Talon sizes up iron ore at Trairao in Brazil

Talon Metals (TLO-T) has released a slew of drill results from its extensive 2011 exploration program, showing iron content in weathered and fresh rock at its Trairao project in Brazil.

Diamond drilling on the fresh, unweathered, banded iron-formation unit showed long intervals of iron mineralization. 

In the first target area, hole 14 hit 152 metres grading 28% iron from surface, hole 77 returned 259 metres carrying 22% iron from 133 metres depth and hole 86 cut 101 metres averaging 29% iron from 146 metres depth. In area two hole 73 cut 141 metres grading 26% iron, and in area three hole 4 cut 98 metres carrying 23% iron. All of the highlighted holes ended in mineralization.

The company reports that areas one and two of the unweathered unit are apparently folded and duplicated, while in area three there are two parallel units underlying the weathered rock.

Targeting the weathered mineralization, including surficial deposits, saprolite and saprock, diamond drilling was largely used to confirm earlier reverse-circulation (RC) drilling and increase the drill density. The company also intends to use the core for metallurgical testing.

Results from the weathered part of area one include hole 50 that cut 89 metres averaging 46% iron, and hole 29 that hit 101 metres carrying 41% iron. In area two, results included hole 43 that cut 73 metres averaging 43% iron and hole 46 that cut 87 metres carrying 40% iron. Area three highlights included hole 4 that intersected 105 metres grading 41% iron and hole 62 that hit 117 metres carrying 39% iron. All intersections were from surface.

The company completed 3,000 metres of RC drilling on its lower-priority areas 7, 9, 10, 11, 12 and 13. The results showed that they are indeed low priority, with few intersections longer than 25 metres and generally low grades.

The results, however, were enough to move Talon shares up 17¢, or 30.9%, to 72¢, with 632,000 shares traded on the day.

But the gain wasn’t enough to make up for the losses following the resignation of Eddie Scholtz, Talon’s CEO. The company said Scholtz left to focus on CIC Energy (ELC-T), where he is chief operating officer. Talon announced that Henri van Rooyen — who has worked with Tau Capital since 2000 — would take the helm as Talon’s CEO.

On the day news of the boardroom shuffle broke, the company’s share price fell 12¢, to a further 18¢ in the days between the announcement and the latest drill results. 

The drop was preceded by an even faster rise two days before, when the company’s share price shot up 32¢ in two days on no news to reach a share price level not seen since last September. 

All of the recent gains and losses are, however, relatively minor compared with the share price drop the company saw last year, going from a $3.14 high in March 2011 to a 36¢ low in October.

Talon plans to use the latest results to update the resource estimate on the weathered rock mineralization at Trairao. The company is also considering an initial resource on the fresh rock.

In November 2011 the company issued an initial resource on areas 4, 5, and 6 that came in at 103 million inferred tonnes grading 29% iron using a 25% iron cut-off. The resource for areas 1, 2 and 3 stands at 1.1 billion inferred tonnes grading 36% iron.

Talon plans to have a prefeasibility study out on the 516-sq.-km property late this year.