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TAW - Tawana Resources NL - Quarterly activities and cash flow report

Release Date: 31/07/2007 11:28
Code(s): TAW
Wrap Text

TAW - Tawana Resources NL - Quarterly activities and cash flow report 1 April - 30 June 2007 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 April - 30 June 2007 Key Points *Trial Mining of Kareevlei Wes progressing on schedule 25 tph DMS plant being commissioned on site Excavation of kimberlites to commence Q4 2007 Kimberlites known to be diamondiferous *Lexshell alluvial diamond project Mining Right finalised Drilling of alluvial channel to commence Q4 2007 *Carter Block Joint Venture signed Drilling of Falcon targets to commence Q3 2007 *Riverton Joint Venture signed 10tph DMS plant moved to site Bulk sampling of kimberlite to commence Q3 2007 *Orapa Prospecting Licence granted Geophysical surveys completed over known kimberlites South Africa Kareevlei Wes Project, Kimberley Region, South Africa (74% owned and operated by Tawana; 26% Seven Falls) The Kareevlei Wes Project comprises a cluster of 5 kimberlitic pipes (KV1-KV5), which vary in surface area from 5.5 ha to less than 0.1 ha. Previous drilling and bulk sampling by Tawana has shown that KV1 and KV2 are potentially economic. Program Establishing the plant and facilities to undertake the trial mining program, aimed at mining up to 20,000 tonnes from kimberlites KV1 and KV2, commenced during the quarter with the transport of the Company`s dense media separation plant to site. The plant and infrastructure is on schedule for the commissioning early Q4 2007, when excavation of the KV1 and KV2 kimberlites will commence. Lexshell Diamond Project, Kimberley Region, South Africa (Tawana 44% and operator /Guma Resources 44%/ Lexshell 12% revenue share) As previously announced, Tawana entered into a joint venture with its strategic alliance partner, Guma Resources Pty Limited, to explore and mine the Lexshell alluvial diamond project in the Northern Cape Province of South Africa. The project is located on a palaeo-channel of the Vaal River adjacent to established alluvial diamond mines. The section of the Vaal River alluvials in which this project is located is noted for the prolific production of large high quality diamonds. Mining has taken place for about 100 years and the area still hosts one of the largest alluvial diamond mines in the world. All statutory requirements relating to the granting of the new order Mining Right over project have been completed. Drilling of the palaeo-channel is scheduled to commence during Q4 2007. Carter Block Project, Lime Acres, South Africa (Tawana earning 40% and operator/Kimberley Consolidated Mining Limited diluting to 60%) A joint venture (the Carter Block Joint Venture) was signed with Kimberley Consolidated Mining Limited (KCM), an unlisted South African company which has advanced plans to list shortly on the JSE Limited and is considering listing on the Alternative Investment Market of the London Stock Exchange in due course. The Carter Block Joint Venture has been formed to prospect and evaluate kimberlites situated on a 266 square kilometer new order Prospecting Right surrounding the De Beers owned Finsch Mine, South Africa (The Carter Block). The granted tenement incorporates three known kimberlites, fourteen BHP Billiton- generated Falcon targets, and four aero-magnetic survey targets. The Joint Venture`s initial focus is the BHP Billiton - generated Falcon Targets and the aero-magnetic survey targets. Tawana has access to the Falcon data by virtue of the separate Daniel Joint Venture with BHP Billiton. BHP Billiton is not participating in the Carter Block Joint Venture but has consented to Tawana using the Falcon data in return for a 2.5% royalty on any future diamond revenue generated by Tawana from the use of the data in the Carter Block. Tawana is able to earn 40% equity in each individual Falcon and aero-magnetic target by identifying kimberlites through drilling and conducting bulk sampling. Expenditure on further evaluation work will be contributed by KCM and Tawana on a pro-rata basis. Tawana will manage the project. The three known kimberlites are currently being prospected by KCM and early indicator mineral sampling has been positive. Several G10 pyrope garnets were recovered from the Shoan kimberlite, indicating that this kimberlite is likely to be diamondiferous. The agreement provides that should Tawana wish to participate in the exploration of these known kimberlites, Tawana would be entitled, subject to contract, to take up an agreed participating interest therein. The Carter Block also incorporates known diamondiferous alluvial deposits which while they will remain wholly-owned and operated by KCM are adjacent to the Tawana alluvials. An opportunity for future co-operation between Tawana and KCM with respect to parallel development of the alluvials is being considered. Riverton Kimberlite Project, Kimberley Region, South Africa (Operated by Tawana; Tawana earning 70%,Taormina Mining (Pty) Ltd diluting to 30%) Tawana entered into a joint venture with Taormina Mining (Pty) Limited ("Taormina"), an unlisted South African company, to prospect and evaluate a kimberlite situated 25 kilometers north of Kimberley, South Africa. The kimberlite is a 4 hectare pipe known locally as the Riverton Mine and is anecdotally reported to have produced good quality diamonds when it was mined by small scale diggers during the 1990`s. Mining is reported to have ceased due to permitting and safety issues. No professionally controlled mining has taken place at Riverton, and Tawana will apply modern exploration and mining techniques to evaluate the potential of this project. Tawana is able to earn 51% equity in the project by conducting a 2000 tonnes bulk sampling program followed by an 8000 tonnes evaluation program if warranted. Thereafter Tawana has the option to increase its equity to 70% by paying Taormina Rand 1.5million (approx. A$260,000). The Company`s 10 tonne per hour dense media separation plant has been moved to site and construction is on schedule for the commencement of bulk sampling in Q3 2007. Melbourne Laboratory Activity within the Melbourne Laboratory during the quarter was primarily focused on the examination of the Pilbara exploration samples. Treatment, examination and reporting of third party exploration samples was also undertaken. Botswana Projects Orapa Project, Botswana (Tawana 100%) In April 2007 the Company was granted a new prospecting licence over an area of approximately 57 square kilometers, covering 8 kimberlites in the Orapa kimberlite field in Botswana. Applications for this Prospecting Licence were submitted by a number of companies on a competitive basis. The Prospecting Licence is held by Seolo Pty Ltd, a 100% owned Botswana registered subsidiary of Tawana. The Orapa kimberlite field is located in north eastern Botswana, and includes the Orapa, Letlhakane and Damtshaa diamonds mines, which produce in excess of 13 million carats of diamonds per year. The Orapa kimberlite field is one of the largest diamondiferous kimberlite fields in the world, containing 79 known kimberlites, of which the majority has been proven to be diamondiferous. Orapa, some 15km from Tawana`s project area, is one of the largest producing kimberlites in the world and is 113 hectares in surface area. The Company plans to undertake a program of evaluation which will entail detailed geophysics, trenching and drilling to establish the size of the kimberlites, followed by bulk sampling to determine the grade and diamond quality of the kimberlites. Initial indications are that the diamondiferous BK24 is in excess of 3 hectares in surface area and at least one other kimberlite has a surface area of 2 hectares. No previous bulk sampling has been conducted on 7 of the eight kimberlites. An initial review of available airborne geophysical data has indicated the possible presence of at least one new kimberlite in the Prospecting Licence area. Ground-based gravity and magnetic surveys were conducted during the quarter. Preliminary interpretation of the data collected by these surveys indicates that the kimberlite BK20 is larger in surface area that previously thought. Drilling to verify this interpretation will be conducted in the second half of 2007. Melbourne Laboratory Activity within the Melbourne Laboratory during the quarter was focused on the completion of examination of the Pilbara exploration samples and samples from the Riverton and Daniel Kimberlite Projects in South Africa. Treatment, examination and reporting of third party exploration samples was also undertaken. Corporate Financial At the end of March, the Company`s cash reserves were $1.227M. Contact: Wolf Marx 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" All press releases and announcements may be inspected on the Company`s web site, namely: www.tawana.com.au 31 July 2007 Sponsor PricewaterhouseCoopers Corporate Finance (Pty) Ltd 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 June 2007 Consolidated statement of cash flows Current Year to Cash flows related to operating activities quarter date ( 6 $A`000 months) $A`000 1.1 Receipts from product sales and related (12) 29 debtors 1.2 Payments for (a) exploration and (581) (827) evaluation (b) development
(c) production (d) administration (422) (871) 1.3 Dividends received 1.4 Interest received 2 2 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) (25) 412 (VAT Refund from SARS) (1,038) (1,255) Net Operating Cash Flows
Cash flows related to investing activities 1.8 Payment for purchases of: (a)prospects (b)equity investments (1) (4) (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 (1) (4) 1.13 Total operating and investing cash (1,039) (1,259) flows (carried forward) 1.13 Total operating and investing cash (1,039) (1,259) 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) in cash held (1,039) (1,259)
1.20 Cash at beginning of quarter/year to 2,317 2,653 date 1.21 Exchange rate adjustments to item 1.20 (51) (167) 1.22 Cash at end of quarter 1,227 1,227 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 parties 74 included in item 1.2 1.24 Aggregate amount of loans to the parties included Nil 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 1,000
4.2 Development 0 1,000 Total 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 211 411 5.2 Deposits at call 1,016 1,906 5.3 Bank overdraft - - 5.4 Other (provide details) - - Total: cash at end of quarter (item 1,227 2,317 1.22) Changes in interests in mining tenements Tenement Nature of Interest Interest reference interest at at end (note (2)) beginning of of quarter
quarter 6.1 Interests in EL9722 Sole interest 100% Nil mining (Packsaddle NT) tenements relinquished, EL2927 (Elliston reduced or South Australia) Joint Venture 80% Nil lapsed Interest EL47/1122
(Pilbara, Western Australia) 66.6% Nil Joint Venture
PL36/2003 Interest Borolong 100% Nil
Sole interest (100% relinquished)
6.2 Interests in PL61/2007 Sole Interest Nil 100% mining Orapa tenements acquired or increased PL86/2007 Sole Interest Nil 100%
Borolong PL87/2007 Sole interest Nil 100% Borolong
NC NC Joint Venture Nil 100% 30/5/1/2/2/081MR Interest
Kareevlei Wes NC Earning Joint Nil Nil 30/5/1/2/2/405 Venture PR Interest
Riverton NC Joint Venture Nil 44% 30/5/1/2/2/054 Interest MR (Share of
Lexshell revenue) 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. 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 number quoted price 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 securities 87,097,481 87,097,481 various Various 7.4 Changes during Nil Nil 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 (description Exercise Expiry and conversion 23,934,843 22,344,843 price date factor) $1.00 30 April 2008 7.8 Issued during quarter Nil Nil 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: 31 July 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. Date: 31/07/2007 11:28:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department.

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