receipts into or for Common Shares and/or other securities of the Corporation, and any other terms specific to the Subscription Receipts being offered; (iv) in the case of Warrants, the number of Warrants being offered, the offering price, whether the Warrants are being offered for cash, the terms, conditions and procedures for the exercise of such Warrants into or for Common Shares and/or other securities of the Corporation, and any other terms specific to the Warrants; and (v) in the case of Units, the number of Units being offered, the offering price, the terms of the Common Shares, Debt Securities, Subscription Receipts and/or Warrants underlying the Units, and any other terms specific to the Units.

All shelf information permitted under applicable securities legislation to be omitted from this Prospectus will be contained in one or more Prospectus Supplements that will be delivered to purchasers together with this Prospectus, unless an exemption from the prospectus delivery requirements is available. Each Prospectus Supplement will be incorporated by reference into this Prospectus as of the date of such Prospectus Supplement and only for the purposes of the distribution of the Securities to which that Prospectus Supplement pertains.

This Prospectus may qualify an “at-the-market distribution” as defined in National Instrument 44-102 – Shelf Distributions (“ NI 44-102 ”). This Prospectus does not qualify for issuance Debt Securities, or Securities convertible into or exchangeable for Debt Securities, in respect of which the payment of principal and/or interest may be determined, in whole or in part, by reference to one or more underlying interests including, for example, an equity or debt security, a statistical measure of economic or financial performance including, without limitation, any currency, consumer price or mortgage index, or the price or value of one or more commodities, indices or other items, or any other item or formula, or any combination or basket of the foregoing items. This Prospectus may qualify for issuance Debt Securities, or Securities convertible into or exchangeable for Debt Securities, in respect of which the payment of principal and/or interest may be determined, in whole or in part, by reference to published rates of a central banking authority or one or more financial institutions, such as a prime rate or bankers’ acceptance rate, or to recognized market benchmark interest rates such as CDOR (the Canadian Dollar Offered Rate) or a United States federal funds rate, and/or that are convertible into or exchangeable for Common Shares.

The Corporation and any selling securityholder may sell the Securities to or through underwriters or dealers purchasing as principals and may also sell the Securities to one or more purchasers directly, through applicable statutory exemptions, or through agents designated by the Corporation and/or the selling securityholders from time to time. The Prospectus Supplement relating to a particular offering of Securities will identify each underwriter, dealer or agent engaged in connection with the offering and sale of the Securities, as well as the method of distribution and the terms of the offering of such Securities, including the net proceeds to the Corporation and/or the selling securityholders and, to the extent applicable, any fees, discounts, concessions or any other compensation payable to underwriters, dealers or agents and any other material terms. See “ Plan of Distribution ”.

Unless otherwise specified in the relevant Prospectus Supplement, in connection with any offering of the Securities, other than an “at-the-market distribution”, the underwriters or agents may over-allot or effect transactions that are intended to stabilize or maintain the market price of the offered Securities at a level above that which might otherwise prevail on the open market. Such transactions, if commenced, may be interrupted or discontinued at any time. See “ Plan of Distribution ”.

No underwriter, dealer or agent involved in an “at-the-market distribution”, no affiliate of such an underwriter, dealer or agent and no person or company acting jointly or in concert with such an underwriter, dealer or agent may, in connection with the distribution, enter into any transaction that is intended to stabilize or maintain the market

ii -

price of the Securities or securities of the same class as the Securities distributed, including selling an aggregate number or principal amount of securities that would result in the underwriter, dealer or agent creating an overallocation position in the Securities. See “ Plan of Distribution ”.

The outstanding Common Shares are listed and posted for trading on the Toronto Stock Exchange (“ TSX ”) under the symbol “TLO”. On January 19, 2023, the last trading day prior to the date of this Prospectus, the closing price of the Common Shares on the TSX was $0.50. Unless otherwise specified in the applicable Prospectus Supplement, the Debt Securities, Subscription Receipts, Warrants and Units will not be listed on any securities exchange. There is no market through which such Securities may be sold and purchasers may not be able to resell such Securities purchased under this Prospectus. This may affect the pricing of such Securities in the secondary market, the transparency and availability of trading prices, the liquidity of such Securities, and the extent of issuer regulation. See “ Risk Factors ”.

Prospective investors should rely only on the information contained or incorporated by reference in this Prospectus. The Corporation has not authorized anyone to provide investors with additional or different information. An investment in the Securities is highly speculative and involves significant risks that should be carefully considered by prospective investors before purchasing such Securities. Such investment should only be made by those persons who can afford the risk of loss of their entire investment. The risks outlined in this Prospectus and in the documents incorporated by reference herein should be carefully reviewed and considered by prospective investors in connection with an investment in such Securities. See “ Cautionary Note Regarding Forward-Looking Information ” and “ Risk Factors ” in this Prospectus and “ Forward-Looking Information ” and “ Risk Factors ” in the Corporation’s then-current annual information form, as well as the risk factors described in the Corporation’s then-current annual management’s discussion and analysis and then-current interim management’s discussion and analysis, if applicable, prior to investing in such Securities.

Prospective investors are advised to consult their own tax advisors regarding the application of Canadian federal income tax laws to their particular circumstances, as well as any other provincial, territorial, foreign and other tax consequences of acquiring, holding or disposing of the Securities, including the Canadian federal income tax consequences applicable to a foreign controlled Canadian corporation that acquires the Securities.

No underwriter, agent, or dealer has been involved in the preparation of this Prospectus or performed any review of the contents of this Prospectus.

The Corporation is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction, and each of Warren E. Newfield (Executive Chairman and Director), Gregory S. Kinross (Director), David E. Singer (Director), David L. Deisley (Director), and Arne Frandsen (Director) reside outside of Canada. The Corporation and each of the individuals named above have appointed Cassels Brock & Blackwell LLP, 2100 Scotia Plaza, 40 King Street West, Toronto, Ontario, M5H 3C2, as their agent for service of process in Canada. Christine Pint, one of the authors of the 2022 Technical Report (as defined herein), resides outside of Canada. Purchasers are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person or company that is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if the party has appointed an agent for service of process.

The Corporation’s head and registered office is located at Craigmuir Chambers, P.O. Box 71, Road Town, Tortola, British Virgin Islands. The mailing address of the Corporation in Canada is 161 Bay Street, Suite 2700, Toronto, Ontario M5J 2S1.

iii -

ABOUT THIS SHORT FORM BASE SHELF PROSPECTUS ...................................................................................1 CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION....................................................1 CURRENCY PRESENTATION AND EXCHANGE RATE INFORMATION ..........................................................2 DIFFERENCES IN REPORTING OF MINERAL RESOURCE ESTIMATES...........................................................3 DOCUMENTS INCORPORATED BY REFERENCE ................................................................................................3 THE CORPORATION..................................................................................................................................................5 THE BUSINESS ...........................................................................................................................................................5 CONSOLIDATED CAPITALIZATION ......................................................................................................................6 USE OF PROCEEDS ....................................................................................................................................................6 PLAN OF DISTRIBUTION..........................................................................................................................................7 EARNINGS COVERAGE RATIO ...............................................................................................................................8 DESCRIPTION OF COMMON SHARES....................................................................................................................8 DESCRIPTION OF DEBT SECURITIES ....................................................................................................................9 DESCRIPTION OF SUBSCRIPTION RECEIPTS.....................................................................................................10 DESCRIPTION OF WARRANTS..............................................................................................................................11 DESCRIPTION OF UNITS ........................................................................................................................................12 SELLING SECURITYHOLDERS..............................................................................................................................12 PRIOR SALES ............................................................................................................................................................13 TRADING PRICE AND VOLUME ...........................................................................................................................13 CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS..............................................................13 RISK FACTORS.........................................................................................................................................................13 LEGAL MATTERS ....................................................................................................................................................15 AUDITORS, TRANSFER AGENT AND REGISTRAR............................................................................................15 INTEREST OF EXPERTS..........................................................................................................................................16 EXEMPTION..............................................................................................................................................................16 STATUTORY AND CONTRACTUAL RIGHTS OF WITHDRAWAL AND RESCISSION..................................16 SCHEDULE “A”.........................................................................................................................................................18 CERTIFICATE OF THE CORPORATION..............................................................................................................C-1

iv -

ABOUT THIS SHORT FORM BASE SHELF PROSPECTUS

An investor should rely only on the information contained in this Prospectus (including the documents incorporated by reference herein) and is not entitled to rely on certain parts of the information contained in this Prospectus (including the documents incorporated by reference herein) to the exclusion of the remainder. The Corporation has not authorized anyone to provide investors with additional or different information. The Corporation (or any selling securityholder) is not offering to sell the Securities in any jurisdictions where the offer or sale of the Securities is not permitted. The information contained in this Prospectus (including the documents incorporated by reference herein) is accurate only as of the date of this Prospectus (or the date of the document incorporated by reference herein, as applicable), regardless of the time of delivery of this Prospectus or any sale of the Common Shares, Debt Securities, Subscription Receipts, Warrants and/or Units. The Corporation’s business, financial condition, results of operations and prospects may have changed since the date of this Prospectus.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

This Prospectus and documents incorporated by reference herein contain “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of applicable United States securities laws (collectively referred to herein as “ forward-looking information ”). All information, other than information concerning historical fact, that addresses activities, events or developments that the Corporation believes, expects or anticipates will or may occur in the future including, without limitation, statements with respect to: the anticipated use of any net proceeds to the Corporation from an offering of Securities, any future projections and conclusions included in the 2022 Technical Report, including but not limited to certain information included in “Schedule A – Executive Summary Section from the 2022 Technical Report” herein, estimates in respect of mineral resource quantities, mineral resource qualities, information regarding the potential for increased mineral resources and increased classification through additional exploration, potential mineralization, metallurgical testing and results, drilling and exploration plans, the Corporation’s business plans and priorities, market trends with respect to demand for and the price of nickel, the likelihood of loss for legal proceedings, the potential extension of mine life at the Tamarack North Project, the effects of environmental legislation and other governmental regulation, the status of the Corporation’s relationships with the communities in which it operates, the Tesla-Talon Supply Agreement (as defined herein) with Tesla Inc. (“ Tesla ”), the acquisition of the facility in North Dakota, United States and the Funding Award (as defined herein), are forward-looking information.

Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information reflects the current expectations or beliefs of the Corporation based on information available to the Corporation as of the date such statements are made.

Forward-looking information contained in this Prospectus and documents incorporated by reference herein is based upon assumptions made by the Corporation regarding, among other things: general economic and political conditions; stable and supportive legislative, regulatory and community environments in the jurisdictions where the Corporation operates; anticipated trends and effects in respect of the COVID-19 pandemic and post-pandemic; demand for nickel and copper and estimates of, and changes to, the market prices for nickel and copper; the Corporation’s market position and future financial and operating performance; anticipated timing and results of exploration, development and construction activities; the Corporation’s ability to develop and achieve production at the Tamarack North Project (as defined in the AIF); the Corporation’s ability to obtain and maintain mining, exploration, environmental and other permits, authorizations and approvals for the Tamarack North Project, the Tamarack South Project (as defined in the AIF), and the Michigan Nickel Properties (as defined herein); the exploration and costs for the Tamarack North Project, the Tamarack South Project, and the Michigan Nickel Properties; successful negotiation of definitive commercial agreements and other agreements, including relating to the Tesla-Talon Supply Agreement, the acquisition of the facility in North Dakota, United States, the Funding Award and off-take agreements for the Tamarack North Project; and the Corporation’s ability to operate in a safe and effective manner. Mineral resource estimates and certain other technical and scientific information are based on the additional assumptions and parameters set out herein, in the 2022 Technical Report and on the opinion of “qualified persons” (as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“ NI 43-101 ”)).

Forward-looking information is subject to significant risks and uncertainties and other factors that could cause the actual results to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to or effects on the Corporation. Factors that could cause actual results or events to differ materially from current expectations include, but are not limited to: failure to establish estimated mineral resources and any mineral reserves; the grade, quality and recovery of mineral resources varying from estimates; risks related to the exploration stage of the Corporation’s properties, including the Tamarack North Project, the Tamarack South Project, and the Michigan Nickel Properties; the requirement for additional capital to earn a 60% interest in the Tamarack North Project and Tamarack South Project; certain terms and restrictive covenants in connection with the amended and restated royalty agreement with TF R&S Canada Ltd., a subsidiary of Triple Flag Precious Metals Corp.; the TeslaTalon Supply Agreement with Tesla remaining subject to certain conditions, including but not limited to the parties completing negotiations and executing detailed supply terms and conditions; the acquisition of the facility in North Dakota, United States being under active negotiations and the Corporation having not yet entered into any agreements in respect thereof; the Funding Award being subject to final negotiations with the Department of Energy; the possibility that future exploration results and metallurgical testing will not be consistent with the Corporation’s expectations (including identifying additional and/or more extensive mineralization and/or recovery); changes in nickel, copper and/or platinum and palladium (together, “ PGEs ”) prices; risks relating to the COVID-19 coronavirus and related variants and the governmental and regulatory actions taken in response thereto; delays in obtaining or failures to obtain necessary regulatory permits and approvals from government authorities; uncertainties involved in interpreting drilling results, and the beneficiation process and other geological and product related data; changes in the anticipated demand for nickel, copper, cobalt, gold and/or PGEs; changes in equity and debt markets; inflation; changes in exchange rates; declines in United States, Canadian and/or global economies; exploration costs varying significantly from estimates; delays in the exploration, mineral processing and/or commercial production from the properties Talon has an interest in; equipment failure; unexpected geological or hydrological conditions; political risks; imprecision in preliminary mineral resource estimates; success of future exploration and development initiatives; the existence of undetected or unregistered interests or claims, whether in contract or in tort, over the properties of Talon (including, the Tamarack North Project, the Tamarack South Project, and the Michigan Nickel Properties); changes to environmental legislation and changes in government regulations and policies; changes relating to the Corporation’s relationships with the communities in which it operates; risks relating to labour; other exploration, development and operating risks; liability and other claims asserted against Talon; volatility in prices of publicly traded securities; and other risks involved in the mineral exploration and development industry and risks specific to the Corporation, including the risk factors identified elsewhere in this Prospectus and documents incorporated by reference herein, including in the Corporation’s then-current annual information form under “ Risk Factors ”, in the then-current annual management’s discussion and analysis and then-current interim management’s discussion and analysis, if applicable, as well as in the 2022 Technical Report and in other disclosure documents of the Corporation filed at www.sedar.com.

Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking information contained in this Prospectus and documents incorporated by reference herein are expressly qualified by this cautionary statement. Although the Corporation believes that the assumptions inherent in the forward-looking information are reasonable and has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forwardlooking information. The Corporation does not undertake to update any forward-looking information, except as required by applicable securities laws.

CURRENCY PRESENTATION AND EXCHANGE RATE INFORMATION

References to “$” or “C$” in this Prospectus are to Canadian dollars, unless otherwise indicated. References to “US$” in this Prospectus are to United States dollars. On January 19, 2023, the Bank of Canada indicative average rate of exchange for Canadian dollars and United States dollars was C$1.00 = US$0.7423 or US$1.00 = C$1.3472.

DIFFERENCES IN REPORTING OF MINERAL RESOURCE ESTIMATES

This Prospectus and documents incorporated by reference herein have been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of United States securities laws. Unless otherwise indicated, all mineral reserve and mineral resource estimates included or incorporated by reference in this Prospectus have been prepared in accordance with NI 43-101. NI 43-101 is an instrument developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. These standards differ significantly from the requirements of the United States Securities and Exchange Commission that are applicable to domestic United States reporting companies. Any mineral reserves and mineral resources reported by the Corporation in accordance with NI 43-101 may not qualify as such under United States Securities and Exchange Commission standards. Accordingly, information contained in this Prospectus and documents incorporated by reference herein containing descriptions of the Corporation’s mineral deposits may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

DOCUMENTS INCORPORATED BY REFERENCE

Information has been incorporated by reference in this Prospectus from documents filed with the securities commissions or similar regulatory authorities in Canada. Copies of the documents incorporated by reference herein may be obtained on request without charge from the Corporate Secretary of the Corporation at 161 Bay Street, Suite 2700, Toronto, Ontario M5J 2S1, telephone (416) 361-9636, and are also available electronically under the profile of the Corporation at www.sedar.com.

As of the date hereof, the following documents filed by the Corporation with the securities commissions or similar regulatory authorities in Canada are specifically incorporated by reference into, and form an integral part of, this Prospectus:

(a) the annual information form of the Corporation dated March 30, 2022 for the year ended December 31, 2021 (the “ AIF ”), except for the information contained under the heading “Description of the Business – Tamarack North Project” and in “Exhibit I – Executive Summary Section from the February 2021 PEA” therein, which have been superseded by the summary from the 2022 Technical Report reproduced in “ Schedule A – Executive Summary Section from the 2022 Technical Report ” in this Prospectus;
(b) the audited consolidated financial statements of the Corporation for the years ended December 31, 2021 and 2020, together with the notes thereto and the auditor’s report thereon (the “ Annual Financial Statements ”);
(c) the management’s discussion and analysis of financial condition and results of operations of the Corporation for the year ended December 31, 2021 (the “ Annual MD&A ”);
(d) the condensed interim consolidated financial statements of the Corporation for the three and nine months ended September 30, 2022 and 2021, together with the notes thereto;
(e) the management’s discussion and analysis of financial condition and results of operations of the Corporation for the three and nine months ended September 30, 2022 (the “ Interim MD&A ”);
(f) the management information circular of the Corporation dated May 24, 2022, regarding the annual and special meeting of shareholders of the Corporation held on June 22, 2022;
(g) the material change report of the Corporation dated January 11, 2022, regarding the agreement with Tesla (the “ Tesla-Talon Supply Agreement ”) (the “ Tesla-Talon MCR ”);
(h) the material change report of the Corporation dated February 1, 2022 in respect of the announcement and closing of: (i) a bought deal public offering of 38,200,000 Common Shares at a price of $0.72 per Common Share for aggregate gross proceeds of $27,504,000, and (ii) a concurrent non-brokered private placement offering of 8,953,013 Common Shares at a price of $0.72 per Common Shares for aggregate gross proceeds of $6,446,169.36;
3 -
(i) the material change report of the Corporation dated October 27, 2022 in respect of the announcement of the updated mineral resource estimate for the Tamarack North Project (the “ Updated MRE MCR ”);
(j) the material change report of the Corporation dated October 27, 2022 in respect of the announcement of the Corporation’s wholly-owned subsidiary, Talon Nickel (as defined herein), being selected as a recipient of the first set of projects funded by President Biden’s Bipartisan Infrastructure Law (the “ Funding MCR ”);
(k) the material change report of the Corporation dated November 17, 2022 in respect of the announcement and closing of a bought deal public offering of 75,231,237 Common Shares at a price of $0.49 per Common Shares for aggregate gross proceeds of $36,863,306.13; and
(l) the technical report entitled “November 2022 National Instrument 43-101 Technical Report of the Tamarack North Project – Tamarack, Minnesota” with an effective date of November 2, 2022 (mineral resource effective date of October 10, 2022) (the “ 2022 Technical Report ”).

Any documents of the foregoing type, and all other documents of the type required by National Instrument 44-101 – Short Form Prospectus Distributions to be incorporated by reference in a short form prospectus including, without limitation, any material change reports (excluding material change reports filed on a confidential basis), comparative interim financial statements, comparative annual financial statements and the auditor’s report thereon, management’s discussion and analysis (“MD&A”), information circulars, annual information forms, marketing materials and business acquisition reports filed by the Corporation with the securities commissions or similar authorities in any of the provinces and territories of Canada, subsequent to the date of this Prospectus and during the 25-month period this Prospectus remains valid, shall be deemed to be incorporated by reference in this Prospectus.

Upon new annual financial statements and related MD&A of the Corporation being filed with the applicable securities commissions or similar regulatory authorities in Canada during the period that this Prospectus is effective, the previous annual financial statements and related MD&A and the previous interim financial statements and related MD&A of the Corporation most recently filed shall be deemed to no longer be incorporated by reference into this Prospectus for purposes of future offers and sales of Securities hereunder. Upon new interim financial statements and related MD&A of the Corporation being filed with the applicable securities commissions or similar regulatory authorities in Canada during the period that this Prospectus is effective, the previous interim financial statements and related MD&A of the Corporation most recently filed shall be deemed to no longer be incorporated by reference into this Prospectus for purposes of future offers and sales of Securities hereunder. Upon a new annual information form of the Corporation being filed with the applicable securities commissions or similar regulatory authorities in Canada during the period that this Prospectus is effective, notwithstanding anything herein to the contrary, the following documents shall be deemed to no longer be incorporated by reference into this Prospectus for purposes of future offers and sales of Securities hereunder: (i) the previous annual information form; (ii) any material change reports filed by the Corporation prior to the end of the financial year in respect of which the new annual information form is filed; (iii) any business acquisition reports filed by the Corporation for acquisitions completed prior to the beginning of the financial year in respect of which the new annual information form is filed; and (iv) any information circulars filed by the Corporation prior to the beginning of the financial year in respect of which the new annual information form is filed. Upon a new management information circular prepared in connection with an annual general meeting of the Corporation being filed with the applicable securities commissions or similar regulatory authorities in Canada during the period that this Prospectus is effective, the previous management information circular prepared in connection with an annual general meeting of the Corporation shall be deemed to no longer be incorporated by reference into this Prospectus for purposes of future offers and sales of Securities hereunder.

A Prospectus Supplement containing the specific terms of an offering of the Securities will be delivered to purchasers of such Securities together with this Prospectus, unless an exemption from the prospectus delivery requirements is available, and will be deemed to be incorporated by reference into this Prospectus as of the date of such Prospectus Supplement only for the purposes of the offering of the Securities to which that Prospectus Supplement pertains.

Any statement contained in this Prospectus or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded, for purposes of this Prospectus, to the extent that a statement contained herein or in any other subsequently filed document that also is, or is deemed to be,

incorporated by reference herein modifies, replaces or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made.

THE CORPORATION

Talon Metals Corp. is a company formed and existing under the BVI Business Companies Act, 2004 (British Virgin Islands).

The outstanding Common Shares are currently listed and posted for trading on the TSX under the symbol “TLO”. The Corporation’s head and registered office is located at Craigmuir Chambers, P.O. Box 71, Road Town, Tortola, British Virgin Islands. The mailing address of the Corporation in Canada is 161 Bay Street, Suite 2700, Toronto, Ontario M5J 2S1.

Intercorporate Relationships

The following chart sets out all of the Corporation’s material subsidiaries as at the date hereof, their jurisdictions of incorporation and the Corporation’s direct and indirect voting interest in each of these subsidiaries:

==> picture [468 x 277] intentionally omitted <==

THE BUSINESS

The Corporation is a mineral exploration company currently focused on the exploration and development of the Tamarack North Project and the Tamarack South Project, nickel-copper-cobalt projects in Minnesota, United States of America. The Corporation’s interest in the Tamarack North Project and the Tamarack South Project is held through its indirect subsidiary, Talon Nickel (USA) LLC (“ Talon Nickel ”). As of the date hereof, the only material property of the Corporation is the Tamarack North Project.

The Corporation also holds an interest in the mineral rights over a land package comprised of approximately 400,000 acres located in the Upper Peninsula of Michigan, United States of America (the “ Michigan Nickel Properties ”). The Corporation does not consider the Michigan Nickel Properties to be a material property of the Corporation as at the date hereof.

If, after the date of this Prospectus, the Corporation is required by Section 4.2 of NI 43-101 to file a technical report to support scientific or technical information that relates to a mineral project on a property that is material to the Corporation, the Corporation will file such technical report in accordance with Section 4.2(5)(a)(i) of NI 43-101 as if the words “preliminary short form prospectus” refer to “shelf prospectus supplement”.

For additional information with respect to the business of the Corporation, readers are referred to the Corporation’s then-current annual information form (in respect of the current AIF, except to the extent certain information has been superseded), annual MD&A and interim MD&A, if applicable, all of which are incorporated by reference herein, as well as the 2022 Technical Report. Schedule “A” to this Prospectus contains a summary of the 2022 Technical Report, which supersedes the information contained under the heading “Description of the Business – Tamarack North Project” and in “Exhibit I – Executive Summary Section from the February 2021 PEA” in the AIF. The summary in Schedule “A” does not purport to be a complete summary of the Tamarack North Project and is subject to all of the assumptions, qualifications and procedures set out in the 2022 Technical Report and is qualified in its entirety with reference to the full text of the 2022 Technical Report, which is incorporated by reference herein. Readers should read the summary in Schedule “A” to this Prospectus in conjunction with the 2022 Technical Report which is available electronically under the profile of the Corporation at www.sedar.com. See “ Documents Incorporated by Reference ”, and see also “ Risk Factors ” in this Prospectus and the Corporation’s then-current annual information form, and the risk factors set forth in the then-current annual MD&A and interim MD&A, if applicable.

CONSOLIDATED CAPITALIZATION

As at September 30, 2022, there were 774,712,164 Common Shares issued and outstanding, as well as 110,573,007 stock options of the Corporation and 823,017 Common Share purchase warrants of the Corporation outstanding which, if exercised, would result in the issuance of an additional 111,396,024 Common Shares. As at the date hereof, there are 850,841,418 Common Shares issued and outstanding, as well as 119,885,507 stock options of the Corporation and nil Common Share purchase warrants of the Corporation outstanding which, if exercised, would result in the issuance of an additional 119,885,507 Common Shares. Other than as noted above, there have not been any material changes in the share and loan capital of the Corporation since September 30, 2022.

The applicable Prospectus Supplement will describe any material change in, and the effect of such material change on, the share and loan capital of the Corporation that will result from the issuance of Securities pursuant to such Prospectus Supplement.

USE OF PROCEEDS

Unless otherwise specified in a Prospectus Supplement, the net proceeds to the Corporation from the sale of any Securities are intended to be used for general corporate purposes, including funding ongoing operations and/or working capital requirements, to repay any indebtedness outstanding from time to time and for discretionary capital programs. Specific information about the use of the net proceeds to the Corporation of any offering of Securities under this Prospectus and the specific business objectives which the Corporation expects to accomplish with such proceeds will be set forth in the applicable Prospectus Supplement relating to that offering of Securities.

There may be circumstances where, based on results obtained or for other sound business reasons, a reallocation of funds may be necessary or prudent. Accordingly, management of the Corporation will have broad discretion in the application of the proceeds of an offering of Securities. The actual amount that the Corporation spends in connection with each intended use of proceeds may vary significantly from the amounts specified in the applicable Prospectus Supplement and will depend on a number of factors, including those referred to under “ Risk Factors ” in this Prospectus and in the documents incorporated by reference herein and any other factors set forth in the applicable Prospectus Supplement. The Corporation may invest funds which it does not immediately use. Such investments may include short-term marketable investment grade securities. The Corporation may, from time to time, issue securities (including debt securities) other than pursuant to this Prospectus. See “ Risk Factors ”.

As at the date hereof, the Corporation has yet to generate any revenue from mining operations and is unlikely to do so in the immediate future. During the year ended December 31, 2021 and the three and nine months ended September 30, 2022, the Corporation had negative cash flow from operating activities. The Corporation anticipates it will continue to have negative cash flow from operating activities in future periods until profitable commercial production is achieved at the Tamarack North Project. As a result, the Corporation may need to allocate a portion of its existing working capital or certain of the net proceeds from any offering of Securities to fund such negative cash flow from operating activities in future periods. See “ Risk Factors – Negative Operating Cash Flow and Additional Funding ”.

The net proceeds to any selling securityholder(s) from any secondary offering of Securities will be set forth in the applicable Prospectus Supplement relating to that secondary offering of Securities. The Corporation will not receive any of the proceeds payable to any selling securityholder(s) under any secondary offering of Securities. See also “ Selling Securityholders ”.

PLAN OF DISTRIBUTION

The Corporation or a selling securityholder may, during the 25-month period that this Prospectus remains valid, offer for sale and issue, as applicable, the Securities, separately or together: (a) to one or more underwriters or dealers; (b) through one or more agents; or (c) directly to one or more purchasers through applicable statutory exemptions. The Prospectus Supplement relating to a particular offering of Securities will identify each underwriter, dealer or agent engaged in connection with the offering and sale of the Securities, as well as the method of distribution and the terms of the offering of such Securities, including the net proceeds to the Corporation (or, if applicable, the selling securityholder(s)) and, to the extent applicable, any fees, discounts, concessions or any other compensation payable to the underwriters, dealers or agents and any other material terms. Only underwriters, dealers or agents so named in the Prospectus Supplement are deemed to be underwriters, dealers or agents, as the case may be, in connection with the Securities offered thereby.

The Securities may be sold, from time to time in one or more transactions at a fixed price or prices which may be changed or at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices, including sales in transactions that are deemed to be “at-the-market distributions” as defined in NI 44-102, including sales made directly on an existing trading market for the Common Shares, such as the TSX, or sales made to or through a market maker other than on an exchange. The prices at which the Securities may be offered may vary as between purchasers and during the period of distribution.

If, in connection with the offering of Securities at a fixed price or prices, the underwriters have made a bona fide effort to sell all of the Securities at the initial offering price fixed in the applicable Prospectus Supplement, the offering price may be decreased and thereafter further changed, from time to time, to an amount not greater than the initial offering price fixed in such Prospectus Supplement, in which case the compensation realized by the underwriters will be decreased by the amount that the aggregate price paid by purchasers for the Securities is less than the gross proceeds paid by the underwriters to the Corporation.

Underwriters, dealers and agents who participate in the distribution of the Securities may be entitled under agreements to be entered into with the Corporation (or, if applicable, the selling securityholder(s)) to indemnification by the Corporation (or, if applicable, the selling securityholder(s)) against certain liabilities, including liabilities under securities legislation, or to contribution with respect to payments which such underwriters, dealers or agents may be required to make in respect thereof. Such underwriters, dealers and agents may be customers of, engage in transactions with, or perform services for, the Corporation (or, if applicable, the selling securityholder(s)) in the ordinary course of business.

Any offering of Debt Securities, Subscription Receipts, Warrants or Units will be a new issue of Securities with no established trading market. Unless otherwise specified in the applicable Prospectus Supplement, the Debt Securities, Subscription Receipts, Warrants or Units will not be listed on any securities exchange. There is no market through which such Securities may be sold and purchasers may not be able to resell such Securities purchased under this Prospectus. This may affect the pricing of such Securities in the secondary market, the transparency and availability of trading prices, the liquidity of such Securities, and the extent of issuer regulation. Certain dealers may make a market in these Securities but will not be obligated to do so and may discontinue any market making at any time without notice. No assurance can be given that any dealer will make a market in such Securities or as to the liquidity of the trading market, if any, for such Securities. See “ Risk Factors ”.

Underwriters, dealers and agents may make sales of Securities in privately negotiated transactions and/or any other method permitted by law, including sales deemed to be an “at-the-market distribution” and subject to limitations imposed by and the terms of any regulatory approvals required and obtained under, applicable Canadian securities laws which includes sales made directly on an existing trading market for the Common Shares, or sales made to or through a market maker other than on an exchange. In connection with any offering of Securities, except with respect to “at-the-market distributions” or as otherwise set out in a Prospectus Supplement relating to a particular offering of Securities, the underwriters, dealers or agents may over-allot or effect transactions which are intended to stabilize or maintain the market price of the Securities offered at a level above that which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time. No underwriter, dealer or agent involved in an “at-the-market distribution”, no affiliate of such an underwriter, dealer or agent and no person or company acting jointly or in concert with such an underwriter, dealer or agent may, in connection with the distribution, enter into any transaction that is intended to stabilize or maintain the market price of the Securities or securities of the same class as the Securities distributed, including selling an aggregate number or principal amount of securities that would result in the underwriter, dealer or agent creating an over-allocation position in the Securities.

Unless otherwise specified in a Prospectus Supplement, the Securities have not been and will not be registered under the 1933 Act or the securities laws of any states in the United States and may not be offered or sold or otherwise transferred or disposed of in the United States or to, or for the account of, U.S. Persons absent registration or pursuant to an applicable exemption from the 1933 Act and applicable state securities laws. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of these Securities within the United States or to, or for the account or benefit of, U.S. Persons.

Participation Rights

On November 7, 2018, the Corporation entered into an investment agreement (the “ Investment Agreement ”) with Resource Capital Fund VI L.P. (“ RCF ”) pursuant to which, among other things, the Corporation granted RCF a contractual participation right in respect of equity financings provided RCF holds 10% or more of all Common Shares on a partially diluted basis. On December 10, 2021, the Corporation and RCF entered into an amendment to the Investment Agreement (the “ Amendment Agreement ”). Pursuant to the terms of the Amendment Agreement, RCF has the ability to acquire that number of Common Shares from the Corporation to provide RCF the ability to maintain their pro-rata shareholding interest in the Corporation after taking into account any sales by the Corporation in respect of an “at-the-market” equity distribution.

EARNINGS COVERAGE RATIO

Earnings coverage ratios will be provided in the applicable Prospectus Supplement relating to any issuance of Debt Securities having a term to maturity in excess of one year, as required by applicable securities laws.

DESCRIPTION OF COMMON SHARES

Pursuant to Talon’s memorandum of association under the BVI Business Companies Act, 2004 (British Virgin Islands), it is authorized to issue one class and one series of shares divided into 100,000,000,000 Common Shares of no par value. The holders of Common Shares are entitled to one vote per share at all meetings of the shareholders of the Corporation either in person or by proxy. The holders of Common Shares are also entitled to dividends, if and when declared by the directors of the Corporation and the distribution of the residual assets of the Corporation in the event of a liquidation, dissolution or winding up of the Corporation. The Common Shares are not subject to call or assessment rights or any conversion rights, and other than the participation rights of RCF set out under “ Plan of Distribution – Participation Rights ”, the Common Shares are not subject to any pre-emptive rights. There are no redemption, retraction, purchase for cancellation, surrender, sinking or purchase fund provisions.

At the annual and special meeting of shareholders of the Corporation held on June 25, 2020, the shareholders of the Corporation approved the amended and restated shareholder rights plan agreement (the “ A&R Rights Plan ”) entered into between the Corporation and Computershare Investor Services Inc., as rights agent. The A&R Rights Plan aims to ensure that all shareholders are treated equally and fairly in the event of a transaction that could lead to a change in control of the Corporation. The A&R Rights Plan also gives the board of directors of the Corporation more time to assess any unsolicited bid that may be made for the Corporation in the future and to explore and

develop alternatives for maximizing shareholder value. A copy of the A&R Rights Plan is available electronically under the profile of the Corporation at www.sedar.com.

As of the date of this Prospectus, the Corporation has not declared dividends and has no current intention to declare dividends on its Common Shares in the foreseeable future. Any decision to pay dividends on its Common Shares in the future will be at the discretion of the Corporation’s board of directors and will depend on, among other things, the Corporation’s results of operations, current and anticipated cash requirements and surplus, financial condition, any future contractual restrictions and financing agreement covenants, solvency tests imposed by corporate law and other factors that the board of directors may deem relevant.

DESCRIPTION OF DEBT SECURITIES

The following sets forth certain general terms and provisions of the Debt Securities. The particular terms and provisions of Debt Securities offered pursuant to this Prospectus will be set forth in the applicable Prospectus Supplement, and the extent to which the general terms and provisions described below may apply to such Debt Securities, will be described in such Prospectus Supplement.

The Debt Securities will be issued in series under one or more trust indentures to be entered into between the Corporation and a financial institution to which the Trust and Loan Companies Act (Canada) applies or a financial institution organized under the laws of any province or territory of Canada and authorized to carry on business as a trustee. Each such trust indenture, as supplemented or amended from time to time, will set out the terms of the applicable series of Debt Securities. The statements in this Prospectus relating to any trust indenture and the Debt Securities to be issued under it are summaries of anticipated provisions of an applicable trust indenture and do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all provisions of such trust indenture, as applicable. Each trust indenture may provide that Debt Securities may be issued thereunder up to the aggregate principal amount which may be authorized from time to time by the Corporation.

Any Prospectus Supplement for Debt Securities will contain the terms and conditions and other information relating to the Debt Securities being offered, including:

the designation, aggregate principal amount and authorized denominations of such Debt Securities;
the currency for which the Debt Securities may be purchased and the currency in which the principal and any interest is payable (in either case, if other than Canadian dollars);
the percentage of the principal amount at which such Debt Securities will be issued;
the date or dates on which such Debt Securities will mature;
the rate or rates at which such Debt Securities will bear interest (if any), or the method of determination of such rates (if any);
the dates on which any such interest will be payable and the record dates for such payments;
any redemption, retraction, purchase for cancellation or surrender term or terms under which such Debt Securities may be defeased;
any exchange or conversion terms;
any sinking or purchase fund provisions relating to such Debt Securities;
the nature and priority of any security interests for such Debt Securities, including the principal properties subject to lien or charge;
any restrictions on issuance of additional Debt Securities, the incurring of additional indebtedness and other material negative covenants; and
9 -
any other specific terms.

Each series of Debt Securities may be issued at various times with different maturity dates, may bear interest at different rates and may otherwise vary.

The Debt Securities will be direct obligations of the Corporation. The Debt Securities will be senior or subordinated indebtedness of the Corporation as described in the relevant Prospectus Supplement.

DESCRIPTION OF SUBSCRIPTION RECEIPTS

The following sets forth certain general terms and provisions of the Subscription Receipts. The Corporation may issue Subscription Receipts that may be exchanged by the holders thereof for Common Shares and/or other Securities of the Corporation upon the satisfaction of certain conditions. The particular terms and provisions of the Subscription Receipts offered pursuant to this Prospectus will be set forth in the applicable Prospectus Supplement, and the extent to which the general terms and provisions described below may apply to such Subscription Receipts, will be described in such Prospectus Supplement.

The Corporation may offer Subscription Receipts separately or together with Common Shares, Debt Securities or Warrants, as the case may be. The Corporation will issue Subscription Receipts under one or more subscription receipt agreements. Under each subscription receipt agreement, a purchaser of Subscription Receipts will have a contractual right of rescission following the issuance of the Common Shares and/or other Securities of the Corporation, as the case may be, to such purchaser, entitling the purchaser to receive the original amount paid for the Subscription Receipts, and any additional amount paid upon exchange thereof, upon surrender of the Common Shares and/or other Securities of the Corporation , as the case may be, if this Prospectus, the relevant Prospectus Supplement, and any amendment thereto, contains a misrepresentation, provided such remedy for rescission is exercised within 180 days of the date the Subscription Receipts are issued.

Any Prospectus Supplement for Subscription Receipts will contain the terms and conditions and other information relating to the Subscription Receipts being offered, including:

the number of Subscription Receipts;
the price at which the Subscription Receipts will be offered and whether the price is payable in installment;
any conditions to the exchange of Subscription Receipts into Common Shares and/or other Securities of the Corporation, as the case may be, and the consequences of such conditions not being satisfied;
the procedures for the exchange of the Subscription Receipts into Common Shares and/or other Securities of the Corporation, as the case may be;
the number of Common Shares and/or other Securities of the Corporation, as the case may be, that may be exchanged upon exchange of each Subscription Receipt;
the designation and terms of any other Securities with which the Subscription Receipts will be offered, if any, and the number of Subscription Receipts that will be offered with each Security;
escrow release conditions, if any;
the dates or periods during which the Subscription Receipts may be exchanged into Common Shares and/or other Securities of the Corporation;
whether such Subscription Receipts will be listed on any securities exchange;
any other rights, privileges, restrictions and conditions attaching to the Subscription Receipts; and
10 -
any other specific terms.

Prior to the exchange of their Subscription Receipts, holders of Subscription Receipts will not have any of the rights of holders of the securities issuable on the exchange of the Subscription Receipts.

DESCRIPTION OF WARRANTS

The following sets forth certain general terms and provisions of the Warrants. The Corporation will deliver an undertaking to the securities regulatory authority in each of the provinces and territories of Canada, pursuant to which the Corporation will agree not to distribute pursuant to this Prospectus, as it may be supplemented or amended, any Warrants that are “novel” (as such term is defined in NI 44-102), including Warrants that are convertible into or exchangeable or exercisable for securities of an entity other than the Corporation or its affiliates, unless the applicable Prospectus Supplement(s) pertaining to the distribution of the novel securities is either (a) first approved for filing by the securities commissions or similar regulatory authorities in each of the provinces and territories of Canada where such novel securities are distributed, or (b) 10 business days have elapsed since the date of delivery to the applicable securities regulatory authority of the draft Prospectus Supplement in substantially final form and the applicable securities regulatory authority has not provided written comments on the draft Prospectus Supplement.

The Corporation may issue Warrants for the purchase of Common Shares and/or other Securities of the Corporation. The particular terms and provisions of the Warrants offered pursuant to this Prospectus will be set forth in the applicable Prospectus Supplement, and the extent to which the general terms and provisions described below may apply to such Warrants, will be described in such Prospectus Supplement.

The Corporation may offer Warrants separately or together with Common Shares, Debt Securities and Subscription Receipts, as the case may be, and such Warrants may be attached to, or separate from, any such offered Securities. The Corporation will issue Warrants under one or more warrant indentures to be entered into between the Corporation and a warrant agent named in the applicable Prospectus Supplement. Each such warrant indenture, as supplemented or amended from time to time, will set out the terms and conditions of the applicable Warrants. The statements in this Prospectus relating to any warrant indenture and the Warrants to be issued under it are summaries of anticipated provisions of an applicable warrant indenture and do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all provisions of such warrant indenture, as applicable.

Any Prospectus Supplement for Warrants will contain the terms and conditions and other information relating to the Warrants being offered, including:

the exercise price of the Warrants;
the designation of the Warrants;
the aggregate number of Warrants offered and the offering price;
the designation, number and terms of the Common Shares and/or other Securities of the Corporation purchasable upon exercise of the Warrants, and procedures that will result in the adjustment of those numbers;
the dates or periods during which the Warrants are exercisable;
the designation and terms of any securities with which the Warrants are issued;
if the Warrants are issued as a Unit with another security, the date on and after which the Warrants and the other security will be separately transferable;
the currency or currency unit in which the exercise price is denominated;
any minimum or maximum amount of Warrants that may be exercised at any one time;
11 -
whether such Warrants will be listed on any securities exchange;
any terms, procedures and limitations relating to the transferability, exchange or exercise of the Warrants;
any other rights, privileges, restrictions and conditions attaching to the Warrants; and
any other specific terms.

Prior to the exercise of their Warrants, holders of Warrants will not have any of the rights of holders of the securities issuable on exercise of the Warrants.

DESCRIPTION OF UNITS

The following sets forth certain general terms and provisions of the Units. The Corporation may issue Units comprising any combination of the other Securities described in this Prospectus. Each Unit will be issued so that the holder of such Unit is also the holder of each Security included in such Unit. Therefore, the holder of a Unit will have the rights and obligations of a holder of each Security comprising the Unit. The agreement, if any, under which a Unit is issued may provide that the Securities comprising the Unit may not be held or transferred separately at any time or at any time before a specified date.

Any Prospectus Supplement for Units will contain the terms and conditions and other information relating to the Units being offered, including:

the designation, terms and aggregate amount of the Units;
the price at which the Units will be offered;
the designation and terms of the Securities comprising the Units, including whether and under what circumstances those Securities may be held or transferred separately;
any provisions for the issuance, payment, settlement, transfer or exchange of the Units or of the Securities comprising the Units;
whether the Units will be issued in registered or global form;
any other rights, privileges, restrictions and conditions attaching to the Units; and
any other material terms and conditions of the Units.

SELLING SECURITYHOLDERS

This Prospectus may also, from time to time, relate to the offering of Securities by way of a secondary offering by certain selling securityholders. The terms under which the Securities will be offered by selling securityholders will be described in the Prospectus Supplement. In connection with any secondary offering, in respect of any selling securityholder that is resident outside of Canada, the Corporation will file a non-issuer’s submission to jurisdiction form on behalf of such selling securityholder with the corresponding Prospectus Supplement. The Prospectus Supplement for, or including, any offering of the Securities by selling securityholders will include, without limitation, where applicable:

the names of the selling securityholders;
the number or amount of Securities owned, controlled or directed by each of the selling securityholders;
12 -
the number or amount of Securities being distributed for the account of each selling securityholder;
the number or amount of Securities to be owned, controlled or directed by each of the selling securityholders after the distribution, and the percentage that number or amount represents out of the total number or amount of outstanding Securities of the class or series being distributed;
whether the Securities are owned by the selling securityholders both of record and beneficially, of record only, or beneficially only;
if the selling securityholder purchased any of the Securities held by it in the two years preceding the date of the Prospectus Supplement, the date or dates the selling securityholder acquired the Securities; and
if the selling securityholder acquired the Securities held by it in the 12 months preceding the date of the Prospectus Supplement, the cost thereof to the selling securityholder in the aggregate and on an average cost-per-security basis.

PRIOR SALES

Information in respect of prior sales of Common Shares and other Securities distributed under this Prospectus and for securities that are convertible or exchangeable into Common Shares or such other Securities within the previous 12-month period will be provided, as required, in a Prospectus Supplement with respect to the issuance of Common Shares and/or other Securities pursuant to such Prospectus Supplement.

TRADING PRICE AND VOLUME

The outstanding Common Shares are traded on the TSX under the symbol “TLO”. Trading prices and volumes of the Common Shares for the previous 12-month period will be provided, as required, in each Prospectus Supplement.

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

Owning any of the Securities may subject holders to tax consequences. The applicable Prospectus Supplement may describe certain Canadian federal income tax considerations generally applicable to investors described therein of purchasing, holding and disposing of applicable Securities, including, in the case of an investor who is not a resident of Canada, Canadian non-resident withholding tax considerations. Prospective investors should consult their own tax advisors prior to deciding to purchase any of the Securities.

RISK FACTORS

An investment in the Securities is speculative and involves a high degree of risk. Prospective investors in a particular offering of the Securities should carefully consider, in addition to information contained in this Prospectus and in the Prospectus Supplement relating to that offering and the information incorporated by reference herein and therein for the purposes of that offering, the risk factors set forth in the Corporation’s then-current annual information form, as well as the Corporation’s then-current annual MD&A and interim MD&A, if applicable, to the extent incorporated by reference herein for the purposes of that particular offering of Securities.

Any such risk factors could materially affect the Corporation’s business, financial condition and/or future operating results and prospects and could cause actual results and events to differ materially from those described in forward-looking statements and forward-looking information relating to the Corporation. The risks described herein and therein are not the only risks facing the Corporation. Additional risks and uncertainties not currently known to the Corporation, or that the Corporation currently deems to be immaterial, may also materially and adversely affect the Corporation’s business, financial condition, operations or prospects.

13 -

In addition, the following risk factors should be carefully considered by investors:

There is No Market for Certain of the Securities

There is currently no trading market for any Debt Securities, Subscription Receipts, Warrants or Units that may be offered and purchasers may not be able to resell such Securities purchased under this Prospectus. This may affect the pricing of such Securities in the secondary market, the transparency and availability of trading prices, the liquidity of such Securities, and the extent of issuer regulation. No assurance can be given that an active or liquid trading market for such Securities will develop or be sustained. If an active or liquid market for such Securities fails to develop or be sustained, the prices at which such Securities trade may be adversely affected. Whether or not such Securities will trade at lower prices depends on many factors, including liquidity of such Securities, prevailing interest rates and the markets for similar securities, the market price of the Common Shares, general economic conditions and the Corporation’s financial condition, historic financial performance and future prospects.

Additional Financings

The continued development of the Corporation may require the Corporation to raise additional financing in the future through the issuance of additional equity securities or convertible debt securities. If the Corporation raises additional funding by issuing additional equity securities or convertible debt securities such financings may substantially dilute the interests of shareholders of the Corporation and reduce the value of their investment. Additional financings and share issuances may result in a substantial dilution to shareholders of the Corporation and decrease the value of the Corporation’s securities.

The failure to raise or procure such additional funds as required could result in the delay or indefinite postponement of business objectives. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, will be on terms acceptable to the Corporation.

Active Liquid Market for Common Shares

There may not be an active liquid market for the Common Shares. There is no guarantee that an active trading market for the Common Shares will be maintained on the TSX. Investors may not be able to sell their Common Shares quickly or at the latest market price if trading in the Common Shares is not active.

Discretion in the Use of Proceeds and Use of Available Funds

Management will have broad discretion concerning the use of the net proceeds from the offering of any Securities and the use of available funds, as well as the timing of their expenditures. Depending on fluctuations in nickel and copper prices and other factors, the intended use of proceeds from the offering of any Securities and use of available funds may change. As a result, an investor will be relying on the judgment of management for the application of the net proceeds from the offering of any Securities and use of available funds. Management may use the net proceeds from the offering of any Securities and available funds in ways that an investor may not consider desirable if they believe it would be in the best interests of the Corporation to do so. The results and the effectiveness of the application of proceeds from an offering of any Securities and available funds are uncertain. If the proceeds and available funds are not applied effectively, the Corporation’s results of operations may suffer.

Negative Operating Cash Flow and Additional Funding

The Corporation has limited financial resources and has no source of operating cash flow. During the year ended December 31, 2021 and the three and nine months ended September 30, 2022, the Corporation had negative cash flow from operating activities. The Corporation anticipates it will continue to have negative cash flow from operating activities in future periods until profitable commercial production is achieved at the Tamarack North Project. There is no assurance that additional funding will be available to the Corporation for the exploration and development of its projects. Furthermore, additional financing, whether through the issuance of additional securities and/or debt, will be required to continue the development of the Tamarack North Project, the Tamarack South Project, and the Michigan Nickel Properties generally. There can be no assurance that the Corporation will be able to obtain adequate additional financing in the future or that the terms of such financing will be favourable. Failure to obtain such additional financing could result in delay or indefinite postponement of further development of the Tamarack North Project, the Tamarack South Project, and the Michigan Nickel Properties generally.

14 -

Conditions Relating to the Tesla-Talon Supply Agreement

The Tesla-Talon Supply Agreement is conditional upon: (i) Talon earning a 60% interest in the Tamarack North Project; (ii) Talon commencing commercial production at the Tamarack North Project; and (iii) the parties completing negotiations and executing detailed supply terms and conditions. Additionally, Talon will use commercially reasonable efforts to achieve commercial production on or before January 1, 2026 at the Tamarack North 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. There is no assurance that any such conditions will be met or that Talon will achieve commercial production at the Tamarack North Project. Although the Corporation continues to negotiate the detailed supply terms and conditions with Tesla, there is no assurance that a definitive agreement will be reached on favourable terms in this regard or at all. If such conditions are not met or if the Tesla-Talon Supply Agreement is terminated in accordance with its terms, it may have a material adverse effect on the Corporation and its business and operations (including the market price of the Common Shares and other securities of the Corporation).

Acquisition of North Dakota Facility and the US Government Funding Remain Under Negotiations

As discussed in the Funding MCR incorporated by reference herein, on July 1, 2022, Talon Nickel submitted an application for US government funding under the United States Bipartisan Infrastructure Law. On October 19, 2022, Talon Nickel was selected as a recipient of the first set of projects funded by the United States Bipartisan Infrastructure Law (the “ Funding Award ”) . The application proposed an ore processing and tailings management facility located at an existing industrial brownfields site in Mercer County, North Dakota, receiving feedstock from the Tamarack North Project and other potential sources in North America. The acquisition of the preferred site in North Dakota is actively under negotiations and the Corporation has not entered into any agreements in respect thereof. The Corporation may not be able to reach any such agreements on favourable terms or at all. If the Corporation is unable to reach any such agreements, subject to the approval of the Department of Energy in the United States, the Corporation will need to identify and acquire another site in North Dakota or elsewhere in order to meet its obligations under the Funding Award. In addition, the Funding Award is subject to final negotiations with the Department of Energy. Any failure or delay in respect thereof may have a material adverse effect on the Corporation and its business and operations (including the market price of the Common Shares and other securities of the Corporation).

LEGAL MATTERS

Unless otherwise specified in the Prospectus Supplement relating to an offering of Securities, certain legal matters relating to the offering of Securities will be passed upon on behalf of the Corporation by Cassels Brock & Blackwell LLP with respect to matters of Canadian law. As at the date hereof, the partners and associates of Cassels Brock & Blackwell LLP beneficially own, directly and indirectly, in the aggregate, less than 1.0% of the outstanding Common Shares.

In addition, certain legal matters in connection with any offering of Securities will be passed upon for any underwriters, dealers or agents by counsel to be designated at the time of the offering by such underwriters, dealers or agents, as the case may be, with respect to matters of Canadian and, if applicable, other foreign law.

AUDITORS, TRANSFER AGENT AND REGISTRAR

MNP LLP is the independent auditor of the Corporation and is independent within the meaning of the Code of Professional Conduct of the Chartered Professional Accountants of Ontario.

The transfer agent and registrar for the Common Shares is Computershare Investor Services Inc., with its principal office in Toronto, Ontario.

15 -

INTEREST OF EXPERTS

The following are the names of each person or company who is named as having prepared or certified a report, valuation, statement or opinion described or included herein or in a document incorporated by reference, and whose profession or business gives authority to such report, valuation, statement or opinion:

MNP LLP provided an auditor’s report dated March 30, 2022 in respect of the Annual Financial Statements. MNP LLP has advised that it is independent within the meaning of the Code of Professional Conduct of the Chartered Professional Accountants of Ontario.
Mr. Brian Thomas, P. Geo, Principal Resource Geologist at Golder Associates Ltd., is a qualified person who authored certain portions of the 2022 Technical Report and who reviewed, approved and verified certain technical information disclosed in the Updated MRE MCR and the Interim MD&A relating to the 2022 Technical Report. To the knowledge of the Corporation, none of the author nor the firm he works with had an interest in any securities or other properties of the Corporation, its associates or affiliates as at the date of the Updated MRE MCR, the Interim MD&A, the 2022 Technical Report or as at the date hereof.
Mr. Roger Jackson, P. Geo, Senior Resource Geologist at Golder Associates Ltd., is a qualified person who authored certain portions of the 2022 Technical Report and who reviewed, approved and verified certain technical information disclosed in the Updated MRE MCR and the Interim MD&A relating to the 2022 Technical Report. To the knowledge of the Corporation, none of the author nor the firm he works with had an interest in any securities or other properties of the Corporation, its associates or affiliates as at the date of the Updated MRE MCR, the Interim MD&A, the 2022 Technical Report or as at the date hereof.
Mr. Oliver Peters, P. Eng., Principal Metallurgist and President at Metpro Management Inc., is a qualified person who authored certain portions of the 2022 Technical Report. To the knowledge of the Corporation, none of the author nor the firm he works with had a material interest in any securities or other properties of the Corporation, its associates or affiliates as at the date of the 2022 Technical Report or as at the date hereof.
Ms. Christine Pint, P. G., Senior Hydrologist and Vice-President, Barr Engineering Co., is a qualified person who authored certain portions of the 2022 Technical Report. To the knowledge of the Corporation, none of the author nor the firm she works with had an interest in any securities or other properties of the Corporation, its associates or affiliates as at the date of the 2022 Technical Report or as at the date hereof.
Dr. Etienne Dinel, Vice President, Geology of the Corporation, is the qualified person who reviewed, approved and verified the technical information disclosed in this Prospectus and in the Tesla-Talon MCR, and certain technical information disclosed in the AIF, the Annual MD&A, the Interim MD&A and the Updated MRE MCR. Dr. Dinel’s holdings of securities of the Corporation as of the date hereof do not exceed 1.0% of the issued and outstanding securities of the Corporation.

EXEMPTION

Pursuant to a decision of the Autorité des marchés financiers dated December 8, 2022, the Corporation was granted a permanent exemption from the requirement that this Prospectus as well as the documents incorporated by reference herein and any Prospectus Supplement and the documents incorporated by reference therein to be filed in relation to an “at-the-market distribution” be publicly filed in both the French and English languages. This exemption is granted on the condition that this Prospectus and any Prospectus Supplement (other than in relation to an “at-the-market distribution”) and the documents incorporated by reference herein and therein be publicly filed in both the French and English languages if the Corporation offers Securities to Québec purchasers in connection with an offering other than in relation to an “at-the-market distribution”.

STATUTORY AND CONTRACTUAL RIGHTS OF WITHDRAWAL AND RESCISSION

Unless provided otherwise in a Prospectus Supplement, the following is a description of a purchaser’s statutory rights. Securities legislation in certain of the provinces and territories of Canada provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within two business days after

16 -

receipt or deemed receipt of a prospectus and any amendment. In several of the provinces and territories, the securities legislation further provides a purchaser with remedies for rescission or, in some jurisdictions, revisions of the price or damages if the prospectus and any amendment contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission, revision of the price or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for the particulars of these rights or consult with a legal advisor.

In an offering of Securities which are convertible, exchangeable or exercisable for other securities of the Corporation, investors are cautioned that the statutory right of action for damages for a misrepresentation contained in the prospectus is limited, in certain provincial and territorial securities legislation, to the price at which the Securities which are convertible, exchangeable or exercisable for other securities of the Corporation is offered to the public under the prospectus offering. This means that, under the securities legislation of certain provinces and territories, if the purchaser pays additional amounts upon conversion, exchange or exercise of the Security, those amounts may not be recoverable under the statutory right of action for damages that applies in those provinces and territories. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of this right of action for damages or consult with a legal advisor.

Original purchasers of Securities which are convertible, exchangeable or exercisable for other securities of the Corporation will have a contractual right of rescission against the Corporation in respect of the conversion, exchange or exercise of such Securities. Other than in the case of an offering of warrants that may reasonably be regarded as incidental to the offering as a whole, the contractual right of rescission will entitle such original purchasers to receive, upon surrender of the underlying securities, the original amount paid for the applicable convertible, exchangeable or exercisable Securities and any additional amount paid upon conversion, exchange or exercise thereof in the event that this Prospectus, the relevant Prospectus Supplement or an amendment thereto contains a misrepresentation, provided that: (i) the conversion, exchange or exercise takes place within 180 days of the date of the purchase of such Securities under this Prospectus and the applicable Prospectus Supplement; and (ii) the right of rescission is exercised within 180 days of the date of the purchase of such Securities under this Prospectus and the applicable Prospectus Supplement. This contractual right of rescission will be consistent with the statutory right of rescission described under Section 130 of the Securities Act (Ontario), and is in addition to any other right or remedy available to original purchasers under Section 130 of the Securities Act (Ontario) or otherwise at law.

17 -

SCHEDULE “A”

EXECUTIVE SUMMARY SECTION FROM THE 2022 TECHNICAL REPORT

This Schedule “A” contains a summary of the 2022 Technical Report which supersedes the information contained under the heading “Description of the Business – Tamarack North Project” and in “Exhibit I – Executive Summary Section from the February 2021 PEA” in the AIF. The summary in this Schedule “A” does not purport to be a complete summary of the Tamarack North Project and is subject to all of the assumptions, qualifications and procedures set out in the 2022 Technical Report and is qualified in its entirety with reference to the full text of the 2022 Technical Report, which is incorporated by reference herein. Readers should read the summary in this Schedule “A” in conjunction with the 2022 Technical Report which is available electronically under the profile of the Corporation at www.sedar.com. Capitalized terms used herein and not otherwise defined shall carry the meanings of such terms in the Prospectus.

Introduction

The Corporation retained Golder Associates Ltd. (“ Golder ”), a member of WSP, as well as Metpro Management Inc. (“ Metpro ”) and Barr Engineering Co. (“ Barr ”) to prepare an update to the Mineral Resource Estimate (“ MRE ”) and a technical report prepared in accordance with NI 43-101 for the Tamarack North Project, being the 2022 Technical Report. The purpose of the 2022 Technical Report is to support the disclosure of a material change to the MRE based on drilling completed since the technical report entitled “NI 43-101 Technical Report Updated Preliminary Economic Assessment (PEA) #3 of the Tamarack North Project – Tamarack, Minnesota” with an effective date of January 8, 2021 (“ PEA #3 ”). As a result of the supply agreement entered into between Talon and Tesla on January 10, 2022 (“ Tesla Supply Agreement ”), the 2022 Technical Report also introduces the inclusion of Iron (Fe) in Sulphides % in the MRE as a payable by-product.

The Tamarack Project, located in Minnesota, USA, comprises the Tamarack North Project and the Tamarack South Project. The Tamarack Project is currently 51% owned by the Corporation through its wholly-owned indirect subsidiary, Talon Nickel (collectively in this summary, “ Talon ”), and 49% owned by Kennecott.

Qualified Person (“ QP ”) site visits to the Tamarack North Project site were conducted by (i) Mr. Brian Thomas (P.Geo.) July 16, 2014, (ii) Mr. Roger Jackson (P.Geo.) between May 9-10, 2022, and (iii) Ms. Christine Pint (P.G) on October 5, 2017, and September 28, 2022. Mr. Peters has not conducted a site visit. Mr. Thomas, Mr. Jackson, Ms. Pint and Mr. Peters are independent QPs, as defined under NI 43-101.

On November 7, 2018, Talon and Kennecott entered into an exploration and option agreement (the “ 2018 Tamarack Earn-in Agreement ”) pursuant to which Talon has the right, subject to certain funding and reporting obligations, to increase its interest in the Tamarack Project to a maximum 60% interest. The 2018 Tamarack Earn-in Agreement came into effect on March 13, 2019 (the “ Kennecott Agreement Effective Date ”) and Talon is the operator of the Tamarack Project.

Location and Ownership

The Tamarack Project is located in north-central Minnesota, approximately 89 kilometres (km) (55 miles) west (W) of Duluth and 210 km (130 miles) north (N) of Minneapolis, in Aitkin County. The Tamarack North Project, which the 2022 Technical Report represents, covers approximately 20,348 acres. The town of Tamarack (population 62, 2020 US Census Bureau) lies within the boundaries of the Tamarack Project (though away from the known mineralization) at an elevation of 386 metres (m) (1,266 feet (ft)) above sea level. The Tamarack Project area is characterized by farms, plantations, wetlands, and forested areas.

On June 25, 2014, Talon entered into an exploration and option agreement with Kennecott (the “ 2014 Tamarack Earn-in Agreement ”) pursuant to which Talon received the right to acquire an interest in the Tamarack Project.

On January 4, 2016, pursuant to the terms of the 2014 Tamarack Earn-in Agreement, as amended, Talon earned an 18.45% interest in the Tamarack Project by making payments totalling US$25,520,800.

18 -

On January 11, 2018, Talon and Kennecott entered into a mining venture agreement (the “ Original MVA ”). Pursuant to the Original MVA, Talon elected not to financially participate in the 2018 winter exploration program at the Tamarack Project. Consequently, Talon’s interest in the Tamarack Project was diluted to 17.56%.

On November 7, 2018, Talon and Kennecott entered into the 2018 Tamarack Earn-in Agreement pursuant to which Talon was granted the right to increase its interest in the Tamarack Project to a maximum 60% interest.

Pursuant to the 2018 Tamarack Earn-in Agreement, Talon took over operatorship of the Tamarack Project and has earned a 51% interest in the Tamarack Project. Talon has the right to further increase its interest in the Tamarack Project to 60% by:

Completing a Feasibility Study (“ FS ”) on the Tamarack Project within seven years of the Kennecott Agreement Effective Date; and
Paying Kennecott US$10M on or before the seventh anniversary date of the Kennecott Agreement Effective Date.

Upon Talon earning a 60% interest in the Tamarack Project, the parties have agreed to enter into a new mining venture agreement (the “ New MVA ”) under which Talon would assume the role of Manager of the Tamarack Project, and the parties would each be required to fund their pro rata share of expenditures in respect of the Tamarack Project or be diluted.

Item 4.0 of the 2022 Technical Report contains further details regarding Talon’s interest in the Tamarack Project.

Environmental Considerations and Permitting

The Tamarack North Project will be subject to state and federal environmental review and permitting processes. Throughout the regulatory approval processes, Talon is required to demonstrate that the Tamarack North Project can avoid or mitigate potential environmental impacts in accordance with regulatory requirements, informed by input from tribal governments and community considerations. That demonstration relies in part on the baseline data and studies described in Item 20.1 of the 2022 Technical Report and the additional environmental work that is expected to be conducted in 2023, described in Item 26.4 of the 2022 Technical Report.

Substantial baseline data collection and studies have been completed to date or will be completed by the end of 2022, which include the following:

Hydrogeologic studies, including investigation activities of the Quaternary deposits and Bedrock and baseline water level data collection;
Surface water hydrology studies and baseline flow data collection;
Water quality monitoring of groundwater and surface water;
Wetland studies, including delineations, soil sampling, porewater sampling and baseline water level data collection;
Materials characterization studies, including assessment of the ore, development rock and overburden;
Biological studies, including aquatic biota, vegetation, wild rice and wildlife studies;
Cultural resource studies; and
Noise survey.

The Tamarack North Project will undergo environmental review, a Minnesota State Environmental Impact Statement (“ EIS ”) will be prepared, and potentially a federal Environmental Assessment or Environmental Impact Statement. Significant permits and approvals will be needed, including a Permit to Mine, Section 404 Wetland Permit, an Air Permit, a National Pollutant Discharge Elimination System (“ NPDES ”) permit, and others. Project permit applications will be prepared once the project design and operation basis have been established. EIS development and permitting include closure plans and analyses to assure satisfactory long-term environmental

19 -

conditions. A detailed closure plan will be developed in future studies. Talon currently has all of the exploration permits required to continue exploration work on the property.

Talon maintains open communications with regulatory agencies to keep regulators informed on project activities and future plans. Talon has also maintained engagement with the community by hosting quarterly information sessions. The primary purpose of these engagements is to share information and gather feedback that can help shape the project plans.

Talon has advised the Mineral Resource QPs that it is not aware of any environmental liabilities or other significant factors or risks which may affect access, title, or the right or ability to perform work on the Tamarack North Project. The QPs have not independently verified this information as described in Item 3.0 of the 2022 Technical Report.

Geology, Mineralization, and Exploration

The Tamarack Intrusive Complex (“ TIC ”) is an ultramafic to mafic intrusive complex that hosts nickel (Ni)-copper (Cu)-cobalt (Co) sulphide mineralization with associated platinum (Pt), palladium (Pd) (PGEs) and gold (Au). The TIC is a multi-magmatic phase intrusion that consists of a minimum of two pulses: the fine grained ortho-cumulate olivine (“ FGO ”) and the coarse-grained ortho-cumulative (“ CGO ”) intrusion of the TIC (dated at 1105 Ma+/-1.2 Ma, Goldner 2011). The FGO and CGO intrusions are related to the early evolution of the approximately 1.1 Ga Midcontinent Rift (“ MCR ”) and have intruded into slates and greywackes of the Thomson Formation of the Animikie Group, which formed as a foreland basin during the Paleoproterozoic Penokean Orogen (approximately 1.85 Ga, Goldner 2011). The TIC is completely buried beneath approximately 35 m to 55 m of Quaternary age glacial and fluvial sediments. The TIC is consistent with other earlier intrusions associated with the MCR that are often characterized by more primitive melts.

The geometry of the TIC, as outlined by a well-defined aeromagnetic anomaly, consists of a curved, elongated intrusion striking north-south (NS) to southeast (SE) over 18 km. The configuration has been likened to a tadpole shape with its elongated, northern tail up to 1 km wide and large, 4 km wide, ovoid shaped body in the south (S). The northern portion of the TIC, being the Tamarack North Project, which hosts the currently defined MRE and identified exploration targets, is over 7 km long and is the focus of the 2022 Technical Report.

The Ni-Cu-Co sulphide mineralization with associated PGEs and Au formed as the result of segregation and concentration of liquid sulphide from mafic or ultramafic magma and the partitioning of chalcophile elements into the sulphide from the silica melt (Naldrett, 1999). The various mineralized zones at the Tamarack North Project occur within different host lithologies, exhibit different types of mineralization styles, and display varying sulphide concentrations and tenors. These mineralized zones range from massive sulphides hosted by altered sediments in the massive sulphide unit (“ MSU ”), to net textured and disseminated sulphide mineralization hosted by the CGO in the semi-massive sulphide unit (“ SMSU ”), a predominantly disseminated sulphide mineralization as well as layers of net textured sulphide mineralization, in the 138 Zone to a disseminated sulphide with a basal massive sulphide at the FGO/MZNO footwall in the CGO East and CGO West (Table 1.1). Mineralization in the 138 Zone, where interlayered disseminated and net textured mineralization occurs, is also referred to as mixed zone (“ MZ ”) mineralization. All these mineralization types are typical of many sulphide ore bodies around the world. The current known mineral zones of the Tamarack North Project (SMSU, MSU, CGO East, CGO West, and 138 Zone) that are the basis of the MRE are referred to collectively as the “ Tamarack Resource Area ”. Also located within the Tamarack North Project are currently, three lesser-defined mineral zones, namely the 480 Zone, 221 Zone, and 164 Zone.

20 -

Table 1.1: Key Geological and Mineralization Relationships of the Tamarack North Project

==> picture [344 x 92] intentionally omitted <==

==> picture [344 x 93] intentionally omitted <==

The TIC and associated mineralization were discovered as part of a regional program by Kennecott initiated in 1991. The focus on Ni and Cu sulphide mineralization was intensified in 1999 based on a model proposed by Dr. A.J. Naldrett of the potential for smaller feeder conduits associated with continental rift volcanism and mafic intrusions to host Ni sulphide deposits similar to Norilsk in Russia, and Voisey’s Bay in Canada.

Disseminated mineralization was first intersected at the Tamarack Project in 2002, and the first significant mineralization of massive and net-textured sulphides was intersected in 2008 at the Tamarack North Project.

To date, exploration has included a wide range of geophysical surveys, including:

Airborne magnetics and electromagnetics (“ AEM ”) (fixed wing and helicopter based);
Ground magnetics;
Surface electromagnetics (“ EM ”);
Surface gravity;
Magnetotellurics (“ MT ”);
Induced polarization (“ IP ”);
Seismic;
Mise-à-la-masse (“ MALM ”);
Magnetometric resistivity (“ MMR ”); and
Downhole electromagnetics (“ DHEM ”).

Kennecott and Talon have conducted extensive drilling at the Tamarack North Project since 2002. This drilling has comprised 439 diamond drill holes (as of October 10, 2022) totalling 172,711.65m with holes between 26.8 m and over 1,236 m depth for an average hole depth of 393 m.

Sample Preparation, Quality Assurance (QA) / Quality Control (QC) and Security

The Talon sample preparation and QA/QC protocol is consistent with industry best practices. The QA/QC program is based on insertion of certified reference materials (“ CRM ”), including a variety of standards, blanks, and duplicate samples, used to monitor the contamination, precision and accuracy of their primary assay lab, and to prevent inaccurate data from being accepted into their assay database.

Talon uses a system of security tags to secure plastic bins used to ship samples from the core shack to the assay lab, ensuring that they have not been tampered with. Samples are prepared and stored in a secure facility and are

21 -

monitored each step of the way to the lab. Before the bin is sealed, a chain of custody form is placed in the plastic bin, which is signed by the lab and returned to Talon upon receipt.

It is the QP’s opinion that the sampling process is representative of the mineralization at the Tamarack North Project and that the sample preparation, the QA/QC procedures used, and the sample chain of custody were found to be consistent with Canadian Institute of Mining, Metallurgy, and Petroleum (CIM) Mineral Exploration Best Practice Guidelines (November 2018).

Data Verification

Resource Data Verification

The QP compared recent assay data from the 2021-2022 drilling program from the Talon database to the original assay certificates from ALS Minerals for a representative population used for resource estimation. No errors were noted for the base metals, however minor errors were identified with the precious metals. These errors were found to not be material to the MRE but will be corrected by Talon.

A QP site visit was conducted May 9-10 of 2022, by Roger Jackson, P. Geo., of Golder, in which three drill hole collar locations were surveyed using a hand-held global positioning system (“ GPS ”) and then compared the coordinates to those provided by Talon. All collars were found to be consistent with the Talon collar coordinates, within the accuracy of the GPS.

As part of the 2022 site visit, the QP conducted verification sampling of drill core representing massive sulphide, semi-massive sulphide and disseminated mineralization. A total of 15 samples were taken along with two additional CRM samples, consisting of one high grade standard and one medium grade standard. Assay values from the verification sample program were consistent with results obtained by Talon, while higher precious metal variances were attributed to the nugget effect.

It is the QP’s opinion that the Tamarack North Project drill hole database has been prepared in accordance with CIM Mineral Exploration Best Practice Guidelines (November 2018) and is of suitable quality to support the MRE in update.

Metallurgical Data Verification

The assays results used to generate metallurgical mass balances were generated by SGS Lakefield in Ontario. The analytical lab is ISO/IEC 17025 certified, which is the international reference for testing and calibration laboratories wanting to demonstrate their capacity to deliver reliable results.

The validity of the mass balances is verified by comparing the direct head assay of a sample with the reconstituted head assay from the individual flotation products.

Mineral Processing and Metallurgical Testing

The flotation flowsheet and conditions that were established in the 2016/2017 program were further optimized using a composite that represented the entire 8.02 Mt of mineralized material that was reported in PEA #3. The head grade of this composite was 1.69% Ni and 0.95% Cu. The primary focus of the program was to produce Ni and Cu concentrates that provide marketing optionality. The program considered three possible scenarios for the flotation concentrates :

The Ni Concentrate Scenario would include shipping both Ni and Cu concentrates to smelters for processing.
The Ni Powder Scenario would include shipping Cu concentrate to a smelter for processing, and transferring Ni concentrate to a co-located facility for production of Ni powder.
The Ni Sulphate Scenario would still ship the Cu concentrate to smelters, but the Ni concentrate would be converted to Ni sulphates in a hydrometallurgical facility.
22 -

The Tesla Supply Agreement eliminated the Ni Concentrate Scenario and the Ni Sulphate Scenario. Under the Tesla Supply Agreement, the Ni concentrate will be delivered to Tesla for further processing instead of at a co-located Ni powder facility. The Cu concentrate will be shipped to a copper smelter.

Since iron in the Ni concentrate may become a payable by-product, the original flowsheet was revised to provide process flexibility to maximize Fe sulphide recovery into the Ni concentrate while minimizing the entrainment of gangue minerals.

Mineral Resource Estimate

This MRE has been prepared by Mr. Roger Jackson (M.Sc., M.Eng., P.Geo), Senior Resource Geologist at Golder, under the supervision of Brian Thomas (P.Geo.), Principal Resource Geologist at Golder, and is summarized in Table 1.2. The effective date of the MRE is October 10, 2022. Mr. Brian Thomas and Mr. Roger Jackson are independent QPs pursuant to NI 43-101.

Table 1.2: Tamarack North Project MRE Effective Date October 10, 2022

==> picture [393 x 348] intentionally omitted <==

Notes:

Mineral Resources are in situ and reported at a 0.50% Ni cut-off. Tonnage estimates are rounded down to the nearest 1,000 tonnes.

Fe in Sulphides % is based on sulphur concentration associated with sulphide minerals and a calculation of stoichiometric Fe concentration in Pentlandite and Pyrrhotite.

Mining recovery and dilution factors have not been applied to the estimates.

NiEq grade based on metal prices in U.S. dollars of $9.50/lb Ni, $3.75/lb Cu, $25.00/lb Co, $1,000/oz Pt, $1,000/oz Pd and $1,400/oz Au using the following formula: NiEq% = Ni%+ Cu% x $3.75/$9.50 + Co% x $25.00/$9.50 + Pt[g/t]/31.103 x $1,000/$9.50/22.04 + Pd[g/t]/31.103 x $1,000/$9.50/22.04 + Au[g/t]/31.103 x $1,400/$9.50/22.04. Fe is not included in the NiEq calculation. The NiEq values are added for information purposes only, and not used to calculate the %Ni cut-off grade. No adjustments were made for recovery or payability.

23 -

The MRE was derived using Datamine RM® software, with metal grades interpolated into manually constructed mineral domain envelopes (“ wireframes ”). All domains had top-cuts applied to restrict outlier values. The block sizes were 5 m x 5 m x 5 m for the USMSU, LSMSU and the 138 Zone domains, and 2.5 m x 2.5 m x 2.5 m blocks for the MSU, CGO West and CGO East domains. Except for a small portion of the MSU domain, all resource domains were “unfolded” and utilized Ordinary Kriging (OK) methodology to interpolate grades (Ni, Cu, Co, Pt, Pd, Au and S) from either 1.5 m (USMSU, LSMSU, 138 Zone domains) or 1.0 m (MSU, CGO West, CGO East domains) composited drill holes. Specific Gravity (“ SG ”) estimates were based on laboratory measurements taken from cut core and where absent, regression formula values were calculated.

Fe in Sulphides % estimates were derived by the calculation of the stoichiometric amount of Fe contained in the amount of Pyrrhotite (Po) and Pentlandite (Pn), based on the estimated Ni, Cu, and Sulphur (S) grades in the resource block model. Refer to Item 14.6.5 for additional details.

The MRE was reported on a “blocks above cut-off” basis, using a 0.5% Ni cut-off, and was then examined visually by the QP and found to have good continuity and reasonable prospects for potential economical extraction using conventional underground mining methods.

The QP is unaware of any known environmental, permitting, legal, title, taxation, socio-economic, marketing, political or any other potential factors that could materially impact the Tamarack North Project MRE provided in the 2022 Technical Report.

The MRE may be materially impacted by the following:

Changes in the break-even COG, as a result of changes in mining costs, processing recoveries, or metal prices.
Changes in geological knowledge/interpretation, as a result of new exploration data.

The listing of Fe in Sulphides % was calculated using some basic mineralogical assumptions, and although potential metallurgical recovery is currently unknown, it has been included in the MRE due to potential value as a by-product. If the by-product value of recoverable Fe, primarily contained in Pyrrhotite (Po), is significant it could potentially support a decrease to Ni % grade cut-off.

Conclusions

Data Verification and Mineral Resource Estimate (MRE)

It is the QP’s opinion that the information relating to geology, exploration and MRE presented in the 2022 Technical Report is representative of the Tamarack North Project. The QP’s validation of the Talon assays against the original certificates and the check assays provides confidence that the assay dataset is of suitable quality to support the basis of the MRE stated in the 2022 Technical Report.

The mineral resources models were constructed incorporating the current geological understanding of the deposits, using the appropriate data described above, and using the appropriate modelling methodologies. The QP performed exploratory data analysis of the assay data, selected appropriate composite lengths, and applied appropriate estimation parameters for the estimation of grades into block model cells. For this MRE, the QP has applied professional judgement and followed the guidance provided in the CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines (2019).

The QP has taken reasonable steps to ensure the block model and MRE is representative of the project data, but notes that there are risks related to the accuracy of the estimates related to the following:

The assumptions used by the QP to prepare the data for resource estimation;
The accuracy of the interpretation of mineralization;
Estimation parameters used by the QP;
Assumptions and methodologies used to estimate SG;
24 -
Orientation of drill holes;
Geological variability of the deposit;
The cut-off grades and related assumptions of commodity prices, mining costs and metallurgical recovery.

For these reasons, actual results may differ materially from the reported MREs.

Metallurgy

Metallurgical process development continued through 2021 and 2022 and confirmed the robustness of the primary flowsheet that was presented in PEA #3. The flowsheet was extended with a primary and secondary scavenger cleaning circuit to incorporate a higher level of process flexibility. The optimized flowsheet will facilitate the generation of a 10% Ni concentrate and a separate high-Fe sulphide concentrate, or a lower-grade Ni concentrate with high Fe sulphide content in addition to a Cu concentrate.

Reagent optimization work that was completed in 2021 resulted in updated Ni regression curves with up to 10% higher Ni rougher recoveries for lower grade samples and 2-3 % Ni recovery gains for high grade composites.

The low levels of deleterious elements in the Cu and Ni concentrates are not expected to trigger any penalty payments. The MgO content in the Ni concentrate of the composite was just below the typical 5% threshold of smelters. Also, optimization work to limit gangue recovery into the flotation concentrates is ongoing.

Credits for by-products will mostly derive from Cu and Co with potentially minor contribution from Au, Pt, and Pd. Further, Fe in Sulphides % in the Ni concentrate may become a major by-product.

Environmental

Baseline environmental studies expanded in 2022 and early coordination meetings with the Minnesota DNR, the lead state agency, have begun to discuss the environmental review process. Baseline data collection for resource areas needed for environmental review and permitting are either underway or planned for 2023. The studies completed to date have not identified any environmental issue that could materially impact the ability to mine the resource. It is the QP’s opinion that the existing baseline data, and the additional studies and reports planned for 2023 will provide adequate information for the Responsible Government Units (“ RGUs ”) to scope and prepare an EIS.

It will be important for Talon to continue to engage with the agencies, tribes and various stakeholders throughout the environmental review and permitting processes.

Recommendations

Exploration, Drilling and Geophysics

In PEA #3, it was recommended that Talon should focus on resource expansion and definition drilling to progress towards a Prefeasibility Study and eventually a Feasibility Study. It was estimated that between 25,000 m and 30,000 m of drilling would be required, mostly focused on expansion of the Tamarack North Project’s current resource area.

Since that time Talon has drilled approximately 49,100 metres, discovering CGO East and CGO West while also increasing contained nickel by 98% in the Indicated Mineral Resource category. Contained nickel in MSU/MMS (Indicated Mineral Resource category) increased by 570%.

On January 20, 2022, Talon signed the Tesla Supply Agreement to supply 75kt of nickel in concentrate over a period of 6 years, starting 2026, which means that Talon has proceeded with the Ni Powder Scenario as contemplated in PEA #3.

25 -

Since January 2021, Talon has developed an Advanced Exploration System (“ AES ”), which is a unique combination of:

Magnetotellurics (“ MT ”) Surface Electromagnetic (“ EM ”), and passive seismic survey equipment operated by Talon’s team of geophysicists;
Five Talon owned and operated drill rigs, producing at a significantly reduced cost per metre, compared to historical cost;
Borehole electromagnetic (“ BHEM ”) and X-hole Seismic Survey equipment also operated by Talon’s team of geophysicists;
Talon’s team of onsite geologists responsible for core-logging, geological modelling and exploration planning; and
Talon’s pseudo real-time assay estimating, resource modelling and mine planning system that allows Talon to rapidly prioritize new discoveries according to economic potential.

Additionally, Talon’s AES is unique as it is the only holistic system designed to discover and delineate high grade nickel along the MCR in a few years instead of decades.

We therefore recommend that Talon continue exploration along the Tamarack North Project portion of the TIC while focusing on the following areas that show high grade potential:

Determine if the CGO West mineral resources connect to the Main Zone MSU and if connected, drill the resource into the Indicated mineral resource category. This work is estimated to require 3,000 to 5,000m of drilling;
Determine if the CGO East mineral resources connect to the Main Zone MSU and if connected, drill the resource into the Indicated mineral resource category. This work is expected to require 3,000 to 5,000m of drilling;
Determine if the MSU below the 138 Zone terminates or extends to the northeast and/or south towards high grade mineralization intercepted in the 164 Zone. Due to the large area between the MSU in the 138 Zone and the 164 Zone this work is expected to require 10,000 m of drilling; and
Deploy the AES in the 221 Zone and 264 Zone to determine the size and extent of high-grade nickel MSU/MMS. Due to the complete lack of drilling between these zones this work is expected to require 15,000 m or more of drilling.

Mineral Resource

The updated MRE provides a reasonable representation of the in situ mineral resources. Recommendations to improve future estimations and to potentially increase mineral resources include:

Collecting more laboratory SG measurements, in particular for the disseminated mineralization (CGOWest, CGO-East, 138 Zone). The current method of SG determination, using the ALS Minerals OAGRA08b method, is appropriate for the types of sulphide mineralization in the Tamarack North Project deposits;
Change the collar location of future drilling into the MSU and LSMSU Domains to provide different intersection angles through the mineralization. This would provide better information on the lateral extents of the sulphide mineralization;
Conduct new geometallurgical test work on the Tamarack North Project mineralization to confirm the precious metal recoveries in the current flowsheet;
Conduct additional electron micro-probe test work on the Tamarack North Project mineral domains to better define the elemental composition of the sulphide minerals. Additional test results could better support the approximation of the Fe in Sulphides % algorithm;
Document the results of metallurgical test work related to Fe in Sulphides % recovery.
26 -

Mineral Processing and Metallurgical Testing

The following recommendations are made for metallurgical activities:

Complete the process development of Talon’s high recovery nickel, iron, copper and cobalt flowsheet to maximize metal and sulphur recoveries to concentrates, while reducing sulphur in the tailings;
Continue flowsheet development with other downstream partners to produce high purity nickel and iron
Investigate the commercialization of sulphur, produced from the Tamarack North Project’s nickel concentrates;
Continue to explore carbon sequestration and/or the production of Supplementary Cementitious Material (“ SCM ”).

If the above activities are successful, Talon will be able to valorize 100% of each tonne of rock, which means maximum environmental protection while deriving significantly higher economic benefits compared to the present nickel supply chain.

Environmental Studies, Permitting, and Social or Community Impact

Recommendations related to environmental review and permitting include additional studies and models to estimate potential environmental impacts, as well as reports that will provide the information needed for development of the EIS.

Talon should collect additional baseline data for groundwater (level and quality), surface water (flow and quality), wetlands (water levels and water quality), vegetation, materials characterization (static and kinetic testing), noise, and biological studies. A meteorological station is being installed at the Tamarack North Project site and monitoring should be conducted. In addition, an archaeological reconnaissance survey and a historic architectural survey and assessment should be planned for 2023.

Modelling potential impacts to the environment from the Tamarack North Project is recommended to commence in early 2023. Modelling efforts should include air modeling, water quantity and quality impact modeling, as well as noise impact modelling. Visual impact analysis should also be performed to establish the visibility of the Tamarack North Project features, and a traffic study should be conducted.

In 2023, Talon should produce the reports and plans needed to support the development of a Draft EIS. These documents would be in five categories: the SEAW, baseline data reports, modelling reports, resource reports, and management plans. These reports would also support preparation of permit applications.

In partnership with the community, Talon should build upon current community engagement plans to:

Identify potential community impacts and opportunities connected to project operations;
Develop community investment plans that align with the community’s long-term development goals;
Ensure best in class community engagement and understanding of project operations; and
Promote equal opportunities for good-paying, high quality jobs with involvement of organized labor in the design and establishment of operations.

Feasibility Study (FS)

At this time, there is sufficient resource knowledge, geotechnical data, and environmental baseline data for Talon to commence with a FS for the development of a mine and rail loadout facility at the Tamarack North Project and an out-of-state battery minerals processing facility. The engineering work for the FS will consist of three main scope areas:

Underground mine;
27 -
Surface facilities at underground mine; and
Processing Facility.

Environmental and regulatory considerations must be taken into account during every step of the engineering design, as well as opportunities for innovation and cost savings. Models for CAPEX, OPEX, and revenue will be created in order to develop a definitive economic analysis of the project.

Budget for Recommended Work

Item	Description	Amount (US$)	Amount (C$)
1.0	Exploration,Drilling,Geophysics and Mineral Resource	$5,900,000	$8,000,000
2.0	Metallurgyand Processing	2,200,000	2,900,000
3.0	Environmental Studies,Permitting,Social or CommunityImpact and Government Relations	10,000,000	13,600,000
4.0	Engineeringand FeasibilityStudy	12,000,000	16,400,000
5.0	Tamarack Land Package	1,000,000	1,400,000
6.0	Local Site Costs,Legal Support,Data Management and Other	2,400,000	3,200,000
	Total	$33,500,000	$45,500,000

28 -

“

CERTIFICATE OF THE CORPORATION

Dated: January 20, 2023

This short form prospectus, together with the documents incorporated in this prospectus by reference, constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by the securities legislation of each of the provinces and territories of Canada.

(signed) “Henri van Rooyen”

Henri van Rooyen Chief Executive Officer

(signed) “Vincent Conte” Vincent Conte Chief Financial Officer

On behalf of the Board of Directors

(signed) “Warren Newfield”

(signed) “Gregory Kinross”

Warren Newfield Director

Gregory Kinross Director

C-1 -

AI assistant

Talon Metals — Capital/Financing Update 2023

44209_rns_2023-01-20_78d74377-671c-4cfa-b40e-09da27359fa6.PDF

PRELIMINARY SHORT FORM BASE SHELF PROSPECTUS

TALON METALS CORP.

TABLE OF CONTENTS

ABOUT THIS SHORT FORM BASE SHELF PROSPECTUS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

CURRENCY PRESENTATION AND EXCHANGE RATE INFORMATION

DIFFERENCES IN REPORTING OF MINERAL RESOURCE ESTIMATES

DOCUMENTS INCORPORATED BY REFERENCE

THE CORPORATION

Intercorporate Relationships

THE BUSINESS

CONSOLIDATED CAPITALIZATION

USE OF PROCEEDS

PLAN OF DISTRIBUTION

Participation Rights

EARNINGS COVERAGE RATIO

DESCRIPTION OF COMMON SHARES

DESCRIPTION OF DEBT SECURITIES

DESCRIPTION OF SUBSCRIPTION RECEIPTS

DESCRIPTION OF WARRANTS

DESCRIPTION OF UNITS

SELLING SECURITYHOLDERS

PRIOR SALES

TRADING PRICE AND VOLUME

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

RISK FACTORS

There is No Market for Certain of the Securities

Additional Financings

Active Liquid Market for Common Shares

Discretion in the Use of Proceeds and Use of Available Funds

Negative Operating Cash Flow and Additional Funding

Conditions Relating to the Tesla-Talon Supply Agreement

Acquisition of North Dakota Facility and the US Government Funding Remain Under Negotiations

LEGAL MATTERS

AUDITORS, TRANSFER AGENT AND REGISTRAR

INTEREST OF EXPERTS

EXEMPTION

STATUTORY AND CONTRACTUAL RIGHTS OF WITHDRAWAL AND RESCISSION

SCHEDULE “A”

EXECUTIVE SUMMARY SECTION FROM THE 2022 TECHNICAL REPORT

Introduction

Location and Ownership

Environmental Considerations and Permitting

Geology, Mineralization, and Exploration

Sample Preparation, Quality Assurance (QA) / Quality Control (QC) and Security

Data Verification

Resource Data Verification

Metallurgical Data Verification

Mineral Processing and Metallurgical Testing

Mineral Resource Estimate

Notes:

Conclusions

Metallurgy

Environmental

Recommendations

Exploration, Drilling and Geophysics

Mineral Resource

Mineral Processing and Metallurgical Testing

Environmental Studies, Permitting, and Social or Community Impact

Feasibility Study (FS)

Budget for Recommended Work

CERTIFICATE OF THE CORPORATION

More from Talon Metals

Talon Metals Capital/Financing Update 2023