Talon Amends Interim Loan to Saber

Road Town, Tortola, British Virgin Islands (Sept 1, 2009) – – Talon Metals Corp., (“Talon”) (TSX: TLO) is pleased to announce that it has entered into a definitive, binding pre-merger agreement (the “Merger Agreement”) with Saber Energy Corp. (“Saber”) in respect of the proposed business combination (the “Merger”) of Talon and Saber (each, a “Company” and, together, the “Companies”), as contemplated in the previously announced heads of agreement (“HOA”) between the Companies dated September 25, 2008. The Merger remains subject to the approval of the Toronto Stock Exchange (the “TSX”) and the shareholders of Talon and Saber.

In addition, Talon has agreed to further amend the CDN$6 million loan to Saber (the “Interim Loan”), as previously announced on September 25, 2008, March 24, 2009 and April 24, 2009, such that Talon will loan a further US$0.5 million to Saber upon the satisfaction of certain conditions. The maturity date of the Interim Loan has also been amended to be the earlier of December 15, 2009 and the effective date of the Merger.

Talon has completed a due diligence review on Saber, with the assistance of an experienced coal bed methane(“CBM”) industry consultant. The completion of the due diligence review was delayed until Saber had compiled and interpreted all of its exploration results, and more specifically, concluded its farm-in agreement with Tlou Energy Pty Ltd (“Tlou”).

“The merger with Saber will allow Talon to participate in a large, rapidly developing coal bed methane project where significant exploration progress has been made to date,” said Mr. Stuart Comline, President and CEO of Talon. “Talon will further benefit in that the next phase of exploration is fully funded, thus reducing the forward risk to Talon on a large exploration venture in one of the most stable countries in Africa. In addition, Talon shareholders stand to gain from Saber’s plans to further explore the priority targets that have been identified and to develop its gas project with its joint venture partner, Tlou. With Tlou’s experienced management team and the large land holdings over the coal seams in Botswana, Saber is a key strategic player in developing the coal bed methane and shale gas industry in southern Africa, a region facing significant energy shortages.”

Tlou is using the compilation and interpretation of Saber’s exploration results from its more than 80 wells to effectively deploy its proprietary, Integrated Exploration Solution on the Karoo Central license area where three coal seams within a 40-50 metre potential pay zone have been identified. Furthermore, the Karoo North and Karoo West licence areas, where very little data is available, will be explored.

Tlou is a 50-50 joint venture between Mitchell Energy Group (“Mitchell”) and Walcot Capital (“Walcot”) both based in Australia. Tlou was founded exclusively to focus on developing CBM production in southern Africa and the Saber project is its first undertaking.

Over the past decade, the Australian CBM industry has developed into a rapidly growing industry in which large scale CBM reserves have been delineated. This growth has attracted substantial investment to the sector in Australia. The executives behind Mitchell and Walcot have been a significant part of this growth in Australia. Mitchell’s experienced team, which has drilled a significant number of the CBM wells in Australia, brings to the Saber project a proven drilling methodology intended to minimize project risk, while proving this large scale CBM opportunity.

Under Tlou’s management, exploration at the Saber project is expected to resume in the near future, including drilling on the priority rated projects, mainly in the Karoo Central and Karoo North licence areas. As Tlou will fund 100% of this new exploration program (estimated at US$8 million), Talon’s treasury will not be impacted for the forthcoming phase of exploration, while Talon has the opportunity to benefit from the project’s potential future commercial development.

Value Warrants

As previously announced, upon the first closing in connection with the Saber Placement, (as defined below) which is anticipated to occur prior to closing of the Merger, Talon will receive 6,000,000 common share purchase warrants of Saber (each, a “Value Warrant”). Each Value Warrant will entitle the holder thereof to purchase one common share of Saber at an exercise price equal to the gross subscription price paid in respect of each common share of Saber sold pursuant to the Saber Placement.

The Merger

Under the terms of the Merger Agreement, Talon and Saber have agreed, inter alia, that, upon the Merger, the securities of each of the Companies will be exchanged for securities of the company resulting from the Merger (“MergeCo”) on the following basis:

1. each outstanding common share of Talon will be exchanged for one (1) common share of MergeCo (each, a “MergeCo Share”);
   
2. each option outstanding under the stock option plan of Talon to purchase common shares of Talon (a “Talon Option”) will be exchanged for an option to acquire an equal number of MergeCo Shares at an exercise price per MergeCo Share equal to the exercise price of the Talon Option so exchanged;
3. each outstanding purchase Value Warrant issued by Saber to Talon will be cancelled;
   
4. each outstanding common share of Saber (each, a “Saber Share”) will be exchanged for 0.17685 MergeCo Shares; and
   
5. each outstanding common share purchase warrant of Saber (a “Saber Warrant”) will be exchanged for 0.17685 MergeCo warrants. Each whole MergeCo warrant will entitle the holder to purchase one (1) MergeCo Share at an exercise priceof US $0.90.

Talon has received an opinion from its financial advisor, Thomas Weisel Partners Canada Inc., to the effect that, as of the date of such opinion, and subject to the assumptions, qualifications and limitations set forth in the opinion, that the consideration payable pursuant to the Merger is fair, from a financial point of view, to Talon.

Certain conditions must be satisfied on or before November 30, 2009 or such other date as the Companies may agree (the “Completion Deadline”) in order to complete the Merger including:

1. certain regulatory and government approvals;
2. approval of the Merger by the shareholders of each of Talon and Saber;
   
3. no material adverse change shall have occurred on a consolidated basis in respect of Saber or Talon;
   
4. Saber raising proceeds of at least CDN$2.2 million through the issuance of Saber Shares (the “Saber Placement”); and
   
5. execution of voting support agreements pursuant to which, among other things, the holders of a majority of the outstanding Saber Shares agree to vote in favour of the Merger.

Among other circumstances, the Merger Agreement may be terminated:

1. by mutual consent of the Companies;
   
2. by a Company if:
   
   1. certain conditions precedent for its benefit are not satisfied in accordance with the terms of the Merger Agreement;
   2. the Merger is not completed by the Completion Deadline, provided that there is no intentional breach of the covenants of such terminating Company;
      
   3. at either of the shareholders’ meetings of the Companies held to approve the Merger, shareholder approval is not obtained;
   4. the board of directors of the other Company fails to recommend to the shareholders of such other Company that they vote in favour of the Merger, except as expressly permitted in limited circumstances under the Merger Agreement;
      
   5. the board of directors of the other Company withdraws, amends, modifies, qualifies, or publicly proposes to or publicly states that it intends to withdraw, amend, modify or qualify, its recommendation to the shareholders of such other Company that they vote in favour or the Merger;
      
   6. the other Company fails to hold a shareholders’ meeting on or before November 10, 2009 to approve the Merger, subject, in the case of Talon to adjournment of up to 10 business days in certain circumstances; and
   7. there is an intentional breach of the covenants of the other Company or any of such other Company’s subsidiaries or affiliates, as applicable;
3. by Saber if:
   
   1. the board of directors of Talon approves or recommends a Talon Superior Proposal (as defined in the Merger Agreement);
   2. Talon enters into a definitive agreement with respect to a Talon Superior Proposal; and
4. by Talon if:
   
   1. in the event that due diligence investigations performed by Talon and/or its representatives reveal any information or fact which, in the sole opinion of Talon, has or would have a Material Adverse Effect on Saber (as defined in the Merger Agreement).

In the event that the Merger Agreement is terminated by Saber in the circumstances described in items (b)(iv) to (vii) or (c) above, or by either Saber or Talon if the meeting of the shareholders of Talon to approve the Merger is held and Talon’s shareholders do not approve the Merger, Talon is required under the Merger Agreement to pay to Saber the reasonable third party fees and expenses incurred by Saber in connection with the transactions contemplated by the Merger Agreement and the agreements relating to the Interim Loan, including the negotiation thereof. Similarly, if the Merger Agreement is terminated by Talon in the circumstances described in items (b)(iv) to (vii) above, or by either Talon or Saber if the meeting of the shareholders of Saber to approve the Merger is held and Saber’s shareholders do not approve the Merger, Saber is required under the Merger Agreement to pay to Talon a termination payment of US$600,000 plus all reasonable third party fees and expenses of Talon incurred in connection with the negotiation and execution of the Merger Agreement and the transactions contemplated thereby.

A copy of the Merger Agreement has been filed on Talon’s SEDAR profile atwww.sedar.com.

In light of the fact that when the Companies entered into the HOA on September 25, 2008, some of the directors of each Company beneficially owned or exercised control or direction over common shares of the other Company, including Warren Newfield (who is a director of both Companies), an independent committee of the board of directors of Talon comprised of Sandra Cowan, Stuart Comline and Luis Mauricio de Azevedo, was formed to review each of the Interim Loan, the HOA and the Merger Agreement. Talon’s independent committee and board of directors have approved each of the Interim Loan and the HOA (and respective amendments thereto) and the Merger Agreement.

Interim Loan

As described above, and as previously announced, Talon has loaned an aggregate principal amount of CDN$6 million to Saber under the Interim Loan. Pursuant to an amending agreement between the Companies dated as of the date hereof, Talon has agreed to lend a further US$0.5 million to Saber upon the satisfaction of certain conditions.

The Interim Loan bore interest at 12% per annum from September 23, 2008 to January 24, 2009 and at 18% per annum from January 25, 2009 to July 31, 2009. From August 1, 2009 to the date of maturity of the Interim Loan (being the earlier of December 15, 2009 and the effective date of the Merger), the Interim Loan bears interest at 25% per annum.

Update on the Saber Coal-Bed Methane (“CBM”) Project

Botswana is one of the most attractive jurisdictions in Africa for resource exploration and development and has a well established and administered resource industry.

In addition to drilling over 80 holes, Saber has compiled a series of composite logs and captured the results of its desorption, adsorption, gas analysis and other tests, including proximate analysis in a relational database for identifying areas for further exploration and possible development. Tlou analyzed these results as part of its extensive technical due diligence and to determine how best to implement its Integrated Exploration Solution (“IES”). After consultation with Tlou, Saber decided to shut-in its remaining production 5-spots, pending the results of the IES and determination of the appropriate drilling and completion techniques.

Botswana and other countries in southern Africa are facing significant shortages of electricity over the next decade. CBM is an important fuel source for gas-fired power stations. SNC Lavalin, under contract from Saber, has already completed a technical study for a 1,000 MW combined cycle gas fired power station.

To advance the development of the Saber CBM project, Saber and certain of its subsidiaries and affiliates entered into a share sale agreement (the “Share Sale Agreement”) with Tlou and related shareholders’ deeds and management agreements (together, the “Tlou Transaction Documents”) pursuant to which Tlou acquired (the “Tlou Transaction”) an indirect:

1. 64% interest in seven prospecting licences comprising Saber’s “Masama” licence area, also known as “Karoo North”;
   
2. 10% interest in five prospecting licences comprising Saber’s “Kalahari” licence area also known as “Karoo Central”; and
   
3. 75% interest in six prospecting licences comprising Saber’s “Karoo West” licence area.

Tlou has the right to purchase an additional 25% shareholding interest in the Karoo Central licence area according to a pre-determined formula. In the event that Tlou does not complete the work programs on the Saber project within the timeframe contemplated in the Tlou Transaction Documents, all of the shares of Saber’s subsidiaries and affiliates acquired by Tlou thereunder will be transferred back to Saber and/or its subsidiaries and affiliates, subject to limited exceptions.

Saber has outstanding 152,980,690 common shares and 2,530,534 Saber Warrants.

For additional information on Saber and Tlou please refer to Talon’s news releases dated April 24, 2009 and May 25, 2009.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States or in any state in which such offer, solicitation or sale would be unlawful. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to a U.S. person (as defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

The Saber Shares have not been approved or disapproved by the United States Securities and Exchange Commission or by any state securities commission or regulatory authority, or any Canadian provincial securities commission or other regulatory authority, nor have any of the foregoing authorities passed on the accuracy or adequacy of the information contained herein. Any representation to the contrary is a criminal offense.

About Talon

Talon is a TSX-listed company focused on the acquisition, exploration and development of high quality resource projects. Talon has a well-qualified exploration and management team with extensive experience in exploration and project management.

Talon has gold exploration projects and is a developing a portfolio of potash projects in Brazil. Talon aims to acquire interests in, and develop, large resource projects, where it can add value to those projects, while reducing risk, through diversification of the commodity type held and the stage of development of each project.

Talon has a treasury of approximately CDN$5 million and holds 2,450,000 common shares in Beadell Resources Limited (ASX:BDR). Talon has 27,054,222 common shares outstanding and 30,239,222 shares fully diluted.

For additional information on Talon please visit the Talon’s website at www.talonmetals.com or contact:

Erica Belling
VP Investor Relations
Tau Capital Corp.
Tel: (416) 361-9636 x 243
Email: ebelling@taucapital.com

Forward-Looking Information

This news release contains forward-looking information. 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 (including, without limitation, statements regarding potential mineralization, the depth of the mineralization and the CompanyÍs exploration plans and objectives) are forward-looking information. This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company 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 Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things, risks related to the exploration stage of the CompanyÍs properties, the possibility that future exploration results will not be consistent with the CompanyÍs expectations (including identifying additional and/or deeper mineralization), changes in the price of iron ore, changes in equity markets, political developments in Brazil, uncertainties relating to the availability and costs of financing needed in the future, changes to regulations affecting the CompanyÍs activities, delays in obtaining or failures to obtain required regulatory approvals, the uncertainties involved in interpreting exploration results and other geological data and the other risks involved in the mineral exploration business. Forward-looking information speaks only as of the date on which it is provided and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of buy . Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.

The mineral resource figure disclosed in this news release is an estimate and no assurances can be given that the indicated levels of iron will be produced. Such estimate is an expression of judgment based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. While the Company believes that the mineral resource estimate disclosed in this news release is well established, by their nature mineral resource estimates are imprecise and depend, to a certain extent, upon statistical inferences which may ultimately prove unreliable. If such estimate is inaccurate or reduced in the future, this could have a material adverse impact on the Company.

Mineral resources are not mineral reserves and do not have demonstrated economic viability. Inferred mineral resources are estimated on limited information not sufficient to verify geological and grade continuity or to allow technical and economic parameters to be applied. Inferred mineral resources are too speculative geologically to have economic considerations applied to them to enable them to be categorized as mineral reserves. There is no certainty that mineral resources can be upgraded to mineral reserves through continued exploration.