Talisman Mining : Sinclair Nickel Project Exploration Update

ASX Media Release - 09 January 2017

Sinclair Nickel Exploration Update

Completion of follow-up Diamond and RC Drilling

Highlights

Board of Directors Jeremy Kirkwood

Non-Executive Chairman

Dan Madden

Managing Director

Alan Senior

Non-Executive Director

Brian Dawes

Non-Executive Director

Karen Gadsby

Non-Executive Director

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Contact Details

Telephone:

[phone]

Email: [e-mail]

Website: www.talismanmining.com.au

Capital Structure

Shares on Issue: 185,699,879 (TLM)

Options on Issue: 10,505,000 (Unlisted)

• Targeted follow-up diamond and RC drilling programs completed at several prospective areas within the Sinclair Nickel Project.

• Most assay results have now been received for RC and diamond drilling completed, with only one hole (SNRC025) pending.

• Downhole EM completed at Delphi North, Sinclair North and Parnassus.

• Nickel sulphides intersected in the first diamond drill hole of the current program (SND010) at Delphi North targeting down plunge extensions from previous drilling, including:

   2.52m @ 3.35% Ni from 206.66m down-hole,

  including 1.55m @ 4.85% Ni from 206.66m and;

   3.06m @ 1.60% Ni from 224.08m down-hole.

• Downhole EM conductor identified to the north and above SND010.

• Single diamond drill hole at Stirling intersected disseminated mineralisation within a high Mg-O ultramafic sequence - assays pending.

• Detailed interpretation of all results to be completed before determining subsequent Sinclair Nickel Project work program planned in the first quarter of 2017.

Talisman Mining Ltd (ASX: TLM) is pleased to announce the completion of follow-up diamond and reverse circulation (RC) drilling at its 100% owned Sinclair Nickel Project ("Sinclair").

A total of five areas were tested by measured program of RC and diamond drilling with results reinforcing the nickel fertility and high prospectivity of the Sinclair project area.

Following the integration of all assay, geology and geophysical data from the DHEM surveys, Talisman will conduct a comprehensive review of results generated from the program before determining the scope of the next exploration program at Sinclair in the first quarter of 2017.

Delphi North

Delphi North is a high priority target corridor which displays strong correlation to the Sinclair mine geological environment. Nickel sulphide mineralisation has been confirmed over a strike length of 700m and the area has the potential to host significant nickel sulphide mineralisation.

A total of three diamond drill holes (SND010, SND012 and SND013) were completed for 877.3 metres which built on the results of a program of two RC fences completed in October 2016 (Figure 1).

Diamond drill hole SND010 was completed to test the potential for mineralisation down plunge from the previous RC drill program which intersected 4m @ 4.79% Ni from 154m down-hole (SNRC0101) and 9m @ 4.20% Ni from 131m down-hole (SNRC0192).

The first hole from the latest three-hole diamond drill program completed at Delphi North (SND010) returned several mineralised massive sulphide intersections (Table 2) including:

 2.52m @ 3.35% Ni from 206.66m down-hole (including 1.55m @ 4.85% Ni from 206.66m); and

 3.06m @ 1.60% Ni from 224.08m down-hole.

A subsequent DHEM survey completed on this hole identified an elongated, north plunging, high conductance EM plate at 15,000 Siemens, centred to the north and above SND010 (Figure 2).

A further two holes (SND012 and SND013) were drilled approximately 75m north of SND010 to test the interpreted EM conductor position generated from hole SND010. The two holes intersected a complex folded ultramafic sequence as observed in previous drilling. Hole SND013 intersected a narrow zone (0.3m) of visible massive nickel sulphides from 241.12m down hole, however assay results did not return any significant intersections (greater than 1% nickel).

Although the holes were successful in intersecting the initial interpreted EM target location from the survey undertaken on hole SND010, the recent drilling and DHEM results from SND012 and SND013 have significantly modified the previous EM interpretation and conductor position.

DHEM surveys of SND012 and SND013 have recorded two separate, smaller but very high conductance, off-hole EM plates on either side of the drilled section (Figure 2). The complex folded nature of the geology logged in all three drill holes, along with these modelled small, very high conductance EM plates, may indicate that the Delphi mineralised horizon has a highly deformed and discontinuous nature. Further integration and analysis of all available recent and historic data is required to be undertaken prior to planning the next phase of exploration.

1 Refer to ASX release dated 7 October 2016 for full details including all appropriate JORC tables

2 Refer to ASX release dated 27 October 2016 for full details including all appropriate JORC tables

Figure 1: Delphi North drill collar plan showing recent and historic collar locations, simplified geology and Priority Target position Figure 2: Delphi North projected long section showing new and existing Ni massive sulphide intersections, newly modelled (and historic) DHEM conductors for SND010, SND012 and SND03, and an interpreted Massive Sulphide Envelope.

Stirling

A single diamond hole (SND011) was completed at Stirling to a downhole depth of 358.3m (Figure 3). The hole was targeting an interpreted mineralised position based on recent reinterpretation by Talisman of historic DHEM and lithologies.

The diamond hole intersected stringer nickel sulphides in a basal contact position from 240.6 to 242.2 metres as well as visible disseminated and matrix nickel sulphide mineralisation within a high MgO ultramafic sequence from 246.8 to 247.7 metres. The nickel sulphide intervals are interpreted to represent a zone of highly deformed sulphides proximal to the targeted folded basal contact position. Assay results from sampling did not return any significant results (greater than 1 metre at 1% nickel).

Results from the DHEM survey of SND011 have indicated that a moderate conductance off-hole anomaly is located below and to the south of the drill hole. A weak in-hole anomaly has also been interpreted in the data, which is correlated to the narrow zone of nickel sulphides logged in the drill core.

SND011 is the first hole drilled by Talisman to test the conceptual position at Stirling. Further interpretation and incorporation of the new data into the existing exploration model is required and will be completed in early January prior to planning the next phase of exploration.

Figure 3: Sinclair Project drill collar location plan showing recent RC and diamond drill collars, mine infrastructure and simplified geology.