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Tawana Resources NL - March 2006 quarterly report
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")
March 2006 Quarterly Report
Highlights
- Trial mining of Perdevlei commenced
- Application for Mining Right over Kareevlei Wes lodged
- Initial results of sampling of targets in Pilbara encouraging
- Melbourne Laboratory freehold sold with leaseback agreement
- Prospectus lodged for underwritten 1:3 non-renounceable Rights Issue
- Management boosted by employment of Basil Tambanis as Corporate Operations
Officer
Shareholders are urged to view the Rights Issue Prospectus at www.tawana.com.au
for a full review of all of the Company"s activities.
South African Projects
Daniel Kimberlite Project
(Tawana 22.2% and operator/ BHP Billiton 51.8% /Seven Falls 26%)
Falconr Targets
Following the discovery of kimberlites A1, A2 and A95 during Q4 2005, the BHP
Billiton Falconr data was reviewed and all of the previously identified targets
were reassessed. BHP Billiton subsequently confirmed its intention of
contributing its share of expenditure on the ongoing drilling of the Falconr
targets.
A program for this exploration has been agreed by the joint venture partners
with the first phase entailing drilling approximately 20 Falconr targets
identified by BHP Billiton. Subsequently an additional 19 targets were
identified for drilling during the first phase.
The first phase of this program has commenced on currently accessible targets
and is expected to be completed by the end of 2Q 2006.
Drilling will be conducted in several phases during 2006 as access becomes
available.
A95 Kimberlite
Tawana has completed a small bulk sampling program designed to determine whether
the kimberlite A95 is diamondiferous. 500 tonnes of calcretised kimberlite were
excavated from the top 2 metres of two sections of A95 and processed in the
Company"s Dense Media Separation plant. Four small diamonds were recovered
weighing a total 0.14cts proving that the kimberlite is diamondiferous but
giving no indication of the grade. (See Comment )
Further drill testing of this kimberlite is planned.
Comment: Shareholders should be aware that kimberlites in the Limeacres region
of South Africa, such as Perdevlei, Kareevlei and A95, are characterised by a
surface alteration known as "calcretisation". This occurs when the exposed
portions of the kimberlite are indurated by calcium carbonates deposited by
circulating ground waters. This has the effect of coating any diamonds in the
surficial, calcretised part of the kimberlite with carbonates, which may have an
adverse affect on the recovery of diamonds by conventional methods. Bulk
sampling of exposed calcretised kimberlite, therefore, only provides information
as to whether the kimberlite is diamondiferous or not. Samples of deeper
sections of the kimberlite can then be collected, if warranted, to determine the
grade of the deposit.
Kareevlei Wes
(Tawana 74% and operator, Seven Falls 26%.)
An application for a Mining Right for Kareevlei has been submitted to the South
African Department of Minerals and Energy. The Company has been advised that the
Mining Right can be expected to be granted during 3Q 2006.
The Company has commenced preparation of a commercial operating plan for the
Kareevlei Wes operation.
Perdevlei
(Tawana 74% and operator, Seven Falls 26 %.)
The Company-owned 10 tonne per hour dense media separation plant has been moved
from Kareevlei Wes to Perdevlei and has commenced the processing of 2000 tonnes
of kimberlite excavated from the K1 kimberlite during the quarter. Results of
this processing are expected to be available by the end of the second quarter.
Australian Projects
Pilbara Project
(Tawana 50%, De Beers Australia 50%)
Tawana Diamonds Australia Limited (TDAL) is the company formed jointly by De
Beers and Tawana to explore and develop Australian diamond projects. TDAL is
managed by Tawana Resources NL.
A helicopter supported sampling program was completed during Q4 2005 during
which 304 samples were collected over areas in which previous De Beers sampling
had identified kimberlitic indicator mineral anomalies. These samples are being
processed and examined in the Company"s Melbourne Laboratory.
Initial results have been very encouraging. Kimberlitic indicator minerals have
been recovered from two discrete areas. In the one area a microdiamond was
recovered from a sample containing kimberlitic minerals, which are interpreted
as being derived from a kimberlite close to the sample site. This is an
excellent result for such an early stage of the exploration program, which is
focused on an area some 40km from the Blacktop project area.
The other positive area is approximately 5km to the west of the Blacktop
kimberlite.
The DMS plant hired for processing the proposed bulk samples of the Blacktop
kimberlite is being prepared for transport to site. This will be done as soon as
statutory approvals have been granted and the dry season has commenced.
Melbourne Laboratory
During December 2005 Tawana acquired the De Beers diamond laboratory in
Melbourne. In March 2006 the building containing the laboratory was sold with a
long term lease-back agreement. The proceeds of this sale, being $1.87million,
will be used to support the funding of Tawana"s exploration and development
programs. The laboratory is now fully operational, and while primarily
concentrating on the Company"s sample determinations, there is also capacity to
handle third party work.
Corporate
1:3 Underwritten Non-renounceable Rights Issue
On 13 April 2006 the Company announced a non-renounceable rights issue on the
basis of 1 new share for every 3 fully paid ordinary shares held on the Record
Date to issue up to 21,493,747 shares at $0.35 (Rand1.61) per share.
The rights issue is underwritten by ABN AMRO Morgans Corporate Limited and will
raise approximately A$7.5 million (before expenses).
It is anticipated that the net proceeds raised from the rights issue, will be
applied by the Company to fund exploration on existing tenements, the
development of the Kareevlei Wes Project and working capital requirements of the
Company.
Details and timing of the rights issue
As indicated, the rights issue will take place in the ratio of 1 new share for
every 3 fully paid shares held at the close of business on Friday, 5 May 2006
("Record Date"). In addition, shareholders will also be able to apply for new
shares in excess of their allocated entitlement; such shares to be allocated at
the discretion of the Directors.
The issue price for the new shares will be A$0.35 per share. The issue price
payable for new shares by South African registered eligible shareholders will be
R1,61 per new share being the Rand equivalent of A$0.35 as at 11 April 2006,
being the last practicable date prior to the finalisation of the terms of this
announcement. The Rand equivalent of A$0.35 has been set based on Standard
Bank"s quoted selling rate for A$ - Cheques and Telegraphic Transfers. All
subscription monies from South African shareholders will be retained for use in
Tawana"s South African operations.
The Prospectus was lodged with the Australian Securities Investment Commission
("ASIC") on 20 April 2006. The dates of the rights issue are as follows:
2006
Last day to trade in shares on the JSE Wednesday, 26 April
in order to be entitled to participate
in the rights issue
South African public holiday Thursday, 27 April
Last day to trade in shares on the ASX Friday, 28 April
in order to be entitled to participate
in the rights issue
Shares trade `ex" rights issue Friday, 28 April
participation on JSE
South African public holiday Monday, 1 May
Shares trade `ex" rights issue Monday, 1 May
participation on ASX
Record Date on ASX and JSE to determine
shareholders of Tawana entitled to Friday, 5 May
participate in the rights issue
Rights issue opens and Prospectus and
Entitlement and Acceptance Form Wednesday, 10 May
dispatched to entitled Tawana eligible
shareholders
Rights issue closes as to acceptance
and payment in South Africa at Wednesday, 24 May
12:00**** and at 17:00 AEST in
Australia
Shares quoted on ASX (with deferred Thursday, 25 May
settlement)
Updating by Computershare Investor
Services 2004 (Pty) Limited of
shareholders accounts and anticipated Friday, 2 June
date for commencement of trading of new
shares on JSE
Notes:
* All or any of the above dates are subject to change. Subject to the
Australian Corporations Act, the ASX, the JSE and the ASIC, the Company,
with prior written consent of the Underwriter, reserves the right to vary
any or all such dates as set out above. Any changes to the above dates
will be communicated to shareholders in the appropriate manner as required
by the ASX and in the case of the JSE, by release over SENS and by
publication in the South African press.
** Shareholders are advised that trading in shares on the JSE in Tawana is
settled within the STRATE environment five business days following a trade.
*** In South Africa, no dematerialsation or rematerialisation of Tawana share
certificates may take place from Friday, 28 April 2006 to Friday, 5 May
2006, both days inclusive.
**** South African shareholders should note that although in the dematerialised
environment payment usually takes place on delivery, in this instance,
dematerialised shareholders will be required to make payment for their
rights on or before 12:00 on the closing date of the rights issue, namely,
Wednesday, 24 May 2006, with share delivery/updating of accounts only
taking place on Friday, 2 June 2006. Dematerialised shareholders should
consult with their CSDP or broker with regard to the deadline that the CSDP
or broker requires payment to be made by.
Documentation regarding the rights issue
It is anticipated that the Prospectus dated 20 April 2006 and Form of
Entitlement and Acceptance providing detailed information on the rights issue
will be dispatched to registered shareholders on or about 10 May 2006. Eligible
shareholders should note that they will be required to complete the Entitlement
and Acceptance Form in order to acquire shares in terms of the rights issue.
Appointment of Corporate Operations Officer
On 12 April 2006 the Company announced the appointment of Basil Tambanis as
Corporate Operations Officer effective 22 May 2006.
Basil is an experienced corporate adviser with significant Australian and
international transaction expertise in business analysis, valuations, strategic
business development and fund raising. He joins us from Intersuisse Corporate
where he established strong ties to the resource sector and financial market.
Prior to entering the equity capital markets, Basil spent 8 years in the mining
sector managing the construction and commissioning of a variety of mining
projects including crushing circuits, alluvial processing plants and CIP
processing plants. He has also supervised the implementation of exploration
programs in Australia and PNG. Basil holds a Bachelor of Business in Financial
Risk and Risk Management.
At Tawana, Basil will combine his extensive corporate finance and mining
experience to accelerate final feasibility and development of the Kareevlei Wes
project and bulk sample testing at Blacktop.
Cash Position
The attached Appendix 5B shows the cash position of the Company as at 31 March
2006 to be $605,000. This excludes the $1.87million received from the sale of
the Melbourne laboratory building in April 2006 and the anticipated $7.5million
(before costs) to be received from the rights issue described above.
For further information please contact:
Wolf Marx
Tel: +61 (0)3 98635222
Mob: +61 (0)428 398446
Email: wolf.marx@tawana.com.au
Andrew Smith
Tel: +61 (0)8 82768794
Mob: +61 (0)417 265205
Email: andrew.smith@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 addition of the "Australasian Code for the
Reporting of Mineral Resources and Ore Reserves"
ASX 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 31 March 2006
Consolidated statement of cash flows
Current Year to date
Cash flows related to operating quarter ( 3 months)
activities $A"000 $A"000
1.1 Receipts from product -
sales and related
debtors
1.2 Payments for (a) (487) (487)
exploration and
evaluation
(b)
development (154) (154)
(c)
production
(d)
administration
1.3 Dividends received - -
1.4 Interest received 1 1
1.5 Interest and other costs
of finance paid
1.6 Income taxes paid
1.7 Other (provide details
if material)
(640) (640)
Net Operating Cash Flows
Cash flows related to
investing activities
1.8 Payment for purchases
of: (a)prospects (95) (95)
(b)equity investments
(c) other fixed assets
1.9 Proceeds from sale of:
(a)prospects
(b)equity investments
1.10 Loans to other entities
1.11 Loans repaid by other
entities
Net investing cash flows (95) (95)
1.13 Total operating and (735) (735)
investing cash flows
(carried forward)
1.13 Total operating and (735) (735)
investing cash flows
(brought forward)
Cash flows related to
financing activities
1.14 Proceeds from issues of -
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
Net increase (decrease) (735) 735
in cash held
1.20 Cash at beginning of 1,340 1,340
quarter/year to date
1.21 Exchange rate - -
adjustments to item 1.20
1.22 Cash at end of quarter 605 605
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 88
parties included in item 1.2
1.24 Aggregate amount of loans to the Nil
parties 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 Nil Nil
arrangements
Estimated cash outflows for next quarter
$A"000
4.1 Exploration and evaluation 1,400
4.2 Development Nil
Total 1,400
Reconciliation of cash
Reconciliation of cash at the Current Previous
end of the quarter (as shown quarter quarter
in the consolidated statement $A"000 $A"000
of cash flows) to the related
items in the accounts is as
follows.
5.1 Cash on hand and at bank 214 482
5.2 Deposits at call 391 858
5.3 Bank overdraft - -
5.4 Other (provide details) - -
Total: cash at end of 605 1,340
quarter (item 1.22)
Changes in interests in mining tenements
Tenement Nature of Interest at Interest
reference interest beginning of at end of
(note (2)) quarter 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 price Amount
number quoted per paid up
security per
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 65,609,529 65,609,529 various various
securities
7.4 Changes during
quarter
(a) Increases
through issues
(b) Increase
through exercise of
options
7.5 +Convertible debt
securities Nil Nil
(description)
7.6 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through securities
matured, converted
7.7 Options Exercise Expiry
(description and 21,869,843 21,869,843 price date
conversion factor) $1.00 30 April
2008
7.8 Issued during Nil Nil
quarter
7.9 Exercised during Nil Nil
quarter
7.10 Expired during Nil Nil
quarter
7.11 Debentures Nil Nil
(totals only)
7.12 Unsecured notes Nil Nil
(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: 27 April, 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.
27 April, 2006
Date: 28/04/2006 08:13:55 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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