ROAD TOWN, Tortola, British Virgin Islands, Dec. 10 /CNW/ - Talon Metals Corp., ("Talon" or the "Company") (TSX: TLO) is pleased to announce that it has concluded an agreement (the "Agreement") with Brazauro Resources Corporation ("Brazauro") (TSXV: BZO) whereby Brazauro has been granted an option to earn a 100% interest in Talon's Agua Branca Gold Project ("Agua Branca"). Agua Branca comprises a total area of 9,356 hectares (23,119 acres) in the Tapajos Gold District within the Para State, Brazil.
"We are pleased with this option to sell the Agua Branca Project and the positive impact it is expected to have on Talon's treasury," said Mr. Stuart Comline, President and CEO of Talon. "Today's announcement is a significant step in a process begun in early 2009 to identify a purchaser for which this gold project is a better fit. This is part of Talon's strategy to realize value on the gold projects in our portfolio that we view as not meeting our corporate objectives."
Under the terms of the Agreement, Talon will receive initial payments of US$60,000 immediately and a further US$60,000 upon the transfer of the licences to Brazauro.
In order to exercise its option, Brazauro is required to make additional payments to Talon of US$130,000 on or before December 31, 2010 and a further payment of US$1.87 million on or before September 30, 2011. In addition, Brazauro must spend US$1 million on exploration within two years of the transfer of the licences, including the completion of a minimum of 2,000 metres of core sample drilling in the first year.
Talon is also entitled to a 2% net smelter royalty which Brazauro can re-purchase for US$2 million. If the payments are not made or the exploration program is not completed Brazauro forfeits its ownership rights.
Talon is a TSX-listed company focused on the acquisition, exploration and development 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$4.4 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.
Forward- Looking Statements
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 impact of the Agreement on Talon's treasury, the payment and exploration obligations of Brazauro under the Agreement and Talon's entitlement to a net smelter royalty under the Agreement. 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: political developments in Brazil; changes to regulations affecting the Company's activities; Brazauro's intentions in respect of Agua Branca and its obligations under the Agreement; Brazauro's financial condition and the results of its exploration at Agua Branca; failure of Brazauro to comply in all material respects with the terms and conditions of the Agreement; 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 new information, future events or results or otherwise. 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.
SOURCE Talon Metals Corp.
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: email@example.com