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TAW - Tawana - Interim financial report: half-year ended 30 June 2008
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: TAW
ISIN: AU000000TAW7
("Tawana" or "the company")
ABN 69 085 166 721
Interim Financial Report for the half-year ended 30 June 2008
CONTENTS
Page
Corporate Directory 2
Directors` Report 3
Auditor`s Independence Declaration 14
Income Statement 15
Balance Sheet 16
Statement of Recognised Income and Expenditure 17
Statement of Cash Flows 18
Notes to and Forming Part of the Financial Statements 19
Directors` Declaration 26
Independent Review Report to the Members 27
This interim financial report does not include all the notes of the type
normally included in an annual financial report. Accordingly, this report is to
be read in conjunction with the annual report for the year ended 31 December
2007 and any public announcements made by Tawana Resources Limited during the
interim reporting period in accordance with the continuous disclosure
requirements of the Corporations Act 2001.
CORPORATE DIRECTORY
Board of Directors
Neil Barry
Wolfgang Marx
Euan Luff
Brian Phillips
Company Secretary
Derrick Ehmke
Registered Office
60 Wilson Street
SOUTH YARRA VIC 3141
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 Code: Options TAWOA
JSE Code: Options TAWA
DIRECTORS` REPORT
The Directors of Tawana Resources N.L submit herewith the financial report
for the half-year ended 30 June 2008. 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:
Director Qualifications and Experience
Neil Barrie Board Member since 19 June 2008. Mr.
Executive Chairman Barrie, an Honours graduate from the
BA (Hons) University of Western Australia and a
former KPMG Director, has 20 years
experience in mining evaluation and
corporate development throughout
Australia, South Africa and Botswana.
Interest in Shares - 855,904
Interest in Options - 4,270,000
Wolfgang Marx Board Member since 16 November 1998. Wolf
Managing Director Marx is a qualified geologist and has over
BSc, BA, FAusIMM, CPGeo 30 years experience in geology
particularly in exploration for gold and
diamonds.
Interest in Shares - 7,062,500
Interest in Options - 814,500
Brian Phillips Board Member since 4 April 2005. Brian
Non-Executive Director Phillips is a qualified mining engineer
AWASM, FAusIMM, MIMMM and has over 40 years experience in the
mining industry being a Fellow of the
AusIMM, a member of the IMMM, a past
Director of The Australian Gold Council
and past President of the Victorian
Minerals and Energy Council. He is a non-
executive director of Panoramic Resources
Limited 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 - 507,300
Interest in Options - 312,500
Euan Luff Board Member since 16 November, 1998. Euan
Non-Executive Director Luff is Senior Partner of Wilmoth Field
B Juris LL.B.AL.Arb.A. 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 - 7,244,870
Interest in Options - 1,604,150
COMPANY SECRETARY Company Secretary since 22 January 2007.
Derrick Ehmke Derrick has over 40 year`s 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.
Interest in Shares - Nil
Interest in Options - Nil
REVIEW OF OPERATIONS
The Company continued its exploration program, concentrating on diamond
exploration and evaluation. A summary of the major activities are as follows:
PROJECTS IN SOUTH AFRICA
KAREEVLEI WES PROJECT, KIMBERLEY REGION, SOUTH AFRICA
(Operated by Tawana; 74% owned by Tawana and 26% owned by 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
are available to complete this program. Tawana is in discussions with a number
of parties to progress this project.
St. AUGUSTINES KIMBERLITE PROJECT, KIMBERLEY
(Operated by Tawana; Tawana 30% equity in Vecto Trade 436 (Pty) Ltd)
In late 2007 Tawana acquired a 30% of the issued shares in Vecto Trade 436
(Pty) Ltd ("Vecto") which was granted a New Order Prospecting Right over the
St Augustines kimberlite located 600 metres west of the world famous Kimberley
Mine or "Big Hole" in Kimberley, South Africa. The St Augustines mine is
located in the northern half of the Prospecting Right due west of the Big Hole.
The Kimberley Mine produced 14.5 million carats of diamonds from 22.5 million
tons at a grade of 64 carats per hundred tons. Mining ceased 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 two kimberlite
pipes of the Kimberley Mine and St Augustines are located on the same structure
and are connected by a kimberlite fissure.
Mining at St Augustines ceased in 1902. Subsequently the tailings of the
Kimberley Mine were deposited over the St Augustines kimberlite. The removal
of these tailings has recently exposed in-situ kimberlite at St Augustines.
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.
A non-invasive gravimetric survey conducted by Tawana in November 2007
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. In addition to confirming the location of the St
Augustine`s mine, two new targets close to St Augustines have also been
identified. 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 legal advisors in South Africa have advised that it is too early
to express an opinion as to the merits of the application or its prospects
of success since the Department of Minerals and Energy, which is opposing
the application on behalf of the Minister, has as yet not replied to the
allegations in the founding papers.
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.
LEXSHELL ALLUVIAL PROJECT, KIMBERLEY REGION, SOUTH AFRICA
(Tawana 88% revenue share/ Lexshell 12% revenue share)
During Q2 2008 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 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.
The Company is in discussions with a third party on participating in future
bulk sampling of the palaeochannel.
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.
DANIEL KIMBERLITE PROJECT, LIME ACRES DISTRICT, SOUTH AFRICA
(Operated by Tawana; 74% owned by Tawana, 26% owned by Seven Falls)
The Daniel Kimberlite Project ("DKP") was originally a joint venture between
Tawana, BHP Billiton and Seven Falls, which encompasses an area 30kms in
radius centred on the De Beers owned Finsch Diamond Mine. Utilisation of
FalconRegistered technology has led to the identification of kimberlitic targets
situated in the Lime Acres District of South Africa.
During the first half of 2008 BHP Billiton withdrew from the joint venture
and waived its rights to any royalty from future revenue.
In early 2007 Prospecting Right Applications were submitted over additional
targets. Drilling of the additional targets will be conducted when the
Prospecting Rights are granted.
DANIEL ALLUVIAL PROJECT, LIME ACRES DISTRICT, SOUTH AFRICA
(Operated by Tawana; 60% owned by Tawana, 40% owned by Seven Falls)
The Daniel Alluvial Project ("DAP") was originally a joint venture between
Tawana, BHP Billiton and Seven Falls, which encompasses the "Main Channel" of
an extensive alluvial system downstream of the De Beers owned Finsch Diamond
Mine. Utilisation of FalconRegistered technology led to the identification of
the alluvial system situated in the Lime Acres District of South Africa.
Drilling and bulk sampling by Tawana proved the deposit to be diamondiferous.
During the first half of 2008 BHP Billiton withdrew from the joint venture
and waived its rights to any royalty from future revenue.
Tawana and Seven Falls are in discussions to restructure this joint venture
to facilitate further evaluation of the alluvial deposit.
TAWANA ALLUVIAL PROJECT, LIME ACRES DISTRICT, SOUTH AFRICA
(Operated by Tawana; 70% owned by Tawana, 30% owned by Seven Falls)
The Tawana Alluvial Project ("TAP") was originally a joint venture between
Tawana, BHP Billiton and Seven Falls, which encompasses the "Feeder Channel"
and "Eastern Gravels" of an extensive alluvial system downstream of the De
Beers owned Finsch Diamond Mine. Utilisation of FalconRegistered technology led
to
the identification of the alluvial system situated in the Lime Acres District
of South Africa. Drilling and bulk sampling by Tawana proved the deposit to
be diamondiferous.
During the first half of 2008 BHP Billiton withdrew from the joint venture
and waived its rights to any royalty from future revenue.
Tawana and Seven Falls are in discussions to restructure this joint venture
to facilitate further evaluation of the alluvial deposit.
PROJECTS IN BOTSWANA
ORAPA DIAMOND PROJECT, BOTSWANA
(100% owned by Tawana, Nowak Investments Pty Ltd earning 51%)
In February 2008 Tawana entered into a joint venture with Nowak Investments
(Pty) Limited (Nowak) to continue the exploration and evaluation of Tawana`s
Orapa Diamond Project in Botswana. The agreement is subject to Ministerial
approval.
Under the terms of the agreement Nowak will be required to conduct and sole
fund evaluation work to earn a 51% interest in the project, including:
Review all the results from the work completed by Tawana.
Select kimberlites for mini-bulk sampling to a depth of 30 metres below
surface. For this purpose, the Management Committee, comprising members of
Tawana and Nowak, will determine the selected kimberlites.
Excavate at least one shaft per selected kimberlite to a depth of 30 metres.
Excavate from horizontal drives at 30m below surface no less than 100 tonnes
of kimberlite for processing from the selected kimberlites less than 1 hectare
in surface area, and no less than 200 tonnes of kimberlite from the selected
kimberlites greater than 1 hectare in surface area. A maximum of 1100 tonnes
of kimberlite will be excavated for processing during this initial phase. If
warranted, additional bulk samples of up to 3000 tonnes per kimberlite could
be excavated and processed in subsequent phases.
Nowak has also undertaken to conduct exploration on the Borolong and Moshaiwa
projects.
At the completion of the above program Tawana will have the option to
contribute 49% of ongoing expenditure, or allow Nowak to continue sole funding
to earn 70% interest in the projects by completing a bankable feasibility study.
Thereafter both parties will contribute pro-rata to expenditures.
Nowak completed the planned shaft sinking on kimberlite BK24 during Q2 2008
and bulk sampling of fresh kimberlite has commenced. To the end of June 2008
approximately 30 tonnes of kimberlite had been excavated and was 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. Samples of kimberlite from one of the
shafts contained specimens 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.
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.
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.
BOROLONG/MOSHAIWA DIAMOND PROJECT, BOTSWANA
(100% owned by Tawana, Nowak earning 51%)
Exploration licences in the prospective north eastern part of Botswana,
between the city of Francistown and the Orapa kimberlite province, were
granted to Tawana during mid 2003 and mid 2007. The licences cover areas
which are known to be geologically favourable for kimberlite intrusions, and
which were known to include sites where kimberlitic indicator minerals had
been recovered by earlier explorers.
Kimberlitic indicator minerals were recovered from soil samples collected
over identified targets during 2004, 2005 and 2006. Such targets were
identified from existing magnetic and previous sampling data. Additional
follow up sampling by Tawana during 2007 confirmed the presence of indicator
minerals in this area.
In early 2008 Tawana entered into a joint venture with Nowak to continue
the exploration of this project with Nowak undertaking to sole fund the
exploration to earn 51% equity in the project.
During Q2 2008 Nowak collected 36 soil samples in the Moshaiwa Prospecting
Licence with the aim to locate the source of the kimberlitic indicator
minerals found here previously.
PROJECTS IN AUSTRALIA
PILBARA REGIONAL EXPLORATION, WESTERN AUSTRALIA
(Tawana 66.6% and operator /De Beers Australia Exploration 33.3%)
During the first half of 2008 Tawana examined geophysical data over
kimberlite fissures indicated to be located to the north-east of the Black
Top kimberlite. This study showed that the fissures are unlikely to be of
economic interest.
Tawana has advised De Beers that it intends to withdraw from the project
on completion of environmental rehabilitation to be completed in Q3 2008.
FLINDERS ISLAND/VENUS BAY PROJECTS, SOUTH AUSTRALIA
(Tawana 80%, Orogenic Exploration 20%, Flinders Mines earning 70%)
In April 2007 ASX listed Flinders Mines Limited (FMS), (formerly Flinders
Diamonds Limited), Tawana and Orogenic Exploration Pty Ltd (OEPL) executed
an agreement which allows FMS to earn, over two four-year periods, a 70%
interest in ELs 3928 (formerly EL2927), Venus Bay, and 3200, Flinders Island.
The equity can be earned in two stages, 50% for an expenditure of $1 million
with Tawana and OEPL diluting to 30% and 20% respectively. Thereafter FMS has
the option to earn a further 20% by spending a further $1 million on the
project, with Tawana and OEPL diluting to 15% each. FMS may withdraw after
spending $250,000. OEPL is free carried until a decision to mine and FMS can
remain as manager during its sole contributor period.
In Q1 2008 FMS completed a helicopter-borne magnetic survey over the Venus
Bay project area and identified targets over indicator mineral anomalies which
resulted from previous exploration. Drilling of these targets during Q2 2008
failed to intersect kimberlite.
FMS has flown REPTEM (a form of high resolution electro-magnetic survey) over
the northern part of Flinders Island. A gravity survey was also completed, with
a regional 200 x 200m grid over the entire island and more detailed infill to
100 x 100m over REPTEM targets. These include the "Gem Valley" and "Flinders
Valley" in the north and five other promising EM "Conductive Sinkhole" targets
Assessment and interpretation of the datasets is continuing.
TIMBER CREEK PROJECT, NORTHERN TERRITORY
(Tawana 100%)
No further work has been conducted on this project. The Company is in the
process of relinquishing title over this project.
MELBOURNE LABORATORY
Activity within the Melbourne Laboratory during the half year was focused
on the examination of the Orapa exploration samples.
Treatment, examination and reporting of third party exploration samples from
South Africa and Australia were 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 in our ongoing Australian diamond exploration.
Funding
Tawana completed a renounceable rights issue during Q1 2008, raising $559,204
before costs. The proceeds of the Rights Issue provided additional working
capital to fund the Company`s projects which include trial mining at Kareevlei
Wes and an assessment of the Tawana Alluvials and St Augustines Projects in
South Africa.
During Q2 2008 2,125,600 shares were issued to two prominent South African
business people, raising $148,792 before costs. Furthermore the Company placed
an uncommitted portion of the rights issue to raise an additional $180,000 and,
subsequent to the end of the quarter, completed a placement to sophisticated
investors to raise a further $320,000. 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.
HALF YEAR RESULT
The operating loss of the consolidated entity for the half year after income
tax of $nil was $1,268,932 (comparative half year, income tax of $nil and
operating loss $3,469,991).
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 2008. This is detailed on page 14 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 8th day of September 2008.
AUDITOR`S INDEPENDENCE DECLARATION
As lead auditor for the review of Tawana Resources N.L for the half year
ended 30 June 2008, 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
8 September 2008
PricewaterhouseCoopers
CONSOLIDATED INCOME STATEMENT as at 30 June 2008
Notes Half-year Half-year
2008 2007
$ $
Revenue from continuing 4 29,232 94,455
operations
Other income 4 14,559 -
Corporate costs (189,627) (132,018)
Depreciation (97,715) (164,177)
Employee benefits expense (246,536) (323,671)
Exploration expenses (531,023) (2,584,195)
written off
Impairment of assets - (14,844)
Finance costs - (17,891)
Travel costs (7,526) (56,070)
Other expenses 5 (240,296) (271,580)
Loss before income tax (1,268,932) (3,469,991)
expense
Income tax expense - -
Loss from continuing (1,268,932) (3,469,991)
operations after income tax
expense attributable to
members of the parent
Earnings per share for loss Cents Cents
attributable to the ordinary
equity holders of the company:
Basic earnings per share (0.012) (0.040)
Diluted earnings per share (0.012) (0.040)
The above consolidated income statement should be read in conjunction with
the accompanying notes.
CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2008
Notes June December
2008 2007
$ $
ASSETS
Current assets
Cash and cash equivalents 57,408 149,862
Trade and other 80,686 88,981
receivables
Inventories 60,291 76,818
198,385 315,661
Non-current assets
Receivables 37,221 47,423
Investment in associate 16,640 16,640
Property, plant and 594,829 850,889
equipments
Exploration expenditure 5,938,275 7,971,366
6,586,965 8,886,318
Total assets 6,785,350 9,201,979
LIABILITIES
Current liabilities
Trade and other payables 186,317 142,761
Share money held in trust 9 80,000 -
Provisions 118,093 116,389
384,410 259,150
Non-current liabilities
Director`s Loan 25,467 -
Provisions 24,161 30,784
49,628 30,784
Total liabilities 434,038 289,934
Net assets 6,351,312 8,912,045
EQUITY
Contributed equity 7 33,895,238 33,339,335
Reserves (3,996,437) (2,148,733)
Accumulated losses (23,547,489) (22,278,557)
Total equity 6,351,312 8,912,045
The above consolidated balance sheet should be read in conjunction with the
accompanying notes.
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSES FOR THE HALF-YEAR
ENDED 30 JUNE 2007
Notes Half-year Half-year
2008 2007
$ $
Exchange rate differences (1,862,139) (423,365)
on translation of foreign
operations
Net income recognised (1,862,139) (423,365)
directly in equity
Loss for the half year (1,268,932) (3,469,991)
Total recognised income (3,131,071) (3,893,356)
and expense for the half
year attributable to
members of the parent
The above consolidated statement of recognised income and expenses should
be read in conjunction with the accompanying notes.
CONSOLIDATED CASH FLOW STATEMENT FOR THE HALF-YEAR ENDED 30 JUNE 2008
Notes Half-year Half-year
2008 2007
$ $
Cash flows from operating
activities
Receipts from customers 42,492 29,564
(incl. GST)
Interest received 2,981 64,891
Payments to suppliers and (566,036) (608,871)
employees (incl. GST)
Net cash outflow from (520,563) (514,416)
operating activities
Cash flows from investing
activities
Payments for exploration (263,372) (511,231)
activity
Proceeds from sale of 31,409 34,964
property plant and
equipment
Purchase of property, - -
plant & equipment
Net cash outflow from (231,963) (476,267)
investing activities
Cash flows from financing
activities
Proceeds from Director`s 25,467 -
Loan
Share money received held 80,000 -
in trust
Proceeds from the issue of 555,903 -
shares
Net cash inflow from 661,370 -
financing activities
Net decrease in cash & (91,156) (990,683)
cash equivalents
Cash and cash equivalents 149,862 2,655,399
at the beginning of the
half-year
Effects of exchange rate (1,298) (423,365)
changes on cash and cash
equivalents
Cash and cash equivalents 57,408 1,241,351
at the end of the half-
year
The above consolidated cash flow statement should be read in conjunction
with the accompanying notes.
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2008
1. Basis of preparation of the half-year report
This general purpose financial report for the interim half-year reporting
period ended 30 June 2008 has been prepared in accordance with Accounting
Standard AASB 134: Interim Financial Reporting and the Corporations Act
2001.
This interim financial report does not include all the notes normally
included in an annual financial report. Accordingly, this report is to be
read in conjunction with the annual report for the year ended 31 December
2007 and any public announcements made by Tawana Resources N.L. during the
interim reporting period in accordance with the continuous disclosure
requirements of the Corporations Act 2001.
The accounting policies adopted are consistent with those of the previous
financial year and corresponding interim reporting period.
2. Going concern
The consolidated entity has incurred a loss of $1,268,932 for the half-year
ended 30 June 2008, has a net deficit of working capital of $186,025 and a
net asset balance of $6,351,312. The interim financial report has been
prepared on the basis of going concern which contemplates continuity of
normal business activities and the realisation of assets and settlement of
liabilities in the ordinary course of business. The Directors believe this
basis to be appropriate.
The ability of the company to continue as a going concern is dependent
of obtaining additional funding to finance ongoing activities, including
future production, mine development and exploration activities. Subsequent
to the half-year end the company received a further $320,000 as part of an
equity placement and $675,000 from Seven Falls Trading 155 (Pty) Limited.
Refer to note 9 for further details. Management`s plans to obtain further
financing include seeking a joint venture partner to fund certain exploration
projects and/or raising additional funds through equity placements. If the
company is unable to implement its plans, it could be forced to cease
operations.
At this time, the directors are of the opinion that no assets are likely to
be realised for an amount less than the amount at which it is recorded in
the financial report at 30 June 2008. Accordingly, no adjustments have been
made to the financial report relating to the recoverability and classification
of the asset carrying amounts or the amounts and classification of liabilities
that might be necessary should the company not continue as a going concern.
3. Segment information
The economic entity operated predominantly in the mineral exploration
industry in South Africa, Botswana and within Australia.
Primary Reporting - Geographic Segments
Australia Africa
Half-year Half-year
2008 2007 2008 2007
$ $ $ $
Operating Revenue
External sales 26,416 31,272 2,816 63,183
Intersegment sales - - 177,158 113,212
Other revenue 14,559 - - -
Total Segment 40,975 31,272 179,974 176,395
revenue
Segment Expenses
Segment expenses (1,100,982) (3,215,727) (211,741) (348,719)
Intersegment (177,158) (113,212) - -
expenses
Unallocated - - - -
expenses
Total Segment (1,278,140) (3,328,939) (211,741) (348,719)
expense
Loss before income (1,237,165) (3,297,667) (31,767) (172,324)
tax
Eliminations Consolidated Entity
Half-year Half-year
2008 2007 2008 2007
$ $ $ $
Operating Revenue
External sales - 29,232 94,455
Intersegment sales (177,158) (113,212) - -
Other revenue - - 14,559 -
Total Segment (177,158) (113,212) 43,791 94,455
revenue
Segment Expenses
Segment expenses - - (1,312,723) (3,564,446)
Intersegment 177,158 113,212 - -
expenses
Unallocated - - - -
expenses
Total Segment 177,158 113,212 (1,312,723) (3,564,446)
expense
Loss before income - - (1,268,932) (3,469,991)
tax
4. Revenue and other income
Half-year Half-year
2008 2007
$ $
Revenue from continuing operations
Interest income 2,981 64,891
Laboratory income 26,251 29,564
29,232 94,455
Other income
Profit on sale of assets 14,559 -
14,559 -
5. Expenses
Half-year Half-year
2008 2007
$ $
Other expenses from continuing operations
Administrative costs 89,581 124,243
Auditors remuneration 24,545 49,724
Laboratory expenses 5,105 17,361
Occupancy costs 102,205 76,236
Other expenses 18,860 4,016
240,296 271,580
6. Dividends
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.
7. Equity securities issued
Half-year Half-year Half-year Half -year
2008 2007 2008 2007
Shares Shares $ $
Issues of ordinary
shares during the
period:
Rights issue 8,240,053 - 424,369 -
Share placement 2,125,600 - 131,534 -
10,365,653 - 555,903 -
Listed options converted Half-year Half-year
2008 2007
Options Options
Balance at start of the half-year 22,344,144 22,344,144
Expired during the half-year (22,344,144) -
Granted during the half-year 8,240,053 -
Balance at end of half-year 8,240,053 22,344,144
Unlisted options granted Half-year Half-year
2008 2007
Options Options
Balance at start of half- year 1,640,000 1,390,000
Granted during the half-year - 1,250,000
Balance at end of half-year 1,640,000 2,640,000
8. Contingent liabilities and commitments
(a) An Indemnity Guarantee of $7,500 is held by the bank for Tawana
Resources N.L for the Timber Creek Project mining tenement held in the
Northern Territory.
(b) Lease Commitments
There is an operating lease on the premises occupied by the parent entity at
60 Wilson Street, South Yarra, expiring on 25 April 2011. Commitments under
the operating lease are as detailed below:
2008 2007
$ $
No later than one year 147,000 735,963
Later than one year but not later than 269,500 634,693
five years
Later than five years - -
8. Contingent liabilities and commitments (continued)
(b) Lease Commitments (continued)
There is a three year sub-lease relating to the operating lease above,
expiring on 25 April 2011. Lease payments receivable from the sub-lease
are as detailed below:
2008 2007
$ $
No later than one year 82,000 -
Later than one year but not later than 150,333 -
five years
Later than five years - -
9. Events occurring after the balance sheet date
Subsequent to the balance date
* 5,000,000 shares were issued in July 2008 contributing an additional
$400,000 to equity. $80,000 of this money was received prior to the end of
June and has been reflected on the face of the Balance Sheet under Current
Liabilities. The balance of $320,000 was received in July 2008.
* $675,000 was received as payment from Seven Falls Trading 155 (Pty)
Limited for the acquisition of a 26% interest in the certain South African
exploration project areas as a result of an agreement signed in April 2005.
The Directors are not aware of any other matters or circumstances that have
arisen subsequent to balance sheet 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 2008.
DIRECTORS` DECLARATION 30 JUNE 2008
In the directors` opinion:
the financial statements and notes set out on pages 11 to 19 are in
accordance with the Corporations Act 2001, including:
complying with Accounting Standards, the Corporations Regulations 2001 and
other mandatory professional reporting requirements; and
giving a true and fair view of the consolidated entity`s financial position
as at 30 June 2008 and of its performance for the half-year ended on that
date; and there are reasonable grounds to believe that Tawana Resources N.L.
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 directors.
On behalf of the directors
Wolf Marx
Director
Signed at Melbourne on this 8th day of September 2008.
INDEPENDENT AUDITOR`S REVIEW REPORT TO THE MEMBERS OF TAWANA RESOURCES N.L
Report on the half-year financial report
We have reviewed the accompanying half-year financial report of Tawana
Resources N.L., which comprises the balance sheet as at 30 June 2008, and
the income statement, statement of recognised income and expense and cash
flow statement for the half-year ended on that date, other selected
explanatory notes and the directors` declaration for the Tawana Resources
N.L. Group (the consolidated entity). The consolidated entity comprises
Tawana Resources N.L. (the company) and the entities it controlled during
the half-year.
Directors` responsibility for the half-year financial report
The directors of the company are responsible for the preparation and faire
presentation of the half-year financial report in accordance with Australian
Accounting Standards (including the Australian Accounting Interpretations)
and the Corporations Act 2001. This responsibility includes designing,
implementing and maintaining internal control relevant to the preparation
and fair presentation of the half-year financial report that is free from
material misstatement, whether due to fraud or error; selecting and applying
appropriate accounting policies; and making accounting estimates that are
reasonable in the circumstances.
Auditor`s responsibility
Our responsibility is to express a conclusion on the half-year financial
report based on our review in accordance with Auditing Standards on Review
Engagements ASRE 2410 Review of an Interim Financial Report Performed by the
Independent Auditor of the Entity, in order to state whether, on the basis of
the procedures described, we have become aware of any matter that makes us
believe that the financial report is not in accordance with the Corporations
Act 2001 including: giving a true and faire view of the consolidated entity`s
financial position as at 30 June 2008 and it performance for the half-year
ended on that date; and complying with Accounting Standard AASB 134 Interim
Financial Reporting and the Corporations Regulations 2001. As the auditor of
Tawana Resources N.L., ASRE 2410 requires that we comply with the ethical
requirements relevant to the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. It also includes reading
the other information included with the financial report to determine whether
it contains any material inconsistencies with the financial report. A review
is substantially less in scope than an audit conducted in accordance with
Australian Auditing Standards and consequently does not enable us to obtain
assurance that we would become aware of all significant matters that might be
indentified in an audit. Accordingly, we do not express an audit opinion.
For further explanation of a review, visit our website
http://www.pwc.com/au/financialstatementaudit.
While we considered the effectiveness of management`s internal controls over
financial reporting when determine the nature and extent of our procedures,
our review was not designed to provide assurance e 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 have complied with the independence requirement
of the Corporations Act 2001.
Conclusion
Based on our review, which is not an audit, we have not become aware of any
matters that makes us believe that the half-year financial report of Tawana
Resources N.L. is not in accordance with the Corporations Act 2001 including:
giving a true and fair view of the consolidated entity`s financial position
at 30 June 2007 and of its performance for the half-year ended on that date,and
Complying with Accounting Standard AASB 134 Interim Financial Reporting and
Corporations Regulations 2001.
PricewaterhouseCoopers
Tim Goldsmith
Melbourne
Partner
8 September 2008
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Date: 09/09/2008 11:04:00 Supplied by www.sharenet.co.za
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