TALGA GROUP LTD — Capital/Financing Update 2013

Feb 28, 2013

1 MARCH 2013

ASX: TLG

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DRILLING UNDERWAY AT COARSE FLAKE GRAPHITE PROJECT, SWEDEN

• Diamond core drilling program at the Raitajärvi graphite project has commenced as planned.

Talga Resources Ltd ABN 32 138 405 419 1st Floor, 2 Richardson St, West Perth, WA 6005 T: +61 8 9481 6667 F: +61 8 9322 1935 www.talgaresources.com

• Drilling is targeting strike and depth extensions of the current JORC Inferred coarse flake graphite resource.

• Four drill holes have been completed to date, each of which have intercepted visible coarse flake graphite.

Talga Resources Limited (ASX: TLG; “Talga” or “the Company”) is pleased to report that drilling has commenced at its 100% owned Raitajärvi graphite deposit in north Sweden (Fig 1).

Corporate Information ASX Code TLG Shares on issue 54.40m Options (unlisted) 3.75m 52 week high A$0.77 52 week low A$0.15

Company Directors Sean Neary

Non-Executive Director & Chairman

Mark Thompson Managing Director

Piers Lewis

Non-Executive Director

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ASX Code: TLG

The drilling program (for details see ASX:TLG release 4[th] Feb 2013) is being undertaken to test for strike and depth extensions of the current JORC inferred flake graphite resource grading 10.8% Cg, which was based on historic drilling by the Geological Survey of Sweden . In addition, the drillcore will provide detailed geological, structural and metallurgical information to potentially fasttrack the deposit to preliminary economic studies.

Photo 1. Graphite flake visible in first Talga drillhole at Raitajärvi.

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Drilling

Graphite at Raitajärvi is hosted by a sequence of metasediments and schists. In the four holes completed to date, multiple zones of graphite up to 35m down hole width have been intersected. These holes are located up to 100m south of the current JORC resource, confirming the potential for a significant upgrade in resource size (see Fig 2) . The zones appear to compare favourably with those intersected in historic drilling within the resource area (see Table 1).

Managing Director, Mark Thompson said, “We are pleased to be drilling again in Sweden, with winter offering ideal conditions and diamond drilling being the fastest way to advance towards economic studies . We expect this phase of resource targeting to be completed by the end of March with assay results available for a new resource estimate within a further 4-6 weeks .

The historic work by the Geological Survey of Sweden (drilling and preliminary metallurgical studies) showed the graphite at Raitajärvi to be of large flake size and marketable carbon grades (see ASX:TLG release 4[th] Feb 2013) . With commercial aspects of the end product already well understood, our drilling focusses simply on an expansion of resource tonnes. We aim to identify a mine life of 10 years or more for this attractive coarse flake graphite deposit on the doorstep of the European market.”

For further information, please contact:

Talga Resources Ltd.

Mark Thompson Managing Director +61 (08) 9481 6667 admin@talgaresources.com

Photo 2. Talga staff and contractors preparing drillsite at Raitajärvi.

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Photo 3. Talga staff geologist logging new Raitajärvi core.

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Media:

Warrick Hazeldine/Greg Galton Cannings Purple +61 (08) 6314 6300 whazeldine@canningspurple.com.au ggalton@canningspurple.com.au

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ASX: TLG

ABOUT TALGA RESOURCES

Talga Resources ( Talga ) (ASX: “TLG”) is a diversified mineral explorer and developer with a portfolio of 100% owned graphite, iron, copper and gold projects in Sweden and Western Australia.

Graphite

Talga wholly owns multiple advanced and high grade graphite projects in the Kiruna Mineral District of northern Sweden. The immediate focus is to advance these projects towards development, utilising the advantages of established quality infrastructure including power, road, rail and ports. Initially this will entail economic studies on the JORC Indicated and Inferred 7.6Mt @ 24.4% Cg Nunasvaara resource and upgrading of the size and status of the Raitajärvi graphite Inferred resource.

Iron

Talga owns multiple JORC compliant iron resources and exploration targets located in the Kiruna mineral district. The iron ore deposits are of significant scale and strategic importance, with considerable growth upside based on historic drilling. Talga’s strategy is to commercialise these assets to provide funds for the graphite projects.

Gold

Talga owns multiple high grade gold projects located in the Yilgarn and Pilbara regions of Western Australia. Additionally the Company owns several copper-gold projects within its Sweden portfolio.

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Fig 1. Talga Resources project locations in north Sweden.
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Competent Person’s Statement

The information in this report that relates to Exploration Results is based on information compiled and reviewed by Mr Darren Griggs and Mr Mark Thompson, who are members of the Australian Institute of Geoscientists . Mr Griggs and Mr Thompson are employees of the Company and have sufficient experience which is relevant to the activity to which is being undertaken to qualify as a "Competent Person" as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (“JORC Code”) . Mr Griggs and Mr Thompson consent to the inclusion in the report of the matters based on this information in the form and context in which it appears.

The information in this report that relates to Resource Estimation is based on information compiled and reviewed by Mr Simon Coxhell. Mr Coxhell is a consultant to the Company and a member of the Australian Institute of Mining and Metallurgy. Mr Coxhell has sufficient experience relevant to the styles of mineralisation and types of deposits which are covered in this document and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (“JORC Code”). Mr Coxhell consents to the inclusion in this report of the matters based on this information in the form and context in which it appears.

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ASX: TLG

Fig 2. Plan of central part of Talga’s Raitajärvi graphite project showing graphite intercepts in drilling and trenches outside the current JORC resource using lower cut-off 5%Cg. Phase 1 drilling area subject to drilling Feb-March 2013.

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A190004
A192008
A192006
A192005
A189001
A191002
A191001
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ASX: TLG

Table 1. Historical diamond drill sampling results at Raitajärvi, selected where interval >5%Cg and including internal waste.

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East North Collar RL EOH From To Interval Grade
Hole ID Azi Dip
(RT90) (RT90) (m) (m) (m) (m) (m) %Cg
AI91001 1826154 7392824 110 105 -50 71 46.5 47.7 1.2 8.3
AI91002 1826067 7392848 106 105 -50 81 33.0 34.5 1.5 12.9
70.0 74.6 4.7 8.5
AI91003 1826207 7393209 120 105 -50 69 14.1 15.2 1.1 9.3
22.9 55.8 33.0 10.6
63.6 65.5 1.9 8.9
AI91004 1826188 7393214 117 105 -50 61 25.7 53.0 27.3 10.6
AI91005 1826241 7393298 126 105 -50 93 45.5 48.2 2.8 7.5
59.5 68.0 8.5 8.2
AI91006 1826320 7393360 136 105 -50 84 45.0 46.8 1.8 5.7
54.8 57.4 2.6 6.8
AI91008 1826189 7393105 114 105 -50 77 10.7 12.8 2.1 8.2
13.6 15.0 1.4 5.4
32.6 58.0 25.4 8.2
AI91009 1826196 7393165 117 105 -50 83 8.6 47.4 38.8 8.0
60.8 64.2 3.4 7.3
AI92001 1826189 7393136 115 105 -45 57 10.0 15.4 5.4 7.9
23.0 49.0 26.0 7.3
51.0 52.9 1.9 5.5
55.0 56.9 1.9 6.0
AI92002 1826239 7393247 126 105 -45 55 6.3 9.2 2.9 15.3
15.9 44.7 28.9 14.2
AI92003 1826272 7393290 130 105 -45 45 8.6 10.5 2.0 6.4
12.2 21.3 9.1 5.9
AI92004 1826343 7393353 140 105 -45 45 20.3 21.5 1.3 5.0
AI92005 1826359 7393390 142 105 -45 53 19.4 20.4 1.0 5.6
AI92006 1826421 7393540 146 105 -45 36 14.3 19.2 4.9 9.6
AI92008 1826394 7393589 139 105 -45 53 27.0 30.9 3.9 5.5
AI92009 1826253 7393269 127 105 -45 51 16.7 19.2 2.5 13.5
37.0 42.2 5.2 9.4
AI92010 1826225 7393251 123 105 -45 67 16.8 19.1 2.3 11.3
42.7 44.0 1.4 13.5
50.4 61.8 11.5 14.1
AI92011 1826222 7393226 121 105 -45 52 11.4 45.8 34.4 9.9
47.7 49.2 1.5 5.9
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Note.

Historical diamond drill sampling conducted by SGU. Graphitic carbon assay by LECO detector.

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