TALISMAN MINING LIMITED — AGM Information 2017

Nov 22, 2017

F o c u s e d A u s t r a l i a n m i n e r a l r e s o u r c e s c o m p a n y

Discovering & Developing Opportunities in Copper-Gold & Nickel

AGM Presentation: November 2017

F o c u s e d A u s t r a l i a n m i n e r a l r e s o u r c e s c o m p a n y

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This presentation has been prepared by Talisman Mining Limited.

This document contains background information about Talisman Mining Ltd current at the date of this presentation. The presentation is in summary form, has not been independently verified and does not purport be all inclusive or complete nor does it contain all the information that a prospective investor may require in evaluating a possible investment in Talisman Mining Ltd or its assets.

Recipients should conduct their own investigations and perform their own analysis in order to satisfy themselves as to the accuracy and completeness of the information, statements and opinions contained in this presentation.

This presentation is for information purposes only. Neither this presentation nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of securities in any jurisdiction. This document is not a prospectus and does not contain all of the information which would be required to be disclosed in a prospectus. This presentation may not be distributed in any jurisdiction except in accordance with the legal requirements applicable in such jurisdiction. Recipients should inform themselves of the restrictions that apply in their own jurisdiction. A failure to do so may result in a violation of securities laws in such jurisdiction.

This presentation does not constitute investment advice and has been prepared without taking into account the recipient's investment objectives, financial circumstances or particular needs and the opinions and recommendations in this presentation are not intended to represent recommendations of particular investments to particular persons. Recipients should seek their own professional, legal, tax, business and/or financial advice when deciding if an investment is appropriate. All securities transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments. To the fullest extent permitted by law, Talisman Mining Ltd and its related bodies corporate, its directors, officers, employees and representatives (including its agents and advisers), disclaim all liability and take no responsibility for any part of this presentation, or for any errors in or omissions from this presentation arising out of negligence or otherwise and do not make any representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of any information, statements, opinions, estimates, forecasts, conclusions or other representations contained in this presentation. This presentation may include forward-looking statements. These forward-looking statements are not historical facts but rather are based on Talisman Mining Ltd.'s current expectations, estimates and assumptions about the industry in which Talisman Mining Ltd operates, and beliefs and assumptions regarding Talisman Mining Ltd.'s future performance. Words such as “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “potential” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are only predictions and are not guaranteed, and they are subject to known and unknown risks, uncertainties and assumptions, some of which are outside the control of Talisman Mining Ltd. Past performance is not necessarily a guide to future performance and no representation or warranty is made as to the likelihood of achievement or reasonableness of any forward-looking statements or other forecast. Actual values, results or events may be materially different to those expressed or implied in this presentation. Given these uncertainties, recipients are cautioned not to place reliance on forward looking statements. Any forward looking statements in this presentation speak only at the date of issue of this presentation. Subject to any continuing obligations under applicable law and the ASX Listing Rules, Talisman Mining Ltd does not undertake any obligation to update or revise any information or any of the forward looking statements in this presentation or any changes in events, conditions or circumstances on which any such forward looking statement is based.

F o c u s e d A u s t r a l i a n m i n e r a l r e s o u r c e s c o m p a n y

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Monty development and near-term production

• ♦ High grade copper mine – Monty Ore Reserve = 8.7% Cu

• ♦ Monty pre-production finance secured -$US 20 million facility

• ♦ Monty mine development underway– forecast production start in approx. 12 months

Significant exploration value and potential at Springfield Project

• ♦ Proven VMS camp with proximal high grade Cu-Au deposits

Optionality to nickel prices with 100% owned Sinclair Nickel Operation

• ♦ Low capital, fast track option to nickel production

Emerging Opportunity in NSW -well endowed and proven gold and base metal district

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“Maximise value to shareholders through exploration, discovery and development of complementary opportunities in base and precious metals”.

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► Oct 2016 – Nickel mineralisation returned from drilling at Delphi North ► April 2017 – Monty Feasibility Study Completed ► April 2017 – Execution of Ore Sales Agreement for Monty ore and JV Agreements ► July 2017 – Approval of Monty Mining Proposal and commencement of surface works ► July 2017 – Secured tenements in NSW Lachlan Orogen ► Sept 2017 – Monty decline commences ► Oct 2017 – Debt financing secured for Monty pre-production capital ► Nov 2017 – Ground holding in NSW increased ► Nov 2017 – RC and Diamond drilling at multiple targets at Springfield

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Springfield JV (30% Talisman)

Development of the world’s highest grade copper mine underway

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Monty provides tremendous confidence in the exceptional exploration potential of the Springfield JV

• ♦ Talisman 30% interest in JV with Sandfire Resources NL (70% and JV Manager)

• ♦ Proven world-class VMS province and geological model

• ♦ Multiple VMS horizons are key areas of exploration focus

• ♦ Includes high-grade and high value Monty Cu-Au deposit:

• ♦ TLM 30% share Monty Ore Reserve[1] = 280kt @ 8.7% Cu &

• 1.4g/t Au

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1 Refer Appendix 1 Note ii

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Low capital and low risk development pathway with outstanding forecast returns

Initial ore production life = 30 months

Total payable production = 19.9kt Cu and 5.7koz Au

Forecast pre-tax[1] free cash flow = A$64M

Pre-production capital cost = A$22M Notional AISC = A$1.90/lb payable Cu (US$1.37)

Pre-tax NPV (8% discount rate) = A$46M

Notional C1 cash cost

= A$1.56/lb payable Cu (US$1.13)

Pre-tax IRR = 78%

Payback period (from 1[st] prod) = 17 months

Talisman retains full upside (and downside) exposure to variations in Monty FS revenue and cost estimates on:

COSTS

REVENUE

• ♦ Total ore mined and delivered

• ♦ Underground mining costs

• ♦ Ore head grades

• ♦ Ore haulage costs

• ♦ Metal prices

• ♦ Closure costs

• ♦ Development timeline

• ♦ Capital costs

Forecast Monty Operating costs (excl royalties)

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1 Estimated Talisman consolidated tax losses available to offset Monty life of mine taxable income at 30 June 2017 A$44M

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OSA reduces risk with full exposure to revenue and cost upside

• ♦ Ore Sales Agreement (OSA) provides a low capital, low risk and high return development route for Talisman:

• ♦ Retains optionality in relation to any future discoveries on the Springfield JV tenements

• ♦ No plant build (attractive (low) pre-production capital intensity and lower risk)

• ♦ Independent third-party calculation of mined grade

• ♦ Fixed metal recovery formulae and high fixed payabilities

  • ♦ Recognises expected Monty ore processing performance and concentrate quality

  • ♦ Eliminates Talisman exposure to metallurgical processing and product marketing risks

• ♦ Commercial, highly competitive and transparent Ore Treatment Fee (OTF)

  • ♦ Incorporates all downstream costs (processing, G&A, transport and conc. treatment/refining)

  • ♦ Closely aligned with actual DeGrussa processing, G&A and downstream costs

  • ♦ Transparency of cost components (linkage to industry benchmarks or annual indexation)

• ♦ Exploration JV Agreement covers ongoing exploration activities of the Springfield JV

• ♦ Mining JV Agreement covers rights/obligations for development and mining activities

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See Appendix 2 for further explanation of OSA and OTF

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US$20M Monty financing secured (TLM 30% basis)

Talisman’s share of forecast pre-production capital now fully funded

• ♦ Competitive process involving major Australian banks and other typical resource project lenders

• ♦ Project debt finance facility of up to US$20M executed with Taurus Mining Finance Fund

• ♦ Interest rate of 6.75% per annum

• ♦ Capped royalty of 2.25% on gross metal-in-ore sales receipts up to 29.7kt copper (and 16.5koz gold)

• ♦ Maturity in Sept 2020

• ♦ Full funding for TLM share of forecast pre-production capital

• ♦ Highly competitive overall cost of capital

• ♦ No mandatory hedging requirements

• ♦ No requirement to fully draw

• ♦ Flexibility on early repayment

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A conventional underground operation
Target Monty project development 1Q 2Q 3Q 4Q 1Q 2Q 3Q
timeline FY18 FY18 FY18 FY18 FY19 FY19 FY19
3D schematic of Monty decline and
Detailed design and engineering P underground mine design
Early mobilisation and preliminary
P P
site activities
Mining Proposal Approval P
Decline Development P
First Ore Production
♦ Mining contract awarded to Byrnecut
Australia Pty Ltd
♦ First ore ~12 months from Portal cut
♦ Maximum planned mining rate of
approx. 400ktpa
♦ Development plan leverages off
existing DeGrussa infrastructure
♦ Longitudinal long-hole open stoping
with backfill
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• ♦ Longitudinal long-hole open stoping with backfill

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Untested potential for further mineralisation in Monty near mine environment

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• ♦ Current Mine Plan includes higher-grade, highertonnage LZ only

• ♦ Potential for excluded Upper Zone (UZ) to enter mine plan with grade control drilling

• ♦ Lower Zone (LZ) growth potential with grade control drilling

• ♦ Represents one limited stratigraphic package within the wider prospective Monty Corridor

Monty Ore Reserve as at 31 March 2017[2]

Deposit Reserve Category Tonnes (t) Copper (%) Gold (g/t) Cont. Cu (t) Cont. Au (oz)	Deposit Reserve Category Tonnes (t) Copper (%) Gold (g/t) Cont. Cu (t) Cont. Au (oz)	Deposit Reserve Category Tonnes (t) Copper (%) Gold (g/t) Cont. Cu (t) Cont. Au (oz)	Deposit Reserve Category Tonnes (t) Copper (%) Gold (g/t) Cont. Cu (t) Cont. Au (oz)	Deposit Reserve Category Tonnes (t) Copper (%) Gold (g/t) Cont. Cu (t) Cont. Au (oz)	Deposit Reserve Category Tonnes (t) Copper (%) Gold (g/t) Cont. Cu (t) Cont. Au (oz)
Monty (100% basis) Proved - - - - - Probable 920,000 8.7 1.4 80,000 42,000 Total 920,000 8.7 1.4 80,000 42,000	-	-	-	-	-

2 Refer Appendix 1 Note ii

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Monty Deposit provides ‘proof of concept’ for Doolgunna VMS Camp

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NORANDA VMS MINING CAMP
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• ♦ VMS deposits can and do occur at multiple stratigraphic levels within the prospective sequence, eg Noranda VMS mining camp

• ♦ Bryah Basin VMS Camp now with three VMS Deposits ( DeGrussa, Monty, Horseshoe Lights ) and four VMS occurrences at different stratigraphic levels within the prospective Karalundi sequence

• ♦ Potential remains to increase known mineralisation with further systematic exploration

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Springfield – Multiple Prospective Horizons

• ♦ Potential for multiple host horizons within prospective corridors

• ♦ Monty, Homer, Southern Volcanics and Central

• ♦ Limited diamond and RC drilling by JV outside of Monty Resource

• ♦ ~90% of JV diamond holes drilled for resource definition purposes

• ♦ 16km Southern Volcanics Corridor has 6 RC holes and no diamond drilling to date

• ♦ Application of new and improved exploration techniques

• ♦ Evolving and improving geological understanding and interpretations

• ♦ Potential for deeper drilling of prospective

horizons

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New interpretations at multiple locations to be tested in the current quarter

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Monty NE
Homer South
Monty Host Stratigraphy
Monty East (new interpreted position
Monty Off-Set
Monty Deposit
Monty Host Stratigraphy
♦
Recently identified opportunities and interpretations (new interpreted position
include Monty NE , Monty East and Homer South Trend :
♦ Monty NE significant intersection of 5m @ 4.11% Cu [3]
♦ RC drilling planned at Monty NE to test a second and
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• ♦ RC drilling planned at Monty NE to test a second and separate bottom of hole aircore anomaly in this area

3 Refer to ASX Announcement 13 September 2016

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New interpretations at
Homer South
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Sinclair Nickel Project

Advanced opportunity in a proven nickel province

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Premium surface and underground assets with extensive infrastructure

• ♦ Located in the world-class Agnew-Wiluna Greenstone belt

  • ♦ +9Mt historical nickel production

• ♦ Previous Sinclair mine production (2008-13)

  • ♦ 1.58Mt @ 2.44% Ni for 38,599t of contained Ni

• ♦ Existing asset base includes infrastructure with approx. A$120M replacement value

• ♦ Low capital, fast track option to nickel production

• ♦ Resource targets for known mineralisation at Sinclair mine

• extension plus Sinclair remnants

• ♦ Regional exploration prospectivity

  • ♦ Prospects in close proximity to existing infrastructure

  • ♦ Regional opportunities along Sinclair trend (8km basal contact)

    • ♦ Results at Delphi North incl 9m @ 4.2% Ni[4]

♦ Active on-ground exploration

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4 Refer to ASX Announcement 27 October 2016

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Significant infrastructure in place with replacement value of approx. A$120M

• ♦ 350ktpa concentrator

  • ♦ Operated at ~440ktpa

• ♦ Open pit, decline and underground mine

• ♦ 200-person accommodation village

• ♦ Administration buildings

• and stores

• ♦ Exploration office and core yard

• ♦ Mining contractor facilities

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A re-commencement of operations at Sinclair, subject to near-mine exploration success, has the potential for low capital intensity and fast-tracked transition to production

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NSW Project Development

Building a New Exploration Focus

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♦ NSW selected as an initial focus region:

• ♦ Well endowed and proven gold and base metal district with production and current reserves estimated at:

  • ♦ 20.3 Mt Cu, 104 Moz Au, 29 Mt Ag[1]

• ♦ Under explored – minimal to no recent exploration

• ♦ Recent “use it or lose it” changes in mining regulations have created multiple opportunities

• ♦ Availability and quality of government datasets

• ♦ Local landholders amenable to on-ground exploration activities

• ♦ Mineral prospectively highlighted by historical

production and recent exploration success:

• ♦ Cadia Cu-Au mine (Newcrest), North Parkes Cu-Au Mine (CMOC/Sumitomo), Cobar-CSA Cu-Zn mine (Glencore), Lake Cowal Au mine (Evolution), Woodlawn Zn mine (Heron)

• ♦ Peel Mining Mallee Bull Project

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♦ Low cost project entry

• ♦ New project generation/ pegging of new tenement applications

♦ Earn-in JV opportunities

• ♦ Two new granted tenements (TLM 100%), and one application located along the Gilmore Suture Zone:

• ♦ Myamley – EL8615

• ♦ Sussex – EL8658

• ♦ Bobadah– ELA5556

• ♦ EL8414 Exploration Farm-In with Peel Mining Ltd –

• ♦ Work to date

• ♦ Review of historic exploration

• ♦ Interpretation of the regional structural framework and targeting exercise to further understand geological controls on mineralisation within the Cobar and Mineral Hill – Mt Boppy corridors

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• ♦ Myamley Base Metal Project (EL8615) - Located along the large Gilmore Suture Zone, north of Mineral Hill Mine

• ♦ Known historic mineral occurrences – “Rip and Tear Mine”

• ♦ Very little modern systematic exploration undertaken to date:

• ♦ Auger drilling, soil sampling, IP surveys and limited shallow RAB/ percussion drilling

• ♦ Results have highlighted base metal anomalies at: Rip & Tear, Studmouse[2] and Myamley[3] prospects

• ♦ Land Access Agreements signed over areas of initial interest

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• ♦ Sussex Gold Project (EL8659) - Located along the Large Crustal scale Gilmore Suture Zone, north of Mt Boppy Mine

• ♦ Known historic mineral occurrences – Cobra Shaft, Earl of Sussex and Big Reef prospects

♦ Limited modern systematic exploration undertaken to date:

• ♦ Lag sampling, soil sampling, aircore drilling, shallow RAB/ percussion drilling

♦ Mulga Prospect

• ♦ Lag sampling at the Mulga Prospect has identified a large gold anomaly over a strike extent of 3km, follow up RAB and RC percussion drilling has intersected significant gold mineralisation; best intervals include;

• ♦ WDRC22[4] – 2 metres at 4.9 g/t Au from 53 metres

♦ Cobra Shaft prospect

• ♦ Shallow percussion drilling at the Cobra Shaft returned significant gold mineralisation; including;

• ♦ SXP4[5] - 4 metres at 1.04 g/t Au

• ♦ SXP6[5] - 12 metres at 0.95 g/t Au

• ♦ SXP12[6] - 2 metres at 4.05 g/t Au

• ♦ NSP3[7] - 6 metres at 1.27 g/t Au

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• ♦ TLM has the right to earn up to 75% of two granted ELs through expending a total of $700k over 5 years (Mt Walton and Michelago)

• ♦ Mt Walton (EL8414)

• ♦ Historic exploration includes: surface sampling, gravity and IP surveys, limited isolated drilling and DHEM

• ♦ Au-in-rock samples up to 1g/t Au with coincident IP chargeability anomaly

• ♦ Shallow drilling testing intersected banded epithermal quartz, pyrite and pyrrhotite, and anomalous precious mineralisation

  • ♦ TMW05[8] - 3.0m @ 3.2 g/t Au

• ♦ IP anomaly remains untested by bedrock drilling

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Cumbine Prospect showing IP chargeability image (125m depth), drill collars, rock chip samples and soil samples

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♦ Michelago (EL8451):

• ♦ Located within the well endowed Goulbourn Trough which is host to the large Woodlawn lead-zinc deposit

• ♦ Covers a total strike extent of 50Km

• ♦ Prospective for Volcanic Associated Massive Sulphide (VAMS) deposits similar to the Woodlawn VAMS deposit to the north-east

• ♦ Numerous base metal, gold and silver historical workings

• ♦ Little modern exploration

♦ Review of historical exploration in progress

• ♦ NP40[9] – 6.0 metres at 0.58% Cu

• ♦ AL105[10] – 4.0 metres at 1.32g/t Au

• ♦ AL106[10] – 1.0 metre at 2.43g/t Au

• ♦ PH56[11] – 9.1 metres at 1.07% Zn

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• ♦ Execution of Land Access Agreement over remaining project areas

• ♦ Field mapping and geochemical sampling following structural targeting exercise

• ♦ On-ground field work expected to commence in early 2018:

• ♦ Systematic regolith sampling over historic anomalies at Rip & Tear, Cumbine, Big Reef, Myamley

• ♦ Ground geophysical surveys over priority target areas including, gravity, magnetics and IP surveys

• ♦ Development of targets and prioritisation for inground exploration programs through 2018

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The Talisman Investment Case

Emerging metals producer with exceptional prospectivity

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Emerging metals producer with exceptional prospectivity

• ♦ Monty a high-grade, high-returning copper-gold project

• ♦ Development underway

• ♦ Low risk, low capital driven by ore sales arrangement

• ♦ Pre-production capital fully financed

• ♦ First production targeted December quarter 2018

• ♦ Highly leveraged to exploration success from active programs at the joint venture ground

• ♦ Sinclair a low start-up cost, fast track nickel production option

♦ Upcoming activities

• ♦ Testing of exploration targets at Springfield

• ♦ Progression of decline and development

• ♦ Assessment of opportunities at Sinclair

• ♦ Development of targets and prioritisation for in-ground exploration programs at NSW Projects

• ♦ Progressing quality opportunities to create value which are complementary to our assets, experience and expertise

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Experienced and diverse Executive Team and Board

Dan Madden – Managing Director

• ♦ +15 years experience across base and precious metals from exploration through to operations

Tony Greenaway – General Manager Geology

• ♦ +25 years base and precious metal exploration experience from grass roots evaluation through to advanced feasibility studies

Shaun Vokes – Chief Financial Officer and Company Secretary

• ♦ +25 years experience in senior commercial and financial roles from project evaluation/development through to financing and metals marketing

Capital Structure
Shares on Issue	185.7M
Unlisted Options	9.7M
Market Capitalisation (at 25c)	A$ 46M
Cash (30 Sept 2017)	A$ 7.3M
Substantial Shareholders
Kerry Harmanis	~18%
Institutional Investors	~11%

Capital Structure
Shares on Issue	185.7M
Unlisted Options	9.7M
Market Capitalisation (at 25c)	A$ 46M
Cash (30 Sept 2017)	A$ 7.3M
Substantial Shareholders
Kerry Harmanis	~18%
Institutional Investors	~11%

Non Executive Directors	Non Executive Directors
Jeremy Kirkwood(Non-Exec. Chair)	Investment Banking, Corporate Strategy
Karen Gadsby(Non-Exec. Dir)	Finance, Commercial & Board Experience
Brian Dawes(Non-Exec. Dir)	Operational Executive
Alan Senior(Non-Exec. Dir)	Resources Project Development

Recent Research click here

Philosophy and Core Beliefs

• ♦ Behave and act as business owners

• ♦ Be accountable for our decisions and actions

• ♦ What we say is what we do

• ♦ Engage with stakeholders in meaningful and clear way

• ♦ Develop mutually beneficial partnerships and opportunities

• ♦ Build strong commitment across our team and with stakeholders

• ♦ Collaborative approach

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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 r e s o u r c e s c o m p a n y

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Discovering & Developing Opportunities in Copper-Gold & Nickel

AGM Presentation: November 2017

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Note i: Mineral Resources

Information in this presentation that relates to the Monty JORC Mineral Resource estimate is information previously published by Sandfire Resources NL (“Sandfire”) and is available on the Sandfire and ASX websites (see announcement “Maiden High-Grade Mineral Resource for Monty VMS Deposit: 99,000t of Copper and 55,000oz of Gold”, dated 13 April 2016 (Sandfire Announcement)). For full details of the Monty Resource estimate, including the Competent Person’s Statement related to the estimation of the Monty Mineral Resource, please refer to the Sandfire Announcement.

Talisman confirms that it is not aware of any new information or data that materially affects the information included in the Sandfire Announcement, and that all material assumptions and technical parameters underpinning the estimates in the Sandfire Announcement continue to apply and have not materially changed and confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original Sandfire Announcement.

Note ii: Ore Reserves

Information in this presentation that relates to Ore Reserves and Exploration Results and Exploration Targets as defined under the 2012 Edition of the “Australian Code for Reporting of Mineral Resources and Ore Reserves”, is information previously published by Talisman Mining Ltd (“Talisman”) and is available on the Talisman and ASX websites (see announcement “Monty Feasibility Study Results”, dated 5 April 2017 (Talisman Announcement)). For full details of the Ore Reserve estimate, including the Competent Person’s Statement related to the estimation of the Ore Reserve, please refer to the Talisman Announcement.

Talisman confirms that it is not aware of any new information or data that materially affects the information included in the Talisman Announcement, and that all material assumptions and technical parameters underpinning the estimates in the Talisman Announcement continue to apply and have not materially changed and confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original Talisman Announcement.

Exploration Results and Exploration Targets

Information in this presentation that relates to Exploration Results and Exploration Targets as defined under the 2012 Edition of the “Australian Code for Reporting of Mineral Resources and Ore Reserves”, is based on information compiled by Mr Anthony Greenaway, who is a member of the Australasian Institute of Mining and Metallurgy. Mr Greenaway is a full-time employee of Talisman Mining Ltd and has sufficient experience which is relevant to the style of mineralisation and types of deposit under consideration and to the activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australian Code for Reporting of Mineral Resources and Ore Reserves”. Mr Greenaway consents to the inclusion in this report of the matters based on information in the form and context in which it appears.

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Exploration Results and Exploration Targets

Information in this presentation that relates to Exploration Results and Exploration Targets as defined under the 2012 Edition of the “Australian Code for Reporting of Mineral Resources and Ore Reserves”, is based on information compiled by Mr Anthony Greenaway, who is a member of the Australasian Institute of Mining and Metallurgy. Mr Greenaway is a full-time employee of Talisman Mining Ltd and has sufficient experience which is relevant to the style of mineralisation and types of deposit under

consideration and to the activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australian Code for Reporting of Mineral Resources and Ore Reserves”. Mr Greenaway consents to the inclusion in this report of the matters based on information in the form and context in which it appears.

1 NSW Department of Planning and Environment Website, July 2017

2 Results taken from Annual Report for the year ending February 28, 1977 for EL676, GS1977/030.R00000990. Geological Survey of NSW DIGS reporting system

3Results taken from Second Report for six months to March 1975 for EL676 GS1974/356.R00022366. Geological Survey of NSW DIGS reporting system

4Drilling results taken from Cortana Resource Ltd Annual Technical Report for EL6161 2007, GS2007/925.R00041962. Geological Survey of NSW DIGS reporting system

5Drilling results taken from Pan Australian Mining Ltd Report for the period for EL2445 18.6.86 to 17.12.86, GS1985/291.R00014020. Geological Survey of NSW DIGS reporting system 6Drilling results taken from Pan Australian Mining Ltd Report for the period for EL2445 18.12.86 to 17.6.87, GS1985/291.R00014021. Geological Survey of NSW DIGS reporting system 7Drilling results taken from Pan Australian Mining Ltd Report for the period for EL2445 18.6.88 to 17.12.88, GS1985/137.R6200. Geological Survey of NSW DIGS reporting system

8Taken from Triako Resources Ltd Annual Report for EL5393 2001, GS2002/522.R00030150. Geological Survey of NSW DIGS reporting system

9Drilling results taken from Tenneco Australia Inc. Summary Report Michelago Project for EL308 1973, GS1973/138.R00023351. Geological Survey of NSW DIGS reporting system 10Drilling results taken from Monaro Mining Ltd Annual report EL6376 for the period ending 10/02/2006, GS2006/049.R00054339. Geological Survey of NSW DIGS reporting system 11Drilling results taken from Amax Exploration (Australia) Inc. Quarterly report No. 7 17/11/1971, GS1971/605.R00024616. Geological Survey of NSW DIGS reporting system

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Appendix 2

Additional Monty Feasibility Study Detail

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Capital cost composition (TLM 30% basis)

Capital item	A$M
Surface infrastructure	9.9
Underground mine development	9.5
Underground mine infrastructure	2.4
Total pre-production capital	21.8
Sustaining capital 5.5
Closure costs	1.0
Total capital cost	28.3

Commodity Price Assumptions

Commodity / FX	CY 2017	CY 2018	CY 2019	CY 2020	CY 2021
Copper – U$/lb	2.51	2.74	2.81	2.78	2.68
Gold – U$/Oz	1310	1398	1375	1374	1296
Silver – U$/Oz	17.95	19.14	18.84	18.83	17.75
Currency AUD:USD	0.733	0.730	0.725	0.720	0.715

Operating cost parameters (TLM 30% basis)

Operating item	A$M	A$/t ore
Underground mining	28.8	120.5
Ore transport to DeGrussa	1.4	5.8
Ore Treatment Fee (OTF)	50.4	211.0
Sandfire management fee 0.2 1.0
Royalties	8.1	34.0
Total operating cost	88.9	372.3

Operating item	A$M	A$/lb payable Cu
Underground mining	28.8	0.65
Ore transport	1.4	0.03
Ore Treatment Fee(OTF)	50.4	1.15
Sandfire management fee	0.2	0.01
Gold and silver credits	(12.3)	(0.28)
Notional C1i cost	68.5	1.56
Royalties – gov’t and native title	8.1	0.19
Sustaining capital 5.5 0.13
Closure costs	1.0	0.02
Total notional AISCi	83.1	1.90

i C1 and AISC are calculated on the basis of notionally including the OSA Ore Treatment Fee as a production cost. AISC is defined as the operating cash cost of production (net of by-product credits) plus royalties and sustaining capital and closure costs but exclusive of any finance costs or corporate overhead allocation.

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Mineralisation Style	Mineral Resource Category	Tonnes (t)	Copper (%)	Gold (g/t)	Contained Copper (t)	Contained Gold (oz)
Massive Sulphides	Indicated	754,000	12.0	2.1	91,000	51,000
	Inferred	9,000	20.7	2.7	2,000	1,000
	Total	763,000	12.1	2.1	92,000	52,000
Halo	Indicated	287,000	2.2	0.3	6,000	3,000
	Inferred	-	-	-	-	-
	Total	287,000	2.2	0.3	6,000	3,000
Total	Indicated	1,041,000	9.3	1.6	97,000	54,000
	Inferred	9,000	20.7	2.7	22,000	1,000
	Total	1,050,000	9.4	1.6	99,000	55,000

5 Refer Appendix 1 Note Figures in this table are rounded to the nearest thousand.

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Ore Reserve estimate and Mine Plan on 100% Basis as at 31 March 2017	Ore Reserve estimate and Mine Plan on 100% Basis as at 31 March 2017	Ore Reserve estimate and Mine Plan on 100% Basis as at 31 March 2017	Ore Reserve estimate and Mine Plan on 100% Basis as at 31 March 2017	Ore Reserve estimate and Mine Plan on 100% Basis as at 31 March 2017	Ore Reserve estimate and Mine Plan on 100% Basis as at 31 March 2017
Reserve Category	Tonnes(t)	Copper(%)	Gold(g/t)	Contained Copper(t)	Contained Gold(oz)
Proved - - - - - Probable 920,000 8.7 1.4 80,000 42,000 Total 920,000 8.7 1.4 80,000 42,000 Mine Plan 800,000 9.4 1.5 74,000 38,000 Ore Reserve estimate and Mine Plan for the Monty deposit (100% basis)	-	-	-	-	-
	920,000	8.7	1.4	80,000	42,000
	920,000	8.7	1.4	80,000	42,000
	800,000	9.4	1.5	74,000	38,000
Ore Reserve estimate and Mine Plan on Talisman 30% Basis as at 31 March 2017
Reserve Category	Tonnes (t)	Copper (%)	Gold (g/t)	Contained Copper (t)	Contained Gold (oz)
Proved - - - - - Probable 280,000 8.7 1.4 24,000 13,000 Total 280,000 8.7 1.4 24,000 13,000 Mine Plan 240,000 9.4 1.5 22,000 11,000 Ore Reserve estimate and Mine Plan for the Monty deposit(30% basis)	-	-	-	-	-
	280,000	8.7	1.4	24,000	13,000
	280,000	8.7	1.4	24,000	13,000
	240,000	9.4	1.5	22,000	11,000

6 Refer Appendix 1 Note ii Figures in this table rounded to the nearest thousand

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Logical and low risk pathway with economic benefits shared between JV partners

Mining Joint Venture Agreement (MJVA)

Ore Sale Agreement (OSA)

• ♦ Establishes the rights and obligations of the Springfield JV parties related to activities associated with the development, mining and ultimate decommissioning of mineral discoveries

• ♦ Development and mining of Monty will operate under the terms of this MJVA

• ♦ Applies to Monty ore (and near-Monty extensions)

• ♦ Potential future Springfield JV discoveries subject to separate OSA at discretion of both JV parties

• ♦ Monty ore (at a max rate of approx. 0.4Mtpa) blended with Sandfire’s existing DeGrussa ore feed

Exploration Joint Venture Agreement (EJVA)

• ♦ Point of ore sale to Sandfire is at a dedicated weighbridge near DeGrussa ROM pad

• ♦ Covers the ongoing exploration activities of the Springfield JV on the JV tenements and outlines the rights and obligations of the JV parties

• ♦ Provides a mechanism to progress future mineral discoveries, including the option to utilise the existing MJVA

• ♦ TLM receives net ore sale revenue payment on equivalent payable metal-in-concentrate basis after deduction of Ore Treatment Fee (OTF) per tonne of delivered ore and Royalties

• ♦ Ore sales revenue derived from (independently) calculated head grade, prevailing metal prices, fixed recovery formulae and fixed payabilities

• ♦ Certain components of OTF are subject to annual indexation and/or pegged to annual industry determined benchmarks

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Springfield JV exposure
OPEX variables (ex royalties):
♦ Underground mining costs
Underground
♦ Ore haulage costs to DeGrussa
mining
♦ Closure costs
Fixed exposure (with indexation):
Ore haulage to ♦ Ore Treatment Fee (OTF) – covers
DeGrussa plant all Sandfire downstream costs and
plant usage charge
REVENUE variables:
♦ Ore volumes and grades
♦ Metal prices
POINT OF
ORE SALES Fixed exposure:
♦ Process recovery formulae
♦ Metal payabilities
Business service
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Talisman economics

Monty Feasibility Study OPEX estimates (TLM 30% basis)

• ♦ 239kt mined ore

• ♦ Underground mining + ore haulage cost = A$126/t

• ♦ Sandfire Ore Treatment Fee (OTF) = A$211/t

• ♦ Fixed Sandfire monthly management fee = equates to ~A$1/t

• ♦ Total operating costs (excl royalties and closure) = A$81M

• ♦ Implied operating cost per tonne ore = A$338/t

Monty Feasibility Study REVENUE estimates (TLM 30% basis)

• ♦ 239kt mined ore containing 22.3kt Cu, 11.5koz Au & 124koz Ag

• ♦ LOM average prices: US$6118/t Cu, US$1369/oz Au, US$18.7/oz Ag & 0.723 A$

• ♦ Implied gross revenue = A$181M

• ♦ Implied gross revenue per tonne ore = A$758/t

• ♦ Copper revenue received / metal-in-ore value = 89.0%*

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♦ Metal payabilities ♦ * Feasibility Study LOM average copper recovery of 92.8% multiplied by payability of 95.9%
Sandfire exposure (cost volatility mitigated with indexation of OTF)
Business service Concentrate Concentrate Treatment and Metals
Ore processing
support (G&A) product transport refining charges production
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Monty ore ownership and risks transfer at this point

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----- Start of picture text -----

Mined
DeGrussa plant
Monty ore Dedicated weighbridge at
Springfield JV mining/ore haulage risk Sandfire processing/downstream risk processing and
(TLM 30% DeGrussa ROM pad
concentrate sales
Basis)
Talisman 30% of Monty ore
Monty ore Calculated Calculated Ore sale
HEAD Calculated METAL METAL METAL
tonnes metal-in- payable revenue per
GRADES metal-in-ore RECOVERIES PAYABILITIES PRICES
weighed concentrate metal tonne
Head grades calculated directly Fixed metal recovery Fixed metal payabilities Prevailing LME and
from block model once grade formulae are applied to are applied to calculated Comex metal prices are
control (GC) drilling on each stope calculated metal-in-ore. metal-in-concentrate. applied to calculated
is complete. GC drilling on a 10m x payable metal.
10m basis and calculations carried
out by an independent third party.
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TALISMAN

Ore sale revenue per Monty ore tonne Ore Treatment Fee (OTF) of A$211 per Monty ore tonne delivered to DeGrussa. (equiv. U$0.83/lb payable Cu) Fixed monthly management fee (equates to ~A$1 per Monty ore tonne delivered) Forecast government and native title royalty payments based on calculated payable metal

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SANDFIRE RESOURCES
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♦ Ore Treatment Fee (OTF) of approx. A$211/t ore

• ♦ Recognises all downstream costs post ore sale:

• ♦ Ore processing and associated business services/G&A

• ♦ Concentrate transport and refining costs (~55% of OTF)

• ♦ A dedicated plant usage charge

• ♦ Closely aligned with actual DeGrussa processing, G&A and downstream costs

• ♦ Appears elevated on a per tonne of ore basis due to the extremely high grade nature of Monty ore

• ♦ Concentrate costs actually levied per tonne of conc/Cu

• ♦ Equates to US$0.86/lb payable Cu metal (at spot A$)

• ♦ Modest plant usage charge allows Talisman to avoid a substantial investment in dedicated processing, site services, transport and marketing infrastructure

• ♦ Plus removes all accompanying risk exposures

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DeGrussa opex as per quarterly US$ operating data released by Sandfire and avg. 1HFY17 A$/US$ rate of 0.75; all A$/US$ conversions above at this rate.

Adjustments to reflect high Monty ore grade

DeGrussa processing/G&A costs applied to Monty Feasibility Study operating parameters to arrive at notional per pound unit costs.

DeGrussa opex expressed on a per pound contained metal basis; Monty OTF and implied usage charge expressed on a per pound payable metal basis.

DeGrussa transport, treatment and refining cost notionally adjusted back to a per tonne ore cost utilising Monty Feasibility Study operating parameters.

This is an indicative analysis only. The calculation of specific OTF components is notional and derived solely on an implied basis utilising DeGrussa 1HFY17 actual opex. Talisman does not warrant that these implied component amounts align in any way with the specific component amounts of the aggregate OTF within the OSA.

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A technically sound and highly economic underground project

All costs borne by the Springfield Joint Venture under the OSA are incorporated in the Monty financial analysis on a 100% basis. As such, Talisman’s underlying economic interest in the development of Monty equates to its 30% interest in the Springfield Joint Venture and is therefore represented by its simple 30% share of forecast financial returns as outlined below.

Operating parameters (TLM 30% basis)	Units	FS (Mar 2017)
Pre-production mine development	months	12
Ore production mine life	months	30
Total mined and milled ore	kt	239
Copper head grade (LOM avg)	% Cu	9.35
Gold head grade (LOM avg)	g/t Au	1.50
Silver head grade (LOM avg)	g/t Ag	16.2
Total copper-in-ore mined	kt	22.3
Total gold-in-ore mined	koz	11.5
Total silver-in-ore mined	koz	124.0
Total payable copper metal	kt	19.9
Total payable gold metal	koz	5.7
Total payable silver metal	koz	56.2

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Financial parameters (TLM 30% basis)	Units	FS (Mar 2017)
Forecast copper price (LOM avg)	US$/t	6,118
Forecast gold price (LOM avg)	US$/oz	1,369
Forecast silver price (LOM avg)	US$/oz	18.76
Forecast A$/US$ (LOM avg)	USc	0.723
Total gross revenue	A$M	181
Total net revenue (post royalties)	A$M	173
Total cash operating costs	A$M	89
Pre-tax operating cashflow	A$M	92
Pre-production capital cost	A$M	22
LOM sustaining capital cost	A$M	5
Ungeared, pre-tax free cashflow	A$M	64
Notional C1 costi	A$/lb pay Cu	1.56
Notional All-in-sustaining-cost (AISC)i	A$/lb pay Cu	1.90
Pre-tax NPV (8% discount rate, real)	A$M	46
Pre-tax IRR	%	78
Payback period (from first production)	months	17
Ore reserve life - to - payback period	x	1.8
NPV / pre-production capex	x	2.1

iC1 and AISC are calculated on the basis of notionally including the OSA Ore Treatment Fee as a production cost. AISC is defined as the operating cash cost of production (net of by-product credits) plus royalties and sustaining capital and closure costs but exclusive of any finance costs or corporate overhead allocation.

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