Talisman Mining Ltd 100%

The Wonmunna iron project is situated in the heartland of the East Pilbara iron-ore mining industry, with three major mines within a 25km radius, the West Angelas (Rio Tinto), Hope Downs 1 (Rio Tinto/Hancock) and Mining Area C (BHP Billiton) Operations.

Figure (1) Wonmunna Project Location

The Wonmunna Iron Ore Project Mineral Resource is contained within three separate deposits, North Marra Mamba (NMM), Central Marra Mamba (CMM) and South Marra Mamba (SMM; see Figure 2). These resources are summarised in the following table:

Table (1) Wonmunna Iron Ore Project - Inferred Mineral Resources.

* In accordance with Clause 24 of the JORC Code, tonnages have been rounded to the nearest 0.1Mt.

Figure (2) Wonmunna Iron Ore Mineral Resources Locations

The iron ore mineralisation within the Wonmunna Mineral Resource deposits occur as a number of discrete zones of supergene-enriched Marra Mamba Iron Formation within preserved synclinal 'keels', and as such, comprises flat-lying blankets averaging 20m-40m in thickness within the oxidised zone. In turn, this mineralisation is overlain by low grade (40%-50% Fe) Channel Iron Deposit (CID) mineralisation ranging from 0m to 20m in thickness.

Metallurgical testwork and ore characterisation studies have been completed for the Mineral Resource by METS Pty Ltd. The metallurgical testwork showed that the 60% Fe cut off grade produces a saleable grade DSO product in both the lump and fines fractions. Results also indicate generally 'soft' ore, potentially amenable to continuous free-digging mining, with high lump: fines ratios in excess of 60:40.

A Scoping Study was undertaken by AMC Condultants Pty Ltd, in the first half of 2009. The Scoping Study considered 54 potential operating scenarios for the Wonmunna Project, estimating associated mining, processing, transportation and other capital and operating costs for each scenario to an accuracy of +-30% commensurate with the usual degree of accuracy for such studies.

The Scoping Study concluded that the Wonmunna Project is potentially economic based on high-grade and low-grade options with ore sold to nearby mines at production rates of 2 Mtpa to 5 Mtpa.

Talisman believes the results of the AMC Scoping Study on the Wonmunna Project are encouraging and in light of this, the Company is continuing to evaluate the project including considering strategic alternatives related to marketing and sales options for Wonmunna. This may include the potential for mine gate sales, infrastructure sharing or other arrangements, strategic options for a joint venture, or other mechanism to realise value from the Wonmunna Project.

Mining Lease applications have also been completed over NMM, CMM & SMM Mineral Resources. In addition to the currently defined Iron Ore Mineral Resource, further exploration targets are shown in Figure 3. 

Figure (3) Wonmunna Exploration Targets

Competent Persons' Statement

Information in this statement that relates to Exploration Results and Mineral Resources is based on information compiled by Mr Harry Cornelius, who is a member of the Australasian Institute of Mining and Metallurgy. Mr Harry Cornelius is a full time employee of Talisman Mining Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity undertaken to qualify as a Competent Person as defined in the 2004 Edition of the 'Australian Code for Reporting of Mineral Resources and Ore Reserves'. Mr Harry Cornelius consents to the inclusion in this statement of the matters based on information in the form and context in which it appears.