Talon Metals Corp., announced that it has entered into a binding Memorandum of Understanding (the "MoU") with Tlou Energy Limited ("Tlou Energy") regarding the Company's Saber Gas Project. The intention of this MoU is to complete a transaction whereby Talon will transfer to Tlou Energy all of Talon's rights in the Saber Gas Project licences in return for 19,285,714 shares of Tlou Energy, currently an unlisted company. This will result in Talon holding 30% of the fully diluted share capital of Tlou Energy as of the closing date of the transaction.

In addition, Talon has an option to increase its stake in Tlou Energy by subscribing for up to an additional 4,945,055 shares. The exercise price of this option is A$1.25 per share and the expiry date is June 30, 2013. Also, there is a provision for one Talon representative to be appointed to Tlou Energy's board of directors and Talon also has the right to nominate a second director. The Saber drilling equipment being held for sale is not part of the proposed transaction and will remain the property of Talon.

The Saber Gas Project is targeting coal bed methane ("CBM") and shale gas deposits (collectively referred to as "Gas Deposits") in Botswana, Africa. This Project has licenses with a total area of approximately three million acres over three blocks in Botswana. Tlou Energy is currently managing, operating and funding the exploration program on the Saber Gas Project. Talon holds a 90% interest in the Kalahari block (this interest can be reduced to 65% in certain circumstances), a 21% interest in the Masama block and a 25% interest in the Kweneng block.

Tlou Energy is an emerging gas exploration company actively prospecting for Gas Deposits throughout southern Africa with a treasury of over A$12 million. The principals have a proven track record of creating shareholder value in CBM companies. One such example is Sunshine Gas Limited, an Australian Stock Exchange listed CBM company which was initiated and prospected by the principals of Tlou Energy up to the discovery and delineation of a significant CBM resource. Sunshine Gas, which was a Top 200 ASX-listed entity, was subsequently sold to Queensland Gas Company for A$1.1 billion (US$722 million) in 2008.

"This transaction gives Talon a substantial holding in a leading CBM exploration company actively seeking and prospecting Gas Deposits in southern Africa," commented Stuart Comline, President and CEO of Talon. "Tlou Energy has an experienced management team and the skills, technologies and resources to develop and commercialize production on the Gas Deposits in the region. With the fulfilment of Tlou Energy's plans to pursue a stock exchange listing within the next year, these shares would become tradable securities which should benefit from public market valuations in this buoyant sector."

Tlou Energy has drilled 9 of a total of 12 holes planned for the exploration program encompassing the Masama, Kalahari and Kweneng blocks at the Saber Gas Project. Although full results are awaited, the results received to date meet the expectations of Tlou Energy's technical team.

The transaction as outlined in the MoU will supersede the joint venture agreements entered into by Saber Energy Corp. and Tlou Energy in 2009.

The completion of the transaction outlined in the MoU is conditional on, among other things, reciprocal due diligence reviews by both Talon and Tlou Energy, both parties receiving shareholder approval, an independent valuation, and any additional approvals in Botswana or required by the Toronto Stock Exchange or applicable corporate law.