Talon hits iron in fresh and weathered rock at Trairao

Vancouver – Talon Metals (TLO-T) has released a slew of drill results from its extensive 2011 exploration program, showing significant iron content in both weathered and fresh rock at its Trairao project in Brazil.

Diamond drilling on the fresh, unweathered banded iron formation unit showed long intervals of iron mineralization. In target area one, hole 14 hit 151.6 metres grading 28.17% iron from surface, hole 77 returned 258.9 metres carrying 21.69% iron from 133 metres depth, and hole 86 cut 101.4 metres averaging 28.72% iron from 146 metres depth. In area two hole 73 cut 141.3 metres grading 26.03% iron, and in area three hole 4 cut 97.6 metres carrying 22.77% iron. All of the highlighted holes ended in mineralization.

In areas one and two the unweathered banded iron formation unit is apparently folded and duplicated, while in area three there area two parallel units underlying the weathered rock.

Targeting the weathered mineralization, including surficial deposits, saprolite and saprock, diamond drilling was used largely to confirm earlier reverse circulation drilling and increase the drill density. The company will also use the core for metallurgical testing.

Results from the weathered part of area one include hole 50 that cut 89.2 metres averaging 46.2% iron and hole 29 that hit 100.8 metres carrying 41.22% iron. In area two, results included hole 43 that cut 72.9 metres averaging 42.57% iron and hole 46 that cut 87 metres carrying 40.09% iron, and in area three highlights included hole 4 that intersected 104.7 metres grading 41.13% iron and hole 62 that hit 116.6 metres carrying 38.82% iron. All intersections were from surface.

Talon reports that the diamond drilling showed comparable grades to the earlier RC drilling on the weathered mineralization, which extends from surface to between 54 and 200 metres depth.

The company also completed about 3,000 metres of RC drilling on its lower-priority areas 7, 9, 10, 11, 12, and 13, with results showing that they are indeed low priority with few intersection longer than 25 metres and generally low grades.

The positive results, however, were enough to propel Talon’s share price up 17¢ or 30.9% to 72¢ with 632,000 shares traded.

But the sharp gain was not enough to make up for the losses in the days before that followed news of Talon’s CEO Eddie Scholtz resigning. The company stated that Scholtz left because he needed to spend more time focusing on CIC Energy (ELC-T), where he is COO. Talon announced that Henri Van Rooyen would take the helm of Talon as CEO, who has been working with Tau Capital since 2000.

On the day news of the boardroom shuffle broke, the company’s share price dropped 12¢, and proceeded to drop a further 18¢ in the days between the announcement and the latest drill results. The drop was preceeded by an even faster rise the two days before, when the company’s share price shot up 32¢ in two days on no news to reach a share price level not seen since last September. All of the recent gains and losses are, however, relatively minor compared with the share price drop the company saw last year, going from a high of $3.14 in March 2011 to a low of 36¢ in October.

Talon plans to use the latest results to update the resource estimate on the weathered rock mineralization at Trairao, and the company is considering completing an initial resource on the fresh rock.

In November 2011 the company issued an initial resource on areas 4, 5, and 6 that came in at 103 million tonnes grading 29% iron using a 25% iron cut-off. The resource for areas 1, 2, and 3 currently stands at 1.1 billion tonnes grading 36% iron.

Talon also plans on having a pre-feasibility study out on the 516-sq.-km property by late 2012.