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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 April - 30 June 2008
Key Points
Orapa
Shafts on BK24 kimberlite completed
Shaft sinking on BK22/23 commenced
Bulk samples from BK24 being transported to processing plant
Kareevlei Wes
Crushing circuit upgrade continuing
Rakana
Aquila Joint Venture intersects more manganese
Flinders Island/Venus Bay
Drilling new kimberlite targets commenced
Corporate
Neil Barrie appointed as Executive Chairman
BEE transactions commenced
Funding
Funds raised for projects
Botswana
Orapa Project, Botswana
(Tawana 100%, Nowak Investments Pty Ltd earning 51%)
Tawana has been advised by Nowak that shaft sinking on the Orapa Project
kimberlite BK24 have been completed and bulk sampling of fresh kimberlite has
commenced. To date approximately 30 tonnes of kimberlite has been excavated and
is being transported to a dense media separation plant in Francistown where
processing of the samples is expected to commence in Q3 2008.
Nowak excavated three shafts into the kimberlite to access fresh kimberlite at
approximately 30m below surface. A sample of kimberlite from one of the shafts
contained a specimen of eclogite embedded in the kimberlite. This is an
important specimen because it proves that BK24 sampled the eclogitic layer in
the Earth`s mantle, which is the source of diamonds in the Orapa diamond field.
(An image of this specimen can be seen on the Company`s website at
www.tawana.com.au)
Nowak has commenced excavating shafts on the kimberlite BK22/23 which is located
2.5km northeast of BK24. The purpose of this is to excavate bulk samples to test
for diamond as for BK24.
Nowak has also collected 36 soil samples in the Moshaiwa Prospecting Licence
with the aim to locate the source of the kimberlitic indicator minerals found
here previously.
Background
Nowak is a Botswana registered unlisted company. The Managing Director of Nowak
is Roy Spencer, formerly CEO of European Diamonds plc. Technical consultant to
Nowak is Dr. Leon Daniels, formerly a director of Tawana. Dr. Daniels and Mr.
Spencer have a wealth of experience in diamond exploration, evaluation and
mining. Dr Daniels was instrumental in acquiring the AK6 kimberlite for AIM
listed African Diamonds Plc and Roy Spencer discovered the world class Grib
Diamond Deposit in Russia and recently brought the Liqhobong Diamond Mine in
Lesotho into production.
The probable development by De Beers and African Diamonds plc (AFD-L) of a new
diamond mine in the Orapa area on the AK6 kimberlite (located 25km to the south
of the Tawana licence), which was originally discovered and evaluated in the
1970`s and considered at that time to be a small, low-grade kimberlite, provides
an indication of the potential that still remains in Botswana. It is also
noteworthy that Firestone Diamond plc (FDI-L) has reported encouraging results
from its work in the Orapa field on kimberlite BK11 and BK16, and elsewhere 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 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. The
Orapa mine is one of the largest producing kimberlites in the world and is 113
hectares in surface area.
The Orapa mine is located 20 km to the west, Letlhakane is 30km to the south,
and Damtshaa is 6km to the south of the Tawana licence.
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. Work has commenced on
upgrading the crushing circuit. This work is continuing.
Contracts for the trial mining earthmoving will be let when sufficient funds
have been raised to complete this program. Tawana is in discussions with a
number of parties to progress this project.
Lexshell Alluvial Diamond Project
(Tawana 88% revenue share, Lexshell Mining 366 (Pty) Limited 12% revenue share)
During the quarter Tawana drilled 23 holes in the central portions of the
Lexshell granted New Order Mining Right located some 60km northwest of
Kimberley. This drilling identified a well defined palaeochannel. The boundary
of the palaeochannel has been identified by aerial photography and close
inspection of the Google Earth image. (This image can be seen on the Company`
website)
The area occupied by the palaeochannel within the Mining Right is interpreted as
covering 20 to 26 hectares, and is immediately adjacent to existing third party
alluvial diamond mining operations.
Rakana /Aquila Joint Venture
(74% owned and operated Aquila Resources Limited; 26% Rakana Consolidated Mines
Pty Ltd; 6.8% indirect Tawana)
In April carbon steel resources producer and developer, Aquila Resources Limited
(ASX:AQA Aquila) announced promising manganese assay results from its Avontuur
Projects located 75km north west of Kuruman, in the Northern Cape Province of
South Africa.
Tawana holds an indirect interest of 6.8% (previously incorrectly stated as
5.2%) in the Joint Venture through its 26% holding in Rakana.
In early July Aquila announced further promising manganese assay results from
its Avontuur Projects.
The manganese discoveries were identified on two mineralised prospects some 20km
apart and adjoining the northern-most farms of the main Kalahari Manganese
Field.
Australia
Flinders Island/Venus Bay Joint Venture
(80% Tawana; 20% Orogenic Exploration Pty Ltd; Flinders Mines Limited operator
and earning 70%)
Tawana`s joint venture partner and operator, Flinders Mines Limited (formerly
Flinders Diamonds Limited) ("Flinders") has reported that it has commenced
drilling targets at Venus Bay.
In Q1 2008 Flinders completed a helicopter-borne magnetic survey over the Venus
Bay project area and identified interesting targets over indicator mineral
anomalies which resulted from previous exploration.
Flinders is able to earn 70% in the Flinders Island and Venus Bay project areas
by sole funding $2million of exploration.
Melbourne Laboratory
Activity within the Melbourne Laboratory during the quarter was focused on the
examination of the Orapa exploration samples.
Treatment, examination and reporting of third party exploration samples from
South Africa and Australia was also undertaken.
Corporate
Appointment of Executive Chairman
Following the resignation of Brian Phillips as Chairman of Tawana, the Board
appointed Mr. Neil Barrie as Executive Chairman. Despite other business
commitments Mr. Phillips has agreed to remain as a non-executive director of the
Company.
Mr. Barrie`s brief is to drive development across our range of existing highly
advanced diamond interests in South Africa and Botswana, and to seek out
directly or through strategic alliance partners, new mineral opportunities with
the major focus on iron ore, coal, gold and base metals in the highly
prospective southern African countries. In Australia, the right to access data
collected by De Beers Australia Exploration Limited is a valuable asset that is
being pursued.
Mr. Barrie, an Honours graduate from the University of Western Australia and a
former KPMG Director, resides in Melbourne and has 20 years experience in mining
evaluation and corporate development throughout Australia, South Africa and
Botswana.
On appointment, Mr. Barrie praised the outstanding prospects for Tawana based on
the company`s advanced Kareevlei Wes, St Augustine`s and Alluvial diamond
prospects in South Africa, our highly encouraging Orapa diamond project in
Botswana and the value to the Company of the recent manganese discovery by joint
venturer, Aquila Resources, in South Africa.
Mr. Barrie said: "Over the past quarter we have significantly increased our
focus on the capital requirements of our projects to fast-track Kareevlei Wes
and to further evaluate the outstanding potential of our Orapa assets.
We have been in discussion with a number of companies in Australia and Southern
Africa to evaluate a range of additional resource opportunities in coal, gold
and base metals to add to our diamond and manganese interests.
The clear aim of our Board is to see Tawana move from an exploration to a mining
Company in the near future."
He went on to say, "I take over at a time where there is increasing focus in
South and Southern Africa and our already established presence and excellent
strategic alliance partners provide us with a solid platform for strategic
growth. I look forward to being an integral contributor to Tawana Resources
which is on the threshold of potentially realising significant successes based
on the excellent stewardship of the Board and its senior management team."
Seven Falls Transaction
During the quarter Tawana advised that two prominent South African business
people, Ms Basetsana Kumalo and Ms Lindiwe Leketi became Tawana shareholders via
a transaction between their company, Pro Direct 189 Pty Ltd, ("Pro Direct") and
Tawana.
Tawana acquired Pro Direct`s 21% stake in Tawana`s Black Empowerment Partner
("BEE"), Seven Falls Trading 155 (Pty) Limited ("Seven Falls"). The
consideration for the acquisition was 2,125,600 Tawana shares, giving Pro Direct
a holding of 2.09% in Tawana.
Subsequently Tawana sold the Seven Falls shares it had acquired from Pro Direct
to Motjoli Resources Pty Ltd ("Motjoli").
Tawana is in discussions with Motjoli, the major shareholder of Seven Falls, to
restructure the BEE relationship in line with current best practice.
Funding
During the quarter the Company placed an uncommitted portion of the recent
rights issue to raise an additional $260,000 and, subsequent to the end of the
quarter, completed a placement to sophisticated investors to raise a further
$319,976. All shares were placed at A$0.08 with a free attached option
exercisable at A$0.10 on or before 1 April 2011.
Directors are in discussions with a number of parties to raise additional funds
to complete the trial mining of Kareevlei Wes.
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 30 June 2008
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 - 32
related debtors
1.2 Payments for (a) exploration and (73) (160)
evaluation
(b) development - -
(c) production - -
(d) administration (436) (612)
1.3 Dividends received
1.4 Interest received - 2
1.5 Interest and other costs of finance
paid
1.6 Income taxes paid
1.7 Other (provide details if material) (7) 1
(VAT Refund from SARS)
(516) (737)
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
1.9 Proceeds from sale of:
(a)prospects - -
(b)equity investments - -
(c) other fixed assets 8 8
1.10 Loans to other entities - -
1.11 Loans repaid by other entities - -
Net investing cash flows 8 8
1.13 Total operating and investing cash
flows (carried forward) (508) (729)
1.13 Total operating and investing cash (508) (493)
flows (brought forward)
Cash flows related to financing
activities
1.14 Proceeds from issues of shares, 606 606
options, etc.
1.15 Proceeds from sale of forfeited shares - -
1.16 Proceeds from borrowings 31 119
1.17 Repayment of borrowings (88) (88)
1.18 Dividends paid - -
1.19 Other (provide details if material) - -
Net financing cash flows 549 637
Net increase (decrease) in cash held 41 (92)
1.20 Cash at beginning of quarter/year to 16 150
date
1.21 Exchange rate adjustments to item 1.20 (1)
1.22 Cash at end of quarter 57 57
Note 1: Tawana completed the placement of the shortfall of a renounceable rights
issue and a placement to sophisticated investors during the quarter, raising
A$319,976 These funds were cleared and paid into the Company`s account on 9 and
17 July 2008
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 included in Nil
item 1.2
1.24 Aggregate amount of loans to the parties included in item Nil
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 100
4.2 Development 0
100
Total
Reconciliation of cash
Reconciliation of cash at the end of the Current Previous
quarter (as shown in the consolidated statement quarter quarter
of cash flows) to the related items in the $A`000 $A`000
accounts is as follows.
5.1 Cash on hand and at bank 57 16
5.2 Deposits at call - -
5.3 Bank overdraft
- -
5.4 Other (provide details) - -
Total: cash at end of quarter (item 1.22) 57 16
Note 1: Tawana completed the placement of the shortfall of a renounceable rights
issue and a placement to sophisticated investors during the quarter, raising
A$319,976 These funds were cleared and paid into the Company`s account on 9 and
17 July 2008
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 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 price Amount paid
number quoted per up per
security 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 102,763,134 102,763,134 various Various
7.4 Changes during quarter
(a) Increases through
issues
6,990,053 6,990,053 $0.08 $0.08
2,125,600 2,125,600 $0.07 $0.07
1,250,000 1,250,000 $0.08 $0.08
(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 date
and conversion factor) 8,240,053 8,240,053 price 1 April
$0.10 2011
7.8 Issued during quarter 8,240,053 8,240,053 $0.10 1 Apirl
2011
7.9 Exercised during Nil Nil
quarter
7.10 Expired during quarter 29,234,843 22,344,843 $1.00 30 April
2008
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: 30 July 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
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 July 2008
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Date: 31/07/2008 09:18:01 Supplied by www.sharenet.co.za
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