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Tawana - Half-Year Financial Report On 30 June 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")
ABN 69 085 166 721
Half-Year Financial Report 30 June 2006
CORPORATE DIRECTORY CONTENTS
Board of Directors Page
Brian Phillips Corporate Directory 2
Wolfgang Marx Directors" Report 3
Leon Daniels Auditor"s Independence Declaration 5
Euan Luff Directors" Declaration 6
Income Statement 7
Company Secretary Balance Sheet 8
Harry Hill Statement of Cash Flows 9
Statement of Changes in Equity 10
Registered Office Notes to and Forming Part of
60 Wilson Street the Financial Statements 12
SOUTH YARRA VIC 3141 Independent Review Report to
the Members 15
Auditor
PricewaterhouseCoopers
GPO Box 1331L
MELBOURNE VIC 3001
Share Registry
Computershare Investor
Services Pty Ltd
Yarra Falls
452 Johnston Street
ABBOTSFORD VIC 3067
Stock Exchange Listing
Home Exchange is Melbourne
ASX/JSE Code: Shares TAW
ASX/JSE Code: Options TAWO
DIRECTORS" REPORT
The Directors of Tawana Resources N.L submit herewith the financial report
for the half-year ended 30 June 2006. In order to comply with the
provisions of the Corporations Act 2001, the Directors report as follows:
DIRECTORS
Details of the Directors of the company in office at any time during or
since the end of the half year and at the date of this report are:
Wolfgang Marx:.. Managing Director BSc, BA, FAusIMM, CPGeo
Qualifications and Experience
Board Member since 16 November 1998. Wolf Marx is a qualified geologist and
has over 25 years experience in geology particularly in exploration for
gold and diamonds.
Interest in Shares - 6,148,500
Interest in Options - 1,999,500
Brian Phillips: Non-Executive Chairman FAusIMM, AWASM, MIMMM
Qualifications and Experience
Board Member since 4 April 2005. Brian Phillips is a qualified mining
engineer and has over 40 years experience in the mining industry being a
Fellow of the AusIMM, a member of the IMM, a past Director of The
Australian Gold Council and past President of the Victorian Minerals and
Energy Council. He is Chairman of Leviathan Resources Ltd and Indophil
Resources N.L. He is a member of the Audit and Risk Management Committee
and the Remuneration and Nomination Committee.
Interest in Shares - 194,800
Interest in Options - 41,133
Leon Daniels: Executive Director BSc, PhD
Qualifications and Experience
Board member since 16 November 1998. Leon Daniels is a South African
national living in Botswana who has over 25 years experience in gold and
diamond mining and exploration.
Interest in Shares - 5,417,000
Interest in Options - 1,797,166
Euan Luff: Non-Executive Director B Juris LL.B.AL.Arb.A.
Qualifications and Experience
Board Member since 16 November, 1998. Euan Luff is Senior Partner of
Wilmoth Field and Warne, Solicitors. In his professional capacity he acts
as a legal adviser to a number of private and public Companies. He is a
member of the Audit and Risk Management Committee and the Remuneration and
Nomination Committee.
Interest in Shares - 6,443,620
Interest in Options - 1,854,812
COMPANY SECRETARY
Harry Hill
Qualifications and Experience
Company Secretary since 16 November 1998. Harry Hill has over 30 years
experience as a Company Secretary having been Company Secretary of several
publicly listed companies involved in mining and mineral exploration,
education, construction, and clothing both wholesale and retail. He is a
Certified Practising Accountant and a Fellow of the Institute of Corporate
Managers, Secretaries and Administrators
Interest in Shares - Nil
Interest in Options - Nil
REVIEW OF OPERATIONS
The company continued with its active exploration program, concentrating on
diamond exploration and evaluation. A summary of the major activities are
as follows:
South African Projects
Daniel Kimberlite Project
(Tawana 22.2% and operator/ BHP Billiton 51.8% /Seven Falls 26%)
Falcon (R)Targets
The drilling of Falcon (R) targets has re-commenced after a short break
during May. The number of targets identified for drilling has increased
after additional reviews of data. The first phase now entails drilling
approximately 31 Falcon (R) targets located on granted Prospecting Rights.
Twenty four of these targets have now been drilled. The remaining
accessible targets will be drilled during the third quarter of
2006.Negotiations for access to additional targets have commenced.
Drilling will be conducted in several phases during 2006 as access becomes
available. Tawana is contributing 30% of the costs of this drilling, while
BHP Billiton is contributing 70%.
A9/10 and A25 Kimberlites
Falcon (R) targets A9/10 and A25 were recommended by BHP Billiton for
ground inspection, which revealed that they were kimberlites on which
previous explorers had conducted limited exploration. The A9/10 kimberlite
has an exposed surface area of approximately 3 hectares, while A25 is about
1 hectare.
Bulk samples from these kimberlites, processed by Tawana, have shown that
they are diamondiferous but are unlikely to be economic.
Perdevlei
(Tawana 74% and operator, Seven Falls 26 %.)
The Company-owned 10 tonne per hour DMS plant has completed the processing
of 2,000 tonnes of kimberlite excavated from the K1 pipe. Results show that
the material processed has a grade of approximately 5 carats per hundred
tonnes.
Previous results from drilling into the deeper (150m below surface)
sections of the kimberlite indicated that the grade of the pipe could be
substantially higher. The trial mining demonstrates that the upper portions
of the kimberlite appear to be uneconomic. The application is currently
being reviewed by the Northern Cape Provincial Departments in accordance
with statutory regulations.
Kareevlei Wes
(Tawana 74% and operator, Seven Falls 26%.)
The application for a Mining Right for Kareevlei has been accepted by the
South African Department of Minerals and Energy. No objections to the grant
of the Mining Right have been received. The Company has been advised that
the Mining Right can be expected to be granted during Q3 2006.
In anticipation of the granting of this Mining Right the Company has
continued preparation of a commercial operating plan for the Kareevlei Wes
project.
Tawana Alluvials
(Tawana 74% and operator, Seven Falls 26%.)
Tawana has been approached by five companies interested in participating in
the ongoing evaluation of the diamondiferous alluvials of the Feeder
Channel and Eastern Gravels. Negotiations with the preferred bidders will
be conducted during the third quarter.
Australian Projects
Pilbara Project
(Tawana 50%, De Beers Australia 50%)
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 were processed and examined in the Company"s Melbourne Laboratory.
Results have been very encouraging. Kimberlitic indicator minerals have
been recovered from several discrete areas.
The results which indicate probable extensions to the Blacktop kimberlite
will be followed up as a matter of priority.
Clearances for the DMS plant and camp sites and for the bulk sampling of
the Blacktop kimberlite have been completed by the Aboriginal Traditional
Owners and approval has been granted by the Minister of Industry and
Resources. The bulk sampling program commenced in early September.
HALF YEAR RESULT
The operating loss of the consolidated entity for the half year after
income tax of $nil was $3,562,160 (comparative half year, income tax of
$nil and operating loss $4,925,391).
The directors do not recommend the payment of a dividend nor has one been
recommended or paid since the end of the previous financial year.
AUDITOR INDEPENDENCE
In accordance with the requirements of section 307C of the Corporations Act
2001, the Auditors have provided a signed Auditor Independence Statement
for 30 June 2006. This is detailed on page 6 of this report.
This report is made in accordance with a resolution of the Board of
Directors.
Wolf Marx
Director
Signed at Melbourne on this 30th day of August 2006.
Auditor"s Independence Declaration
As lead auditor for the review of Tawana Resources N.L for the half year
ended 30 June 2006, I declare that to the best of my knowledge and belief,
there have been:
- no contraventions of the auditor independence requirements of the
Corporations Act 2001 in relation to the review; and
- no contraventions of any applicable code of professional conduct in
relation to the review.
This declaration is in respect of Tawana Resources N.L and the entities it
controlled during the period.
Tim Goldsmith
Melbourne
Partner
31 August 2006 PricewaterhouseCoopers
TAWANA RESOURCES N.L. AND CONTROLLED ENTITIES
DIRECTORS" DECLARATION
FOR THE HALF-YEAR ENDED 30 JUNE 2006.
In the opinion of the directors:
the financial statements and notes set out on pages 8 to 14 are in
accordance with the Corporations Act 2001, including:
- give a true and fair view of the consolidated entity"s financial
position at 30 June 2006 and of its performance, as represented by the
results of its operations, changes in equity and its cash flows, for the
half year ended on that date; and
- comply with Accounting Standards, the Corporations Regulations 2001
and other mandatory professional reporting requirements; and
- there are reasonable grounds to believe the company will be able to
pay its debts as and when they become due and payable
This declaration is made in accordance with a resolution of the Board of
Directors.
On behalf of the Directors
Wolf Marx
Director
Signed at Melbourne on this 30th day of August 2006.
TAWANA RESOURCES N.L. AND CONTROLLED ENTITIES
CONSOLIDATED INCOME STATEMENT
FOR THE HALF-YEAR ENDED 30 JUNE 2006
Notes Half-year Half-year
2006 2005
$ $
Revenue from continuing - -
operations
Other income 2 272,391 43,271
Depreciation 2 (514,340) (261,880)
Foreign exchange loss (48,083) (1,475,908)
Exploration expenses written (2,279,442) (2,034,612)
off
Administration expenses (992,686) (1,196,262)
Profit /(Loss) before income (3,562,160) (4,925,391)
tax
Income tax expense - -
Profit /(Loss) after tax (3,562,160) (4,925,391)
Loss attributable to minority - -
interest
Net Profit /(Loss) (3,562,160) (4,925,391)
attributable to members of
Tawana Resources N.L
Earnings per share for profit Cents Cents
attributable to the ordinary
equity holders of the company:
Basic earnings per share (0.051) (0.085)
(cents per share)
Diluted earnings per share (0.051) (0.085)
(cents per share)
The above consolidated income statement should be read in conjunction with
the accompanying notes.
TAWANA RESOURCES N.L. AND CONTROLLED ENTITIES
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2006
Consolidated
30 June 31 December
2006 2005
$ $
CURRENT ASSETS
Cash and cash equivalents 6,681,491 1,340,481
Trade and Other Receivables 461,655 706,608
Inventories 85,490 54,039
TOTAL CURRENT ASSETS 7,228,636 2,101,128
NON-CURRENT ASSETS
Receivables 41,854 61,324
Property, plant and equipment 1,728,642 3,859,985
Exploration expenditure 8,309,708 9,749,360
TOTAL NON-CURRENT ASSETS 10,080,204 13,670,669
TOTAL ASSETS 17,308,840 15,771,797
CURRENT LIABILITIES
Trade and Other Payables 135,913 158,607
Provisions 47,764 13,427
TOTAL CURRENT LIABILITIES 183,677 172,034
NON CURRENT LIABILITIES
Interest bearing loans and - 2,577
borrowings
TOTAL NON CURRENT LIABILITIES - 2,577
TOTAL LIABILITIES 183,677 174,611
NET ASSETS 17,125,163 15,597,186
EQUITY
Issued Capital 32,680,335 25,880,021
Other Reserves (1,866,724) (156,547)
Accumulated losses (13,688,448) (10,126,288)
TOTAL EQUITY 17,125,163 15,597,186
The above consolidated balance sheet should be read in conjunction with the
accompanying notes.
TAWANA RESOURCES N.L. AND CONTROLLED ENTITIES
STATEMENT OF CASH FLOWS
FOR THE HALF-YEAR ENDED 30 JUNE 2006
Consolidated
2006 2005
Inflows/ Inflows/
(Outflows) (Outflows)
$ $
Cash flows from Operating
Activities
Receipts from customers 110,083 43,271
(incl. GST)
Interest received 25,573 -
Payments to suppliers and
employees (incl. GST) (889,762) (2,919,048)
Net cash (outflow) from (754,106) (2,875,777)
operating activities
Cash flows from Investing
Activities
Proceeds from disposals of a - 880,000
subsidiary (net cash
received)
Payments for exploration (839,790) ( 460,358)
activity
Proceeds from sale of ( -)
property plant and equipment 1,893,572
Purchase of property, plant - ( 269,200)
& equipment
Net cash inflow from 1,053,782 150,442
investing activities
Cash flows from Financing
Activities
Proceeds from the issue of 6,800,314 2,003,073
shares
Net cash inflow from 6,800,314 2,003,073
financing activities
Net Increase/(Decrease) in 7,099,990 (722,262)
Cash & Cash Equivalents
Effects of exchange rate (1,758,980) 389,952
changes
Add opening cash brought 1,340,481 3,040,461
forward
Cash and cash equivalents at 8 6,681,491 2,708,151
the end of the half-year
The above consolidated statement of cash flows should be read in
conjunction with the accompanying notes.
TAWANA RESOURCES N.L. AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 30 JUNE 2005
Attributable to equity holders of the parent
Issued Retained Foreign Currency
Capital Earnings Translation Reserve
At 1 January 2005 20,361,252 (4,428,692) (171,421)
Net gains on available
for sale assets - - -
Currency translation
Differences - - 351,827
Loss for the period - (4,925,391) -
Exercise of options 501,472 - -
Issue of shares 1,501,601
At 30 June 2005 22,364,325 (9,354,083) 180,406
Asset Revaluation Total
Reserve
At 1 January 2005 22,884 15,784,023
Net gains on available
for sale assets 118,946 118,946
Currency translation
Differences - 351,827
Loss for the period (4,925,391)
Exercise of options 501,472
Issue of shares 1,501,601
At 30 June 2005 141,830 13,332,478
Attributable to equity holders of the parent
Issued Retained Foreign
Currency
Capital Earnings Translation
Reserve
At 1 January
2006 25,880,021 (10,126,288) (179,431)
Currency
translation - - (1,710,177)
Differences
Loss for the
period - (3,562,160) -
Issue of shares 6,800,314 - -
At 30 June 2006 32,680,335 (13,688,448) (1,889,608)
Asset Revaluation Total
Reserve
At 1 January
2006 22,884 15,597,186
Currency
translation - (1,710,177)
Differences
Loss for the
period - (3,562,160)
Issue of shares - 6,800,314
At 30 June 2006 22,884 17,125,163
The above consolidated statement of changes in equity should be
read in conjunction with the accompanying notes.
NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS
FOR THE HALF-YEAR ENDED 30 JUNE 2006
1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT
The half-year consolidated financial statements for the interim period
ended 30 June 2006 are a general purpose financial report prepared in
accordance with the requirements of the Corporation Act 2001, Australian
Accounting Standard AASB 134: Interim Financial Reporting, Urgent Issues
Group Interpretations and other authoritative pronouncements of the
Australian Accounting Standards Board.
It is recommended that this financial report be read in conjunction with
the annual financial report for the year ended 31 December 2005 and any
public announcements made by Tawana Resources NL and its controlled
entities during the half-year in accordance with the continuous disclosure
requirements arising under the Corporations Act 2001.
The half-year report does not include full disclosures of the type normally
included in an annual financial report.
The accounting policies adopted are consistent with those of the previous
financial year and corresponding interim reporting period.
2. LOSS FOR THE HALF-YEAR
Half-year
2006 2005
$ $
(a) Specific items
Profit /(Loss) before income tax
expense includes the following
revenues and expenses whose
disclosure is relevant in explaining
the financial performance of the
entity:
Other income
Profit on sale of assets 137,035 -
Interest 25,273 43,271
Other 110,083 -
272,391 43,271
Expenses
Depreciation 514,340 261,880
Net foreign exchange differences 48,083 1,475,908
Exploration expenses written off 2,279,442 2,034,612
Administrative costs 759,218 1,144,075
Employee related expenses 233,468 52,187
3,834,551 4,968,662
3. DIVIDENDS PAID OR PROVIDED FOR ON ORDINARY SHARES
The directors do not recommend the payment of a dividend nor has one
been recommended or paid since the end of the previous financial year.
4. ISSUED CAPITAL
Ordinary Shares Half-year Half-year Half-year Half-year
2006 2005 2006 2005
Shares Shares $ $
Movements in
ordinary shares
on issue
Exercise of options - 668,629 - 501,472
Shares allotted 21,487,952 2,002,134 6,800,314 1,501,601
21,487,952 2,670,763 6,800,314 2003,073
5. CONTINGENT ASSETS & LIABILITIES
The South African Revenue Services has informed Tawana Resources S.A. (Pty)
Ltd and Diamond Resources (Pty) Ltd that they should be de-registered for
Value Added Tax("VAT") purposes as the companies have not earned any
revenue. The companies are currently in a process of appeal against the
decision. Should the appeal not succeed, the companies may be liable for
repayment of all VAT (including penalties and interest) amounting to
$444,094 (Rand 2,361,960) for Tawana Resources S.A. (Pty) Ltd and $157,361
(Rand 836,942) for Diamond Resources (Pty) Ltd.
The VAT receivable as noted in the balance sheet has been offset against
this liability by the South African Revenue Services.
Based on the facts available at present, the Directors are of the opinion
that it is probable the appeal will be successful. As such the VAT
receivable has been recognised and a liability has not been recorded, but
is considered to be a contingent liability.
6. SEGMENT INFORMATION
Primary Segment - Geographic Segments
The following table presents the revenue and profit / (loss) information
regarding the geographic segments for the half year periods ended 30 June
2006 and 30 June 2005.
The group operated predominantly in the mineral exploration industry in
Africa and within Australia.
Australia Africa
2006 2005 2006 2005
$ $ $ $
Segment Revenue
External Sales - - - -
Other income 238,113 43,271 34,278 -
Total Segment
revenue 238,113 43,271 34,278 -
Segment result (2,933,847) (2,530,202) (628,313) (2,395,189)
Total Operations
2006 2005
$ $
Segment Revenue
External Sales - -
Other income 272,391 43,271
Total Segment
revenue 272,391 43,271
Segment result (3,562,160) (4,925,391)
7. EVENTS OCCURING AFTER THE BALANCE SHEET DATE
The Directors are not aware of any other matters or circumstances that have
arisen subsequent to balance date that has significantly affected or may
significantly affect the operations of the economic entity, the results of
those operations or the state of affairs of the economic entity subsequent
to the half-year ended 30 June 2006.
8. ADDITIONAL INFORMATION
Reconciliation of Cash
For the purposes of the consolidated cash flow statement, cash and cash
equivalents comprise the following at 30 June 2006:
30 June 30 June
2006 2005
$ $
Cash at hand and in bank 6,663,027 1,836,721
Short term deposits 18,464 902,455
Bank Overdraft - (31,025)
6,681,491 2,708,151
Independent review report to the members of
Tawana Resources N.L
Statement
Based on our review, which is not an audit, we have not become aware of any
matter that makes us believe that the financial report of Tawana Resources
N.L:
- does not give a true and fair view, as required by the
Corporations Act 2001 in Australia, of the financial
position of the Tawana Group (defined below) as at 30 June
2006 and of its performance for the half-year ended on
that date, and
- is not presented in accordance with the Corporations Act
2001, Accounting Standard AASB 134: Interim Financial
Reporting and other mandatory financial reporting
requirements in Australia, and the Corporations
Regulations 2001.
This statement must be read in conjunction with the rest of our review
report.
Scope
The financial report and directors" responsibility
The financial report comprises the balance sheet, income statement,
statement of changes in equity, cash flow statement, accompanying notes to
the financial statements, and the directors" declaration for the Tawana
Group (the consolidated entity), for the half-year ended 30 June 2006. The
consolidated entity comprises both Tawana Resources N.L (the company) and
the entities it controlled during that half-year.
The directors of the company are responsible for the preparation and true
and fair presentation of the financial report in accordance with the
Corporations Act 2001. This includes responsibility for the maintenance of
adequate accounting records and internal controls that are designed to
prevent and detect fraud and error, and for the accounting policies and
accounting estimates inherent in the financial report.
Review approach
We conducted an independent review in order for the company to lodge the
financial report with the Australian Securities and Investments Commission.
Our review was conducted in accordance with Australian Auditing Standards
applicable to review engagements. For further explanation of a review,
visit our website http://www.pwc.com/au/financialstatementaudit.
We performed procedures in order to state whether, on the basis of the
procedures described, anything has come to our attention that would
indicate that the financial report does not present fairly, in accordance
with the Corporations Act 2001, Accounting Standard AASB 134: Interim
Financial Reporting and other mandatory financial reporting requirements in
Australia, a view which is consistent with our understanding of the
consolidated entity"s financial position, and its performance as
represented by the results of its operations, changes in equity and cash
flows.
We formed our statement on the basis of the review procedures performed,
which included:
- inquiries of company personnel, and
- analytical procedures applied to financial data.
Our procedures include reading the other information included with the
financial report to determine whether it contains any material
inconsistencies with the financial report.
These procedures do not provide all the evidence that would be required in
an audit, thus the level of assurance provided is less than that given in
an audit. We have not performed an audit, and accordingly, we do not
express an audit opinion.
While we considered the effectiveness of management"s internal controls
over financial reporting when determining the nature and extent of our
procedures, our review was not designed to provide assurance on internal
controls.
Our review did not involve an analysis of the prudence of business
decisions made by directors or management.
Independence
In conducting our review, we followed applicable independence requirements
of Australian professional ethical pronouncements and the Corporations Act
2001.
PricewaterhouseCoopers
Tim Goldsmith Melbourne
Partner 31 August 2006
Date: 11/09/2006 11:11:00 AM Supplied by www.sharenet.co.za
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