Talon Metals Selected to Lead Public Testimony Before US Treasury Regarding Critical Minerals Tax Credit
Talon Metals Selected to Lead Public
Testimony Before US Treasury Regarding
Critical Minerals Tax Credit
Washington, D.C.--(Newsfile Corp. - February 23, 2024) - Talon Metals Corp. (TSX: TLO) (OTC PINK:
TLOFF) ("
Talon
" or the "
Company
") Chief External Affairs Officer and Head of Climate Strategy Todd
Malan was selected to lead the public testimony during yesterday's US Treasury's public hearing on
Section 45X Advanced Manufacturing Production Tax Credit for Critical Minerals.
"It was an honor to share Talon's perspective on how the 45X tax credit for critical minerals was
intended by Congress to support domestic mineral extraction. We shared two proposals that we think
respond to the Treasury Department's concerns about foreign sourced minerals qualifying for a
domestic production incentive. If our proposals are adopted, they will provide long-term financial
support to the domestic production of eligible critical minerals like nickel,"
Malan commented after
addressing the Treasury/IRS panel. He added, "
As the IRA's support for secure supply chains in critical
minerals is being challenged by Chinese oversupply of these minerals which is driving down prices, a
comprehensive 45X tax credit that includes extraction of raw materials from the geology of the United
States would be very timely support for the critical mineral supply chain."
Section 45X of the
Inflation Reduction Act
(IRA) is a production tax credit intending to incentivize
investments in the full manufacturing supply chain of clean energy systems like electric vehicle (EV)
batteries. Section 45X applies to the manufacturing of equipment used in solar, wind, hydrogen and
batteries and also credits critical minerals production applying to specific elements in the periodic table.
The list includes nickel, cobalt and platinum group metals that are all present in the high-grade ores that
Talon plans to extract from the underground mine at the Tamarack Nickel Project (which is currently in the
environmental review process conducted by Minnesota regulators and tribal sovereign governments as
part of the State's permitting process).
The 45X production tax credit for critical minerals is equal to 10% of the annual production cost of
producing the specified element to a certain level of purity.
Remarkably, the 45X tax credit for critical
minerals does not decline over time or expire.
Under IRS precedent, "production cost" would usually include the cost of acquiring raw materials along
with employee costs, energy, depreciation of equipment etc.
However, the US Treasury indicated in draft
regulations issued on December 15, 2023, that it was withholding allowing the cost of raw materials from
the calculation of production cost for the 45X critical minerals tax credit to further study potential abuse
and how it could allow raw materials cost to be included consistent with the intent of Congress. Today's
hearing was part of an effort to obtain input from experts and stakeholders on this specific question.
Talon believes that Congress created this extraordinary tax credit for critical minerals to benefit the entire
U.S. supply chain for critical minerals from mining to recycling. Also, the statutory language clearly states
that the 45X tax credit only applies to production that occurs within the United States or its possessions.
In the case of applicable critical minerals, the mineral
is
the component, so it stands to reason that only
the cost of extraction of such mineral (in its raw form) occurring in the US or its possessions should
qualify for the 45X tax credit in calculating the cost of production of such mineral.
Malan explained to the Treasury and IRS panel that Talon remains committed to President Biden's vision
for responsible mining and securing America's critical mineral supply chains.
He pointed out that
producing sustainably sourced critical minerals has national security implications given Chinese and
Russian dominance of critical minerals like nickel.
Malan outlined Talon's recommendation to the
Treasury that a taxpayer producing an applicable critical mineral as specified in the law should be able
to include the full cost of purchasing the "source material" or ore in the calculation of the 45X tax credit.
To include raw materials cost in the calculation of production cost of the critical mineral to the specific
level of purity, the taxpayer would need to obtain:
Certification that the raw materials (mined ore that is physically processed prior to refining) has a
chemical characteristic (assay) that indicates that it is the source of the final eligible critical
mineral;
Certification that the raw materials were extracted from the geology of the United States;
Certification that such supplier has not itself claimed the 45X tax credit with regard to any of the
same costs; and
Certification that such supplier has not provided certification related to any of the same costs to
any other entity.
Talon believes this "Buy American" proposal for adding raw materials extraction cost to the calculation of
production cost using definitions under § 1.263A - applied to raw materials extracted in the US -- is
easily administrable, addresses the concerns of the Treasury Department that it must ensure that
"foreign minerals" cannot benefit from the 45X tax credit, and is consistent with the intent of Congress in
enacting 45X as applied to critical minerals: to cover the full US sourced supply chain required to
produce eligible applicable critical minerals.
Malan's full statement can be found
here
.
ABOUT TALON
Talon is a TSX-listed base metals company in a joint venture with
Rio Tinto
on the high-grade
Tamarack
Nickel-Copper-Cobalt Project
located in central Minnesota. Talon's shares are also traded in the US
over the OTC market under the symbol TLOFF. The Tamarack Nickel Project comprises a large land
position (18km of strike length) with additional high-grade intercepts
outside the current resource area
.
Talon has an earn-in right to acquire up to 60% of the Tamarack Nickel Project, and currently owns 51%.
Talon is focused on (i) expanding and infilling its current high-grade nickel mineralization resource
prepared in accordance with NI 43-101 to shape a mine plan for submission to Minnesota regulators,
and (ii) following up on additional high-grade nickel mineralization in the Tamarack Intrusive Complex.
Talon has an agreement with Tesla Inc.
to supply it with 75,000 metric tonnes (165 million lbs) of nickel in
concentrate (and certain by-products, including cobalt and iron) from the Tamarack Nickel Project over
an estimated six-year period once commercial production is achieved. Talon has a
neutrality and
workforce development agreement
in place with the United Steelworkers union. Talon's Battery Mineral
Processing Facility in Mercer County was
selected by the US Department of Energy
for US$114.8
million funding grant from the Bipartisan Infrastructure Law and the
US Department of Defense awarded
Talon a grant of US$20.6 million
to support and accelerate Talon's exploration efforts in both Minnesota
and Michigan. Talon has well-qualified experienced exploration, mine development, external affairs and
mine permitting teams.
For additional information on Talon, please visit the Company's website at
www.talonmetals.com
Media Contact:
Todd Malan
1-(202)-714-8187
Investor Contact:
Sean Werger
1-(416)-500-9891
FORWARD-LOOKING STATEMENTS
This news release contains certain "forward-looking statements". All statements, other than statements
of historical fact that address activities, events or developments that the Company believes, expects or
anticipates will or may occur in the future are forward-looking statements. These forward-looking
statements reflect the current expectations or beliefs of the Company based on information currently
available to the Company. Such forward-looking statements include statements relating to the
interpretation of Section 45X of the IRA and the development of the Tamarack Nickel Project. Forward-
looking statements are 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 statements, 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 Company.
Any forward-looking statement speaks only as of the date on which it is made and, except as may be
required by applicable securities laws, the Company disclaims any intent or obligation to update any
forward-looking statement, whether as a result of new information, future events or results or otherwise.
Although the Company believes that the assumptions inherent in the forward-looking statements are
reasonable, forward-looking statements are not guarantees of future performance and accordingly undue
reliance should not be put on such statements due to the inherent uncertainty therein.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/198985