Talon Announces Acquisition Of Two Iron Ore Projects In Brazil

Road Town, Tortola, British Virgin Islands (Sep 29, 2010) – Talon Metals Corp., (“Talon” or the “Company”) (TSX: TLO) is pleased to announce that it has completed the acquisition of 100% of the rights to two iron ore projects in ParÁ State, Brazil, through concluding two separate agreements respectively with Codelco do Brasil MineraÇão Ltda (“Codelco”) and Barrick International (Barbados) Corp. (“Barrick Barbados”).

The agreement with Codelco resulted in Talon acquiring a 70.05% interest in the Trairão iron project (“Trairão Project”). Talon separately acquired Barrick do Brasil MineraÇão Ltda., (“Barrick Brasil”), which holds the remaining 29.95% interest in the Trairão Project, from Barrick Barbados. With this acquisition, Barrick Brasil became a wholly owned subsidiary of Talon and will berenamed Talon Iron MineraÇão Ltda. Barrick Brasil also has a 100% interest in an exploration licence with iron ore potential in the InajÁ greenstone belt (“InajÁ South Project”) and a 33.69% interest in the Terra Escura Nickel Project, also in ParÁ State.

Under the agreement with Codelco, Talon paid Codelco a nominal purchase price and will pay a royalty of US$0.7005 per tonne of iron mined and sold, in the event of mining in the future on the licences.

Under the agreement with Barrick Barbados, Talon paid Barrick Barbados a nominal purchase price and is obliged to pay certain production related royalties, at varying levels in respect of specific metals, in the event of mining on any of the rights to projects held by Barrick Brasil.

In the case of the Trairão Project, the royalty payable to Barrick Barbados is US$0.2995 per tonne of iron mined and sold. However, Talon has the right to buy back this royalty for US$599,000 during the 12 month period following the start of commercial production. In terms of the InajÁ South Project, Barrick will receive a net smelter royalty of 0.5% for any base metals that may be produced and sold and 1.0% for any precious metals that may be produced and sold. There are also provisions for Talon to buy back the base metal royalty and for Barrick Barbadosto buy back up to a 50% interest in any future gold mining operation, which exceeds a reserve of three million ounces.

“The acquisition of these iron ore projects is in line with our strategy to acquire interests in new mineral projects where there is the potential to add value through further exploration,” said Mr. Stuart Comline, President and CEO of Talon. “In the case of iron ore, there is robust demand and solid fundamentals for the future of the commodity. The Trairão Project in particular, being at surface and partially prospected, has the potential to be developed through an intense prospecting program.”

The ParÁ State is one of the more recently developed iron ore producing districts in Brazil and in which the principal iron ore mines are at CarajÁs, some 200 kilometres to the north of the Trairão Project. Currently exploration for iron ore by other companies continues both to the south and north of the Trairão Project area, and in the immediate vicinity of the InajÁ South Project area.

The Trairão Project has exploration licences for approximately 72,429 hectares over 12 properties and applications have been made for an additional two properties covering a further 17,869 hectares, which areas have near surface iron ore potential. Nine discreet and extensive occurrences of banded iron formation (“BIF”), which are hosted in the Archean age Serra da Seringa greenstone belt, are developed within the licence areas acquired by Talon. The BIFs have a cumulative strike length of 51 kilometres and are covered by iron rich colluvium and epigenetically enriched iron deposits near surface, which collectively extend to depths of between 20 and 61 meters. Codelco, in its joint venture with Barrick Brasil, undertook only limited exploration on the nine target areas, but drilled three diamond drill holes, which had individual assays of between 45% and 60% Fe, over 28 metres, 61 metres and 31 metres, respectively, within the near surface colluvial and enriched deposits.

Based on the exploration completed to date and Talon’s extensive due diligence work, the Company intends to commence a drilling program immediately on the known higher priority target at the Trairão Project, with the intention of establishing a National Instrument 43-101 compliant resource estimate on the near surface enriched iron deposits on the initial priority target area, during the first quarter of 2011. Thereafter, drilling will extend to the other target areas.

At the InajÁ South Project, which is located 120 kilometres south of the Trairão Project, Talon has acquired one mineral licence, with an area of 6,577 hectares. Within the licence area, an Archean age BIF of the InajÁ greenstone belt is developed along a prominent ridge over a strike length of 11 kilometres. The principal target here is the BIF, which is similar to the targets currently being prospected by other companies on the adjacent licences.

The Terra Escura Nickel Project is located 40 kilometres southwest of the town of Rio Maria and immediately adjacent to Trairão Iron Project. It comprises two nickel laterite targets known as Santa FÉ and Santa Cruz, with exploration permits covering 19,863 hectares. Nickel mineralization is related to the lateritic profile developed over sepentinized dunites and peridotites that are part of the Serra Azul mafic-ultramafic complex.

Map of Talon's Iron Ore Projects

Figure 1 – Map of Talon’s Iron Ore Projects

Conference Call
Talon Metals will host a conference call with Stuart Comline, President and CEO, to discuss this news release on Wednesday September 29,2010 at 1:00 p.m. Eastern Standard Time.

To participate in the conference call, investors and media from the US and Canada should dial 1-888-231-8191 ten minutes prior to the scheduled start time. International callers should dial +1 (647)427-7450.

Talon Metals will offer an archived webcast of the conference call, accessible from the Company’s web site at www.talonmetals.com.

Special Shareholder Meeting
Talon Metals will be holding a special shareholders meeting on Wednesday, October 27, 2010 to approve the proposed transaction with Tlou Energy Limited (“Tlou Energy”) regarding the Saber Gas Project. The Company intends to transfer to Tlou Energy its remaining rights and interest in the Saber Gas Project licenses in return for an approximate 30% interest in Tlou Energy.

An information circular dated September 27, 2010 will be mailed to shareholders on or before Wednesday October 6, 2010.

About Talon

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

Talon has a treasury of approximately CDN$4 million and has 63,877,950 common shares outstanding and 70,517,450 shares fully diluted.

For additional information on Talon please visit the Company’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 Statements

This press release contains certain “forward-looking information”. All information, other than information pertaining to historical fact, which addresses activities, events or developments that Talon believes, expects or anticipates will or may occur in the future constitutes forward-looking information. Forward-looking information reflects the current expectations or beliefs of Talon based on information currently available to Talon. Such forward-looking information includes, among other things, statements relating to: the Company’s exploration plans at the Trairão Project; the Company’s business plans and priorities; potential mineralization and resources at the Trairão Project and the InajÁ South Project; potential development of the Trairão Project; market trends with respect to demand for and the price of iron ore; and the plans and expectations of the Company concerning the transfer to Tlou Energy of Talon’s rights and interest in the Saber Gas Project licenses.

Forward-looking information is 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 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, but are not limited to: changes in the price of iron ore; changes in the anticipated demand for iron ore; political developments in Brazil; changes to regulations affecting the Company’s activities, including tax and trade laws and policies; delays in obtaining or failures to obtain required regulatory permits and approvals from government authorities; delays in commencing the Company’s proposed drilling program; equipment failure; unexpected geological or hydrological conditions; the uncertainties involved in interpreting drilling results and other geological data; the possibility that future exploration results will not be consistent with the Company’s expectations; exploration costs varying significantly from estimates; the existence of undetected or unregistered interests or claims, whether in contract or in tort, over the property of Talon; uncertainties relating to the availability and costs of financing needed to complete exploration activities and demonstrate the feasibility of the Company’s projects; the success of future exploration and development initiatives; and other risks involved in the mineral exploration and development industry. For risk factors relating to the proposed transfer of the Company’s remaining interest in the Saber Gas Project to Tlou Energy, see the section entitled “Forward-Looking Information” in the Company’s press release dated August 12, 2010 available on the Company’s SEDAR profile at www.sedar.com.

Forward looking information 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 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.