Talon Metals Acquires Potash Exploration Projects in Brazil



    
    Exploration Licences Granted for Juruena Gold Project in Brazil

    TSX:TLO
    

    ROAD TOWN, Tortola, British Virgin Islands, May 25 /CNW/ - Talon Metals
Corp., ("Talon" or the "Company") (TSX: TLO) today announces that it has
concluded an agreement with Kmine Holdings Ltd. ("Kmine"), a private company,
to acquire a 100% interest in Bancor Mineracao Ltda. ("Bancor"), a Brazilian
subsidiary of Kmine. Bancor has eight potash project areas in the Sergipe and
Alagoas States of Brazil comprising a total of 36,402 hectares (89,951 acres)
for which it holds exploration licenses for potash or has applied for
exploration licenses.
    Separately, Talon was recently awarded the exploration rights to the
Juruena Gold Project in Mato Grosso State, Brazil from the Departamento
Nacional de Produção Mineral ("DNPM").
    "The acquisition of the potash exploration licences from Kmine conforms
to our strategy to acquire interests in holdings that have the potential to
become substantial projects," said Mr. Stuart Comline, President and CEO of
Talon. "It also underlines our belief that, under the current uncertain
circumstances and a depressed commodity market, it is important to acquire
strategic holdings in commodities that may have a more settled future. We will
continue to review other potash opportunities, as well as gold opportunities
that have the potential to host substantial deposits."

    The Bancor Potash Projects and the Kmine Agreement

    Bancor holds the exploration rights on 17,473 hectares (43,176 acres) in
three project areas and has applied for the exploration rights on an
additional 18,929 hectares (46,774 acres) in five further project areas. All
of these potash projects are in the Sergipe and Alagoas states of Brazil. The
project areas are in the same sedimentary basin as established oil producing
areas and the nearby Taquari-Vassouras potash mine, which is operated by Vale
and produced 607,000 tonnes of potash in 2008.
    A considerable amount of exploration data exists for the area, mainly
from the oil industry including one well in Bancor's Sergi project area which
intersected a cumulative 25 metres of potash mineralization in three
sedimentary units. Other wells in, or close to, the Bancor project areas have
also intersected potash mineralization. The existing exploration data will be
reviewed as part of Talon's exploration program, which will commence
immediately.
    Under the terms of the agreement with Kmine, Talon has acquired a 100%
interest in Bancor, for cash payments of US$20 million, payable over 10 years,
of which US$375,000 was payable on closing of the agreement and again at the
commencement of the second year. Thereafter, further incremental payments are
made annually on the third, fourth and fifth anniversaries of the closing date
of the agreement and the final payment is payable on the tenth anniversary of
the closing date. The agreement allows for Talon to make payments from the end
of the second year, part in Talon shares (50% of each payment) and part in
cash. The amount payable in Talon shares is equivalent to 47% of the full
purchase consideration. Furthermore, Talon may withdraw from the agreement at
any time and return the Bancor shares to Kmine.
    Potash is a major component of fertilizers and Brazil is a large consumer
of this commodity in its extensive agricultural industry. Brazil imports most
of its potash as currently only about 10% of its consumption is produced
domestically. Furthermore, world potash demand has increased 35% on a
cumulative basis between 2000 and 2007 and industry projections are for
further increases in demand. However potash deposits are not readily found in
many regions of the world. In fact 84% of world potash production is currently
supplied by only five countries.

    The Juruena Gold Project

    On April 30, 2009 the DNPM in Brazil granted Talon a 6,369 hectare
(15,739 acre) exploration license for the Juruena Gold Project ("Juruena") in
the Alta Floresta gold district in the Mato Grosso State, some two years after
the Company submitted a tender for the exploration rights. Juruena, which
previously had been one of the major garimpeiro mining sites in Brazil, has an
estimated historical production of some 250,000 ounces of gold, mainly from
shallow alluvial and saprolite deposits from eleven pits. The hard rock target
here is a series of multiple quartz veins hosted in alteration zones within
granites. The Company is undertaking a more detailed assessment of previous
mining and exploration at Juruena to formulate a strategy to maximize the
value for Talon.

    Update on the Saber Coal Bed Methane ("CBM") project

    Further to the Company's press release of April 24, 2009, Talon is
continuing with its due diligence review on the Saber CBM projects in
Botswana. The initial agreement entered into between Saber and Tlou Energy Pty
Ltd. ("Tlou") on April 24, 2009 will add considerable management capability
and experience to the Saber projects, subject to the successful negotiation
and execution of definitive agreements with Tlou. It is anticipated that this
will enhance the exploration program and will result in an improved assessment
of the exploration results and potential of the projects in the coming months.
Accordingly, this will provide the necessary confidence for Talon management
to determine whether to proceed with the proposed merger with Saber.

    About Talon

    Talon is a TSX-listed company focused on the acquisition, exploration and
advancement of high quality 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$6.5 million and holds 2,450,000
common shares in Beadell Resources Limited (ASX:BDR). Talon has 27,054,222
common shares outstanding.

    Forward-Looking Statements

    This press release contains certain "forward-looking statements". All
statements, other than statements of historical fact, that address activities,
events or developments that Talon believes, expects or anticipates will or may
occur in the future are forward-looking statements, including, without
limitation, statements regarding Talon's plans and objectives, the potential
merger of Talon and Saber (the "Merger"), the continuation of Talon's due
diligence review of Saber, and the entry by Saber and Tlou into definitive
agreements. These forward-looking statements reflect the current expectations
or beliefs of Talon based on information currently available to Talon.
Forward-looking statements are subject to a number of risks and uncertainties
that may cause the actual results of Talon to differ materially from those
discussed in the forward-looking statements, 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 Talon. Material factors
that could cause actual results or events to differ materially from current
expectations include, among other things: the failure of the Tlou exploration
program to yield positive results; the failure of Tlou and Saber to
successfully negotiate and enter into definitive agreements; the failure of
Talon and Saber (together, the "Companies") to reach agreement and to execute
a pre-Merger agreement; and subsequently, the failure of the Companies to
complete the Merger; changes in government regulations and policies; and other
exploration, development and operating risks.
    Any forward-looking statement speaks only as of the date on which it is
made and, except as may be required by applicable laws, Talon disclaims any
intent or obligation to update any forward-looking statement, whether as a
result of new information, future events or results or otherwise. Although
Talon believes that the assumptions inherent in the forward-looking statements
are reasonable, forward-looking statements are not guarantees of future
performance and accordingly undue reliance should not be put on such
statements due to the inherent uncertainty therein. Information pertaining to
Saber has been furnished by Saber. Although Talon does not have any knowledge
that would indicate that any such information is untrue or incomplete, Talon
assumes no responsibility for the accuracy or completeness of such
information.





For further information:

For further 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

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