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TAW - Tawana - Quarterly Activities and Cash Flow Report - 1 October -

Release Date: 31/01/2008 11:27
Code(s): TAW
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TAW - Tawana - Quarterly Activities and Cash Flow Report - 1 October - 31 December 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 October - 31 December 2007 Key Points 31 January 2008 Orapa results G10 garnets recovered from BK24 kimberlite St Augustines kimberlite exposed St Augustines kimberlite sampled at surface Gravity survey locates two anomalies Riverton Bulk Sampling completed Botswana Orapa Project, Botswana (Tawana 100%) In April 2007 the Company was granted a new prospecting licence over an area of approximately 57 square kilometres, covering 8 kimberlites in the Orapa kimberlite field in Botswana. 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 diamond mine, 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 has commenced a program of evaluation to determine the grade and diamond quality of the kimberlites. Ground-based gravity and magnetic surveys were completed during the September quarter. Interpretation of the data collected by these surveys indicated that the kimberlites BK20, BK23 and BK24 are larger in surface area than previously thought. Drilling to verify this interpretation was completed during the December quarter. Drill cuttings from the kimberlites were transported to the Company`s Flowsort x-ray unit in Kimberley in South Africa for analysis and diamond recovery and selected samples from each of the kimberlites were sent to the Company`s Melbourne laboratory for mineral analyses. Kimberlitic minerals were recovered from the samples and analysed by electron microprobe. 13% of the kimberlitic garnets from BK24 were reported to be "G10" garnets, which signify that this kimberlite has a high probability of being economically diamondiferous. The processing of the drill cuttings in the Company`s Flowsort is continuing. Several Joint Venture proposals have been received from companies interested in participating in the Orapa project. The Directors of Tawana are considering these proposals. 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 diamondiferous kimberlite pipes (KV1-KV5). Previous drilling and bulk sampling by Tawana has shown that KV1 and KV2 are potentially economic. The Company`s 25 tph processing plant has been constructed on site and the Dense Media Separation (DMS) section has been commissioned. The completion of the crushing circuit is awaiting the acquisition of a suitable secondary crusher. The current mining boom being experienced in South Africa has made locating a crusher difficult but Management is confident that suitable equipment has been located and that appropriate terms of supply will be negotiated. St Augustines Kimberlite Project, Kimberley, South Africa (Tawana 30% equity in Vecto Trade 436(Pty) Ltd (Vecto)) In September 2007 the Company announced that it had acquired a 30% indirect interest in the St Augustines kimberlite located 600 metres west of the famous Kimberley Mine, "the Big Hole", in Kimberley, South Africa. "The Big Hole" produced 14.5 million carats of diamonds from 22.5 million tonnes at a grade of 64 carats per hundred tonnes. Mining ceased at the Big Hole in 1914. The St Augustines kimberlite was mined in the late 1890`s and records show that the diamond quality was considered identical and the grade similar to that of the nearby Kimberley Mine. Geological records indicate that the kimberlite pipes of "the Big Hole" and St Augustines are located on the same structure and are connected by a kimberlite fissure. Records show that St Augustines was only partially mined to a depth of approximately 240 metres as compared to the Kimberley Mine which was mined to a depth of 1097 metres. Mining at St Augustines ceased in 1902. Subsequently the tailings of the Kimberley Mine were deposited over the St Augustines kimberlite. The tailings have since been removed and this has exposed the kimberlite at surface. Rock samples of the kimberlite have been collected and these are being mineralogically analysed in the Company`s Melbourne laboratory. A non-invasive gravimetric survey conducted by Tawana in November 2007 identified the location of the original pit of the St Augustine`s mine. Two new targets close to St Augustines have also been identified. The gravimetric survey was undertaken to confirm the exact position of the known kimberlite and to determine whether other kimberlites occurred in the Prospecting Right. The two new targets are in the southern half of the Prospecting Right and display similar gravity responses to that of the known St Augustines kimberlite. In January 2008, the Company was advised that De Beers Consolidated Mines Limited (the surface owners of the land constituting the southern half of the St Augustines Mine Prospecting Right) has applied for a Judicial Review and setting aside of the Minister of Minerals and Energy`s administrative act in granting the Prospecting Right, or alternatively, that portion of the Prospecting Right in so far as it affects the southern half of the Prospecting Right. Tawana`s South African legal advisors have advised that it is too early to express an opinion as to the merits of the application or its prospects of success. The Department of Minerals and Energy, which is opposing the application on behalf of the Minister, has not yet replied to the allegations in the founding papers nor made discovery of the documentation upon which the decision to grant the Prospecting Right was made. Pending determination thereof, however, South African legal advisers have advised that the Prospecting Right remains registered and valid. They have further pointed out that the original pit of the St Augustine`s mine is not located in the southern half of the Prospecting Right. Riverton Kimberlite Project, Kimberley Region, South Africa (Tawana earning 70% and operator, Taormina Mining (Pty) Ltd ("Taormina") diluting to 30%) Bulk sampling of the Riverton kimberlite was completed during the quarter with the processing of 2,300 tonnes of material collected from 6 sites in the kimberlite pipe. It is the opinion of Tawana that the results of the bulk sampling indicate that the Riverton kimberlite is uneconomic. Tawana, in conjunction with Taormina, is currently considering options for the future of the project. Australia Melbourne Laboratory Activity within the Melbourne Laboratory during the quarter was focused on the examination of the Orapa exploration samples and samples from the St Augustines kimberlite. Treatment, examination and reporting of third party exploration samples from South Africa and Australia was also undertaken. Corporate The Directors of Tawana are reviewing the Company`s funding requirements for 2008 and are in active discussions with various parties regarding funding options. 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" 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 2007 Consolidated statement of cash flows Current Year to date Cash flows related to operating quarter (12 months) activities $A`000 $A`000 1.1 Receipts from product sales and 8 39 related debtors 1.2 Payments for (a) exploration (592) (2,205) and evaluation (b) development (c) production (d) administration (272) (1,394)
1.3 Dividends received 1.4 Interest received 4 7 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if 12 428 material) (VAT Refund from SARS) (840) (3,125) Net Operating Cash Flows Cash flows related to investing activities 1.8 Payment for purchases of: (a)prospects - (16) (b)equity investments (c) other fixed assets - (20) 1.9 Proceeds from sale of: (a)prospects (b)equity investments (c) other fixed assets 29 29 1.10 Loans to other entities 1.11 Loans repaid by other entities
Net investing cash flows 29 (7) 1.13 Total operating and investing cash flows (carried forward) (811) (3,132) 1.13 Total operating and investing cash (811) (3,132) flows (brought forward) Cash flows related to financing activities 1.14 Proceeds from issues of shares, - 795 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 - 795 Net increase (decrease) in cash (811) (2,337) held 1.20 Cash at beginning of quarter/year 922 2,653 to date 1.21 Exchange rate adjustments to item 55 (150) 1.20 1.22 Cash at end of quarter 166 166 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 54 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 available Amount used $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 50 4.2 Development 0 Total Reconciliation of cash Reconciliation of cash at the end of the quarter Current Previous (as shown in the consolidated statement of cash quarter quarter flows) to the related items in the accounts is as $A`000 $A`000 follows. 5.1 Cash on hand and at bank 166 719 5.2 Deposits at call - 203 5.3 Bank overdraft - -
5.4 Other (provide details) - - Total: cash at end of quarter (item 1.22) 166 922 Changes in interests in mining tenements Tenement Nature of Interest at Interest at
reference interest beginning end of (note (2)) of quarter quarter 6.1 Interests in mining tenements relinquished, reduced or lapsed
6.2 Interests in mining tenements acquired or increased 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 (description) Nil Nil 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions 7.3 +Ordinary securities 92,397,481 92,397,481 Various Various 7.4 Changes during quarter (a) Increases through issues (b) Increase through exercise of options 7.5 +Convertible debt securities (description) Nil Nil 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted 7.7 Options (description and Exercise Expiry conversion factor) 29,234,843 22,344,843 price date $1.00 30 April 2008 7.8 Issued during quarter Nil Nil 7.9 Exercised during quarter Nil Nil 7.10 Expired during quarter Nil Nil 7.11 Debentures Nil Nil (totals only) 7.12 Unsecured notes (totals Nil Nil 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: Date: 31 January 2008 (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. 31 January 2008 Sponsor PricewaterhouseCoopers Corporate Finance (Pty) Ltd Date: 31/01/2008 11:27:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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