TALGA GROUP LTD — Capital/Financing Update 2013

Feb 3, 2013

ASX: TLG

4 FEBRUARY 2013

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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

TALGA TO COMMENCE DRILLING RAITAJÄRVI COARSE FLAKE GRAPHITE PROJECT

• Maiden 3,800m diamond core drilling programme at the Raitajärvi graphite project scheduled to commence in February 2013.

• Targeting increase in size and classification of current JORC flake graphite resource that includes 49% large to jumbo size flake.

• New resource estimate will allow scoping studies to commence on targeting potential 10 year minelife operation

The board of Talga Resources Limited (“Talga”) is pleased to announce its approval of a 31 drill hole program comprising 3,800m diamond drilling at its 100% owned Raitajärvi coarse flake graphite deposit in north Sweden (see 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$0.12

Site environmental surveys and stakeholder approvals have been completed and work permits received . Talga’s field staff have mobilised to Sweden to join the Company’s local staff for drilling scheduled to commence on February 15.

Photo 1. Coarse flake graphite exposed in historic surface trench at Raitajärvi.

Company Directors

Sean Neary

Non-Executive Director & Chairman

Mark Thompson Managing Director

Piers Lewis

Non-Executive Director

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ASX Code: TLG

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Historical Exploration at Raitajärvi

Fig 1. Location map showing Talga’s mineral projects in Sweden.

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The Raitajärvi project contains graphite mineralisation defined by historic work including mapping, trenching, geophysical surveys and diamond drilling conducted primarily by the geological survey of Sweden (SGU).

In 1974-78 SGU geophysics defined three large (6.0 x 1.5km) elongate conductors. Trenching over the anomalies revealed coarse flake graphite at surface, suggesting potential for open-pit style development .

The SGU completed 20 diamond drill holes (1,791m) in 1990-91 along with microscopy and enrichment tests . Both the drilling and trench samples were only selectively assayed. Most drilling was constrained to the western limb of the three anomalies. Although graphite was confirmed in the adjacent central and eastern anomalies, they were not followed up at the time.

Fig 2. Graphite flake size distribution (historic drill sample microscopy, n=87)

In 2012 Talga used the historic drilling to define an initial JORC Inferred resource of 0.5Mt @ 10.8% graphite (“Cg”), calculated over approximately 300m strike and to 70m depth. The resource is open both along strike and at depth .

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<0.1mm (ultrafine-fine flake)
0.1-0.2mm (fine - large flake)
0.2-0.4mm (large - jumbo flake)
>0.4mm (jumbo flake and above)
11% 13%
38%
38%
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The remainder of 3,000m of strike is yet to be comprehensively tested. The widths and grades of graphite detected outside the current resource highlight the potential for a significant increase in the size of the resource (see Table 1-2).

Coarse Flake Graphite

The SGU and local universities conducted preliminary microscopy of flake size distribution (n=87) . Graphite flake size was predominantly coarse with a maximum size of 1.2mm and 11% of the samples >0.4mm (40 mesh, jumbo flake). 49% of the samples measured >0.1mm (80 mesh, large flake) . See Fig 2 and Appendix 2 for details.

Benchtop beneficiation tests of the flake graphite resulted in concentrate with a carbon content of 90-93%C using unoptimised simple flotation . Enrichment tests of this concentrate showed excellent results with a

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final concentrate grade of 99%C, a purity of graphite in high demand for the growing lithium-ion battery markets.

Strategy

Talga aims to capitalise on its strengths which include owning multiple graphite resources in a stable mining jurisdiction, and the location synergies of potential shared processing infrastructure. In addition, the complete product suite of graphite flake sizes available from Talga’s deposits will allow the company to take advantage of multiple market segments.

The advanced status of the Raitajärvi deposit (resource in place with preliminary metallurgical testwork completed), the nature of the product (predominant large flake with significant jumbo size that attracts market premiums) and the scope to significantly increase the size of the resource makes the upcoming drilling program at Raitajärvi a priority . Moreover, historic investigations of Raitajärvi graphite concentrates by the SGU indicated broadly similar grade, flake size distribution and carbon purity as the Woxna deposits in central Sweden, currently in re-development by Flinders Resources (TSXV:FDR).

Next Steps

Talga’s Phase 1 drill program aims to define a deposit with potential 10 year mine life (See Fig 3). It is anticipated the drilling program will take approximately eight weeks to complete and samples will be sent in batches to the ALS-Chemex laboratory in Sweden for processing . Talga would expect results to start becoming available in Q2 with positive results enabling an new resource estimate in Q3.

The Raitajärvi drilling results and impact on the resource base will drive the decision to incorporate the data into a scoping study which contemplates economics based upon shared processing facilities between Nunasvaara and Raitajärvi.

For further information, please contact:

Talga Resources Ltd.

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

Media:

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

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Fig 3. 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 commencing Feb 2013.

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A190004
A192008
A192006
A192005
A189001
A191002
A191001
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Table 1. Historical trench sampling results at Raitajärvi,

selected where interval >5%Cg and located outside the current JORC resource.

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East North Collar RL From To Interval Grade
Trench ID Azi Dip [Trench length]
(RT90 2.5) (RT90 2.5) (m) (m) (m) (m) (m) %Cg
AI89001 1826173 7393200 115 105 5 358 47 52 5 9.4
80 90 10 8.5
128 132 4 21.8
204 211 7 7.2
303 312 9 10.3
AI90004 1826387 7393769 130 105 4 90 20 22 2 6
26 30 4 6
33 54 21 5.1
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Table 2. Historical diamond drill sampling results at Raitajärvi,

selected where interval >5%Cg and located outside the current JORC resource.

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East North Collar RL EOH From To Interval Grade
Trench ID Azi Dip
(RT90 2.5) (RT90 2.5) (m) (m) (m) (m) (m) %Cg
AI91001 1826112 7392818 110 105 -50 71 46.5 47.7 1.2 8.3
AI91002 1826025 7392841 106 105 -50 81 33.0 34.5 1.5 12.9
70.0 74.6 4.7 8.5
AI92005 1826315 7393384 142 105 -45 52.5 19.4 20.4 1.0 5.6
AI92006 1826376 7393534 146 105 -45 36 14.3 19.2 4.9 9.6
AI92008 1826348 7393583 139 105 -45 53 27.0 30.9 3.9 5.5
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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 multiple graphite 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 advance the iron ore projects with further drilling to attain larger JORC resources before considering options to commercialise these assets, either in their own right or in conjunction with other parties.

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.

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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