TALISMAN MINING LIMITED — Interim / Quarterly Report 2014

Apr 29, 2014

30[th] April 2014

COMPANY SNAPSHOT

March 2014 Quarterly Activities Report

Board of Directors

Alan Senior Non-Executive Chairman

Gary Lethridge Managing Director

Graeme Cameron Technical Director

Brian Dawes Non-Executive Director

Karen Gadsby Non-Executive Director

Contact Details

6 Centro Avenue Subiaco, Western Australia, 6008 Australia

Telephone: + 61 8 9380 4230

Facsimile: + 61 8 9382 8200

Highlights

Doolgunna Copper-Gold Projects – Sandfire Resources Exploration Farm-in

• High quality geophysical, geological and geochemical project datasets provided to Sandfire Resources (ASX: SFR) during the Quarter following the $15M Joint Venture Farm-in Agreement executed with Sandfire in December 2013.

• Sandfire are undertaking a systematic and technically driven approach to assessing the Talisman project datasets utilising both in-house and external expert input.

• This thorough technical review and integration of the combined Talisman-Sandfire intellectual property is progressing well with involvement of Talisman technical personnel.

• Desktop modelling of the extended DeGrussa mine corridor into Talisman’s Springfield Project has identified a combined 65km strike length of prospective VMS host rocks across the combined Talisman and Sandfire tenements.

• Sandfire intend to undertake additional low level assaying of some existing Talisman drill samples to allow evaluation and prioritisation of potential DeGrussatype geochemical “signatures” across all of Talisman’s Doolgunna Projects.

• This Principal Component Analysis will assist in determining high priority geochemical areas of interest consistent with DeGrussa.

• .

• Sandfire has advised that first drilling is anticipated during the second half of 2014.

Email:

info@talismanmining.com.au

Website:

www.talismanmining.com.au

Soil Sampling and Mapping Programs Completed at Halloween West JV

• Second phase of detailed soil sampling program completed to test the western extension of the Halloween VMS-target horizon, and to test a newly identified prospective horizon (with malachite) in the north-east of the Halloween West project area, confirmed two coherent Cu-Au anomalies which correlate with the interpreted extension of the prospective Halloween VMS target horizon.

Capital Structure

Shares on Issue: 131,538,627 (TLM)

Options on Issue: 8,900,000 (Unlisted)

Corporate

• Cash reserves of $16.6 million at 31 March.

• Active project identification and due diligence activities continue with several exploration project opportunities currently under detailed assessment with a clear commodity focus on nickel sulphide, copper-gold and/or gold projects in Australia.

Talisman Mining Ltd ABN 71 079 536 495 6 Centro Avenue, SubiacoWestern Australia 6008 www.talismanmining.com.au

March 2014 Quarterly Activities Report

- Exploration Farm in Joint Venture with Sandfire Resources NL

In December 2013, Talisman secured the involvement of leading Australian copper producer Sandfire Resources NL (ASX: SFR) in the next phase of exploration of its Doolgunna copper-gold projects through a $15 million exploration farm-in joint venture (refer ASX release 20/12/2013). The Letter Agreement covers Talisman’s interests in the Springfield , Halloween and Halloween West JV Projects.

Talisman’s Springfield Projec t lies immediately along strike, to the east; from Sandfire’s operating DeGrussa Copper-Gold mine, and the Halloween and Halloween West JV Projects abut Sandfire’s Doolgunna Project to the west ( see Figure 1 ). These Projects are interpreted to contain extensions of the volcanic rock package which hosts the DeGrussa VMS deposits. The exploration farm-in enables the two companies to work together and share local exploration knowledge in order to target potential copper-gold discoveries at these projects.

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Talisman has invested more than $20 million exploring its Doolgunna Projects over the past four years. During this time, it has assembled a comprehensive geo-scientific database which has facilitated the identification of a series of highquality copper-gold exploration targets, especially across the Springfield Project and within the interpreted extension of the DeGrussa Mine Corridor ( see Figure 1 ).

Following the completion of the Exploration Farm-in Joint Venture Agreement, Talisman provided a copy of its extensive, high-quality datasets to Sandfire. Full integration, processing and evaluation of these datasets by Sandfire is now well advanced with a focus on identification of initial priority target areas along the extended DeGrussa Mine Corridor and across the greater Doolgunna Projects.

Importantly, Sandfire has already identified a combined 65km strike length of prospective Volcanogenic Massive Sulphide (VMS) horizon across the combined Talisman and Sandfire tenements, providing a significantly expanded search horizon for potential new VMS deposits ( see Figure 1 ).

Figure 1 - Talisman’s Doolgunna Copper-Gold Projects subject to the $15M Exploration Farm-in Joint Venture with Sandfire and interpreted DeGrussa Mine Corridor and regional geology

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March 2014 Quarterly Activities Report

Sandfire is undertaking a technically driven and systematic approach to the detailed assessment of Talisman’s Doolgunna Projects datasets with the involvement of both Talisman personnel and external expert consultants supporting its in-house exploration team. Work known to have been undertaken, planned or underway by Sandfire on Talisman’s Doolgunna projects is as follows.

 Lithochemical Targeting

Detailed geochemical analysis of the DeGrussa copper-gold mineralisation has enabled Sandfire to develop a robust set of geochemical pathfinder elements (Principal Components) with a unique metal signature. When combined in this way the lithochemical data provides a powerful tool to better detect DeGrussa-style mineralisation and host rocks and to prioritize highly-prospective areas for further drilling and ground electromagnetic surveys.

A preliminary evaluation of the Talisman data has indicated that there is likely to be several prospective areas across the Doolgunna Projects, however further assaying of Talisman drill samples is required in order to identify the critical pathfinder elements used to “fingerprint” the DeGrussa signature.

This work is currently underway and will provide an important input for determining the overall prospectivity along the DeGrussa VMS Trend.

 Geophysical Evaluation

Another critical step towards robust new target generation is the compilation, integration and evaluation of the Talisman geophysical datasets.

The Talisman magnetic and gravity data is of a very high quality and resolution allowing more precise interpretation and mapping of the key units and target horizons along the DeGrussa Trend into the Springfield Project. Sandfire has developed a strong understanding of the geology at DeGrussa and now using the Talisman geophysical data is in a position to extend its interpretation across the entire combined Doolgunna Project.

While Talisman has gathered extensive first-pass Moving Loop Electromagnetic data over the Springfield Project, further scope remains to apply the latest high-energy Fixed Loop and Downhole electromagnetic techniques over well-defined VMS targets.

Sandfire have demonstrated considerable capability with the successful discovery of the “blind” C4 and C5 mineralised shoots at DeGrussa using these high-energy electromagnetic methods and it has the ability to apply these same techniques over targets on the Doolgunna JV Projects once all the data has been compiled and the revised geological and geochemical interpretations are at hand.

 Targeting and Drilling

First drilling under the new exploration farm-in agreement is anticipated to commence in the second half of 2014. As discussed above, Sandfire is currently working towards fully integrating and re-interpreting the extensive Talisman datasets. This work is highly likely to build-on Sandfire’s growing understanding of the controls and location of the DeGrussa mineralisation and potentially lead to new VMS copper-gold targets amenable to detailed ground electromagnetic surveys and direct drill testing.

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March 2014 Quarterly Activities Report

- Halloween West JV Soil Sampling

During the December Quarter and prior to the exploration farm-in agreement with Sandfire, Talisman undertook another phase of exploration at the Halloween West JV ( Talisman ~63%; Chrysalis Resources Ltd ~37% ). This comprised approximately 800 soil samples taken along 100m and 200m-spaced soil sampling traverses.

The exploration program was designed to test for the surface expression of copper-gold mineralization across two previously defined target areas including the western extension of the Halloween VMS target horizon at the Wizard Prospect and a malachite-bearing (secondary copper) sedimentary horizon in the east of the tenement at the Malachite Prospect (see Figure 2 ).

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Figure 2: Halloween West JV Project showing recently completed soil sampling program over the Wizard and Malachite Prospects

At the Wizard Prospect, a zone of coherent copper-gold anomalism was defined and correlates with the interpreted western extension of the prospective Halloween volcano-sedimentary corridor. Maximum assay results returned were 90.3ppm Cu against a background 25–40ppm Cu and a peak 447.9ppb Au against a background < 2 ppb Au (see Figure 3 , Appendix 2 ).

At the Malachite Prospect, copper-gold anomalism was confirmed as occurring across the general area surrounding a known malachite occurrence. Maximum assay results returned were 103.7ppm Cu against a background of 25–40ppm Cu and a peak of 72.5 ppb Au against a background of background < 2 ppb (see Figure 3 , Appendix 2 ).

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March 2014 Quarterly Activities Report

Geological mapping at the Malachite Prospect indicates that the surface copper-gold anomalism is associated with a copper-bearing inter-volcanic sedimentary horizon and as such may warrant further mapping and geochemical evaluation to determine its possible extents and significance.

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Figure 3 – Halloween West JV copper results for soil sampling programs at the Wizard and Malachite Prospects

The next phase of activity at the Halloween Projects, which is now underway, will involve a process of integration, analysis and modelling of the combined exploration data sets by Sandfire. Once complete, this will then enable planning of the next phases of exploration at the Halloween West Project. Talisman’s share of future exploration activities on this Project will be funded and managed by Sandfire under the terms of the Letter Agreement.

Murchison Exploration Projects

Livingstone Project (TLM 80%)

The Livingstone Project is located approximately 130km to the north-west of Meekatharra (see Appendix 1) and covers an area of 208 km². The Project straddles the western extension of the prospective Bryah Basin at the northern margin of the Yilgarn Craton. A major shear zone traverses the entire Project with widespread gold intercepts returned by historic percussion drilling programs over a strike length of more than 31km.

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March 2014 Quarterly Activities Report

Kerba Ni-Cu-PGE Prospect

The Kerba Prospect comprises an interpreted ovoid Proterozoic-aged mafic-ultramafic intrusion localised along the major regional Kerba Fault Zone (see Figure 4 ). The principal exploration target at Kerba is Voisey Bay (or Nova)-style magmatic nickel-copper-PGE sulphide mineralization associated with the basal contact of the host mafic-ultramafic intrusion.

An initial 4-hole RC drilling program for 983 metres was completed in November 2013 to test for the presence of nickel sulphide mineralisation as well as to establish a platform for deeper down-hole electromagnetic (DHEM) surveying. This work was previously reported on in Talisman’s December 2013 Quarterly Report.

Importantly, petrographic examination of the drill chips noted widespread sulphide development within the mafic-ultramafic lithologies. Minor blebs of chalcopyrite and pyrite are preferentially developed in the pyroxenite unit and trace, fine-grained nickel sulphide (pentlandite) was observed at a pyroxenite-peridotite contact and it is interpreted that these sulphides were the result of localized (hydrothermal) remobilization from olivine rich phases at depth.

Down-hole electromagnetic (DHEM) surveys were completed on all holes, with no significant conductors detected.

Elevated nickel (>0.3% Ni) and copper (>300 ppm Cu) drill results were returned from the saprolite horizon above the nickel-sulphide bearing ultramafic contact, with a best intersection of 6m @ 0.47% Ni from 6m depth in LVRC001.

While these elevated results in the near-surface environment are the result of weathering processes, it was interpreted that they may also provide a useful vector to primary nickel-copper sulphides at depth elsewhere in the Kerba intrusion.

During the Quarter an external expert review was undertaken in order to assess the results of the recent drilling programme at the Kerba Prospect and to determine the validity of conducting further exploration at the Prospect.

It was concluded that the Kerba intrusion represents a fractionated ultramafic body comprising a basal peridotite grading upwards into more iron-rich pyroxenite and high-Mg basalt. It appears that much of the observed copper sulphide is hosted by the upper pyroxenite indicating normal fractionation processes, rather than massive nickel sulphide development.

However, the review also highlighted that the basal contact of the main peridotite body lies to the south of the current drilling and as such remains untested (See Figure 4 ).

Further mapping and surface geochemistry is under consideration to check for evidence of nickel sulphide accumulation along this untested basal contact position.

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March 2014 Quarterly Activities Report

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Figure 4: Kerba Prospect magnetic image showing completed RC drill-holes to test FLEM plates, 3D magnetic model and interpreted prospective basal contact to Kerba peridotite.

Muddawerrie Gold Project (TLM 80%)

The Muddawerrie Project is located approximately 100km north-west of Meekatharra in the Murchison Region of Western Australia (see Appendix 1). The Project covers an area of approximately 52km² and comprises a prospective Archaean greenstone belt with significant potential to host high-grade, banded iron formation (BIF) and mafic-hosted shear zone gold deposits, similar to those at Mt Magnet and Meekatharra.

There were no field activities conducted at Muddawerrie during the Quarter; however various desktop activities were undertaken.

Previous detailed soil sampling by Talisman has identified widespread gold anomalism at Muddawerrie.

A field visit is planned for the June 2014 Quarter and exploration programs are currently being prepared and may include drill testing of the better targets identified at the Project.

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March 2014 Quarterly Activities Report

Milgun Project (TLM 100%)

The Milgun Project is located approximately 20km north west of the Shelby Project and covers a potential northern outlier of the Bryah Basin (see Appendix 1). The Milgun Project is interpreted to be located within a tectonically uplifted block of Bryah basement rocks. It is interpreted that basement uplift is an effective mechanism for focused fluid flow and possible copper-gold and gold mineralisation.

No field activities were conducted at Milgun during the Quarter.

A field visit is planned for the June 2014 Quarter to conduct further mapping and to “ground-truth” geophysical targets and previously identified geochemical copper-gold anomalies.

Shelby Project (TLM 100%)

The 1,816 km² Shelby Project is located along the northern margin of the Bryah Basin approximately 30km north of the Horseshoe Lights Copper-Gold Mine (see Appendix 1). On the basis of its geological setting, Talisman has identified the Shelby Project as having the potential to host large Iron OxideCopper-Gold (IOCG) deposits (e.g. Olympic Dam, Prominent Hill) and/or a Voisey’s Bay-style maficultramafic intrusive hosted nickel-copper-PGE sulphide deposit.

An ongoing review is focused on better defining potential geophysical targets along the interpreted northern Marymia Margin for possible follow-up exploration activities including detailed gravity and drilling.

Consideration is also being given to the potential for joint venturing this Project.

CORPORATE

At the end of the Quarter, Talisman held cash of $16.6 million.

Business Development

Having secured external exploration funding for its Doolgunna Copper-Gold Projects as a consequence of the recent exploration farm-in agreement with Sandfire, Talisman is strategically positioned to attempt to secure new, high-quality exploration assets.

During the March Quarter, Talisman’s business development activities were focused on the identification of potential quality exploration projects located within Australia for further assessment. Principal commodities under consideration are nickel sulphide, copper-gold and gold.

Of the exploration projects identified during the Quarter, assessment and initial investigation activities were conducted on 16 copper-gold projects, 18 nickel sulphide, 6 gold and 2 base metals exploration projects. (see Figure 5 )

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March 2014 Quarterly Activities Report

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Figure 5: Business development opportunities reviewed during quarter by principle commodity type.

Detailed technical and commercial due diligence activities were undertaken during the Quarter and continue on several of these exploration projects.

Investment & Royalty Update

During the Quarter, ASX listed resources company, Ochre Group Holdings Limited (“Ochre” - ASX: OGH) announced that it had agreed to sell the Wonmunna Iron Ore Project, located in the Pilbara region of Western Australia to Ascot Resources Limited (“Ascot” - ASX: AZQ) – refer OGH & AZQ announcements on 18 March 2014 .

Talisman holds 35 million ordinary shares in Ochre . This investment was acquired by Talisman in early 2011 as part consideration for the sale of the Wonmunna Iron Ore Project to Ochre at that time. This shareholding currently represents approximately 5.85% of Ochre’s issued capital.

Proposed Transaction Details ( -OGH & AZQ announcements on 18 March 2014- )

Reported consideration payable by Ascot to Ochre for the Wonmunna Iron Ore Project comprises:

1. the issue of 88 million fully paid ordinary Ascot shares (post a two for one consolidation of Ascot shares);

2. based on a minimum of a $10.0 Million in fund raising by Ascot, a A$2 million cash consideration is payable on completion;

3. Subject to various conversion conditions, a further A$29.75 million payable five years from transaction completion and at a coupon rate of 5.88% PA; and

4. a 1% gross revenue royalty commencing 12 months after the first shipment.

Should the proposed transaction and fund raising by Ascot complete successfully Ochre anticipates holding approximately 50% of Ascot’s adjusted issued capital and to have two representative directors on the Board of Ascot.

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March 2014 Quarterly Activities Report

Royalty

As part of the sale of the Wonmunna Iron Ore Project to Ochre, Talisman was also granted by Ochre a 1% gross revenue royalty from all metals mined from that project. Talisman understands that Ascot will assume Ochre’s obligation to Talisman for this 1% gross revenue royalty upon completion of the proposed transaction between Ochre and Ascot.

Potential Value Accretion

Based on historical studies on the Wonmunna project, Ascot is proposing to establish a 5Mtpa operation in the medium term which will target the production of both lump and fines products. (-AZQ announcements on 18 March 2014 and 25 March 2014-)

Assuming the transaction between Ochre and Ascot is completed and should Ascot proceed to successfully develop and operate the Wonmunna Iron Ore Project, it is possible that Talisman may potentially receive value from:

1. the receipt of a future revenue stream from the Wonmunna Project in the form of the gross revenue royalty; plus

2. a potential increase in its investment in Ochre as a result of a potential share price re-rating of Ochre, commensurate with Ochres interest in Ascot if/ when development milestones are achieved by Ascot.

Competent Persons’ Statement

Information in this ASX release that relates to Exploration Results and Mineral Resources is based on information compiled by Mr Graeme Cameron, who is a member of the Australasian Institute of Mining and Metallurgy. Mr Graeme Cameron 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 Graeme Cameron consents to the inclusion in this report of the matters based on information in the form and context in which it appear.

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March 2014 Quarterly Activities Report

Appendix 1 – Talisman Mining Ltd Project locations

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March 2014 Quarterly Activities Report

Appendix 2 – Halloween West JV Project; Significant soil sampling assay results (Copper > 60ppm and Gold > 10ppb)

Prospect	North	East	Cu	Au		Prospect	North	East	Cu	Au
Name	(GDA94)	(GDA94)	(ppm)	(ppb)		Name	(GDA94)	(GDA94)	(ppm)	(ppb)
Malachite	7168875	715898	103.7	3.3		Wizard	7167850	709900	90.3	-0.5
Malachite	7169149	715499	102.1	6.2		Wizard	7168052	711002	89.6	3.7
Malachite	7168974	715501	100.5	2.3		Wizard	7168123	711004	89.1	1.8
Malachite	7168949	715500	97.5	2.2		Wizard	7168150	710900	82.8	-0.5
Malachite	7169200	715700	81.6	-0.5		Wizard	7168099	710900	79.2	-0.5
Malachite	7169299	715899	80.6	4.4		Wizard	7167650	710501	76.5	-0.5
Malachite	7169001	715400	75.1	2.6		Wizard	7167900	710700	75.8	-0.5
Malachite	7169199	715899	74.5	1.8		Wizard	7167824	709899	73.3	447.9
Malachite	7169024	715401	72.7	1.8		Wizard	7167874	710699	73	1.2
Malachite	7169051	715398	72.7	1.3		Wizard	7168125	710899	66.4	-0.5
Malachite	7169175	715399	71.1	-0.5		Wizard	7168075	710800	66.3	-0.5
Malachite	7169274	715699	70.2	-0.5		Wizard	7167925	710500	66.1	-0.5
Malachite	7169200	715799	68.9	0.8		Wizard	7168200	710900	64.4	-0.5
Malachite	7169175	715698	68.7	-0.5		Wizard	7168276	710999	63.6	3.7
Malachite	7169075	715502	68	72.5		Wizard	7167975	710802	62.3	0.8
Malachite	7169225	715700	67.1	-0.5		Wizard	7168100	710799	61.8	-0.5
Malachite	7169025	715801	65.8	1.4		Wizard	7167774	709903	61.6	3.2
Malachite	7169348	715699	65.7	-0.5		Wizard	7168001	710801	61.2	-0.5
Malachite	7169075	715400	65.6	2.5		Wizard	7167376	709302	60.8	1.6
Malachite	7169324	715797	64.8	-0.5		Wizard	7167801	709900	60.7	1.7
Malachite	7169326	715900	64	-0.5		Wizard	7167749	710501	60.6	-0.5
Malachite	7169373	715799	63.8	-0.5		Wizard	7167849	710501	60.1	-0.5
Malachite	7168926	715800	63.3	4.8		Wizard	7168250	710800	21.6	28.6
Malachite	7169000	715301	63.3	-0.5
Malachite	7168924	715699	62.7	-0.5
Malachite	7168825	715900	61.8	-0.5
Malachite	7169350	715798	61.6	-0.5
Malachite	7169276	715902	61.5	2.5
Malachite	7168901	715600	60.9	-0.5
Malachite	7169350	715898	60.6	1.3
Malachite	7168976	715300	60.5	-0.5
Malachite	7169423	715899	60.1	0.9
Malachite	7168949	715700	60.1	-0.5
Malachite	7168975	715400	60	1.6
Malachite	7169100	715699	60	-0.5
Malachite	7169449	715899	60	-0.5
Malachite	7168900	715699	38.5	31.1

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March 2014 Quarterly Activities Report

Appendix 3 – Talisman Mining Tenement Schedule as at 31[st] March 2014

Project/Tenement	Location and blocks (Area)	Interest at Beginning Quarter	Interest at End Quarter	Acquired during Quarter	Disposed during Quarter	Joint Venture Partner/Farm-In Party
HALLOWEEN WEST	W.Australia
E52/2275	6	60%	60%	-	-	JV -Chrysalis Resources Farm-in - Sandfire ResourcesLtd
HALLOWEEN	W.Australia
P52/1241	(200 HA)	100%	100%	-	-	Sandfire Resources Ltd*
LIVINGSTONE	W.Australia
E52/2565	15	80%	80%	-	-	Zebina Minerals Pty Ltd
E52/2566	31	80%	80%	-	-	ZebinaMineralsPtyLtd
E52/2593	24	80%	80%	-	-	Zebina Minerals Pty Ltd
P52/1423	(195 HA)	100%	100%	-	-
E52/2931	2	100%	100%	-	-
**MILGUN **	W.Australia
E52/2281	41	100%	100%	-	-
E52/2690	67	100%	0%	-	Surrendered
E52/2708	21	100%	100%	-	-
MUDDAWERRIE	W.Australia
E51/1447	17	80%	80%	-	-	Zebina Minerals Pty Ltd
SHELBY	W.Australia
E52/2499	42	100%	100%	-	-
E52/2500	36	100%	100%	-	-
E52/2519	3	100%	100%	-	-
E52/2628	29	100%	100%	-	-
E52/2629	9	100%	100%	-	-
E52/2634	19	100%	100%	-	-
E52/2660	21	100%	0%	-	Surrendered
E52/2661	69	100%	0%	-	Surrendered
E52/2662	50	100%	0%	-	Surrendered
SPRINGFIELD	W.Australia
E52/2282	70	100%	100%	-	-	Sandfire Resources Ltd
E52/2313	14	100%	100%	-	-	Sandfire Resources Ltd
E52/2466	14	100%	100%	-	-	Sandfire Resources Ltd

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March 2014 Quarterly Activities Report

Appendix 4 - JORC TABLE 1

Section 1 Sampling Techniques and Data (Criteria in this section apply to all succeeding sections.)

Criteria	JORC Code Explanation	Commentary
Sampling techniques	• Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.	781 soil samples were taken on a 100m x 25m north-south oriented grid pattern across the interpreted Halloween Target Horizon. The spacing was increased to 200m over the far eastern extents of the target horizon where its location is less well defined.
	• Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.	Samples were only taken from erosional or residual areas amenable to_in situ_soil sampling. No samples were taken from areas covered by alluvial deposits.
	• Aspects of the determination of mineralisation that are Material to the Public Report. • In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.	Soil samples were taken for assay by scraping an area of 1m x 1m to remove surficial material. A 25cm deep was dug and a sample taken and dry sieved at the sample site to collect ~100g of <2mm sample.
Drilling techniques	• Drill type (eg core, reverse circulation, open-	No drilling reported
	hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face- sampling bit or other type, whether core is oriented and ifso, by what method, etc).

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March 2014 Quarterly Activities Report

	Criteria	JORC Code Explanation	Commentary
	Drill sample recovery	• Method of recording and assessing core and chip sample recoveries and results assessed.	No drilling reported
		• Measures taken to maximise sample recovery and ensure representative nature of the samples.	No drilling reported
		• Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.	No drilling reported .
	Logging	• Whether core and chip samples have been	No drilling reported .
		geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.
		• Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) _photography. _	No drilling reported
		• The total length and percentage of the relevant intersections logged.	No drilling reported
	Sub- sampling techniques and sample preparation	• If core, whether cut or sawn and whether quarter, half or all core taken.	No core was sampled.
		• If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.	All soil samples were sieved dry through a 2mm sieve to collect 100gof sample for analysis.
		• For all sample types, the nature, quality and appropriateness of the sample preparation technique.	The sample preparation of soil samples follows industry best-practice for sample preparation involving splitting, sieving, drying, and pulverizing of the total sample.
		• Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.	Field QC procedures for all soil sampling programs involve the use of Certified Reference Material (CRM) as assay standards. The insertion ratio of standards was 1:20. All QC/QA controls and measures are routinely reviewed and reported on at the completion of the programme. External laboratory QC/QA checks are routinely monitored and stored in the Talisman database.
		• Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.	No field duplicates have been taken.
		• Whether sample sizes are appropriate to the grain size of the material being sampled.	Soil sample size is considered adequate for the sampling media, mineralisation style and purpose of this program.

March 2014 Quarterly Activities Report

Criteria	JORC Code Explanation	Commentary
Quality of assay data and laboratory tests	• The nature, quality and appropriateness of	All soil samples were sent to ACME Laboratories, Vancouver for low level multi-element (36) analysis by Aqua- Regia digestion with an ICP-MS finish (1DX).
	the assaying and laboratory procedures used and whether the technique is considered partial or total.
	• For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.	Not applicable.
	• Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.	All soil assays were required to conform to the Talisman procedural QA/QC guidelines as well as routine laboratory QA/QC guidelines. This has been achieved using laboratory standards and duplicates as well as company standards. QA/QC reports have been generated and all data is stored in the Talisman Database.
Verification of sampling and assaying	• The verification of significant intersections by either independent or alternative company personnel.	The Talisman Exploration Manager has verified all significant soil assay results.
	• The use of twinned holes.	No holes drilled.
	• Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.	Field and laboratory data have been collected electronically and stored in the Talisman_Datashed_ database The data is visually examined using _ArcGIS_and mining software.
	• Discuss any adjustment to assay data.	No adjustments have been made.
Location of data points	• Accuracy and quality of surveys used to	All soil samples are also located using handheld GPS (accurate to <5m),
	locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.
	• Specification of the grid system used.	The coordinate system used was the Geocentric Datum of Australia (GDA) 1994. Coordinates are in the Map Grid of Australia zone 50 (MGA).
	• Quality and adequacy of topographic control.	A handheld GPS has been used to determine local altitude.

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March 2014 Quarterly Activities Report

Criteria	JORC Code Explanation	Commentary
Data spacing and distribution	• Data spacing for reporting of Exploration Results.	Soil sampling across the Halloween Target Horizon was completed along 25 lines on a nominal 100m by 25m grid pattern, and extending to 200m spacing along 6 lines over the western extent of the target horizon.
	• Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.	Not applicable for first phase exploration soil sampling.
	• Whether sample compositing has been applied.	No composite samples were taken.
Orientation of data in relation to geological structure	• Whether the orientation of sampling achieves	The orientation of soil sampling traverses was designed to traverse the geological sequence at a perpendicular angle.
	unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.
	• If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.	No known orientation-based sampling bias has been identified.
Sample security	• The measures taken to ensure sample security.	Samples are stored in field prior to submission under the supervision of the Project Geologist. Samples are transported by an accredited courier service to ACME Laboratories, Vancouver.
Audits or reviews	• The results of any audits or reviews of	None undertaken.
	sampling techniques and data.

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March 2014 Quarterly Activities Report

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria	JORC Code Explanation	Commentary
Mineral tenement and land tenure status	• Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.	Soil sampling at Halloween West was conducted on tenement E52/2275. This lease is the focus of a Joint Venture between Talisman (61%) and Chrysalis Resources (39%). The tenement is located 150km north-east of Meekatharra, WA and falls within the Department of Conservation-managed Doolgunna pastoral lease.
	• The security of the tenure held at the time of reporting along with any known impediments to obtaining a license to operate in the area.	E52/2275 at Halloween West Springfield expires on the 8th February 2014. An Extension-of-Term has been granted and the tenement is in good standing with no existing impediments to exploration,
Exploration done by other parties	• Acknowledgment and appraisal of	Exploration work at Halloween West completed prior to Talisman’s tenure included geochemical soil and rock chip sampling, geological mapping, airborne time domain electromagnetic (VTEM) surveying and RC drilling to test geophysical VTEM targets.
	exploration by other parties.
Geology	• Deposit type, geological setting and style of mineralisation.	Talisman’s Halloween West Project lies within the Proterozoic-aged Bryah rift basin enclosed between the Archaean Marymia Inlier to the north and the Proterozoic Yerrida basin to the south. The rocks comprise dolerites, basalt, and volcanic–derived sediments of the Narracoota Formation. The principal exploration targets in the Springfield area are Volcanic Hosted Massive Sulphide (VHMS) and structurally-controlled base metal (copper) deposits with associated gold mineralisation.
Drill hole Information	• A summary of all information	No drilling reported.
	material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: • easting and northing of the drill hole collar • elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar • dip and azimuth of the hole • down hole length and interception depth • hole length. • If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly _explain why this is the case. _

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March 2014 Quarterly Activities Report

Criteria	JORC Code Explanation	Commentary
Data aggregation methods	• In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.	No weighted intercepts reported.
	• Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.	No aggregate intercepts reported.
	• The assumptions used for any reporting of metal equivalent values _should be clearly stated. _	No metal equivalent values reported.
Relationship between mineralisation widths and intercept lengths	• These relationships are particularly	No drilling results reported
	important in the reporting of Exploration Results. • If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. • If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true width not known’).
Diagrams	• Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.	Refer to Figures and Tables in the body of text.
Balanced reporting	• Where comprehensive reporting of	Refer to Figures and Tables in the body of text.
	all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

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March 2014 Quarterly Activities Report

Criteria	JORC Code Explanation	Commentary
Other substantive exploration data	• Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious _or contaminating substances. _	No other substantive exploration data reported.
Further work	• The nature and scale of planned	See body of text.
	further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling). • Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

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