Talisman Mining : Quarterly Activities/Appendix 5B Cash Flow Report

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31 January 2022

December 2021 Quarterly Activities Report

Talisman gears up for multi-pronged exploration push in NSW in 2022

Highlights:

Lachlan Copper-Gold Project, NSW

• Significant investment in large-scale geophysical surveys set to enhance Talisman's understanding of the Cobar Superbasin sub-surface geology and structure and is expected to shorten the discovery timeline on its tenure by several years.
• This follows a regional targeting review which indicates that airborne gravity surveys, previously untested in the region, can deliver a step-change in the Company's targeting capability by revealing the presence of blind mineralisation concealed below cover.
• Targeting, planning and land-holder consultation completed for these surveys, including the largest Airborne Gravity Gradiometry (AGG) survey (~15,500 line-kms) ever flown in the district.
• Airborne Electro-Magnetic (AEM) survey contracted using the VTEM™ Max system to fly 6,285 line- kms over highly prospective target areas for sulphide lode-stylecopper-gold systems.
• Four new Exploration Licences (EL9302, EL9306, EL9315 and EL9324) granted as a result of new tenement applications submitted following the 2021 independent regional targeting review, expanding Talisman's tenure portfolio in NSW to >4,100km2 of active Exploration Licences.
• Targeted geochemical exploration programs commenced over highly prospective areas on EL8571, with the objective of delivering an ongoing pipeline of targets for drill testing in 2022.
• COVID-19protocols in place and operational (including a testing regime for Talisman's locally based exploration team).

Lucknow Gold Project, NSW

• Land access negotiations for the next phase of exploration, targeting the near-surface potential along strike from the historical Lucknow Gold mine, delayed by regional COVID-19 impacts.

Corporate

• Royalty cash receipts from the Wonmunna Iron Ore Project of $0.73 million received for the quarter with a further $0.3 million received subsequent to quarter-end1.

• Ongoing review of potential metalliferous mineral growth opportunities in WA and elsewhere.
• Talisman remains well-funded with cash on hand at 31 December of $10.2 million.

• Refer Talisman ASX announcement dated 15 April 2021 for royalty details.

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COVID-19

In response to the current COVID-19 situation on the Australian east coast, the Company continues to maintain strict protocols and has updated its COVID-19 procedures across the corporate office and exploration sites in order to protect the safety and well-being of our employees, contractors and local communities.

Regular rapid antigen testing protocols are now in place for all Company exploration personnel working in NSW, while the majority of our employees and contractors working at NSW exploration sites are domiciled within NSW to reduce travel requirements. The Company continues to monitor the global pandemic with respect to any potential impacts on current and future work activities.

Lachlan Copper-Gold Project, NSW

Activity during the December 2021 quarter focused on the planning and targeting of two significant geophysical surveys commencing in late January 2022 across Talisman's 4,183km2 tenement portfolio2 (Appendix 2). An extensive prospectivity review was undertaken of Talisman's tenement portfolio referenced against known mineral systems in the area, focusing on the key vectors to mineralisation attributed to significant recent discoveries.

From this review, it is apparent that economic mineral systems in the Cobar Superbasin have key geophysical characteristics which can be remotely sensed through the use of airborne geophysical surveys.

As a result of this work, Talisman has contracted to commence two large-scale regional geophysical surveys to provide an efficient and cost-effective"first-pass" screening mechanism for geophysical anomalism associated with Cobar and Mineral Hill-style mineralisation analogues over most of its substantial Exploration Licence area.

These large-scale surveys represent a significant investment in Talisman's highly prospective tenement portfolio and have the potential to shorten the discovery timeline on Talisman's tenure by several years by focusing exploration effort in areas considered most likely to return an economic discovery, including by potentially indicating the presence of blind mineralisation concealed below cover.

The surveys will also greatly enhance Talisman's understanding of sub-surface geology and structure in the area and provide further data for the interpretation of regional and prospect-scale structures hosting mineralisation. The acquisition and interpretation of both datasets is expected to provide a step-change to Talisman's understanding of the region and its exploration efforts in 2022 and beyond.

Airborne Electro-Magnetic Survey - VTEM™ Max

Airborne Electro-Magnetic (AEM) surveys have been used widely in the Cobar Superbasin and have led to the discovery of deposits with significant sulphide content through the direct detection of conductive anomalies in basement rocks. Discoveries using AEM surveys as a key targeting tool include the Mallee Bull Cu-Au-Ag-Zn-Pb deposit, currently being developed by Peel Mining Ltd, and the recent Constellation Cu-Au-Ag discovery by Aeris Resources Ltd.

• Refer Talisman ASX announcement dated 17 January 2022 for full details including JORC tables.

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Talisman has refined the target areas for the AEM survey to those assessed as being most prospective for sulphide lode-style mineralisation. The AEM survey commencing in late January has been designed to fly 6,285-line kilometres covering four blocks of Talisman's NSW exploration portfolio (refer Figure 1) including these priority target areas.

This includes three key target areas from the geological review conducted by independent exploration expert, Dr Jon Hronsky, in May 20213.

Figure 1: Talisman VTEM Survey Areas

• Refer Talisman ASX announcement dated 30 July 2021.

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Talisman has contracted UTS Geophysics Pty Ltd to undertake the AEM survey using the VTEM™ Max helicopter-borne AEM system (Figure 2). The survey will cover five of Talisman's Exploration Licences and part of one Exploration Licence Application in the Lachlan Project: EL8414 (TLM 87%), EL8547, EL8658, EL8680, EL9298 and ELA6403 respectively. The AEM survey is scheduled to commence in the last week of January 2022 and should take approximately five weeks to complete, subject to favourable weather conditions.

Figure 2: UTS Geophysics helicopter-borne AEM system

Regional Airborne Gravity Gradiometry Survey

During the quarter, a review of literature and publicly available information was completed which indicated that all known mineralised systems in the Cobar Superbasin have an associated gravity anomaly, likely due to the emplacement of siliceous alteration and associated sulphide ore minerals into lower density volcanic and volcano-sedimentary host rocks. This contrast in rock density has been used by other explorers in the area to vector exploration on a prospect scale, however Talisman's strategy to use gravity as a regional vectoring tool has never before been implemented in the Cobar Superbasin at this scale. The gravity survey will also resolve regional structure at a significantly higher level of detail, allowing a re-interpretation of structures known to host mineralisation.

Talisman has contracted XCalibur Aviation (Australia) Pty Ltd to fly an Airborne Gravity Gradiometry (AGG) survey using the proprietary FALCON® AGG system. FALCON is the world's most advanced airborne gravity gradiometer technology and provides high-quality gravity data to a resolution of 50m or better. The survey will be flown using a Cessna C208 Grand Caravan aircraft, standard for this survey type (Figure 3).

Figure 3: FALCON AGG system flown using a Cessna C208 Grand Caravan aircraft

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The AGG survey, which will be flown over a nominal 15,500-line kilometres at a 200m line spacing, represents the first application of airborne gravity techniques to the exploration for mineral systems in the Cobar area. This survey is due to commence in the last week of January 2022 and is planned to take approximately six weeks to complete, subject to favourable weather conditions. Areas subject to the AGG survey are shown in Figure 4.

Figure 4: Talisman's FALCON® AGG survey area

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