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Tawana Resources NL - Quarterly report for the period ended 30 September 2006
Tawana Resources NL
(Incorporated in Australia)
(Registration number ACN 085 166 721)
Share code on the JSE Limited: TAW & ISIN: AU000000TAW7
Share code on the Australian Stock Exchange Limited: TAW & ISIN: AU000000TAW7
("Tawana" or "the Company")
Quarterly Activities and Cash Flow Report
1 July - 30 September 2006
Key Points
- Bulk sampling of Blacktop kimberlite dyke commenced
* 600+ diamonds to 23 October
* Blacktop 01 and 02 dykes confirmed diamondiferous
* Processing and concentrate analysis to continue into
2007
- Engineering plans for Kareevlei Wes trial mining
completed
* Mining Right application proceeding - process slower
than expected
- Drilling of Daniel Kimberlite targets nearing completion
* 26 Falcon targets drilled during first phase
* Bulk sampling of kimberlites at Falcon targets A1, A9/10 and A25
completed.
* Joint Venture agreement formalised
Commenting on the quarter"s work, Managing Director Wolf Marx said "We have had
an outstanding start to the bulk sampling program at Blacktop. As of 20
October we have 600 diamonds from relatively small parcel of concentrate that
has been produced to date. It will be several months before we have completed
treating the costean material and assessing the recovered indicator minerals
and diamonds, and I look forward to keeping shareholders advised of progress".
Mr. Marx went on to say "In South Africa, we are in advanced discussions with a
party interested in participating in the alluvial project. We are also
advancing a proposal with a new Black Empowered group to gain access to a
section of the Daniel Kimberlite project area not covered by our partners BHP
Billiton and Seven Falls".
Mr. Marx concluded: "We are still endeavouring to secure a licence to commence
the Kareevlei Wes trial mining program. The process of gaining approvals
through the relevant government departments remains challenging, but it appears
that we are close to meeting pre-approval requirements".
Pilbara Western Australia
Blacktop Kimberlite Project
(Tawana 50% and operator /De Beers Australia Exploration 50%)
Blacktop number 01 and 02 dykes are diamondiferous. The dense media separation
(DMS) plant was commissioned on 8 September 2006, and to 30 September, 263
diamonds weighing 20.89 carats were recovered from analysis of the initial
Flowsort concentrate. To 20 October 640 diamonds weighing 52.82 carats had
been recovered. The majority of the stones are white dodecahedrons, with the
largest stone weighing 1.24 carats. All diamonds are in the size fraction +1mm
to -19mm.
The excavation of sample costeans from the Blacktop 01 kimberlite commenced on
14 August 2006, and a total of 79 costeans was excavated perpendicular to the
strike of the dyke. Ten costean clusters (figures 1 and 2) were focused on
areas where the dyke widened ("blows") in places up to some 5 metres in width.
Approximately 6,000 tonnes have been excavated and trucked to the DMS plant.
While additional blows may exist along strike of Blacktop 01, costeaning was in
areas which were readily accessible.
Since commissioning the DMS plant, processing has progressed well and at the
end of September 2,100 tonnes of material had been processed through the plant.
DMS concentrates are screened, packed and sealed on site and transported to
Perth on a regular basis where the concentrates are passed through a Flowsort X-
Ray recovery unit. The resulting concentrate from the Flowsort unit is sent to
Tawana"s laboratory in Melbourne for identification of indicator minerals and
diamonds. It is expected that treatment of the material will be completed late
in the December quarter, with completion of Flowsort and laboratory analysis
continuing into 2007. Update reports will be released as results are to hand.
A variety of kimberlite types was identified during costeaning including a
large proportion of macrocrystic textured kimberlite containing numerous mantle
xenoliths. This is deemed significant as large crystals tend to indicate that
the kimberlite was sourced deep within the mantle, an ideal environment for
diamonds A summary of the production statistics for the processing of the
Blacktop bulk sample to the end of September are shown in Table 1.
Table1. Bulk sample Summary to 30 September 2006
Samples DMS DMS Flowsort Flowsort Diamonds Diamonds
Excavated Processed concentrate processed concentrate recovered recovered
t t Produced t t Sorted in No cts
Lab kg
6,000 2,100 22.4T 4.202 2.039 263 20.89
Figure 1: Contour map showing costeans and bulk sample sites over Blacktop 01
Samples were also taken over the Blacktop 02 dyke (figure 1) for heavy mineral
analysis. These samples have been analysed in Tawana"s laboratory and the
diamondiferous nature of this sub-parallel dyke has been confirmed.
Figure 2: Excavation of kimberlite from sample site BTB10
Figure 3: Blacktop processing and camp site
(All images can be view on the Company"s website; www.tawana.com.au)
Exploration
Pilbara Regional Exploration
Regional reconnaissance and follow-up sampling within the 17 granted De Beers
tenements commenced on 26 September and was completed by 11 October 2006. This
program included reconnaissance stream sampling and the follow up of anomalies
generated from aeromagnetic surveys and heavy mineral anomalies from previous
De Beers sampling.
This helicopter sampling program was based out of Blacktop camp and included
Tawana geologists and a geologist on secondment from De Beers. The sampling
area covered approximately 4000 square km.
Some 266 samples were collected during the program as shown in Table 2 and
Figure 4.
Table 2 Sampling statistics for 2006 field period
Sample type Samples
collected
Loam 165
Stream 97
Rock 4
TOTAL 266
Figure 4: Map highlighting Pilbara tenement boundaries and distribution of
samples collected during current field season
Kareevlei Wes Project
(Tawana 74% and operator/Seven Falls 26%)
As previously reported the Company"s South African and Australian based mining
consultants have completed the detailed planning for the trial mining of the
KV2 kimberlite at Kareevlei Wes.
The Mining Right application has progressed to the stage where it has been
approved by the Northern Cape Provincial Departmental stakeholders and is still
being assessed by the Kimberley regional branch of the Department of Minerals
and Energy (DME). Once this process has been completed the application will be
referred to the DME headquarters in Tshwane (formerly Pretoria). Guidelines
recently announced by the DME indicate that the DME allows for a 12 month
completion of processing of Mining Right Applications.
In view of the longer than anticipated (based on DME guidance) time taken for
the Mining Right to be processed the Company has notified its South African
employees that they will be retrenched at the end of November if, as now
anticipated, the Mining Right has not been approved prior to that time. Re-
employment priority will be given to current employees when the Mining Right
has been approved.
Daniel Kimberlite Project
(Tawana 22.2% and operator/ BHP Billiton 51.8% /Seven Falls 26 %)
Tawana has commenced negotiations with a black empowered group holding
Prospecting Rights over a large area within the Daniel Project Area.
Falcon Targets
Drilling of the Falcon kimberlite targets is nearing completion with no
additional kimberlites identified. Twenty six targets have been drilled during
2006.
The current drilling is on ground covered by granted new order Prospecting
Rights. Applications for additional Prospecting Rights were submitted to cover
several other Falcon targets on 19 farms in the Daniel Project Area, but the
Company has been informed that the applications over all 19 farms have been
rejected on the grounds that prior applications by other parties had been made.
The Company has reason to believe that on at least seven of the farms no prior
applications exist. The Company is making representations to the DME on behalf
of the Joint Venture to reinstate our applications over these seven farms.
A1, A9/10 and A25 Kimberlites
Tawana completed bulk sampling programs designed to determine the grade and
diamond quality of the kimberlites identified as Falcon targets A1, A9, A10 and
A25 (Table 3). Kimberlite was excavated from each of the four kimberlites and
transported to the Company"s DMS plant located at Perdevlei where the minus
19mm plus 1.5mm material was processed. The following Table summarises the
results. No further work will be conducted on these kimberlites and
rehabilitation has been completed.
Table 3: Bulk Sampling Results
Kimberlite Tonnes Diamonds Carats CPHT Largest (ct)
A1 1178 30 5.13 0.8 3.15
A9 535 1 0.23 - -
A10 720 33 2.37 0.33 0.29
A25 182 2 0.12 0.06 -
Tawana Alluvials
(Tawana 70% and operator/Seven Falls 30 %)
Eastern Gravels and Feeder Channel
Negotiations with third parties to participate in the continuation of the
economic assessment of the Eastern Gravels and Feeder Channel alluvial diamond
deposits are continuing.
Joint Venture Agreement Formalised
Tawana, BHP Billiton and Seven Falls have formalised the various separate
agreements between the companies into one Joint Venture Agreement. In the
process the companies have agreed to amend some aspects of the terms to
recognise circumstances that did not exist at the time the original agreements
were negotiated.
One of the key amendments is the transfer of an additional 4% equity in the
Tawana Alluvials (Eastern Gravels and Feeder Channel) from Tawana to Seven
Falls in consideration for Seven Falls waiving its rights to a participating
interest in any areas within the Daniel Project Area (defined as an area having
a radius of 30 kilometres centered on the Finsch Mine) in which fully black
empowered parties other than Tawana, BHP Billiton or Seven Falls hold
Prospecting Rights. BHP Billiton has also agreed to waive its rights to a
participating interest in such areas but retains the right to a 2.5% royalty
from any diamond production from such areas in consideration of the provision
to Tawana of Falcon data on the areas. Tawana has agreed to seek to acquire the
diamond marketing rights for such areas for BHP Billiton on a best endeavours
basis.
Melbourne Laboratory
Activity within the Melbourne Laboratory during the third quarter was primarily
focused on the examination of Flowsort concentrate from the Blacktop bulk
sampling program, and the recovery and classification of macrodiamonds from
these samples. Flowsort macrodiamond concentrate are delivered to the
laboratory on a weekly basis.
In addition to diamond recovery, the laboratory also completed audit checks on
Flowsort tailings, and recovered quality assessment spikes introduced to review
both on site DMS and Flowsort processes.
Treatment, examination and reporting of Pilbara exploration samples was
undertaken, and work was also conducted on third party client samples.
Corporate
Dr Leon Daniels resigned as director and executive director of the Company to
pursue other interests.
The Company is in advanced negotiations with a major black owned South African
company to form a strategic alliance to jointly pursue resource projects in
Southern Africa.
30 October 2006
Contact:
Wolf Marx Basil Tambanis
Tel: +61 3 98635222 Tel: +61 3 98635222
Mob: 0428 398446 Mob: 0414 434339
Email:wolf.marx@tawana.com.au; basil.tambanis@tawana.com.au
This report is based on information compiled by Wolf Marx BSc, BA, FAusIMM,
CPGeo, Managing Director of Tawana Resources NL. He has sufficient experience
relevant to the style of mineralisation and types of deposits under
consideration, and to the activities undertaken, to qualify as a competent
person as defined in the 2004 edition of the "Australasian Code for the
Reporting of Mineral Resources and Ore Reserves"
Sponsor
PricewaterhouseCoopers Corporate finance (Pty) Limited
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.
Name of entity
Tawana Resources N.L.
ABN Quarter ended
("current quarter")
69 085 166 721 30 September 2006
2006
Consolidated statement of cash flows
Current Year to date
Cash flows related to operating quarter ( 9 months)
activities $A"000 $A"000
1.1 Receipts from product -
sales and related debtors
1.2 Payments for (a) (1,942) (3,689)
exploration and evaluation
(b) development
(c) production
(d) (480) (1,339)
administration
1.3 Dividends received - -
1.4 Interest received 40 51
1.5 Interest and other costs
of finance paid
1.6 Income taxes paid
1.7 Other (provide details if
material)
(2,382) (4,977)
Net Operating Cash Flows
Cash flows related to
investing activities
1.8 Payment for purchases of:
(a)prospects
(b)equity investments - (95)
(c) other fixed assets
1.9 Proceeds from sale of:
(a)prospects
(b)South Yarra Building - 1,870
1.10 Loans to other entities
1.11 Loans repaid by other
entities
Net investing cash flows - (1,775)
1.13 Total operating and (2,382) (3,202)
investing cash flows
(carried forward)
1.13 Total operating and (2,382) (3,202)
investing cash flows
(brought forward)
Cash flows related to
financing activities
1.14 Proceeds from issues of - 6,806
shares, options, etc.
1.15 Proceeds from sale of - -
forfeited shares
1.16 Proceeds from borrowings - -
1.17 Repayment of borrowings - -
1.18 Dividends paid - -
1.19 Other (provide details if - -
material)
Net financing cash flows - 6,806
Net increase (decrease) in (2,382) 3,604
cash held
1.20 Cash at beginning of 7,326 1,340
quarter/year to date
1.21 Exchange rate adjustments - -
to item 1.20
1.22 Cash at end of quarter 4,944 4,944
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related
entities
Current
quarter
$A"000
1.23 Aggregate amount of payments to the 98
parties included in item 1.2
1.24 Aggregate amount of loans to the parties Nil
included in item 1.10
1.25 Explanation necessary for an understanding of the
transactions
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which
have had a material effect on consolidated assets and
liabilities but did not involve cash flows
Nil
2.2 Details of outlays made by other entities to establish
or increase their share in projects in which the
reporting entity has an interest
Nil
Financing facilities available
Add notes as necessary for an understanding of the position.
Amount Amount used
available $A"000
$A"000
3.1 Loan facilities Nil Nil
3.2 Credit standby arrangements Nil Nil
Estimated cash outflows for next quarter
$A"000
4.1 Exploration and evaluation 814
4.2 Development Nil
Total 814
Reconciliation of cash
Reconciliation of cash at the end Current Previous
of the quarter (as shown in the quarter quarter
consolidated statement of cash $A"000 $A"000
flows) to the related items in the
accounts is as follows.
5.1 Cash on hand and at bank 29 209
5.2 Deposits at call 4,915 7,117
5.3 Bank overdraft - -
5.4 Other (provide details) - -
Total: cash at end of 4,944 7,326
quarter (item 1.22)
Changes in interests in mining tenements
Tenement Nature of Interest Interest
reference interest at at end of
(note (2)) beginning quarter
of quarter
6.1 Interests in
mining
tenements
relinquished,
reduced or
lapsed
6.2 Interests in
mining
tenements
acquired or
increased
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights
together with prices and dates.
Total Number Issue Amount paid
number quoted price per up per
security security
7.1 Preference
+securities Nil Nil
(description)
7.2 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through
returns of
capital, buy-
backs,
redemptions
7.3 +Ordinary 87,097,481 87,097,481 Various Various
securities
7.4 Changes during
quarter
(a) Increases Nil Nil
through issues
(b) Increase
through
exercise of
options
7.5 +Convertible
debt Nil Nil
securities
(description)
7.6 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through
securities
matured,
converted
7.7 Options Exercise Expiry date
(description 21,869,843 21,869,843 price 30 April
and conversion $1.00 2008
factor)
7.8 Issued during Nil Nil
quarter
7.9 Exercised Nil Nil
during quarter
7.10 Expired during Nil Nil
quarter
7.11 Debentures Nil Nil
(totals only)
7.12 Unsecured Nil Nil
notes (totals
only)
Compliance statement
1 This statement has been prepared under accounting policies which comply
with accounting standards as defined in the Corporations Act or other standards
acceptable to ASX (see note 4).
2 This statement does give a true and fair view of the matters disclosed.
Sign here: W.T.Marx Date: 30 October 2006
(Director)
Print name: W.T.Marx
Notes
1 The quarterly report provides a basis for informing the market how the
entity"s activities have been financed for the past quarter and the effect
on its cash position. An entity wanting to disclose additional
information is encouraged to do so, in a note or notes attached to this
report.
2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect
of interests in mining tenements acquired, exercised or lapsed during the
reporting period. If the entity is involved in a joint venture agreement
and there are conditions precedent which will change its percentage
interest in a mining tenement, it should disclose the change of percentage
interest and conditions precedent in the list required for items 6.1 and
6.2.
3 Issued and quoted securities. The issue price and amount paid up is not
required in items 7.1 and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 1022: Accounting for
Extractive Industries and AASB 1026: Statement of Cash Flows apply to this
report.
5 Accounting Standards ASX will accept, for example, the use of
International Accounting Standards for foreign entities. If the standards
used do not address a topic, the Australian standard on that topic (if
any) must be complied with.
All press releases and announcements may be inspected on the Company"s web
site, namely: www.tawana.com.au
Date: 30/10/2006 07:30:47 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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