Sandfire Resources NL : TLM: Monty Exploration Update

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F o c u s e d A u s t r a l i a n M i n e r a l E x p lo r a t i o n C o m p a n y

20th January 2016

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 Telephone:

[phone]

Facsimile:

+ 61 8 9382 8200

Email:

[e-mail]

Website:

www.talismanmining.com.au

Capital Structure

Shares on Issue:

148,559,904 (TLM)

Options on Issue:

6,400,000 (Unlisted)

ASX: TLM

LATEST DRILLING AT MONTY RETURNS GRADES OF UP TO 36% COPPER, EXTENDING HIGH-GRADE BORNITE ZONE

New results from resource drilling include an exceptional intersection of 14.9m grading 36.7% copper within a broader intercept of 25.8m grading 24.1% copper

Highlights

• The high-grade Monty copper-gold discovery continues to emerge as a significant discovery, with the latest drilling returning spectacular results.

  
  

• The latest hits of up to 36% copper extend the known mineralisation within the exceptionally high-grade bornite zone significantly both up-dip and along strike.

  
  

• Significant new intercepts in the interpreted bornite zone include (down-hole widths, not true widths):

  TLDD0061

  • 25.8 metres grading 24.1% Cu and 0.5g/t Au from 299.0m down-hole,

    Including 14.9 metres grading 36.7% Cu and 0.4g/t Au from 309.0m down-hole.

    TLDD0036

  • 9.6 metres grading 14.1% Cu and 1.5g/t Au from 292.3m down-hole

    
    

• TLDD0061 has extended the bornite zone ~22 metres up-dip from the previously reported intercept in TLDD0026 (21.6m at 34.4% Cu and 0.4g/t Au), while TLDD0036 has extended it ~43 metres to the north-east along strike from TLDD0026.

  
  

• Drilling continues to support initial interpretations of the Monty mineralisation with the overall program on track to generate a maiden JORC resource estimate by the end of the March 2016 Quarter.

  
  

• Other significant new intercepts from recent in-fill drilling targeting the lower massive sulphide zone include:

  TLDD0040

  • 5.0 metres grading 9.8% Cu and 2.9g/t Au from 334.7m downhole

    
    

    TLDD0042

  • 20.8 metres grading 14.9% Cu and 1.3g/t Au from 372.7m down-hole

    
    

    TLDD0043

  • 11.3 metres grading 6.7% Cu and 2.9g/t Au from 392.2m down-hole

    
    

    TLDD0046

  • 13.9 metres grading 7.2% Cu and 2.3g/t Au from 332.7m downhole

    
    

• Drilling of the Homer Trend has re-commenced with an initial diamond hole completed targeting the C5 host stratigraphic horizon along strike from DeGrussa.

  Talisman Mining Limited (ASX: TLM) is pleased to provide an update on resource drilling and exploration activities being conducted by its joint venture partner, Sandfire Resources NL (ASX: SFR; "Sandfire"), at the Springfield Project in WA including latest results from the Monty copper-gold discovery, located 10km east of Sandfire's DeGrussa Copper-Gold Mine.

  
  

  The latest information provided by Sandfire includes significant new thick high-grade intercepts which have extended the previously identified bornite-rich zone both up-dip and along strike, as well as further high-grade results from ongoing in-fill drilling targeting the lower massive sulphide zone.

  
  

  Talisman considers the latest results to be extremely encouraging, reinforcing the significance of the Monty discovery as one of the most important new high-grade copper discoveries in Australia.

  
  

  The collar locations of holes drilled to date by Sandfire for which assay results have been received are shown in the plan view diagram below (see Figure 1) and in Table 1.

  Figure 1: Plan view of Monty showing drill-hole collar locations of holes drilled to date for which assay results have been received and simplified interpreted geology.

  
  

  Monty Resource Definition Drilling Update

  
  

  Sandfire has advised that diamond drilling resumed at Monty in early January and is continuing with four diamond drill rigs operating on a double shift basis and one Reverse Circulation drill rig operating on a single shift.

  
  

  Since the last Monty exploration update (see Talisman ASX Announcement - 17 December 2015 Monty Exploration Update), approximately 4,310m of drilling has been completed. This drilling has focused on resource definition within the lower massive sulphide zone to generate sufficient information to support an initial mineral resource estimate for Monty, which Talisman understands to be on track to be completed by the end of the March 2016 Quarter.

  As noted in the ASX release on 17 December a back log had developed with respect to the processing and dispatch of diamond drill core from Monty to the assay laboratory for analysis as a result of the accelerated resource definition drilling in the last quarter of the 2015 calendar year. As such there were a significant number of assay results for recently completed holes that remained outstanding at that time. Since December 2015 substantial progress has been made in clearing this backlog, however with the level of drilling activity taking place at Monty a number of results remain pending.

  
  

  Significant Extensions of Mineralisation to Monty Bornite Zone

  
  

  Of particular note are drill holes TLDD0061 and TLDD0036, which have intersected massive sulphides containing bornite mineralisation both up-dip and along strike from the previously reported high-grade bornite- rich intersections in TLDD0026 (7.3m grading 6.2% Cu and 2.8g/t Au from 325.6m down-hole and 21.6m grading 34.4% Cu and 0.4g/t Au from 339.4m down-hole).

  
  

  TLDD0061, which is located approximately 22 metres up-dip of TLDD0026, reflecting an apparent flattening of the dip of the mineralisation in this area, has returned the following intersections:

  
  

  • 1.6 metres grading 7.9% Cu and 2.5g/t Au from 227.0m - 228.6m

    (down-hole width, top of intercept is 199m vertically below surface);

    
    

  • 1.5 metres grading 7.2% Cu and 0.2g/t Au from 231.0m - 232.5m

    (down-hole width, top of intercept is 202m vertically below surface);

    
    

  • 1.4 metres grading 3.5% Cu and 0.1g/t Au from 273.6m - 275.0m

    (down-hole width, top of intercept is 241m vertically below surface); and

    
    

  • 25.8 metres grading 24.1% Cu and 0.5g/t Au from 299.0m - 324.8m

    (down-hole width, top of intercept is 263m vertically below surface), including:

    
    

    • 14.9 metres grading 36.7% Cu and 0.4g/t Au from 309.0m - 323.9m, including a bornite rich zone containing:

      o 8.5 metres grading 41.8% Cu and 0.5 g/t Au from 315.4m - 327.9m.

      
      

      TLDD0036, which is located approximately 43 metres to the north-east along strike from the TLDD0026, returned the following intersections:

      
      

  • 1.1 metres grading 3.8% Cu and 0.7g/t Au from 260.3m - 261.4m

    (down-hole width, top of intercept is 231m vertically below surface);

    
    

  • 9.6 metres grading 14.1% Cu and 1.5g/t Au from 292.3m - 301.9m

    (down-hole width, top of intercept is 258m vertically below surface);

    
    

  • 1.1 metres grading 1.2% Cu and 0.4g/t Au from 305.4m - 306.5m

    (down-hole width, top of intercept is 269m vertically below surface);

    
    

  • 3.9 metres grading 5.6% Cu and 1.4g/t Au from 312.2m - 316.1m

    (down-hole width, top of intercept is 275m vertically below surface); including a bornite rich zone containing:

    o 0.4 metres grading 38.1% Cu and 0.2g/t Au from 315.1m - 315.5m; and

  • 0.6 metres grading 1.8% Cu and 0.3g/t Au from 320.0m - 320.6m

(down-hole width, top of intercept is 282m vertically below surface).

The interpreted bornite zone identified in three drillholes to date is a sub zone of the Monty Lower mineralisation that contains both Bornite and Chalcopyrite sulphide mineral species. The recent results add significantly to the potential for the Bornite Zone to represent a significant zone of exceptionally high grade copper mineralisation.

Other Significant Results - Lower Massive Sulphide Zone

A number of significant intercepts continue to be generated by the resource in-fill drilling program, with some of the more notable recent assays including:

TLDD0040 5.0 metres grading 9.8% Cu and 2.9g/t Au from 334.7m - 339.7m

(down-hole width, top of intercept is 298m vertically below surface);

TLDD0042 20.8 metres grading 14.9% Cu and 1.3g/t Au from 372.7m - 393.5m

(down-hole width, top of intercept is 314m vertically below surface);

TLDD0043 11.3 metres grading 6.7% Cu and 2.9g/t Au from 392.2m - 403.5m

(down-hole width, top of intercept is 344m vertically below surface); and

TLDD0046 13.9 metres grading 7.2% Cu and 2.3g/t Au from 332.7m - 346.56m

(down-hole width, top of intercept is 285m vertically below surface).

Figure 2: Vertical Longitudinal Projection and initial interpretation of the Monty Prospect with drill-hole pierce points at the top of the primary intercept shown in bold. All intercepts are down-hole widths. A significant intersection is defined here as any intersection ≥ 3m estimated true width that has a grade of ≥ 2.0 % Cu, inclusive of non-mineralised material. To determine whether intersections that are 2.0% Cu, with the non-mineralised material included, then the intersection is considered significant.

New intersections (not previously reported) are shown on the Vertical Longitudinal Projection. Refer to Table 1 and Table 2 for previously released results and new intersections.