TALISMAN MINING LIMITED — Investor Presentation 2017

May 9, 2017

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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 Investor Presentation: 121 Mining Investment Forum, May 2017

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Disclaimer

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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.

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Talisman overview

Advanced projects in Western Australia

30% interest in Springfield Cu-Au Joint Venture

• High grade Monty deposit located 10km from DeGrussa Plant

• Monty Feasibility Study complete with outstanding forecast returns

• TLM Board approval to proceed to development

• First production targeted December quarter 2018

• Located in proven world-class VMS province with multiple prospective corridors and ongoing exploration

100% owned Sinclair Nickel Project

• Extensive tenement holding in fertile nickel belt with potential to host significant deposits

• Multiple near-mine and regional exploration opportunities

• Sinclair extension, Skye/Stirling, Delphi Nth

• Extensive infrastructure including processing plant with potential fast-track route to production

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OWNERSHIP

Philosophy and core beliefs

• Behave and act as business

• owners

• Be accountable for our decisions and actions

• What we say is what we do

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RELATIONSHIPS

ENGAGEMENT

• Engage with stakeholders in meaningful and clear way

• Develop mutually beneficial partnerships and opportunities

• Build strong commitment across our team and with stakeholders

• Cultivate beneficial two-way communication

• Collaborative approach to build solid relationships

• Share our journey to create value for all stakeholders

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Corporate snapshot

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

Experienced and diverse Executive Team and Board

Dan Madden – Managing Director

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

Tony Greenaway – General Manager Geology

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

Shaun Vokes – Chief Financial Officer and Company Secretary

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

Ben Wilson – General Manager, Project Development

• +20 years experience across multiple commodities from project evaluation to management of mining operations

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Capital Structure	Capital Structure
Shares on Issue 185.7M
Unlisted Options 10.5M
Market Capitalisation (at 32c) ~A$60M
Cash (31 Mar 2017) A$13.8M
Substantial Shareholders
Kerry Harmanis 17%
Hunter Hall 12%
Board
Jeremy Kirkwood (Non-Exec. Chair)	Investment Banking, Corporate Strategy
Daniel Madden (MD)	Financial and Resources Background
Karen Gadsby (NED)	Finance, Commercial & Board Experience
Brian Dawes (NED)	Operational Executive
Alan Senior (NED)	Resources Project Development

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Springfield JV (30% Talisman)

Home to the Monty deposit and a proven world-class VMS province

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Springfield Cu-Au Joint Venture

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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%)

• 324km[2] tenement package located in Western Australia's Bryah Basin - proven world-class VMS province

• Multiple VMS horizons

• Includes high-grade and high value Monty Copper-Gold deposit:

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

  • 1.4g/t Au

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1 Refer to Appendix 1, Note ii

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The Monty Project: High grade, high value

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One of the highest grade copper deposits discovered globally in the last 20 years

• Fast-tracked towards development

• Discovery hole – June 2015

• Mineral Resource – April 2016

• Feasibility Study completed – April 2017

► Strong Feasibility Study outcomes

• Technically sound and highly financially viable underground project

• Low capital and low risk development pathway

• Signed agreements to allow JV mining and ore sales to Sandfire

• Development approval from TLM Board – April 2017

• Debt fund 100% of development capital

• Taurus Funds Management mandated – May 2017

• Targeted first production from Monty in 4Q CY2018

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Mining Lease
M57/1071
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Key Monty Feasibility Study outcomes (TLM 30% basis)

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Low capital and low risk development pathway with outstanding forecast returns

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Initial ore production life Total payable production = Forecast pre-tax free cash flow
= 30 months 20kt Cu and 6koz Au = A$64M
Pre-production capital cost Pre-tax NPV (8% discount rate) Pre-tax IRR
= A$22M = A$46M = 78%
Notional AISC Notional C1 cash cost Payback period (from 1 [st] prod) =
= A$1.90/lb payable Cu (US$1.37) = A$1.56/lb payable Cu (US$1.13) 17 months
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Early site works commenced and first Monty production targeted by Q4 calendar 2018

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Target Monty project development timeline 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
CY17 CY17 CY17 CY17 CY18 CY18 CY18 CY18
Detailed design and engineering
Early mobilisation and preliminary site activities
Final project approval
Decline development
First ore production
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Excellent capital intensity and all-in unit operating costs

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Very low upfront capital intensity ~US$2,000/tpa (~US$0.90/lbpa) and forecast low AISC

Initial capital intensity (US$/lbpa) of global copper mine developments (2015)

Global copper production All-In-Sustaining-Cost (AISC) curve (2016)

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Source: AME Research, 2015
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Source: SNL mine cost data 2016 Note: Data is presented in constant 2016 US Dollars.

MONTY FEASIBILITY STUDY

MONTY FEASIBILITY STUDY

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Maiden Monty Ore Reserve[2] estimate

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Exceptionally high grade underground copper-gold Ore Reserve

► Maiden Ore Reserve[2] of 920kt @ 8.7% Cu & 1.4g/t Au (100%)

Monty Ore Reserve[2] as at 31 March 2017

• TLM 30% share Ore Reserve = 280kt @ 8.7% Cu & 1.4g/t Au

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 [Reserve/stope model diagram]	-	-	-	-	-

• Attributable contained metal of 24kt copper and 13koz gold

• Represents resource conversion of approx. 88% of tonnes and 82% of contained copper

• Set to be one of the highest grade copper mines globally

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Monty (Talisman/Sandfire)
Sudbury (KGHM)
Kinsenda (Metorex) Copper grade (Cu%)
for high grade
DeGrussa (Sandfire) underground copper
mines globally
CSA (Glencore) Source: www.mining.com, February 2017
Reed (Hudbay)
0.0% 2.0% 4.0% 6.0% 8.0% 10.0%
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2 Refer to Appendix 1, Note ii

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Strong upside potential for Monty mineral inventory

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Significant untested potential for further mineralisation in Monty near mine environment

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

• Drilling of first of three deep (~1,400m) diamond holes commenced April 2017

• Test immediate vicinity of the known Monty deposit at depth, along strike and down dip

• Provide additional Down-Hole Electromagnetic (DHEM) platforms to test zones proximal to mine infrastructure

• Area to be tested could potentially be accessed from proposed Monty Mine infrastructure

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Talisman’s underlying operating and economic interest in Monty

Springfield JV exposure

Talisman economics

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OPEX variables (ex royalties):

Underground mining

Ore haulage to DeGrussa plant

• Underground mining costs

• Ore haulage costs to DeGrussa

► Closure costs

Fixed exposure (with indexation):

► Ore Treatment Fee (OTF) – covers all Sandfire downstream costs and plant usage charge

REVENUE variables:

• Ore volumes and grades

• Metal prices

Fixed exposure:

• Process recovery formulae

• Metal payabilities

Monty Feasibility Study OPEX estimates (TLM 30% basis)

239kt mined ore

Underground mining + ore haulage cost = A$126/t (~A$30.2M) Fixed JV management fee = equates to ~A$1/t (~A$0.2M) Sandfire Ore Treatment Fee (OTF) = A$211/t (~A$50.4M)

Implied operating cost (excl. royalties & closure) = A$338/t (~A$81M)

Monty Feasibility Study REVENUE estimates (TLM 30% basis)

239kt mined ore sold 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$758/t (~A$181M)

Implied operating margin = A$420/t (~A$100M)

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

• Feasibility Study LOM average copper recovery of 92.8% multiplied by payability of 95.9%

Sandfire exposure (cost volatility mitigated with indexation of OTF)

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Business service Concentrate Concentrate Treatment and Metals
Ore processing
support (G&A) product transport refining charges production
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Full exposure to key upside scenarios

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Talisman benefits fully if Monty mining or capital cost estimates prove to be conservative

• Retain exposure to any actual variation from Monty FS revenue and cost estimates on:

COSTS

REVENUE

• Total ore mined and delivered

• Underground mining costs

• Ore haulage costs

• Ore head grades

• Closure costs

• Metal prices

• Capital costs

• Development timeline

► Net revenue forecast of A$513 per tonne ore delivered

• Forecast payable revenue (A$758/t) minus OTF (A$211/t) minus royalties (A$34/t)

• Forecast payable revenue retains full exposure to:

• Higher/(lower) prices; eg copper market tightens

• Greater/(lesser) ore volumes ; eg extensions, Upper Zone extraction

• Grade overcall/(undercall); eg grade control drilling uplift

Forecast Monty operating costs (excl royalties)

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SFR mgt fee
0%
UG mining
36%
Ore Treatment
Fee (OTF)
[indexed]
62% Ore haulage
2%
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Forecast Monty capital costs

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Closure costs
4%
Sustaining
capital
19% A$1M Surface
infrastructure
35%
A$6M
A$10M
UG mine A$2M
infrastructure
8%
A$9M
UG mine
development
34%
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Key OSPA benefits for Talisman

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A low capital, exposure minimising and high returning development route for Talisman

► OSPA limited to Monty deposit and near-Monty extensions

• Maintain optionality in relation to any future discoveries on the Springfield JV

► No plant build requirement

• Highly attractive pre-production capital intensity

• Considerably lower risk than typical minority JV development project interest

► Independent calculation of head grade by third party

► Relatively high fixed metal recovery formulae and high fixed payables

• Recognition of expected Monty ore processing performance and concentrate quality parameters

• No Talisman exposure to metallurgical processing and product marketing risks

► Commercially negotiated and highly competitive Ore Treatment Fee (OTF)

• Recognises all downstream costs of processing ore plus transport and treatment/refining of concentrate

• Deducted from payable revenue on an equivalent cost per tonne of ore basis

• Transparency of OTF cost components (linkage to annual industry determined benchmark, eg TC/RCs, or annual indexation from an agreed basis)

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A highly competitive Ore Treatment Fee (OTF)

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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 G&A overheads;

• Product conc. haulage, shipping and refining costs;

• 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

• Downstream costs actually levied per tonne of conc/Cu

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

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

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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 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 OSPA.

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Springfield Exploration Upside Potential

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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, e.g. Noranda VMS mining camp

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

• Potential for multiple host horizons within prospective corridors - Monty, Homer, Southern Volcanics

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Springfield Exploration Upside Potential

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On-going near mine exploration around Monty

• Limited drill testing below existing Monty Resource

• Significant untested potential remains both laterally and at depth

► Three deep diamond drill holes and DHEM surveys scheduled

• Two RC pre-collars completed

• Commencement of first diamond drill hole in April 2017

• Placement of third hole guided by DHEM results

• Area to be tested could potentially be accessed from proposed Monty Mine infrastructure

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Springfield Exploration Upside Potential

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Targeted drilling and DHEM along Monty Trend

• Monty deposit sits within an 8km trend

• Monty Trend subject to targeted RC/diamond drilling and DHEM

• Monty Trend represents one limited stratigraphic package within the wider prospective Monty Corridor

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8km
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Springfield Exploration Upside Potential

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Limited advanced exploration on a regional scale

• Limited RC drilling by JV outside of Monty Resource

• 93% of JV diamond drill holes for resource definition

• Potential for multiple host horizons within prospective corridors

• Monty Corridor

• Homer Corridor

• Southern Volcanics Corridor

• 16km Southern Volcanics Corridor with only 5 RC and no diamond drilling-to-date

• Talisman believes the Southern Volcanics Corridor represents a high priority for the next phase of systematic exploration by the Springfield Joint Venture

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The Monty project and the Springfield JV

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Monty is a low risk, high returning copper project with outstanding potential upside

• Low capital, low risk development path via ore sales to Sandfire

• Outstanding projected returns (TLM 30% basis) of A$64M pre-tax free cashflow, A$46M pre-tax NPV8 and 78% pre-tax IRR

• First production targeted for December quarter 2018

• Monty Deeps diamond drilling over coming months

• Monty Trend exploration potential remains high

• with

• Springfield JV tenure in a proven world-class VMS province multiple prospective corridors

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Sinclair Nickel Project

Advanced opportunity in a proven nickel province

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Sinclair: A low cost, fast track nickel production option

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High class surface and underground assets with extensive infrastructure

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

• +9Mt historical nickel production

• $8M acquisition from Glencore in Nov 2014

• Previous Sinclair mine production (2008-13)

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

► Existing asset base includes:

• OP and UG mine workings, +300ktpa plant and infrastructure, 200 room village & sealed airstrip

• Approx. A$120M Replacement Value

• Low capital, fast track option to nickel production

• Excellent exploration prospectivity

• Prospects in close proximity to existing infrastructure

• Along the broader Sinclair trend (8km basal contact)

• Impressive regional opportunities

• Results at Delphi North incl. 9m @ 4.2% Ni

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Sinclair: Regional and near-mine exploration potential

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Potential for discovery of nickel sulphide mineralisation close to existing infrastructure

• Potential Resource target for known mineralization at Sinclair mine extension and Sinclair remnants

• Assessment of potential JORC 2012 compliant Resource underway

• Other potential resource targets at Skye/Stirling

• Drill ready exploration targets

• Delphi, Skye & Stirling, Schmitz Well

• Regional prospects at early stages

• Mount Clifford, Antioch Trend, Schmitz Well South

• Future exploration work to include regional aircore, RC/DD & geophysics – surface & DHEM

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5.6m @ 2.64%
Ni
9.3m @ 2.31%
Ni
6.3m @ 3.32%
Ni
9.3m @ 2.77%
Ni
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Sinclair: Development potential under right scenario

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

• 300ktpa concentrator

  • Operated at ~440ktpa

• Open pit 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 reduced capital intensity and fast-tracked transition to production

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The Talisman Investment Case

Emerging metals producer with exceptional prospectivity

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The Talisman investment case

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Advanced production opportunities in Western Australian base metals

• Monty a high-grade, high-return copper-gold project

• Low risk, low capital driven by ore sales agreement

• First production targeted December quarter 2018

• Outstanding exploration potential still to be tested

• Sinclair a low cost, fast track nickel production option

• Within a highly endowed exploration address

• Established infrastructure

► Upcoming activities

• Monty deeps diamond drilling (2Q/3Q CY17)

• Final Monty mining approvals and debt facilities (2Q/3Q CY17)

• Sinclair field activities planned for Q2 CY2017

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

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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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THANK YOU

Discovering & Developing Opportunities in Copper-Gold & Nickel Investor Presentation: 121 Mining Investment Forum, May 2017

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Appendix 1: Competent Persons’ Statements

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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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Appendix 2

Additional Monty Feasibility Study detail

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Monty Mineral Resources[4]

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Mineralisation Style	Mineral Resource Category	Tonnes (t)	Copper (%)	Gold (g/t)	Contained Copper(t)	Contained Gold(oz)	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

1. Refer to Appendix 1, Note i

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OreReserve estimate and Mine Plan on 100% Basis[4]

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Reserve Category	Tonnes (t)	Copper (%)	Gold (g/t)	Contained Copper(t)	Contained Gold(oz)	Contained Gold(oz)
Proved
	-	-	-	-		-
Probable
	920,000	8.7	1.4	80,000		42,000
Total Mine Plan	920,000	8.7	1.4	80,000		42,000
	800,000	9.4	1.5	74,000		38,000

1. Refer to Appendix 1, Note ii

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Monty Feasibility Study operating and financial outcomes (30% basis)

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A technically sound and highly economic underground project

All costs borne by the Springfield Joint Venture under the OSPA 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$M	64
Notional C1 cost1	A$/lb pay Cu	1.56
Notional All-in-sustaining-cost (AISC)1	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

1 C1 and AISC are calculated on the basis of notionally including the OSPA 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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Capital and operating cost detail

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$/t	5539	6031	6196	6119	5899
Gold – U$/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 C11 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 AISC1	83.1	1.90

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1 C1 and AISC are calculated on the basis of notionally including the OSPA 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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Underground mining and ore haulage (Shared JV activity)

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A conventional underground operation

• Conventional 1-in-7 production size decline

3D schematic of Monty decline and underground mine design

• Life-of-Mine plan of 796kt at 9.35% Cu and 1.5g/t Au (100% basis)

• Lower Zone (LZ) the focus of the mine plan; UZ excluded at present

• No geotechnical issues with LZ stoping

• LZ commences from approx. 180m below surface

• First ore targeted for 12 months from portal cut

• Long-hole open stope mining method with backfill

• Maximum planned mining rate of approx. 400ktpa

• Mined ore hauled to surface ROM pad at Monty and then to dedicated weighbridge at DeGrussa

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QUARTERLY ORE PRODUCTION
120 16
14
100
12
80
10
60 8
6
40
4
20
2
0 0
1 2 3 4 5 6 7 8 9 10
Development Ore (t) Stoping Ore (t) Total Ore Grade Cu(%)
CU %
KILO-TONNES
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Monty surface infrastructure

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Fit for purpose and leverages off DeGrussa synergies

Schematic of Monty surface infrastructure

• Mined ore from surface ROM pad at Monty transported to DeGrussa via 14km haul road

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• Weighbridge near DeGrussa

• Raw water supply from DeGrussa pumped to Monty

• Communication connection to DeGrussa via fibre

• Monty ROM pad – 50kt

• Waste and PAF dump

• Buildings: mining office, first aid, ablutions, crib/muster room plus contractor supplied workshops

• DeGrussa infrastructure synergies: mining change rooms, IT servers, bore fields, accommodation village facilities

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Key agreements with Sandfire

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

Mining Joint Venture Agreement (MJVA)

Ore Sale and Purchase Agreement (OSPA)

• 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 OSPA 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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The OSPA maximises simplicity and minimises dispute risk

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Monty ore ownership and risks transfer at this point

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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
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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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