Road Town, Tortola, British Virgin Islands (Dec 7, 2009) – Talon Metals Corp., (“Talon” or the “Company”) (TSX: TLO) is pleased to announce that it has concluded an agreement (the “Agreement”) in which it has a right to acquire a 75% interest in a subsidiary of Lara Exploration Ltd. (“Lara”) (TSXV:LRA), that holds all 13 of Lara’s potash exploration licences (including five applications for potash exploration licences), which are located in Sergipe State, Brazil.
Lara’s potash licences comprise two separate blocks, with a total area of 14,114 hectares (34,876 acres), which are contiguous with Talon’s Capela and Panqueca potash prospects, and cover the strike extension trend of the known potash deposits in Vale’s Taquari-Vassouras Mine (Figure 1). With this Agreement, Talon will have interests in exploration licences that cover a cumulative area of 29,163 hectares (72,063 acres) immediately north and north east of the Taquari-Vassouras mine boundary. In addition Talon has holdings south of Vale’s potash mine and in other locations in the Sergipe Basin which total 46,256 hectares (114,300 acres).
Lara’s western block comprises two exploration licences (for a total of 3,618 hectares), adjacent to Talon’s Capela prospect. Lara’s eastern block comprises six exploration licences (for a total of 10,496 hectares) adjacent to Talon’s Panqueca prospect. Lara also has five applications pending for potash exploration licences which total 7,574 hectares (18,715 acres) covering north eastern extensions to Talon’s Panqueca prospect.
“We are delighted to conclude this Agreement with Lara, as the combining of the two companies’ exploration licences represents a major consolidation of potash exploration ground on the northern and northern eastern boundary of Vale’s Taquari-Vassouras mine, the only operating potash mine in Brazil,” said Mr. Stuart Comline, President and CEO of Talon. “This Agreement will also allow for rationalization of the proposed potash exploration program in this area.”
Under the terms of the Agreement with Lara, Talon has a right to acquire a 75% interest in a Brazilian company to be formed, which will hold all of Lara’s potash exploration licences. To exercise its option, Talon must make cash payments of US$0.5 million, as well as undertake a US$4 million work program to be managed and funded by Talon. Both the cash payments and work commitments are on an annual basis, spread over four years. The work program includes the drilling of a minimum of five holes over four years. In addition, Talon is required to complete a Resource Report on these licence areas by late 2014.
Figure 1: Talon’s and Lara’s potash properties in the Sergipe Basin, Brazil
A significant amount of exploration data is available on Lara’s licences from the oil and gas industry, which includes geological and geophysical data from 11 oil wells. Two of these wells intersected a cumulative 37 and 5 metres of potash mineralization respectively, in ten and two individual potash-bearing horizons, at depths between 1,300 and 1,800 metres. Furthermore, data is available for at least 30 2-D seismic lines over Lara’s properties. Talon will acquire this data and conduct a detailed interpretation, in an effort to delineate the basin structure as well as any potash deposits, with the aim of identifying further drill targets.
Brazil is a large consumer of potash with its extensive agricultural industry. The country imports most of its potash as currently only about 10% of its consumption is produced domestically. In three of the last five years (2004-2008), potash demand in Brazil was up over 7%, while world potash demand has been growing at a 5.1% compound annual growth rate (CAGR) over the last seven years (2001 to 2008).
Talon’s Gold Projects – Strategy
Talon has previously stated that it would look for partners for its gold projects that do not meet the Company’s strategic target parameters, in an effort to realize optimum value on these projects. The Company is currently in negotiations with third parties on a number of its gold projects.
About Talon
Talon is a TSX-listed company focused on the exploration and development of the Trairo Iron Project in Par· State, Brazil. 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$18 million and has 92.0 million common shares outstanding and 110.9 million shares on a fully diluted basis.
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 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 Agreement, the acquisition of an interest in Lara’s potash exploration licences, pending potash exploration licences and Talon’s proposed potash exploration program. 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 potash prices; political developments in Brazil; changes to regulations affecting the Company’s activities; delays in obtaining or failures to obtain required regulatory approvals; uncertainties involved in interpreting data from 2D-seismic lines; delays in commencing the Company’s proposed drilling program; or other risks involved in the mineral exploration and development industry. 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.