Talon Metals Signs LOI with Rio Verde Minerals Corp

British Virgin Islands-registered mineral exploration company Talon Metals Corp. has entered into a Letter of Intent with Rio Verde Minerals Corp., a private company focused on the exploration and development of fertilizer projects in Brazil. This LOI provides for the completion of transactio regarding Talon’s Sergipe Potash Project. By terms of the agreement, the BVI company will transfer to Rio Verde all of its rights in the Project in return for approximately 27 million shares, or about 66% of Rio Verde.

Upon completion of the transaction with transfer of Talon’s potash properties, Rio Verde (which is currently unlisted company) is expected to acquire certain phosphate properties in Brazil from Sercor Ltd., a company which is also party to this LOI., and which would be the holder of about 22% of Rio Verde.

After completion of the transactions contemplated by the LOI, Talon Metals will have the right to nominate a majority of the directors of Rio Verde until the company completes a “going public” transaction. The closing of the proposed transactions is expected to occur in December 2010. Upon their completion, Talon will acquire pre-emptive rights to a proportionate participation in any future offering of equity securities of Rio Verde, exercisable for so long as Talon holds 10% or more of the issued and outstanding common shares of Rio Verde, subject to termination in the event that Rio Verde completes a “going public” transaction.

By words of Stuart Comline, President and CEO of Talon Metals, the transaction is aligned with company’s strategy to secure a partner to develop the Sergipe Potash Project. The successful conclusion of this transaction will allow Talon Metals to focus primarily on its 100%-owned iron ore projects in Brazil.

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