Talon Management Discussion and Analysis

For the year ended December 31, 2023

On April 2, 2024 Talon Metals posted a document titled "Management's Discussion and Analysis". A copy of this document (which can be found on sedar.com searching for "Talon Metals") and can also be viewed here.

The following is a brief analysis of that document:

PAGE 15:

"As of December 31, 2023 and April 2, 2024, the Company had working capital of $13.8M US ($19.0 million Canadian) and approximately $8M US ($11 million Canadian), respectively.. In order to continue work towards achieving these business objectives, the Company will need to raise additional capital and there can be no assurance that the Company will be successful in doing so."

Now this is a Canadian company so all these "dollars" stated in the document are Canadian dollars. They typically spend about $20M to $30M US a year. They have spent $5.8M (US) in the first quarter. In effect, they may run out of money sometime in July or August 2024 at this rate and if no additional funding is provided.

Their ability to raise more cash is limited. Their stock price has dropped steadily throughout the year to its present value of around $0.09 to $0.10 per share. With this kind of performance, they are not able to just "sell more shares" as they did in the past since when the stock is dropping, nobody would buy these extra shares.

Thus, the imperative then for Talon is to get "big investors" to buy into their venture and do to this, they are focusing on the Tamarack North project.

PAGES 16:

Clearly, Talon has not identified sufficient mineral resources to support mining operations. They need to find more minerals and other ways to "make money" to move forward. As such, the company is saying:

The Company intends to continue exploration along the Tamarack North Project portion of the Tamarack Intrusive Complex while focusing on the following areas that show high-grade nickel potential
The initial Raptor Zone
The Raptor’s Crest area (northern portion of the Raptor Zone)
The 138 Zone (within the Company’s mineral resource area)
Determine if the CGO East mineral resources extend to the east
Commence a drill program testing the deep MT anomaly residing underneath the Tamarack Deposit

"There is no assurance the various business objectives, plans or milestone as detailed above will be completed on the timelines outlined (or at all). The exploration, development and construction of mineral projects are subject to a number of risks and uncertainties." See PAGE 23 and beyond for risks.

PAGE 18:

"The next "milestone" for the Tamarack North Project is the completion of a feasibility study.

Talon says very little about their efforts in Michigan. Page 22 indicates that they have only spent $508K on Michigan for the whole of 2023

RELATED - PRICE OF NICKEL:

The price of nickel has dropped significantly over the year, likely due to both an increase in supply (triggered by the previous high prices) and the decreased demand caused by the introduction of LFP and other battery technologies lowering the need for nickel.

Related to this, a couple of companies are coming out this year and early next year with a new lithium manganese ferrous phosphate (LMFP) battery that has volumetric energy density very close to the old LI-Ion but with no nickel or cobalt, with much better safety, faster charging, better low temperature performance and 20-30% lower cost. If this remains true, this means the old LI-Ion battery is gone from the scene within the next year or two. See www.whichcar.com.au/news/new-longer-range-battery-coming-for-tesla-model-3 and https://electrek.co/2023/06/06/gotion-unveils-lmfp-ev-battery-it-says-can-deliver-1000-km-per-single-charge-for-a-lower-price/.

The new innovation is a new LMFP battery. This is a lithium manganese ferrous phosphate battery that outperforms the old nickel cobalt battery plus 20%+ lower cost. And if that is indeed the case, it makes no sense to use nickel in batteries … ever.

This would likely affect demand to the point that nickel drops to its "pre EV craze" days of around $15,000 a tonne. Since an underground mine is VERY expensive, this level of pricing may not support an underground mine.