Trairão Iron Project

In September 2010, Talon Metals acquired the Trairão Iron Project, which is located in Pará State, Brazil, pursuant to agreements with each of Codelco do Brasil Mineração Ltda. and Barrick International (Barbados) Corp.

Under the terms of the agreement with Codelco, Talon Metals paid Codelco a nominal purchase price as consideration for a 70.05% interest in the Trairão Iron Project, and agreed to pay Codelco a royalty of US$0.7005 per tonne of iron mined and sold from the Trairão Iron Project.

Under the terms of the agreement with Barrick Barbados, Talon Metals acquired the remaining 29.95% interest of the Trairão Iron Project and agreed to pay Barrick Barbados a royalty of US$0.2995 per tonne of iron mined and sold. Talon Metals has the right to buy back this royalty for US$599,000 during the 12 month period following the start of commercial production.

Subsequent to its acquisition of the Trairão Iron Project, Talon has carried out an extensive initial drilling program which has now been concluded. During this time, a total of 444 RC drill holes comprising 24,215 metres were drilled (346 of the RC drill holes were on Target Areas comprising the updated mineral resource estimate reported below) and a total of 92 diamond drill holes comprising 13,335 metres were drilled.

As a result of this drilling, in March 2012 Talon reported an updated inferred mineral resource estimate and an initial indicated mineral resource estimate for Target Areas 1 to 6 and 8 of the Trairão Iron Project of approximately 1.4 billion tonnes (“Bt”) at an average grade of 34.27% Fe (using a 25% Fe cut-off) in the indicated category and approximately 1.2 Bt at an average grade of 29.48% Fe (using a 25% Fe cut-off) in the inferred category (see table below).

Trairao Resources (Total Aggregated Resources)

Cut Off Grade: 25% Fe

Resource Class

Tonnes (Mt)

Fe (%)

SiO2 (%)

Al2O3 (%)

Mn (%)

P (%)

LOI (%)

FeO (%)

CaO (%)

Grand Total

Indicated

1404.3

34.27

35.79

8.87

0.116

0.036

5.50

1.05

0.018

Inferred

1211.8

29.48

41.60

7.00

0.129

0.034

6.66

8.79

0.342

The effective date of this resource estimate is March 2, 2012

**Refer to Talon's technical report entitled “Fourth Independent Technical Report on Mineral Resources” dated March 30, 2012. Copies are available on this website or on SEDAR at www.sedar.com. Please also see our Disclaimer for further important information.

On March 30, 2012, Talon filed a National Instrument 43-101 - Standards of Disclosure for Minerals Projects ("NI 43-101") compliant technical report entitled "Fourth Independent Technical Report on Mineral Resources" (the "Trairão Technical Report") prepared by Coffey Mining Pty Ltd., under the supervision of Mr. Porfírio Cabaleiro Rodriguez, who is a "qualified person" under NI 43-101, which updated the scientific and technical information on the Trairã;o Iron Project to that date and incorporates the updated resource estimates detailed above.

Since the date of the Trairão Technical Report, Talon has refined its geological model, conducted further mineralogical and metallurgical test work and completed a logistics study to identify various port options for purposes of exporting pellet feed and/or pellets from the Trairão Iron Project.

The refinement of the geological model involved additional detailed surface mapping, as well as more comprehensive lithological and chemical re-logging of the diamond core and RC drill samples, in an effort to better define the characteristics and distribution of the iron mineralization.

Three mineralized lateritic profiles have been identified: surficial, saprolite and saprock, which overly the mineralized fresh rock. There are two types of fresh rock, quartz-magnetite banded iron formation and magnetite-rich mineralization.

Please refer to Talon's press release dated September 27, 2012 entitled "Talon Metals Provides Operational Update on its Trairão Iron Project" and Talon's press release dated November 22, 2012 entitled "Talon Metals Reports Positive Metallurgical Results for the Trairão Iron Project, Brazil" for further information concerning the additional metallurgical test work completed on the Trairão Iron Project. Further metallurgical test work will be required.

Lump and Sinter Potential

In March 2013, Talon announced that it believes there is potential for a high grade, near surface resource that may be amenable to producing direct shipping ore (“DSO”) from the Trairão Iron Project.

Consequently, in late 2013 Talon Metals engaged with potential purchasers of lump and sinter in order to assess the likelihood of being able to profitably sell lump and/or sinter from the Trairão Iron Project in the near future. The Company's dialogue with potential purchasers of lump and sinter remains ongoing.