The Campo Grande Project is located in the Iron Quadrangle gold camp, approximately 100 km west of Belo Horizonte, the capital of Minas Gerais State. A network of paved and gravel roads facilitate vehicle access in the area. The Iron Quadrangle is a world-class gold camp, and has maintained continuous gold production since the 17th century. The main gold mines in the camp are Morro Velho (> 470 t Au), Cuiaba (> 200 t Au) and Raposos (> 100 t Au). In the 1980’s and 1990’s, Anglo American mined four small-to-medium sized oxide gold deposits located 4 to 5 km southeast of Pitangui, which is along strike from the Campo Grande Project. It is estimated that approximately 1 million oz were extracted from these deposits.

The Campo Grande Project consists of three exploration areas of which Talon owns two of the permits 100% and has entered into an option agreement with an arms length third party to acquire a 100% interest in the third permit, which has a 1.5% production royalty payable to the third party.

GEOLOGY
The permits are underlain by the Archaean Rio das Velhas Supergroup and the overlying Neoproterozoic aged Minas Supergroup rocks represented by the Bambu Group. Primary gold mineralization is associated with two horizons in the Nova Lima Group, which is the basal portion of the Rio das Velhas Supergroup.

The Nova Lima Group consists of komatiite flows, tholeiitic basalt flows and iron formation succeeded upward by mafic and felsic tuffs with intercalated carbonaceous sediments and capped by turbidites containing minor felsic and mafic flows. Iron formations host significant stratabound gold mineralization in the lower part of the group. The Lapa Seca “Formation”, in the upper part of the group is a strongly hydrothermally altered shear zone approximately 30 meters wide by 14 km long. This structure hosts the Morro Velho, Bela Fama, Bicalho and Paciencia deposits. Deposit sizes range from 0.5m to 20m thick, 300m to 3,000m long, with grades of 5-15 g/t Au.

On the property an intense hydrothermal alteration zone consisting of silicification and argillization occurs over an area 2,500 m long and 200 to 800 m wide, which is part of a 100 km long alteration zone.

The silicic alteration exhibits massive and granular quartz, stockworks of grey quartz veins/veinlets and drusy quartz typical of epithermal style gold mineralization hosted in the Nova Lima Group of rocks.

Previous operators of the property identified strong Au, As and Sb soil geochemical anomalies (open to the north) coincident with the silicic alteration zone. Anomalous gold values (> 80 ppb) cover an area 1,600 m long by 200 m wide. The As anomaly (> 226 ppm) exhibits a good correlation with the Au anomaly over an area measuring 1,800 m long by 250-800 m wide. The Sb anomaly (> 50 ppm) measuring 1,300 m long by 800 m wide correlates with the northern portion of the Au and As anomaly, and may signify a greater economic potential for this part of the property.

EXPLORATION
In February to March 2007, Talon conducted a nine hole (1,456 metre) Phase One diamond drill program on the Company’s Campo Grande project . Prior to drilling Talon conducted a detailed geological mapping program, accompanied by rock sampling over the main geochemical anomaly at Campo Grande. Sulphide-bearing siliceous rocks which may suggest epithermal style gold mineralization were identified for the first time at Campo Grande.

Highlights of the Phase One drill program included hole CGD-002, which intersected 1.03 g/t Au over 7.98 metres from a depth of 20.90 metres, and 1.18 g/t Au over 20.55 metres from a depth of 45.20 metres, including 3.02 g/t Au over 4.47 metres. A summary of results from the nine holes is presented in Table 1. Exploration to date suggests a structural control to gold mineralization; additional fieldwork is being conducted to further define these controls.

Table 1. Campo Grande Phase One drill program assay summary.

¹ NSV = no significant values
² widths are drill intersected and do not represent true widths
³ Gold (“Au”) grades are uncut