TALGA GROUP LTD — Interim / Quarterly Report 2014

Apr 30, 2014

ASX: TLG

30 APRIL 2014

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~~TALGA~~ R E S O U R C E S

QUARTERLY ACTIVITIES REVIEW For the period ending 31 March 2014

SUMMARY

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

Corporate Information ASX Code TLG Shares on issue 105.1m Options (unlisted) 3.75m

Talga Resources Ltd ( ASX: TLG ) (“ Talga ” or “ the Company ”) is pleased to summarise activities for the quarter ending 31 March 2014, a period considered to be transformational for the Company, with a host of key milestones achieved, including:

• A well supported capital raising despite market conditions.

• Exceptional graphene test results with profound potential development benefits for the Company’s 100%-owned Nunasvaara graphite project in north Sweden.

• Development of a unique pathway to dual graphite/graphene production of a calibre to attract sustained stakeholder and market interest.

• Significant copper-gold project results from Swedish “IOCG” project, enhancing the earlier announced divestment process for this asset.

• Divestment of gold and iron ore projects substantially underway with new focus on value.

Company Directors Keith Coughlan Non-Executive Chairman

Mark Thompson Managing Director

• Cash position and Board change focusses Talga to continue to emerge over next period as well placed graphite/graphene developer with unique commercial possibilities in an arena attracting substantial government and private sector backing globally.

Fig 1. Talga Resources project locations in north Sweden.

Grant Mooney Non-Executive Director

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ASX Code: TLG

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Talga’s work during the period focussed on testwork of ore from its flagship graphite deposits in Sweden, and the ongoing divestment of non-core assets in both Sweden and Western Australia. The results of the graphite and graphene testwork continue to position and strengthen Talga’s seat among the leading pool of emerging high grade suppliers now being increasingly recognised by the global resources investment market and government-backed research institutions as presenting the earliest and optimal opportunities to deliver the grade, quality and security of supply needed to meet the evolving new graphite and graphene based products emerging from European and Asian industrial giants.

SWEDEN GRAPHITE PROJECTS

Talga wholly owns five graphite projects located in the Fennoscandian Shield of northern Sweden, a historic graphite producing area of Europe. Work by Talga has defined two significant graphite JORC (2004) Resources[1] at the Nunasvaara and Raitajärvi graphite projects (see Fig 1 for location and Appendix 1 for resource details).

Fig 2. Talga Resources Nunasvaara graphite project.

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Vittangi Graphite Project - Nunasvaara Deposit (Talga 100%)

Nunasvaara is the highest grade graphite resource in the world defined under JORC or NI43-101 codes (Ref: Technology Metals Research Advanced Graphite Projects Index, updated 10 December 2013) and is favourably located 3 km from a sealed highway and 20 km from rail (see Fig 2 and 4) direct to major graphite and graphene markets in Europe. The project’s JORC resource[1] estimate totals 7.6 million tonnes at 24.4% graphite (“Cg”) (see Appendix 1 and ASX:TLG 8 November 2012) and less than 10% of the mapped outcropping graphite unit has been drilled to date (see ASX:TLG 15 November 2012).

Fig 3 Schematic of TLG ore-tographene route versus others.

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RAW
GRAPHITE
ORE
CRUSH
TALGA
R E S O U R C E S
GRIND
RAW
GRAPHITE
ORE
FLOTATION
PROCESS 1-5 STEPS
1 STEP
GRAPHENE CONCENTRATE
PURIFY
1-5 STEPS
MIX / BIND
ELECTRODE
PROCESS
1-16 STEPS
GRAPHENE
----- End of picture text -----

Metallurgical work commenced during the period to enable completion of a preliminary economic (scoping) study of the Nunasvaara graphite deposit. This included a program of work with the nanotechnology arm of the University of Adelaide (see ASX:TLG 17 January 2014) to characterise graphite and graphene potential of the deposit using different processes. The work was completed and results reported during the period (see ASX:TLG 19 February 2014).

It was demonstrated that comminution of Nunasvaara ore to liberate it’s graphite can be achieved using an electric current and without any need for crushing, grinding or other physical types of milling.

Additionally it was demonstrated that extremely high quality graphene was also rapidly produced directly from the raw unprocessed ore in the same single step process that liberates the graphite. The graphene is produced without leaching, sonication or purification and therefore retains a pristine state of high quality. The Company understands that this is the only example globally where mined, unprocessed ore can be converted directly into graphite and graphene in a true 1-step process.

The testwork reported that Nunasvaara’s graphite and impurities are easily separated from the graphene in the process and concluded, after comparison of the Nunasvaara graphene Raman spectra to those from other methods, that “the quality of the prepared graphene is outstanding and comparable with (that made from) the synthetic graphene routes”. In characterising Nunasvaara graphite, it was noted that the “ore has extraordinary physical properties…not

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observed in any previously tested graphite material”.

The process method has been widely published and used in producing graphene for other researchers and groups globally. However, the graphite material they use as a start point is processed and/or purified. Talga’s unique economic advantage is that the Nunasvaara ore performs ‘straight from the ground’ like a purified product. This likely forms the pathway to Talga enjoying a vastly different production and capital cost structure compared to other producers globally, and represents a paradigm shift in the production outlook for bulk graphene (see Fig 3).

Further metallurgical work will focus on using Nunasvaara’s unique ore characteristics to include a low-cost graphene production option for the deposit. Initially this entails upscaling the work and defining the graphene to graphite yields, graphite recovery options and broad engineering requirements. Results will provide refined economic inputs and allow completion of the economic scoping study which is underway using Entech and other contractors in Perth.

Raitajärvi Graphite Project (Talga 100%)

The historically defined metallurgical profile of the Raitajärvi ore shows a typical pathway for the production of large flake graphite concentrates via crush/grind/flotation recovery. This bodes well for consideration of the project to be a potential large flake graphite producer in the future. However, the deposit also contains some zones of higher grade mineralisation that are candidates for graphene production potential. A new program to test the ability of Raitajärvi ore to produce graphene products along side large flake graphite will be assessed as developments at Nunasvaara continue in the next period.

Other Graphite Projects

Minimal work was undertaken during the period on the Company’s other graphite projects in Sweden.

SWEDEN COPPER-GOLD PROJECTS

Talga wholly owns several copper-gold prospects in Sweden that were acquired from Teck Resources in 2012. While Talga has since focussed its efforts on developing the nearby graphite deposits, the Company considers the copper-gold assets to be worth exploring both technically and commercially. During this period, compilation and analysis of historical exploration data from the Kiskama project was completed and details of the key findings, being significant copper-gold grades over substantial widths, were announced (see ASX:TLG 10 Feb 2014).

Introduction and Setting

Talga’s Kiskama copper-gold project is situated in the Kiruna mining district which hosts multiple large mining operations for iron ore and copper-gold (see Fig 4). Mineral deposits in this region can be highly profitable at what are considered very low grades elsewhere in the world. For example, the Aitik open cut copper-gold mine located 80km south from Kiskama mines a resource of 2,760 Mt @ 0.17% Cu, 0.1g/t Au[(2) ] at 36Mt ore per annum. This is possible due to low power costs (hydro and nuclear) and favourable fiscal regimes combined with high quality established infrastructure.

Fig 4 Kiskama project geology map showing Talga tenements (blue), infrastructure and selected mines, mills and deposits.

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Copper-gold mineralisation at Kiskama comprises copper and iron sulphide-magnetite-hematite as breccia infill and has been described as a shear-hosted iron-oxide copper-gold “IOCG” style deposit[(3)] . Iron oxide copper-gold deposits are highly prized as mineral deposits due to their often sizeable dimensions and shapes being conducive to large-scale bulk mining.

During the March quarter Talga compiled and analysed results from 101 historic drill holes (13,836m) at Kiskama, drilled by the Swedish Geological Survey (“SGU”) episodically in the period 1972-80. The SGU’s drilling focussed on a one kilometre long zone in the north of the tenement and defined mineralisation over a 100m wide zone consisting of multiple sulphide lenses, individually up to 40m wide and extending to 180m vertical depth, and that remain open in all directions. Although sampling of the core was selective, only 27% was assayed for copper and less than 2% for gold, with significant shallow and wide intercepts of copper-gold were returned, including:

• Hole 80004: from 20m depth 42m at 0.49% Cu, 0.07g/t Au incl 10m at 1.23% Cu , 0.16g/t Au from 45m

• Hole 77001: from 16m depth 21m at 1.02% Cu , 0.25g/t Au incl 6m at 1.98% Cu , 0.54g/t Au from 16m

• Hole 77007: from 34m depth 66m at 0.41% Cu incl 7m at 1.24% Cu from 92m

• Hole 72004: from 66m depth 40m at 0.68% Cu incl 5m at 1.07% Cu from 70m & 11m at 1.51% Cu from 94m

• Hole 78016: from 8m depth 16m at 0.36% Cu , 0.45g/t Au incl 6m at 0.75% Cu , 1.14g/t Au from 16m

• Hole 77006: from 31m depth 39m at 0.62% Cu , 0.22g/t Au

Talga considers the selective assaying combined with the mineralisation style leaves considerable potential for mineralised zones to be more extensive than currently known. Refer Appendix 2 for a summary of significant copper-gold intercepts. Additionally in the period Talga analysed modern geophysical data and identified a largely untested 10km long magnetic high associated with mineralisation extending through Kiskama.

The intercepts to date are highly encouraging in the context of nearby mills, proximity to established transport solutions and the bulk amenable mineralisation style. There is clear potential for other metals in the system that have been noted such as cobalt, to add economic credits.

Talga has confirmed drillcores from 95 of the historic holes are stored at the SGU’s facility in Malå and available for further work including resampling systematically for gold and copper. Joint venture and divestment partners are being sought preferentially to advance the Kiskama project.

SWEDEN IRON PROJECTS

Vittangi and Masugnsbyn Iron Projects (Talga 100%)

Work during the quarter on the Company’s iron ore assets in Sweden was restricted in order to minimise expenditure. Discussions with several potential partners or buyers of the iron projects were advanced during the period. These discussions are still at a preliminary stage and any outcome of these negotiations

GOLD PROJECTS - AUSTRALIA

Work during the quarter on the Company’s gold exploration assets in Western Australia was restricted to minimal field work in order to maintain statutory expenditure requirements. Further rationalisation of tenements was undertaken towards cost reductions while retaining core gold targets. Discussions with several potential partners or buyers of the gold projects were advanced during the period. These discussions are still at a preliminary stage and any outcome of these negotiations will be announced to

CORPORATE

During the quarter, Talga initiated a Board restructure which saw the appointment of Mr Grant Mooney as a Non-Executive Director, following the retirement of Mr Piers Lewis. Ms Lisa Wynne replaced Mr Jeremy

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McManus as Company Secretary. The Company completed a substantial upgrade to its website during the quarter (www.talgaresources.com) and changed its share registry to Security Transfer Registrars Pty Ltd.

On 21st March 2014, the Company successfully completed a placement to professional and sophisticated investors, raising A$1.7million (before costs) via the issue of 20 million ordinary shares at 8.5 cents per ordinary share. The Placement funds will enable the Company to complete metallurgical and other testwork required for a dual graphite/grapheme preliminary economic study of the Nunasvaara project in northern Sweden.

Subsequent to the Placement, the Company received a Research and Development Tax Incentive Refund from the ATO for the 2011-12 year, totalling $258,667. The funds were applied to general working capital. A similar refund claim for the 2012-13 year has been lodged and is expected to be decided in the next period.

Talga Managing Director, Mr Mark Thompson, attended an international investment conference where the Company's presentation (see ASX:TLG 24 March 2014) was well received.

As at 31 March, Talga held cash reserves of $1.92million.

Tenement Interests

As required by ASX listing rule 5.3.3, please refer Table 1 for details of Talga’s interests in mining tenements held by the Company. No joint ventures or farm-in/farm-out activity occurred during the quarter.

For further information, please contact:

Talga Resources Ltd.

Mark Thompson Managing Director Tel +61 (08) 9481 6667 Email admin@talgaresources

1 Resource Note: This information was prepared and first disclosed under the JORC code 2004. It has not been updated since to comply with the JORC code 2012 on the basis that the information has not materially changed since it was last reported. The Company is not aware of any new information or data that materially affects the information included in the previous announcement and that all of the previous assumptions and technical parameters underpinning the estimates in the previous announcement have not materially changed.

2 Boliden Annual Report 2012 resource statement as of Dec 31st 2012

3 Martinsson, O., 2011 – Kiskamavaara a shear hosted IOCG-style of Cu-Co-Au deposit in Northern Norrbotten, Sweden, 11th Biennial SGA meeting, Antofagasta, Chile

Competent Person’s Statement

The information in this report that relates to Exploration Results is based on information compiled and reviewed by Mr Mark Thompson, who is a member of the Australian Institute of Geoscientists . Mr Thompson is an employee of the Company and has sufficient experience which is relevant to the activity which is being undertaken to qualify as a "Competent Person" as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (“JORC Code”) . Mr Thompson consents 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 2012 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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TABLE 1

Tenement Holdings

Tenement Holdings
Project/Tenements	Loca/on	Interest at end of quarter	Acquired during quarter	Disposed during quarter
Jalkunen Project Jalkunen nr 1 Jalkunen nr 2 Lautakoski nr 1 Lautakoski nr 2 Lautakoski nr 3 Nybrännan nr 1 Nybrännan nr 2 Suinavaara nr 1 Tiankijoki nr 1	Norrbo:en County, Sweden	100% 100% 100% 100% 100% 100% 100% 100% 100%
Kiskama Project Kiskama nr 1	Norrbo:en County, Sweden	100%
Masugnsbyn Project Masugnsbyn nr 1 Masugnsbyn nr 2	Norrbo:en County, Sweden	100% 100%
Pajala Project Lehtosölkä nr 3 Liviövaara nr 2	Norrbo:en County, Sweden	100% 100%
Piteå Project Gråliden nr 2 Önusträsket nr 2	Norrbo:en County, Sweden	100% 100%
Raitajärvi Project Raitajärvi nr 5 Raitajärvi nr 6	Norrbo:en County, Sweden	100% 100%
ViGangi Project Maltosrova nr 2 Mör:järn nr 1 Nälkävuoma nr Nunasvaara nr 2 Vathanvaara nr 1 Vi:angi nr 2 Vi:angi nr 3	Norrbo:en County, Sweden	100% 100% 100% 100% 100% 100% 100%
Bullfnch Project E77/2139 P77/4106	WA, Australia	100% 100%
Mosquito Creek Project E46/810 E46/823 E46/925 P46/1632 P46/1633 P46/1634 P46/1635 P46/1636 P46/1637 P46/1638 P46/1666 P46/1667 P46/1668 P46/1800	WA, Australia	0% 0% 0% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%		100% 100% 100%

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TABLE 1 (continued)

Tenement Holdings

Project/Tenements	Loca/on	Interest at end of quarter	Acquired during quarter	Disposed during quarter
Talga Talga Project M45/618 P45/2689 P45/2690 P45/2691 P45/2746 P45/2747 P45/2774	WA, Australia	100% 100% 100% 100% 100% 100% 100%
Warrawoona Project E45/3381 P45/2661 P45/2662 P45/2781	WA, Australia	100% 100% 100% 100%

APPENDIX 1

Graphite Resources

Nunasvaara Mineral Resource (10% Cg lower cut-off) Nov 2012

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JORC 2004 Tonnes Grade Contained Graphite
Classification (Mt) (%Cg) (tonnes)
Indicated 5.6 24.6 1,377,600
Inferred 2.0 24.0 480,000
Total 7.6 24.4 1,857,600
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Raitajärvi Mineral Resource (5% Cg lower cut-off) Aug 2013

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JORC 2004 Tonnes Grade Contained Graphite
Classification (Mt) (%Cg) (tonnes)
Indicated 3.4 7.3 246,400
Inferred 0.9 6.4 60,900
Total 4.3 7.1 307,300
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Note: This information was prepared and first disclosed under the JORC code 2004. It has not been updated since to comply with the JORC code 2012 on the basis that the information has not materially changed since it was last reported. The Company is not aware of any new information or data that materially affects the information included in the previous announcement and that all of the previous assumptions and technical parameters underpinning the estimates in the previous announcement have not materially changed.

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APPENDIX 2

Kiskama historical drilling significant intercepts calculated where downhole length >10m and copper grade >0.3% Cu.

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EOH
Easting Northing From Cu Au
Hole ID RL Azi Dip Depth To (m) Interval (m) Significant Intercept
(RT90) (RT90) (m) (%) (g/t)
(m)
72001 1725290 7534040 357 292 -60 159.1 18.5 72.0 53.5 0.51 na 54m @ 0.51% Cu
including 20.6 28.8 8.1 1.24 na 8m @ 1.24% Cu
72004 1725216 7534070 361 112 -60 146.6 66.0 106.2 40.2 0.68 na 40m @ 0.68% Cu
including 69.8 75.1 5.3 1.07 na 5m @ 1.07% Cu
including 94.4 105.1 10.7 1.51 na 11m @ 1.51% Cu
72005 1725231 7534107 359 112 -60 146.0 62.5 87.5 25.0 0.56 na 25m @ 0.56% Cu
including 74.7 83.5 8.8 1.01 na 9m @ 1.01% Cu
72005 1725231 7534107 359 112 -60 146.0 102.3 113.7 11.4 0.90 na 11m @ 0.90% Cu
including 105.4 109.5 4.1 1.81 na 4m @ 1.81% Cu
72006 1725247 7534144 358 112 -60 157.0 28.7 46.0 17.4 0.33 na 17m @ 0.33% Cu
72006 1725247 7534144 358 112 -60 157.0 87.0 98.9 11.9 0.35 na 12m @ 0.35% Cu
72008 1725201 7534033 363 112 -60 208.0 87.2 113.3 26.1 0.47 na 26m @ 0.47% Cu
72009 1725309 7534335 359 112 -60 146.8 111.0 133.8 22.8 0.35 na 23m @ 0.35% Cu
72010 1725347 7534362 359 112 -60 140.7 86.4 99.1 12.7 0.58 na 13m @ 0.58% Cu
73002 1725292 7534255 358 112 -60 160.0 103.8 119.1 15.4 0.41 na 15m @ 0.41% Cu
73004 1725186 7533996 366 112 -60 156.0 81.6 109.2 27.6 0.31 na 28m @ 0.31% Cu
73005 1725179 7534085 362 112 -60 200.8 29.8 47.9 18.0 0.38 na 18m @ 0.38% Cu
73005 1725179 7534085 362 112 -60 200.8 132.4 150.3 17.9 0.60 na 18m @ 0.60% Cu
73006 1725194 7534122 361 112 -60 181.2 104.9 122.3 17.4 0.31 na 17m @ 0.31% Cu
74003 1725334 7534411 361 112 -60 188.2 113.3 126.4 13.1 0.45 na 13m @ 0.45% Cu
75001 1725377 7534436 361 112 -55 172.4 60.4 83.0 22.6 0.52 na 23m @ 0.52% Cu
including 60.4 63.2 2.8 1.77 na 3m @ 1.77% Cu
75002 1725408 7534510 366 112 -55 145.8 56.7 77.3 20.6 0.44 na 21m @ 0.44% Cu
75003 1725415 7534594 373 112 -55 223.5 98.6 163.3 64.7 0.33 na 65m @ 0.33% Cu
75005 1725975 7534840 426 112 -60 199.8 57.9 81.3 23.4 0.32 na 23m @ 0.32% Cu
including 67.6 70.5 2.9 1.14 na 3m @ 1.14% Cu
76007 1725272 7534350 361 112 -60 194.7 164.7 179.4 14.8 0.50 na 15m @ 0.50% Cu
including 170.5 173.9 3.3 1.00 na 3m @ 1.00% Cu
76008 1725336 7534453 363 112 -60 222.1 119.3 141.6 22.3 0.32 na 22m @ 0.32% Cu
76008 1725336 7534453 363 112 -60 222.1 174.6 198.2 23.5 0.43 na 24m @ 0.43% Cu
77001Note. Samples consisting of half core (original core diameter approximately NQ size) were prepared and assayed by ALS-1725445 7534495 364 112 -55 124.0 16.2 37.3 21.1 1.02 0.25 21m @ 1.02% Cu, 0.25g/t Au
Chemex with graphite and multi-elements respectively measured using the LECO and ICP techniques. Internal laboratory including 16.2 22.6 6.5 1.98 0.54 6m @ 1.98% Cu, 0.54g/t Au
77001QAQC was completed during sample analysis and external standards used to monitor quality, with satisfactory results. 1725445 7534495 364 112 -55 124.0 81.5 104.3 22.8 0.33 na 23m @ 0.33% Cu
Intercepts may vary across different datasets due to rounding.including 96.8 99.7 2.9 1.01 na 3m @ 1.01% Cu
77006This information was prepared and first disclosed under the JORC code 2004. It has not been updated since to comply with 1725482 7534480 364 112 -55 105.5 31.3 70.7 39.4 0.62 0.22 39m @ 0.62% Cu, 0.22g/t Au
the JORC code 2012 on the basis that the information has not materially changed since it was last reported.
77007 1725414 7534421 360 112 -55 127.1 34.4 100.0 65.7 0.41 na 66m @ 0.41% Cu
including 92.0 99.0 7.0 1.24 na 7m @ 1.24% Cu
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*Incomplete and non-systematic assaying for gold for this interval. Where no gold assay was made a value of zero was assigned for grade compositing purposes. Inconsistencies in interval length may result from rounding. na = not assayed

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APPENDIX 2 (continued)

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EOH
Easting Northing From Cu Au
Hole ID RL Azi Dip Depth To (m) Interval (m) Significant Intercept
(RT90) (RT90) (m) (%) (g/t)
(m)
77013 1725548 7534799 403 112 -60 208.7 111.3 122.5 11.2 0.48 na 11m @ 0.48% Cu
77013 1725548 7534799 403 112 -60 208.7 142.7 156.8 14.2 0.33 na 14m @ 0.33% Cu
78004 1725548 7534669 386 112 -55 121.6 39.0 52.0 13.0 0.46 na 13m @ 0.46% Cu
78006 1725546 7534584 375 112 -55 121.6 11.5 22.0 10.5 0.37 na 11m @ 0.37% Cu
78016 1722807 7529092 382 112 -55 121.0 8.3 24.2 15.9 0.36 0.45 16m @ 0.36% Cu, 0.45g/t Au
including 15.8 22.0 6.2 0.75 1.14 6m @ 0.75% Cu, 1.14g/t Au
80004 1725239 7534061 360 112 -55 90.1 20.0 62.3 42.3 0.49 0.07 42m @ 0.49% Cu, 0.07g/t Au
including 45.0 55.3 10.3 1.23 0.16 10m @ 1.23% Cu, 0.16g/t Au
80005 1725258 7534053 359 112 -55 60.8 23.0 40.6 17.6 0.70 0.04 18m @ 0.70% Cu, 0.04g/t Au
including 23.0 27.0 4.0 1.45 0.10 4m @ 1.45% Cu, 0.10g/t Au
including 34.0 36.6 2.6 1.10 na 3m @ 1.10% Cu
80006 1725246 7534101 358 112 -55 102.5 37.4 51.3 14.0 1.11 na 14m @ 1.11% Cu
80006 1725246 7534101 358 112 -55 102.5 75.5 93.0 17.5 0.75 na 18m @ 0.75% Cu
including 77.8 84.5 6.7 1.21 na 7m @ 1.21% Cu
80007 1725274 7534133 357 112 -55 93.6 35.1 51.0 16.0 0.35 na 16m @ 0.35% Cu
80008 1725302 7534121 354 112 -55 56.0 9.6 32.0 22.4 0.76 na 22m @ 0.76% Cu
including 18.8 25.5 6.7 1.43 na 7m @ 1.43% Cu
80012 1725340 7534279 357 112 -55 90.4 54.3 67.0 12.7 0.38 na 13m @ 0.38% Cu
including 54.3 56.5 2.2 1.33 na 2m @ 1.33% Cu
80015 1725371 7534396 359 112 -55 98.5 60.5 86.5 26.0 0.58 na 26m @ 0.58% Cu
including 60.5 67.5 7.0 1.22 na 7m @ 1.22% Cu
80016 1725404 7534382 358 112 -55 70.5 29.8 51.5 21.7 0.51 na 22m @ 0.51% Cu
80017 1725451 7534406 358 112 -55 76.5 37.2 62.6 25.5 0.67 na 25m @ 0.67% Cu
including 55.0 61.0 6.0 1.80 na 6m @ 1.8% Cu
80018 1725466 7534443 361 112 -55 74.1 37.0 50.8 13.8 0.60 na 14m @ 0.60% Cu
80021 1725500 7534472 362 112 -55 50.1 14.2 46.7 32.5 0.47 na 33m @ 0.47% Cu
including 36.0 41.3 5.3 1.26 na 5m @ 1.26% Cu
80022 1725474 7534527 367 112 -55 120.7 74.0 88.5 14.5 0.33 na 15m @ 0.33% Cu
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*Incomplete and non-systematic assaying for gold for this interval. Where no gold assay was made a value of zero was assigned for grade compositing purposes. Inconsistencies in interval length may result from rounding. na = not assayed

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Appendix 5B Talga Resources Limited – March 2014 quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

Talga Resources Limited

	ABN 32 138 405 419 Consolidated statement of cash flows		Quarter ended (“current quarter”) 31 March 2014	Quarter ended (“current quarter”) 31 March 2014
			31 March 2014
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other: R&D Rebate Net Operating Cash Flows		Current quarter $A’000		Year to date (6 Mths) $A’000
		- (138) - - (249) - - - - - 239		- (1,075) - - (665) - 1 - - - 239
		(148)		(1,500)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		- - - - - - - - -		- - - - - 3 - - (56)
		-		(53)
		(148)		(1,553)

• See chapter 19 for defined terms.

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Appendix 5B Page 1

Appendix 5B Talga Resources Limited – December 2013 quarterly report

1.13 Total operating and investing cash flows (brought forward)	1.13 Total operating and investing cash flows (brought forward)	1.13 Total operating and investing cash flows (brought forward)	(148)	(1,553)
Cash flows related to financing activities 1.14 Proceeds from issues of shares/options 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other – Share issue costs Net financing cash flows			1,700 - - - - (98)	3,175 - - - - (272)
			1,602	2,903
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter			1,454 468 -	1,350 572 -
			1,922	1,922
Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities
1.23 1.24		Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10		Current quarter $A'000
				114
				-
1.25 Explanation necessaryfor an understandingof the transactions Amount included under 1.23 includes director’s remuneration. Includes capital raising costs of $30,202 for the quarter paid to Patersons Corporate Finance, an entity associated with Mr Coughlan. Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows N/a 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest N/a		Explanation necessaryfor an understandingof the transactions
		Amount included under 1.23 includes director’s remuneration. Includes capital raising costs of $30,202 for the quarter paid to Patersons Corporate Finance, an entity associated with Mr Coughlan.
	N/a
	Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest
	N/a

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	Nil	Nil
	Nil	Nil

• See chapter 19 for defined terms.

Appendix 5B Page 2

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Appendix 5B Talga Resources Limited – March 2014 quarterly report

Estimated cash outflows for next quarter

Estimated cash outflows for next quarter
4.1 Exploration and evaluation (includes R&D) 4.2 Development 4.3 Production 4.4 Administration	$A’000
	320
	-
	-
	180
Total	500

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	1,901	447
	21	21
Total: cash at end of quarter(item 1.22)	1,922	468

Changes in interests in mining tenements

	Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
6.1 Interests in mining tenements relinquished, reduced or lapsed	Mosquito Creek Project WA, Australia E46/810 E46/823 E46/925	Direct, relinquished Direct, relinquished Direct,relinquished	100% 100% 100%	0% 0% 0%
6.2 Interests in mining tenements acquired or increased

• See chapter 19 for defined terms.

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Appendix 5B Page 3

Appendix 5B Talga Resources Limited – December 2013 quarterly report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (cents)	Amount paid up per security (cents)
7.1 Preference+securities (description) 7.2 Changes during quarter	-	-
	-	-
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues Placement (b) Decreases through returns of capital, buy-backs	105,060,089	105,060,089
	20,000,000	20,000,000	8.5 cents	8.5 cents
7.5 +Convertible debt securities (description) 7.6 Changes during quarter
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired/Lapsed during quarter	2,750,000 500,000 500,000	- - -	Exercise price 40 cents 40 cents 40 cents	Expiry date 30 November 2014 21 July 2015 3 October 2016
7.11 Debentures (totals only)
7.12 Unsecured notes(totals only)

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).

• 2 This statement does give a true and fair view of the matters disclosed.

Lisa Wynne Date: 30 April 2014 Company Secretary

• See chapter 19 for defined terms.

Appendix 5B Page 4

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Appendix 5B Talga Resources Limited – March 2014 quarterly report

Notes

• 1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

== == == == ==

• See chapter 19 for defined terms.

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Appendix 5B Page 5