Announcement PDF 27 July 2015 Monty Prospect Drilling Update COMPANY SNAPSHOT Board of Directors Alan Senior Non-Executive Chairman Gary Lethridge Managing Director Brian Dawes Non-Executive Director Karen Gadsby Non-Executive Director Contact Details 6 Centro Avenue Subiaco, Western Australia, 6008 Telephone: +61 8 9380 4230 Facsimile: +61 8 9382 8200 Email: info@talismanmining.com.au Website: www.talismanmining.com.au Capital Structure Shares on Issue: 148,559,904 (TLM) Options on Issue: 7,250,000 (Unlisted) ASX: TLM Talisman Mining Limited (ASX: TLM “Talisman”) is pleased to provide an update on ongoing drilling activities at the Monty Prospect within Talisman’s Springfield Project located approximately 10km east of the DeGrussa Copper Mine (see Figure 1). The Springfield Project is subject to an exploration farm-in joint venture between Sandfire Resources NL (ASX: SFR; “Sandfire”) and Talisman where Sandfire has the right to earn up to a 70% interest in Talisman’s Doolgunna Projects by the expenditure of $15 million on exploration at the Projects. Sandfire have advised that step-out diamond hole TLDD0006, which was collared to intersect the interpreted strike extension of the previously intersected high-grade mineralisation 80m further to the south-west from hole TLDD0005 (see ASX Release – 21 July 2015) has now been completed to a final depth of 553.9 metres. The hole intersected a potentially significant fault zone and an extension of what is interpreted by Sandfire to be the sedimentary host horizon to the intercepts seen in TLDD0004A and TLDD0005. The fault zone was intersected between 407.2 metres and 445.6 metres down-hole, with a thick sedimentary sequence of 80 metres observed from 422.5 metres to 502.2 metres down-hole. This sedimentary sequence is similar to that observed on the margins of the massive sulphide mineralisation at DeGrussa. While no massive sulphides have been observed in TLDD0006, the hole has provided valuable geological and stratigraphic information which will assist Sandfire in guiding ongoing drilling to test the extent and orientation of the high-grade copper-gold mineralisation intersected in the previous three holes (TLDD0004A, TLDD0005 and TLRC0004). The significance of this fault zone, including sense of movement and potential offsets, is not yet known. This includes the relationship of the fault zone to the mineralisation intersected in TLDD0004A and TLDD0005 and the shallow massive sulphide zone intersected in step-out hole TLRC0004. Additional drilling will be required to inform and enhance the growing understanding of the local geological context of the Monty Prospect. Assay results are awaited for TLRC0004. Sandfire have advised Talisman that scout drill hole TLRC0005 has been completed without intersecting economic mineralisation and that the Reverse Circulation (RC) drill rig will continue both, scout drilling to define the location of the prospective horizon and drilling pre-collars for the diamond drill rig. Sandfire have also advised that diamond drilling is continuing and the next diamond drill-hole (TLDD0007) will be targeted approximately 80m down-dip of the mineralisation seen in TLDD0004A. This hole will be drilled as a diamond tail off an existing RC pre-collar that was drilled to a depth of 186m. Monty Prospect Drilling Update Exploration of the Monty Prospect by Sandfire will continue in order to determine the potential extent of the mineralisation and to develop further understanding of the broader geological context of Monty. Sandfire intend to employ a multi-faceted approach to the exploration in the area which will include collating information from ongoing down-hole EM surveys, structural geological reviews, geochemical vectoring and stratigraphic analysis. With Sandfire operating two drill rigs and the potential for additional drilling capacity to be allocated in the coming weeks, Talisman will continue to provide updates as relevant information comes to hand from Sandfire. ENDS For further information, please contact: Gary Lethridge – Managing Director on +61 8 9380 4230 For media inquiries, please contact: Nicholas Read – Read Corporate on +61 419 929 046 Table 1 – Drill-hole Information Summary, Springfield Project Details and co-ordinates of the historical drill-hole SPD021 and recent drill holes completed by Sandfire at the Springfield Project, TLDD0001, TLDD0002A, TLDD0003 and TLDD0004A, together with details of step-out drillholes TLDD0005 and TLDD0006, the new diamond drill hole TLDD0007 and RC holes TLRC0004 and TLRC0005 are provided below: Hole ID Depth Dip Azimuth Grid_ID East North RL Lease ID Hole Status SPD021 553 -60° 180° MGA94_50 743598 7171437 598 E52/2282 Complete TLDD0001 1099 -62° 357° MGA94_50 740146 7174149 589 E52/2313 Complete TLDD0002A 463 -61° 110° MGA94_50 743544 7171211 602 E52/2282 Complete TLDD0003 658 -62° 355° MGA94_50 740596 7174550 589 E52/2313 Complete TLDD0004A 817 -60° 148° MGA94_50 743588 7171281 601 E52/2282 Complete TLDD0005 478 -62° 139° MGA94_50 743544 7171211 602 E52/2282 Complete TLDD0006 554 -62° 138° MGA94_50 743479 7171160 602 E52/2282 Complete TLRC0004 306 -62° 143° MGA94_50 743497 7171025 605 E52/2282 Complete TLRC0005 306 -62° 138° MGA94_50 743321 7170993 602 E52/2282 Complete TLDD0007 Ongoing -62° 138° MGA94_50 743505 7171271 602 E52/2282 In Progress Monty Prospect Drilling Update Figure 1: Talisman’s Doolgunna Copper-Gold Projects subject to the $15M Exploration Farm-In Joint Venture with Sandfire Resources NL Figure 2 – Plan view showing location of recent exploration diamond and RC drilling relative to the DeGrussa Copper Mine. Monty Prospect Drilling Update Competent Person’s Statement Information in this ASX release that relates to Exploration Results and Mineral Resources is based on information compiled by Mr Graham Leaver, who is a member of the Australian Institute of Geoscientists. Mr Leaver is a full time employee of Talisman Mining Ltd and has sufficient experience which is relevant to the style of mineralisation and types of deposit under consideration and to the activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australian Code for Reporting of Mineral Resources and Ore Reserves”. Mr Leaver consents to the inclusion in this report of the matters based on information in the form and context in which it appear. Monty Prospect Drilling Update Appendix 1 - JORC TABLE 1 Section 1 Sampling Techniques and Data (Criteria in this section apply to all succeeding sections) Criteria JORC Code explanation Commentary Sampling techniques  Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down-hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.  Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.  Aspects of the determination of mineralisation that are Material to the Public Report.  In cases where ‘industry standard’ work has been done this would be relatively simple (e.g. ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.   Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, facesampling bit or other type, whether core is oriented and if so, by what method, etc).  Sandfire diamond drilling is completed using NQ2 size coring equipment.   All drill collars are surveyed using RTK GPS. All core, where possible is oriented using a Reflex ACT II RD orientation tool. Downhole surveying is undertaken using a gyroscopic survey instrument. Drilling techniques      The sampling method employed by Sandfire i s half-core sampling of NQ2 core from diamond drilling (DD) Sampling is guided by Sandfire protocols as per industry standard. Sample size reduction is through a Jaques jaw crusher to -10mm and all samples are Boyd crushed to -4mm and pulverised via LM5 to nominal 90% passing -75µm using wet sieving technique. Samples are assayed using Mixed 4 Acid Digest (MAD) 0.3g charge and MAD Hotbox 0.15g charge methods with ICPOES or ICPMS. Fire Assay is completed by firing 40g portion of the sample with ICPMS finish. Monty Prospect Drilling Update Drill sample recovery  Method of recording and assessing core and chip sample recoveries and results assessed.  Measures taken to maximise sample recovery and ensure representative nature of the samples.  Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.     Logging Subsampling techniques and sample preparation  Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.  Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.  The total length and percentage of the relevant intersections logged.   If core, whether cut or sawn and whether quarter, half or all core taken.  If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.  For all sample types, the nature, quality and appropriateness of the sample preparation technique.  Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.  Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.  Whether sample sizes are appropriate to the grain size of the material being sampled.          Sandfire diamond core recovery is logged and captured into the database. Core recoveries are measured by drillers for every drill run. The core length recovered is physically measured for each run and recorded and used to calculate the core recovery as a percentage of core recovered. Appropriate measures are taken to maximise sample recovery and ensure the representative nature of the samples. This includes diamond core being reconstructed into continuous intervals on angle iron racks for orientation, metre marking and reconciled against core block markers. Samples are routinely weighed and the information captured into the central secured database. No sample recovery issues have impacted on potential sample bias Sandfire Geological logging is completed for all holes and is representative across the orebody. The lithology, alteration and structural characteristics of core are logged directly to a digital format following procedures, and using Sandfire NL geologic codes. Data is imported into Sandfire NL’s central database after validation in LogChief™. Logging is both qualitative and quantitative depending on field being logged. All cores are photographed. All drill holes are fully logged. Sandfire complete diamond core orientation where possible and all core is marked prior to sampling. Half core samples are produced using an Almonte Core Saw. Samples are weighed and recorded. All samples are sorted, dried at 80° for up to 24 hours and weighed. Samples are then crushed through a Jaques crusher to nominal -10mm. A second stage crushing is through a Boyd crusher to nominal -4mm. Sample splits are weighed at a frequency of 1:20 and entered into the job results file. Pulverising is completed using LM5 mill to 90% passing 75%µm using wet sieving technique. 1:20 grind quality checks are completed for 90% passing 75%µm criteria to ensure representativeness of sub-samples. Sampling is carried out in accordance with Sandfire protocols as per industry best practice. No field duplicates have been taken. The sample sizes are considered appropriate for VHMS and Gold mineralisation types. Monty Prospect Drilling Update Quality of assay data and laboratory tests  The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.  For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation,etc.  Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.     Verification of sampling and assaying  The verification of significant intersections by either independent or alternative company personnel.  The use of twinned holes.  Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.  Discuss any adjustment to assay data.     Samples are assayed using Mixed 4 Acid Digest (MAD) 0.3g charge and MAD Hotbox 0.15g charge methods with ICPOES or ICPMS. The samples are digested and refluxed with a mixture of acids including Hydrofluoric, Nitric, Hydrochloric and Perchloric acids and analysis conducted for multi elements including Cu, Pb, Zn, Ag, As, Fe, S, Sb, Bi, Mo, Re, Mn, Co, Cd, Cr, Ni, Se, Te, Ti, Zr, V, Sn, W and Ba. The MAD Hotbox method is an extended digest method that approaches a total digest for many elements however some refractory minerals are not completely attacked. The elements S, Cu, Zn, Co, Fe, Ca, Mg, Mn, Ni, Cr, Ti, K, Na, V are determined by ICPOES, and Ag, Pb, As, Sb, Bi, Cd, Se, Te, Mo, Re, Zr, Ba, Sn, W are determined by ICPMS. Samples are analysed for Au, Pd and Pt by firing a 40g of sample with ICP AES/MS finish. Lower sample weights are employed where samples have very high S contents. This is a classical FA process and results in total separation of Au, Pt and Pd in the samples. The analytical methods are considered appropriate for this mineralisation styles. No geophysical tools are used in the analysis. Sandfire DeGrussa QAQC protocol is considered industry standard with standard reference material (SRM) submitted on regular basis with routine samples. SRMs and blanks are inserted at a minimum of 5% frequency rate. Significant intersections have been verified by alternate Sandfire personnel. No twinned holes are being drilled as part of this programme. Primary data is captured on field Toughbook laptops using Logchief™ Software. The software has validation routines and data is then imported into a secure central database. The primary data is always kept and is never replaced by adjusted or interpreted data. Monty Prospect Drilling Update Location of data points  Accuracy and quality of surveys used to locate drill holes (collar and down- hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.  Specification of the grid system used.  Quality and adequacy of topographic control.       Data spacing and distribution  Data spacing for reporting of Exploration Results.  Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.  Whether sample compositing has been applied.      The Sandfire Survey team undertakes survey works under the guidelines of best industry practice. All drill collars are accurately surveyed using RTK GPS system within +/-50mm of accuracy (X, Y, Z). Coordinates are based on control previously established by MHR Surveyors which was derived by ties into the Government SSM/BM network. Downhole surveys are completed by gyroscopic downhole methods at regular intervals. Coordinate and azimuth are reported in MGA 94 Zone 50. Topographic control was established from aerial photography using a series of 33 surveyed control points. TLDD0004A was the first drill hole to intersect the modelled EM plate. TLDD0005 has intersected massive sulphide mineralisation approximately 70 metres along strike to the south-west from the massive sulphide mineralisation intersected in drill hole TLD0004A. TLRC0004 has intersected massive sulphide mineralisation approximately 135 metres along strike to the south-west from the massive sulphide intersection reported in TLDD0005. It is not possible to make any conclusion regarding sample spacing and distribution. No sample compositing has been applied to these exploration results.  Sample security  Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.  If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.  The measures taken to ensure sample security.  Sandfire ensures appropriate security measures are taken to dispatch samples to the laboratory. Chain of custody of samples is being managed by Sandfire Resources NL. Samples are stored onsite and transported to laboratory by a licence transport company in sealed bulka bags. The laboratory receipts received samples against the sample dispatch documents and issues a reconciliation report for every sample batch. Audits or reviews  The results of any audits or reviews of sampling techniques and data.  Sandfire have not completed any external audits or reviews of the sampling techniques and data Orientation of data in relation to geological structure  No significant orientation based sampling bias is known at this time. Drill holes are oriented to intersect a modelled EM plate and/or interpreted stratigraphy. The drill holes may not necessarily be perpendicular to the orientation of the intersected mineralisation. All reported intervals are downhole intervals, not true widths. Monty Prospect Drilling Update Section 2 Reporting of Exploration Results (Criteria in this section apply to all succeeding sections) Criteria JORC Code explanation Commentary Mineral tenement and land tenure status  Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.  The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.  Diamond and RC drilling by Farm-in Partner Sandfire is on tenements E52/2313 and E52/2282. Tenements E52/2282, E52/2313 and E52/2466 form Talisman’s 100% owned Springfield Project, 150km north-east of Meekatharra, WA. Sandfire is currently farming into the project on a staged basis with the right to earn 70% interest in the project Exploration done by other parties  Acknowledgment and appraisal of exploration by other parties. Geology  Deposit type, geological setting and style of mineralisation.   All tenements are current and in good standing. The Talisman tenements are currently subject to a Native Title Claim by the Yungunga-Nya People (WAD6132/98). Sandfire currently has a Land Access Agreement in place with the Yungunga-Nya Native Title Claimants and have assumed management of Heritage Agreements which were executed by Talisman. These agreements allow Sandfire to carry out mining and exploration activities on their traditional land.  Aside from Sandfire Resources and Talisman Mining Limited there has been no recent exploration undertaken on the Talisman Project. Historic exploration work at Springfield completed prior to Talisman’s tenure included geochemical soil and rock chip sampling combined with geological mapping. Some targeted RC drilling was completed over gold and diamond targets.    Talisman’s Doolgunna Project lies within the Proterozoic-aged Bryah rift basin enclosed between the Archaean Marymia Inlier to the north and the Proterozoic Yerrida basin to the south. The principal exploration targets at the Doolgunna Projects are Volcanogenic Massive Sulphide (VMS) deposits located with the Proterozoic Bryah Basin of Western Australia. Monty Prospect Drilling Update Drill hole Information  A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: o easting and northing of the drill hole collar o elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar o dip and azimuth of the hole o down hole length and interception depth o hole length.  Refer to Table 1 of this document – Drillhole Information Summary, Springfield Project. If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case. Data aggregation methods Relationship between mineralisation widths and intercept lengths  In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades are usually Material and should be stated.  Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.  The assumptions used for any reporting of metal equivalent values should be clearly stated.   These relationships are particularly important in the reporting of Exploration Results.  If the geometry of the mineralisation with respect to the drill-hole angle is known, its nature should be reported.  If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’).         Significant intersections are based on greater than 0.5% Cu and may include up to a maximum of 3.0m of internal dilution, with a minimum composite grade of 1.0% Cu. Cu grades used for calculating significant intersections are uncut. Reported intersections are based on a regular sample interval of 1m or 5m composites in regular drilling subject to location of geological boundaries. Minimum and maximum sample intervals used for intersection calculation are 0.3m and 1.2m respectively. No metal equivalents are used in the intersection calculation. Where core loss occurs; the average lengthweighted grade of the two adjacent samples are attributed to the interval for the purpose of calculating the intersection. The maximum interval of missing core which can be incorporated with the reported intersection is 1m. Downhole intercepts of mineralisation reported in this release are from a drill hole orientated perpendicular to a modelled EM plate. The drill hole may not necessarily be perpendicular to the mineralised zone. All widths reported are downhole intervals. The geometry of the mineralisation, relative to the drill hole, is unknown at this stage. All intersections reported in this release are downhole intervals. True widths are not known. Monty Prospect Drilling Update Diagrams  Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.  Appropriate maps with scale are included within the body of the accompanying document. Balanced reporting  Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.  The accompanying document is considered to represent a balanced report. Other substantive exploration data  Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.  Other exploration data collected is not considered as material to this document at this stage. Further data collection will be reviewed and reported when considered material. Further work  The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale stepout drilling).  Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.  Sandfire have indicated to TLM that additional down hole geophysics (DHEM) and drilling will occur to define the extent of the intersected mineralisation