HIGHLIGHTS

• Talon’s 51,635 hectare Trairão Iron Project is located in the Pará State in northern Brazil
   
• The Trairão Iron Project currently has a 1.4 billion tonne indicated mineral resource estimate (34% Fe) plus a 1.2 billion tonne inferred mineral resource estimate (29% Fe)*
   
• Road, rail, navigable rivers, port and power infrastructure (both existing and planned) offers future access to export markets

EXPLORATION STRATEGY

At the outset, Talon’s exploration strategy at its 100% owned Trairão Iron Project (“Trairão Project”) in Brazil was to prospect and evaluate the oxidized iron targets, and delineate a minimum of 600 million tonnes of iron ore resource (in the inferred category). Having received the initial results from the preliminary exploration phase, the strategy threshold increased with the revised objective of delineating a minimum resource of 1 billion tonnes (in the inferred category) which would include mineralization in the lateritic deposits and the Banded Iron Formations (“BIFs”) below them.

LOCATION AND MINERAL RIGHTS

The Trairão Project is located in the southern part of the Carajás Mineral Province, in the municipality of Bannach, 40 kilometres west of the town of Rio Maria, in the State of Pará in northern Brazil. The project area is about 200 kilometres SSW of the mining centre of Parauapebas and 165 kilometres from the Carajás railway that connects the mining district with ‘Porto da Madeira’ in São Luis, Maranhão State.

Talon has a 100% interest in the Trairão Project which has exploration licences that cover approximately 51,635 hectares, and has applications for exploration licences over an additional contiguous area of 28,887 hectares with potential for iron mineralization.

REGIONAL GEOLOGY

The Trairão Project is situated within the Serra da Seringa Archean age greenstone belt, within the Greater Carajás Mineral Province in Brazil. This province is one of the more recently developed mineral areas in Brazil and has expanding production of iron ore, lateritic nickel, manganese, gold and copper and tin.

PROJECT AREA GEOLOGY

The Serra da Seringa Greenstone belt comprises a lower ultramafic to mafic volcanic sequence, passing up through intermediate to acid volcanic rocks, and an upper unit of siliceous metasedimentary rocks. These metasedimentary rocks of the Upper Tucumã Group host BIFs that are the focus of exploration at Trairão. The area has been intruded by tonalitic plutons and subsequently has been folded and faulted. Younger metasedimentary rocks of the Proterozoic Rio Fresco Group occur in the western part of the licence area.

The BIFs form prominent erosional remnant ridges, rising up to 300 metres above the surrounding undulating plains and locally have extensive lateritic development on the plateau regions overlying the BIFs. This has resulted in the development of enriched and oxidized zones within the saprolite and saprock zones and also in the overlying preserved surficial deposits, which together extend to depths down to a depth of between 60 to 110 metres.

Thirteen BIF targets were identified within the Trairão Project area which has a cumulative strike length of about 50 kilometres. The first three targets are expected to form the bulk of the potential. Some of the other targets have subsequently been determined to have low potential for extensive iron mineralization.

The principal exploration targets are the near surface lateritic and surficial iron deposits which overlie most of the more extensive BIFs in a coincident or semi-coincident distribution and tend to be elongated along strike, extending for the length of the BIF and are between 100 and 600 metres wide. The lateritic deposits have grades of between 25% Fe to 60% Fe, with the higher iron grades occurring in the upper zones.

DEVELOPMENT PROGRAM

Previous Exploration

Previous operators on the Trairão Project had completed a preliminary exploration program which included geological mapping, soil and rock geochemical surveys, as well as an aeromagnetic and radiometric survey. This was followed by limited auger and diamond drilling (3 holes) on the priority iron targets identified.

Talon’s Exploration Program and Mineral Resources

Talon’s exploration program commenced in October 2010, with regional mapping and detailed geological mapping of 13 BIF target areas. The regional mapping included a reinterpretation of aeromagnetic data, satellite imagery interpretation and field mapping and was completed in Q3 2011. The detailed mapping of individual targets included interpretation of satellite imagery ground based mapping and detailed magnetic surveys and rock sampling. 

Simultaneously an initial phase of reverse circulation (“RC”) drilling was undertaken, initially on 400 x 200 metre spaced grids and subsequently on 200 x 200 metre spaced grids. The initial drilling program aimed at investigating the lateral continuity of the iron mineralization associated with surficial deposits (eluvium and colluvium deposits) and the underlying supergene enriched saprolite and saprock zones. In October 2011 RC drilling was completed on Target Areas 1 through 13, and a total of 444 RC holes (about 24,000 metres) had been drilled.

In addition, 89 diamond drill holes (about 12,580 metres) were drilled between May and December 2011 on Target Areas 1, 2 and 3 to increase the confidence levels of the inferred resources drilled by the RC rigs and to investigate the BIF.

Results from the drilling of Target Areas 1-6 and 8 delineated a National Instrument 43-101 compliant indicated mineral resource estimate of approximately 1.1 billion tonnes at an average grade of 36% Fe, and an inferred mineral resource estimate of approximately 1.2 billion tonnes at an average grade of 29% Fe (both at a 25% Fe cut-off).*

                                                                       
This mineral resource estimate is within an area with a cumulative strike length of 23,000 metres over Target Areas 1-6 and 8 inclusive. The iron mineralization within this resource includes surficial deposits, saprolite, saprock and BIF.

Based on the assay results now received for RC drill holes on Target Areas 7 and 9 to 13, Talon believes that the potential for extensive iron mineralization on these target areas is low.

Figure 1: Trairão Iron Project – Primary Targets, Areas 1-6 & 8

Next Steps

Mineralogy and metallurgical studies. These studies include mineral characterization and preliminary metallurgical test work on samples from the various mineralized zones.

Infrastructure trade off studies.  Preliminary studies are being undertaken on the various infrastructure and transport options that may be considered for any future possible mining operation, including road, rail, navigable rivers, pipeline, port and shipping alternatives.

INFRASTRUCTURE

• Existing road access to Marabá
   
• A new river port at Marabá is under construction to ship along the Tocantins river by barge to the seaport of Vila do Conde
   
• Alternatively, a new rail line or pipeline could be build to ship Talon’s ore to port options in the São Luis area.

*Quality Assurance, Quality Control and Qualified Persons
Talon’s exploration programs are being managed by Talon’s Mining Engineer, Mr. Ricardo Álvares de Campos Cordeiro (MAIG) and Talon’s VP Exploration, Mr. Paulo Ilidio de Brito. Mr. Cordeiro is qualified person within the meaning of NI 43-101and he has reviewed, approved and verified the technical information on this website (other than the mineral resource estimate) including sampling, analytical and test data underlying the technical information.

The “Qualified Person” who prepared the mineral resource estimate presented in this news release is Mr. Porfírio Cabaleiro Rodriguez, who is a mining engineer, independent of Talon and an employee of Coffey. Mr. Rodriguez is a member of the Australian Institute of Geoscientists (“AIG”). Mr. Rodriguez is responsible for the mineral resource estimate in this news release and has reviewed, approved and verified the data disclosed in this news release relating to the mineral resource estimate (including sampling, analytical and test data underlying the mineral resource estimate). In Coffey’s opinion, the mineral resource estimates disclosed herein are compliant with NI 43-101.

Coffey compiled a NI 43-101 compliant technical report on Target Areas 1-6 and 8 of the Trairão Project entitled “Fourth Independent Technical Report on Mineral Resources” dated March 30, 2012, a copy of which is available under Talon’s SEDAR profile at www.sedar.com.  Please refer to this technical report for further information on the Trairão Project.

All drilling samples have been prepared and analyzed by SGS-Geosol Laboratórios Ltda (“SGS”) which is ISO14001:2004 and ISO 9001:2008 accredited and is independent of Talon. Sample preparation was conducted at SGS Parauapebas preparation facility whereas analyses were performed at the SGS laboratory based in Belo Horizonte, Brazil. The samples were analyzed by fusion with lithium tetraborate-XRF for SiO2, Al2O3, CaO, Fe2O3, K2O, MgO, TiO2, P, Mn and Cr2O3 and retained moisture (LOI) by multi-temperature.

QA/QC procedures include the submission by Talon of systematic duplicates, blanks and standard samples within every sample batch submitted to SGS. In addition, SGS inserts its own standards, blanks and duplicate samples. The results from these control samples indicate acceptable consistency of analysis.

- March  2012 -