Talon Metals Receives Shareholder Approval and Closes Financing Transaction

ROAD TOWN, BRITISH VIRGIN ISLANDS--(Marketwired - January 18, 2017) - Further to a press release dated December 19, 2016, Talon Metals Corp. ("Talon" or the "Company") (TSX: TLO) is pleased to announce that the amendment to the loan agreement (the "Loan Agreement"), dated November 25, 2015, amongst Talon, Resource Capital Fund VI L.P. ("RCF VI") and certain of Talon's subsidiaries (the "Credit Parties") has become effective (the "Loan Amendment") pursuant to the terms of an amending agreement, amongst the same parties, dated December 16, 2106 (the "Amending Agreement"). Minority shareholder approval for, among other things, the Loan Amendment was obtained today at a special meeting of the Company's shareholders in accordance with Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions.

Pursuant to the terms of the Loan Agreement, as amended by the Amending Agreement, among other things:

1. RCF VI has agreed to increase the principal amount of the unsecured loan previously advanced to the Company on December 29, 2015 by US$2,000,000 (from US$14,000,000 to US$16,000,000) to be provided in a second advance (expected to be received by the Company on January 19, 2017) on substantially the same terms as the original loan (the "Second Advance").
2. RCF VI maintains the right to elect to convert all or part of the principal amount of the unsecured loan (including all capitalized interest) into common shares of the Company at any time at a conversion price of C$0.156 per common share. The outstanding principal amount under the Loan Agreement, as amended, will continue to bear interest at the rate of 12% per annum until the maturity date, being the earlier of: (i) November 25, 2018; and (ii) the date upon which RCF VI elects to accelerate the due date upon the occurrence of certain events, including an event of default; and
3. the proceeds of the Second Advance are required to be used for the purposes of funding the Company's share of a winter exploration program at the Tamarack Project and the remainder in accordance with a detailed budget relating to the business activities of the Credit Parties as well as to all general, administrative and others costs and expenses of the Credit Parties, as such budget is updated, revised and amended from time to time with the consent of RCF VI.

Pursuant to the Amending Agreement, as consideration for RCF VI's agreement to increase the principal amount under the Loan Agreement, the Company has issued to RCF VI 15,000,000 common share purchase warrants (the "Warrants"), each exercisable for one common share (each, an "Warrant Share") at an exercise price of CDN$0.11 per Warrant Share for a period of 48 months from the date of issuance of such Warrants.