TALONX RESOURCES LIMITED — Interim / Quarterly Report 2011

Apr 27, 2011

ACN: 009 067 476

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REPORT FOR THE QUARTER ENDED 31 MARCH 2011

HIGHLIGHTS

• Soil Geochemical Sampling Results for Copper, Cobalt, Zinc and Lead - Potential to increase the Company’s resource base within its 100% owned neo-Proterozoic belt, spanning the border between Botswana and Namibia

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• Germanium now trading in excess of US$1,600/kg . The Company is investigating the overall net value that germanium and gallium could contribute to the Kihabe/Nxuu Project.

• Silver now trading in excess of US$ 45/oz. The Company is investigating the potential to recover silver on site. The Kihabe deposit contains 3.3 million ounces of silver.

• Further SEM and XRD analysis of REEs is being conducted on drill samples from the Company’s Tsumkwe Rare Earth target in Namibia.

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REPORT FOR THE QUARTER ENDED 31 MARCH 2011

KIHABE/NXUU BASE METALS PROJECT, BOTSWNA

During the quarter the Company assayed some 5,000 soil geochemical samples collected during 2010 over four regional prospective areas within Prospecting Licence 69/2003, where to date it has a resource base of 25 million tonnes @ 3% Zn/Pb at both the Kihabe and Nxuu deposits.

All four areas have returned elevated assay values, well above normal background values, resulting in the generation of a Cu/Co anomaly and three Zn/Pb anomalies. The four areas are as follows:

The Copper Anomaly

An area of 3.6 sq km was sampled, within which a W/E striking zone, 2.4km in length, returned elevated assay values up to 68ppm for Cu and 281ppm for Co . The normal background values for Cu in this area are less than 10ppm. The Company does not have any record of background Co values in this area but considers the Co results as very encouraging at this stage. Of further encouragement is the fact that the anomaly is coincident with a discrete magnetic high anomaly and a discrete line of terminalia trees. The anomaly is situated about 10km to the NE of the Kihabe Zn/Pb deposit. It is estimated that the calcretised Kalahari sand cover in this area is around 6m deep. Refer to Google Earth images below.

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The Wanchu Anomaly

An area of 1.5 sq km was sampled, within which a W/E striking zone, 1.2km in length, returned elevated assay values up to 390ppm Zn. The normal background values for Zn in this area are less than 20ppm. The anomaly is coincident with a discrete line of terminalia trees and a “dark brown “ soil anomaly bounded by the normal white to yellow Kalahari sands, estimated to be 5m to 15m deep. The anomaly is 4km SE of and runs parallel with the Kihabe Zn/Pb deposit and is along strike and 4km SW of the Nxuu Zn/Pb deposit.

Refer Google Earth image below.

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Target 52 Anomaly

An area of 3.64 sq km was sampled, within which a discrete zone, on the axial trend line of a fold closure, some 4km in length and striking in a NE direction, returned elevated assay values up to 120ppm Zn . The normal background values for Zn in this area are around 10ppm. The hairpin shape of the fold closure is coincident with a discrete line of terminalia trees. This fold closure is likely to be the contact zone of a quartz wacke and the regional dolomite. Zn/Pb/Ag mineralisation in this region is hosted within quartz wackes at the contact with the regional dolomite. It is estimated that the calcretised Kalahari sand cover in this area is around 20m deep. The anomaly is situated about 3km SE of the Nxuu deposit.

Refer Google Earth image below.

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The Tswee Tswee Anomaly

An area of 9.9 sq km was sampled, within which a zone about 1,700m long and 325m wide, covering an area of about 55 ha, returned elevated assay values up to 65ppm Zn. The normal background values for Zn in this area are less than 10ppm. The anomaly is coincident with a thicket of terminalia trees. It is estimated that the calcretised Kalahari sand cover in this area could be 40m to 50m deep. The anomaly is situated 9km to the SE of the Nxuu deposit. Refer Google Earth image below.

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Of interest is the fact that the further to the east these anomalies are situated, the lower the tenor of elevated assay values, coincident with greater depths of Kalahari sand cover. This is to be expected as depth to basement increases in an easterly direction.

TSUMKWE BASE METALS PROJECT, NAMBIA

During the quarter the Company assayed some 640 soil geochemical samples previously collected over EPL2818 in Namibia

The Tsumkwe Copper Cobalt Anomaly

An area of 94 sq Km was sampled, within which a zone about 2.5km long, on the axial trend line of a fold closure, striking in a NE direction, returned elevated Cu values up to 194ppm and elevated Co values up to 401ppm. The normal background Cu values in this area are less than 20ppm. The Company does not have any record of background Co values in this area, though views such elevated Co values as very encouraging. It is estimated that the Kalahari sand cover in this area could be around 10m deep. The anomaly is situated within the same neo-Proterozoic belt the Company is exploring in Botswana and is adjacent to the Kihabe deposit. The anomaly is within 3km of a borrow pit excavated by the local council for surfacing the nearby Gam road. The Company has previously retrieved malachite specimens from the borrow pit which resulted in a soil geochemical sampling programme being conducted in the area. Refer Google Earth images below.

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The Company intends to drill test this target once the seasonal rains have abated, which normally occurs in May.

Sampling and Assaying Methodology

During the quarter the Company purchased an XRF analyzer in order to conduct assaying on site.

All soil samples were collected from 10cm below surface every 50m N/S along sample lines spaced 100m E/W. Each sample was sieve sized down to – 0.4mm, packaged into standard soil sample envelopes containing around 60gm and stored at the Company’s Camp. The Niton XRF Analyser has been set up for the analysis to be conducted in camp under supervised and controlled conditions.

The sample envelopes are placed in the Niton XRF analyser stand and the XRF assaying process allowed to run for one minute for each sample. All samples yielding over 50ppm Zn/Pb/Cu are then re-checked. A third check is then run with the soil samples re-packaged in plastic bags.

The XRF analyser is calibrated every 25 samples via an in-built calibrator and known value standards are used to check the accuracy of the calibration process.

All sample locations yielding over 100ppm Zn/Pb/Cu/Co are then re-visited and closer spaced samples are taken every 10m for 30m north and 30m south of the initial sample location. The in-fill samples are then subjected to the same sampling procedures as those outlined above.

ASSAYING FOR GALLIUM AND GERMANIUM – KIHABE/NXUU DEPOSITS BOTSWANA

Independent Laboratory Assaying for Gallium (Ga) and Germanium (Ge)

The Company submitted diamond drill core samples to be assayed for Ga and Ge because the Kihabe and Nxuu Zn/Pb deposits are potential hosts for such mineralisation. Sections from two holes drilled into the Kihabe deposit (KDD126 and KDD143), {one hole drilled into the Nxuu deposit (NXDD005) and one hole drilled into the Gossan anomaly (GDD001A)}, were submitted for test assaying by ICP Mass Spectrometry.

Combined Ga/Ge assays over 10ppm are as follows:

THE KIHABE DEPOSIT

KDD126 - 500,884E/7,821,667N, Dip -60 Deg, Az 339 Deg.

A 5m intersection from 45m to 50m was assayed.

2m from 45m to 47m yielded 11.25g/t Ga and 1.07g/t Ge.

KDD143 – 502,204E/7,822,383N, Dip -60 Deg, Az 339 Deg.

A 5m intersection from 35m to 40m was assayed.

The whole 5m yielded 8.79g/t Ga and 4.93g/t Ge.

THE NXUU DEPOSIT

NXDD005 – 508,926E/7,821,827N, Dip -90 Deg, Az 0 Deg

A 6m intersection from 19m to 25m was assayed.

The whole 6m yielded 5.27g/t Ga and 4.98g/t Ge

THE GOSSAN PROSPECT

DDGG001A – 503,065E/7,812,885N, Dip -50 Deg, Az 0 Deg

A 6m intersection from 51m to 57m was assayed.

2m from 51m to 53m yielded 8.58g/t Ga and 2.84g/t Ge 2m from 55m to 57m yielded 8.27g/t Ga and 7.55g/t Ge

The significance of these results with regard to the potential to recover Ga and Ge from the Kihabe and Nxuu deposits as a by-product, can only be assessed once the Company has determined their overall net value. The Company’s understanding at this stage is that a possibility does exist to recover Ga and Ge through the process of acid leaching and electro-winning on site.

Determination of the overall size and grade of any Ga/Ge resource at both Kihabe and Nxuu, will require all drill hole samples to be assayed for these two elements. Mineralogical and metallurgical test work will also be required to determine the extent of their recoverability.

USES OF Ga AND Ge

Both Ga and Ge are mainly used in semi conductors. The prices of both Ga and Ge have risen significantly in recent times.

Ga is currently trading around US$725/kg (US$0.75/g) Ge is currently trading around US$1,650/kg (US$1.65/g)

INVESTIGATING RECOVERY OF SILVER ON SITE – KIHABE DEPOSIT BOTSWANA

With the recent increase in the price of silver, to in excess of US$45/oz, the Company plans to conduct metallurgical test work to investigate the possibility of being able to recover silver on site.

The Kihabe resource contains 3.3 million ozs/Ag.

TSUMKWE RARE EARTHS – NAMIBIA

In the Company’s December 2010 quarterly report, total rare earth (TREE) assays were reported in respect of the Company’s Tsumkwe REE project in Namibia, as follows:

Drill Hole	Northing	Easting	Dip/Azimuth	EoH Interval Assayed (m)	TREE Values ppm
RR13	7804660	462900	-90o/0	38-39	1,709.60
NAM464	7804300	462820	-90o/0	30-31	766.60
NAM465	7804610	463370	-90o/0	18-31	838.20
NAM467	7803840	462780	-90o/0	17-18	866.20
NAM477	7804815	462000	-90o/0	39-40	1,497.00

Drill chips from the above holes, taken from the end of hole intervals (EoH) as shown above, together with drill chips from the EoH of 5 other holes drilled in the area have been submitted for thin section petrographic analysis.

Mineralogical test work currently being conducted has identified rare earth minerals at the EoH in all of the above holes drilled into the Tsumkwe REE targets.

The minerals identified included allanite, monazite and probable rare earth carbonates.

Chemical analyses of the samples support the mineralogy with quantities so far indicated to be under 1% of mineral.

Test work is continuing on samples by concentrating the heavy minerals (SGs >2.95) in drill chips that include the rare earth group. Further SEM and XRD studies of these concentrates will properly identify and elucidate the REE species.

Deeper drilling is planned within this area once the seasonal rains have abated, as the indications to date are that the REE values increase at depth.

Within one kilometre of these targets the Company also plans to drill a potential kimberlite target overlain by a recently discovered near-surface sub-outcropping highly silicified brecciated dykelike body.

The information in this release that relates to exploration results, together with any related assessments and interpretations, is based on information approved for release by Mr. Giles Rodney Dale of GR Dale and associates. Mr. Dale is a fellow of the Australian Institute of Mining and Metallurgy. Mr. Dale has sufficient experience which is relevant to the style of mineralisation under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Mineral Resources and Ore Reserves”. Mr. Dale consents to the inclusion in this release of matters based on this information in the form and context to which it appears.

CORPORATE

Funding

On 19 April 2011 the Company announced that it had placed 17,528,466 shares to raise $228,000.

Further funding available to the Company is as follows:

1. Available overdraft facilities and credit standby arrangements amounting to $415,000 2. Available loan facilities amounting to $150,000

Issue of Shares to Directors

At the General Meeting of shareholders held on 4[th] March 2011, approval was given for the issue of fully paid ordinary shares in the Company in lieu of director fees and for a salary sacrifice as follows:

Name	Number of fully paid shares issued
Mr A P Stirling	$48,000 worth at 1.7 cents* =	2,823,530
Mr R W O’Regan	$48,000 worth at 1.7 cents* =	2,823,530
Mr G E Taylor	$44,000 worth at 1.7 cents* =	2,588,235
Mr B M Mosigi	$17,000 worth at 1.7 cents* =	1,000,000
Mr N R Forrester	$33,000 worth at 1.7 cents* =	1,941,176
		11,176,471

*The fully paid shares issued were at the volume weighted average price (“VWAP”) of the shares in the five ASX trading days prior to issue. 1,2,3,4 and 7 March 2011 VWAP average.

The Shares were issued to the Directors in lieu of their directors fees or for a salary sacrifice for the previous financial years. As such the Shares were granted for nil cash consideration, and no funds were raised.

About Mount Burgess Mining N.L.

Mount Burgess Mining N.L. is an established and experienced Australian exploration company with interests focused in southern Africa. The Company’s primary asset is the zinc, lead and silver resource currently being developed at Kihabe-Nxuu in North Western Botswana. The Company has tenements covering the entire proterozoic meta-sedimentary belt between Botswana and Namibia. The area has excellent potential for hosting Kimberlites, rare earth elements and base metals, the focus for continuing exploration. Perth based Mount Burgess has been listed on the Australian Stock Exchange since 1985 and has local asset status in Botswana.

KIHABE RESOURCE STATEMENT

Deposit	External Cut %	Indicated M Tonnes %	Inferred M Tonnes %	Total M Tonnes %
Kihabe	1.5%	11.4 @ 2.90%	3.0 @ 2.60%	14.4 @ 2.84%
Nxuu	0.3%	-	10.9 @ 3.20%	10.9 @ 3.20%
		11.4 @ 2.90%	13.9 @ 3.07%	25.3 @ 3.00%

Zinc Equivalent Grade

Kihabe calculated on metal prices as at 17 July Zn US$1,810/t Pb US$1,955/t Ag 2008: US$18.75/oz Grades applied: Zn 1.75% Pb 0.76% Ag 6.93 g/t Nxuu calculated on zinc and lead at US$ par Grades applied: Zn 1.8% Pb 1.4%

The information in the resource statement that relates to the Kihabe Resource is compiled by Byron Dumpleton, B.Sc., a member of the Australasian Institute of Geoscientists. The information that relates to the Nxuu Resource is compiled by Mr Ben Mosigi, M.Sc., (Leicester University – UK), B.Sc., (University of New Brunswick – Canada), Diploma Mining Tech (Haileybury School of Mines – Canada), a member of the Geological Society of South Africa.

Mr Dumpleton is an independent qualified person and Mr Mosigi is a Technical Director of the Company. Both Mr Dumpleton and Mr Mosigi have sufficient experience relevant to the style of mineralisation under consideration and to the activity to which they have undertaken to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code of Reporting of Mineral Resources and Ore Reserves”. Both Mr Dumpleton and Mr Mosigi consent to the inclusion in this report of the matters based on the information in the form and context in which it appears.

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.

Name of entity MOUNT BURGESS MINING N.L. ABN Quarter ended (“current quarter”) 31009067476 31 March 2011

Consolidated statement of cash flows

Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes refund 1.7 Other (provide details if material) Net Operating Cash Flows	Current quarter $A’000	Year to date (9months ) $A’000
	- (101) - - (188) - - (3) - -	- (303) - - (622) - - (17) 112 -
	(292)	(830)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)	- - (24) - - - - - -	- - (25) - - - - - -
	(24)	(25)
	(316)	(855)

• See chapter 19 for defined terms.

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Appendix 5B Page 1

Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	1.13 Total operating and investing cash flows (brought forward)	(316)	(855)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other – Lease liability repayments Other – Placement fees Net financing cash flows		- - - - - (1) -	633 - 279 (101) - (2) (18)
		(1)	791
Net decrease in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter		(317) 115 1	(64) (136) (1)
		(201)	(201)
Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities Current quarter $A'000 1.23 Aggregate amount of payments to the parties included in item 1.2 52 1.24 Aggregate amount of loans to the parties included in item 1.10 - 1.25 Explanation necessary for an understanding of the transactions N/A
	N/A

Non-cash financing and investing activities

2.1 2.2	Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
	N/A
	Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest
	N/A

• See chapter 19 for defined terms.

Appendix 5B Page 2

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Appendix 5B Mining exploration entity quarterly report

Financing facilities available

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	150	-
	415	2

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	50
	-
	-
	150
Total	200

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to therelateditemsinthe accountsis asfollows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	38	115
	-	-
	(239)	-
		-
Total: cash at end of quarter(item 1.22)	(201)	115

Changes in interest in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	-	-	-	-
	-	-	-	-

• See chapter 19 for defined terms.

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Appendix 5B Page 3

Appendix 5B Mining exploration entity quarterly report

Issued and quoted share securities at the end of current quarter

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions	N/A
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues * (b) Decreases through returns of capital, buy- backs	381,633,471	381,633,471
	11,176,471 N/A	11,176,471 N/A
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	N/A	N/A
7.7 Options Employee Share Plans 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired	16,350,000	NIL	5 cents	31/12/15
	NIL
	NIL
	NIL
7.11 Debentures (totals only)	NIL
7.12 Unsecured notes (totals only)	NIL

*The Shares are being issued to the Directors in lieu of their directors fees or for a salary sacrifice for the previous financial years. As such the Shares will be granted for nil cash consideration, and no funds will be raised. The Shares were approved at the General Meeting of Shareholders held on 4[th] March 2011, issued on 8[th] March 2011 and listed on ASX on 11 March 2011.

• See chapter 19 for defined terms.

Appendix 5B Page 4

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Appendix 5B Mining exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

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

Sign here: Serene Chau ~~(Director/~~ Company secretary)

Date: 29[th] April 2011

Print name: Serene Chau

Notes

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

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

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

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

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

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• See chapter 19 for defined terms.

30/9/2001

Appendix 5B Page 5