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TAW - Tawana Resources NL - Quarterly activities and cash flow 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")
Quarterly Activities and Cash Flow Report
1 October - 31 December 2006
Key Points
+Results of Blacktop kimberlite dyke bulk sampling
-2320 diamonds weighing 163.89 diamonds recovered
-Diamonds valued at US$52.56 per carat
-Grade of kimberlite variable up to 8.63 cpht
+Pilbara Exploration samples being processed
-Results due Q1 2007
+Mining Right Application for Kareevlei Wes awaited
-Social and Labour Plan awaiting approval by DME
+Strategic Alliance signed with Guma Resources (Proprietary) Limited
Australia
Blacktop Kimberlite Project
(Tawana 66.6% and operator /De Beers Australia Exploration 33.3%)
A dense media separation (DMS) plant was commissioned on 8 September 2006, and
the on-site processing was completed by mid-November 2006. The DMS concentrates
were processed by x-ray diamond recovery methods in Perth and the diamonds
sorted and weighed in the Company`s Melbourne laboratory. A total of 2320
diamonds, weighing 163.89 carats were recovered. The majority of the stones are
white dodecahedrons, with the largest stone weighing 1.41 carats. All diamonds
were recovered from the +1mm to -19mm size fractions of the material processed.
Approximately 6,000 tonnes were 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. Figure 1 shows the locations of the bulk sample
sites along the strike of the Blacktop 1 kimberlite fissure. Table 1 and 2
summarise the results of the bulk sampling. The grade of the kimberlite varies
along strike but the quality of the diamonds remained consistent. The variable
grade is interpreted as being the result, mainly, of contamination of the
kimberlite in near-surface exposures by surrounding country rocks. In narrow
sections of the kimberlite contamination of the samples was greatest. During an
early evaluation stage it is common practice to excavate kimberlite from
costeans with minimal cutting back of the surrounding country rocks. This
practice minimizes environmental disturbance of the area but can result in the
contamination of the samples and consequential dilution of the recovered grade.
Table 1 summarises the results of the relatively uncontaminated kimberlite
excavated from wider sections of the kimberlite fissure (known as "blows") and
Table 2 summarises the results of the samples collected from the narrower
sections.
It has been previously reported that De Beers recovered 135 diamonds weighing
5.27 carats from a 32.8t sample.This sample was collected at the BTB01/03 site.
The small size of the sample enabled De Beers to collect that sample free of any
contamination. The larger samples collect by Tawana however have provided a
large enough parcel of diamonds for valuation purposes.
The diamonds were valued by Diamdel, a De Beers diamond trading and marketing
company, at US$52.56 per carat. Commenting on the diamonds the valuers said that
the parcel was unusual in that it contained no boart (low quality industrial)
diamonds and that the presence of larger diamonds in a larger parcel would
result in a higher valuation.
Exploration in the area around Blacktop has given strong indications of the
presence of extensions to the Blacktop kimberlite. Indicator minerals recovered
from one of these sites, known as Blacktop East, display mineral chemistry
signatures typical of diamondiferous kimberlites.
The future program for Blacktop will be formulated once the results of the
regional exploration have been received.
Table 1: Summary of Blacktop 1 Bulk Sampling Results - Kimberlite Blows
HMS Diamonds Carats Avg. Grade
feed Size
tonnes Number ct ct cpht
BTB01 457 396 29.18 0.07 6.39
BTB03 636 667 51.33 0.08 8.07
BTB10 443 612 38.24 0.06 8.63
TOTALS 1536 1675 118.75 0.07 7.73
Table 2: Summary of Blacktop 1 Bulk Sampling Results - Diluted Kimberlite
HMS Number Carats Avg. Grade
feed Size
tonnes Diamonds ct ct cpht
BTB02 594 151 10.97 0.07 1.85
BTB04 198 7 1.49 0.21 0.75
BTB05 1908 473 30.80 0.07 1.61
BTB06 702 4 0.23 0.06 0.03
BTB07 277 3 0.15 0.05 0.06
BTB08 622 5 0.32 0.06 0.05
BTB09 118 2 1.18 0.59 1.00
TOTALS 4419 645 45.14 0.07 1.02
Figure 1: Contour map showing costeans and bulk sample sites over Blacktop 01.
(This Figure 1 can be viewed on the Tawana website at www.tawana.com.au)
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.
Note; The Company considers that any tonnage and grade estimates in this report
do not satisfy the definition of a Mineral Resource as set out in the JORC Code
as insufficient work has been conducted to be able to determine the grade and
tonnage of the deposit with greater accuracy. Further work may or may not
establish a Mineral Resource on the property. Accordingly, the estimate of grade
is released as provided by paragraph 18 of the JORC Code of 2004 in relation to
an exploration target or exploration potential. The diamonds were recovered
from the minus 19mm plus 1mm fractions of kimberlite excavated. The kimberlites
were processed in a rented Dense Media Separation plant with diamond recovery by
a Flowsort x-ray plant and manual sorting.
Pilbara Regional Exploration
Helicopter supported 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.
The 266 samples collected during the program are being processed and examined in
the Melbourne Laboratory. Results are expected during Q1 2007.
South Africa
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.
The Company has been advised that the Financial, Environmental Impact and
Statutory sections of the Mining Right Application have been approved by the
Kimberley Branch of the DME. However one remaining section, regarding the Social
and Labour Plan for mining at Kareevlei Wes, has yet to be approved and sent to
Tshwane.
Management has met with officials of the DME in Kimberley and Tshwane during the
quarter to establish and implement additional requirements by the DME. Tawana is
unable to forecast when the approval process will be completed.
Daniel Kimberlite Project
(Tawana 22.2% and operator/ BHP Billiton 51.8% /Seven Falls 26 %)
Negotiations with a black empowered group holding Prospecting Rights over a
large area within the Daniel Project Area are continuing. This area is not
included within the Tawana/BHP Billiton/Seven Falls joint venture area.
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 have not reached a concluded position. While several proposals have
been considered, none has provided a satisfactory commercial basis for an
agreement. Discussions are continuing.
Corporate
Guma Strategic Alliance
The Company has formed a strategic alliance with Guma Resources (Proprietary)
Limited ("Guma Resources"), a subsidiary of Guma Capital (Proprietary) Limited
("Guma"). The Guma group of companies is a diversified investment group based in
Johannesburg that is black owned and managed. The Guma group was established in
1997 by successful South African entrepreneur Robert Matana Gumede.
Guma focuses on multi-faceted businesses where it can add value and assist in
their growth potential. In addition to several private investments in
diversified sectors, Guma owns 36.6% of GijimaAST that is one of South Africa`s
largest IT companies and is listed on the JSE. GijimaAST posted revenues of
R1.95 billion (A$344.4 million) in the last financial year and received 8th
place overall in the Financial Mail/Empowerdex Top 200 Empowerment Companies
Survey 2006. In 2005, Robert Gumede, chairman of Guma, was runner up in the
South African Chapter of the World Entrepreneur of the Year.
The strategic alliance provides Tawana with a black-controlled business partner
with the ability to leverage of its sizeable net asset base and introduce
resource projects via its strong networks throughout Africa.
The purpose of the strategic alliance is to combine the exploration and mining
skills of Tawana with the financial, entrepreneurial, accounting and business
skills of Guma to explore for, develop and mine diamond and other mineral
deposits in South Africa, Botswana, Namibia, Mozambique and other countries as
agreed by the parties.
The alliance will comprise two stages. The first will be to identify, assess and
acquire mineral rights to projects deemed to be worthy of progressing. The
second stage will involve the formation of joint ventures on a project by
project basis with the aim to confirm the economic merit of the projects via the
completion of definitive feasibility studies adequate to secure debt financing.
The participation in Stage One will be on a 50:50 basis and thereafter the
participating interests will be dependent on the nature of the specific
projects. Tawana will lead the alliance with Guma`s hands-on involvement.
Tawana`s long standing relationship with Seven Falls will continue on the
existing projects in South Africa and Botswana and will be further strengthened
with the appointment of Seven Falls Chairman, Thabo Makweya (former MEC for
Economic Affairs in the Northern Cape), as CEO of Guma Resources.
Staff Changes
Harry Hill resigned effective 22 January 2007 as Company Secretary of the
Company to pursue other interests.
Edward Derrick Ehmke was appointed Company Secretary. Derrick has over 40 years
business experience in Finance, Administration, IT Supply Chain Management and
Marketing. He has been involved predominantly in Retailing and Manufacturing
public companies in South Africa, United Kingdom and Australia. He is a Fellow
of the Institute of Corporate Managers, Secretaries and Administrators. He
currently runs his own consultancy company.
Basil Tambanis resigned effective 31 December 2006 as Corporate Operations
Officer to pursue other interests.
Melbourne Laboratory
Activity within the Melbourne Laboratory during the 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.
Treatment, examination and reporting of third party exploration samples was
undertaken.
Contact:
Wolf
Tel: +61 (0)3 98635222
Mob: + 61 (0)428 398446
Email:wolf.marx@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"
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 December 2006
2006
Consolidated statement of cash flows
Current Year to date
Cash flows related to operating activities quarter (12 months)
$A`000 $A`000
1.1 Receipts from product sales and 45 45
related debtors
1.2 Payments for(a)exploration and (1520) (5209)
evaluation
(b) development
(c) production
(d) administration (720) (2059)
1.3 Dividends received - -
1.4 Interest received 24 75
1.5 Interest and other costs of finance
paid
1.6 Income taxes paid
1.7 Other (provide details if material)
(2171) (7148)
Net Operating Cash Flows
Cash flows related to investing
activities
1.8 Payment for purchases of:
(a)prospects
(b)equity investments
(c) other fixed assets - (95)
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 investing cash (2171) (5373)
flows (carried forward)
1.13 Total operating and investing cash (2171) (5373)
flows (brought forward)
Cash flows related to financing
activities
1.14 Proceeds from issues of shares, - 6,806
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 cash held (2171) 1433
1.20 Cash at beginning of quarter/year to 4944 1,340
date
1.21 Exchange rate adjustments to item (120) (120)
1.20
1.22 Cash at end of quarter 2653 2653
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 66
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 arrangements Nil Nil
Estimated cash outflows for next quarter
$A`000
4.1 Exploration and evaluation 450
4.2 Development Nil
Total 450
Reconciliation of cash
Reconciliation of cash at the end of the Current Previous
quarter (as shown in the consolidated quarter quarter
statement of cash flows) to the related $A`000 $A`000
items in the accounts is as follows.
5.1 Cash on hand and at bank 185 29
5.2 Deposits at call 2468 4915
5.3 Bank overdraft - -
5.4 Other (provide details) - -
Total: cash at end of quarter (item 2653 4944
1.22)
Changes in interests in mining tenements
Tenement Nature of Interest at Interest at
reference interest beginning of end of
(note (2)) quarter quarter
6.1 Interests in
mining
tenements
relinquished,
reduced or
lapsed
6.2 Interests in Blacktop Joint 50% 66.6%
mining Pilbara Venture
tenements Various Interest
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 paid
number quoted per security up per
security
7.1 Preference Nil Nil
+securities
(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 Nil Nil
during
quarter
(a)
Increases
through
issues
(b) Increase
through
exercise of
options
7.5 +Convertible Nil Nil
debt
securities
(description)
7.6 Changes
during
quarter
(a)
Increases
through
issues
(b)
Decreases
through
securities
matured,
converted
7.7 Options 23,934,843 22,344,843 Exercise Expiry date
(description price 30 April 2008
and $1.00
conversion
factor)
7.8 Issued during 475,000 475,000 $1.00 30 April 2008
quarter 1,590,000 $0.35 30 November
2011
7.9 Exercised Nil Nil
during
quarter
7.10 Expired Nil Nil
during
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: January 2007
(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.
25 January 2007
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Date: 25/01/2007 10:55:02 Supplied by www.sharenet.co.za
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