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TAW - Tawana - Quarterly Activities And Cashflow 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 2008
30 January 2009
Key Points
- Kareevlei Wes
- Funding delayed for Trial Mining
- Orapa
- Bulk Sampling of BK24 kimberlite continuing
- Corporate
- Director appointed
- Managing Director retirement
- Melbourne Laboratory closed
- Corporate holding costs minimised
South Africa
Kareevlei Wes Project, Kimberley Region, South Africa
(100% owned and operated by Tawana)
As reported during the September quarter, Tawana concluded an agreement with
Risk Free Investments 2 (Proprietary) Limited t/a Agio Diamond Investments
("Agio") for the sale of a 26% interest in Tawana`s Kareevlei Project for Rand
12Million (approximately A$1.7million at current exchange rates). The Agreement
required Agio to effect payment of the purchase price within 30 days of
signature, ie, by 25 November 2008. Payment was not completed by the due date
and a High Court Summons has been executed.
St. Augustines Kimberlite Project, Kimberley, South Africa
(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 were 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.
A drilling program to confirm the presence or absence of kimberlite or related
rock types in the two targets was completed during the quarter.
A total of seven 6.5 inch holes were drilled using percussion air flush
drilling. All holes were logged at 1m intervals and a total of 220m was drilled
during the 3 day drilling program. The location of the 7 drill holes is shown
in Figure 1.
Figure 1: Gravity image showing location of 7 drill holes within Prospecting
Right south of the St Augustine road.
Of the 7 holes drilled, 6 were sited to determine the cause of the gravity low
anomalies and one (hole 4) was sited to determine the cause of the gravity high.
The hole that was drilled into the gravity high was distinctly different to the
remaining 6 holes in that it intersected 7m of weathered to fresh dolerite
between 2 to 9m. This is compatible with what can be observed in the sidewalls
of the Kimberley mine. All other holes drilled were completely devoid of
dolerite and intersected weathered shale below the dump debris.
The gravity low anomalies are therefore attributed to weathered shale and no
kimberlitic material was intersected during the drilling program.
Prospecting activities over the northern portion of the Prospecting Right will
continue in order to evaluate the area associated with the old St Augustine
kimberlite mine area.
Botswana
Orapa Project, Botswana
(Tawana 100%, Nowak Investments Pty Ltd earning 51%)
Tawana has been advised by Nowak that the sinking of shafts on the BK2
kimberlite was suspended during the quarter to allow for the implementation of
certain additional safety measures. A small amount of fresh kimberlite sample
was processed and results are pending. Nowak aims to extract 100 tonnes from
the base of each of the 3 shafts. Processing of this kimberlite is expected to
re-commence in Q1 2009.
Nowak has also collected 120 soil samples in the Moshaiwa Prospecting Licence
with the aim to locate the source of the kimberlitic indicator minerals
(including diamonds) found here previously. Processing of these samples has been
completed and results are expected during Q1 2009.
Australia
Melbourne Laboratory
The Melbourne Laboratory was closed during the quarter. The upper level has been
sub-let, and discussions have commenced with a third party to sub-let the ground
floor.
Corporate and Funding
Corporate
Over the past quarter, there has been substantial cost reduction in the
corporate overheads of Tawana. Specifically, the head office in Melbourne has
been closed, as has the laboratory which was running unprofitably.
Corporate operating expenses have been pruned by approximately 70% and a
continuous watch will be undertaken on costs to ensure that cash is directed to
actual or potential projects to continue to safeguard asset values.
The Executive Chairman has undertaken a large number of commercial discussions
with potential joint venture partners, and specific details will be released to
the market when documentation has been put in place.
Director appointment
The Directors are pleased to announce the appointment of Ms Nonkquobela Mazwai
to the Board of Tawana effective 20 October.
Ms. Mazwai has extensive experience in the public and private sectors of the
South African mining industry and has consulted for a number of major South
African parastatal Corporations such as transport utility Spoornet, electricity
generator Eskom, the Department of Justice and the Department of Minerals and
Energy. While consulting to the latter Department, she was responsible for the
design of Business Processes for the implementation of South Africa`s New Mining
Laws and the development of the monitoring and measurement mechanisms for the
equity ownership pillar of the Mining Charter.
Ms Mazwai and her business partner, Mr. Moloi, are the principal Shareholders in
Motjoli Resources Pty Ltd., which is the major shareholder in Tawana`s BEE
partner and substantial shareholder, Seven Falls Trading 155 Pty Ltd.
Director retirement
The Directors advise that Wolf Marx has retired as Managing Director of the
company effective 31 January 2009. Wolf has had a long and distinguished career
within the diamond exploration industry throughout Africa and Australia and his
significant technical depth and experience will be retained by the company in a
consultancy capacity. He will be available to evaluate current and new business
opportunities and importantly maintain commercial relationships in Australia,
South Africa and Botswana on behalf of Tawana.
Funding
As detailed, the payment for the sale of 26% interest in Tawana`s Kareevlei
project for Rand 12 million, (approximately AUD$1.7M at current exchange rates)
has been delayed.
On 27 October 2008 Tawana announced to the market the conclusion of an agreement
with Risk Free Investments 2 (Pty) Limited t/as Agio Diamond Investments. Tawana
has issued a summons for payment in the High Court of South Africa and will
pursue settlement vigorously.
The market will be informed of progress on the litigation.
As a potential contingency, the company is pursuing alternate sources of funding
and is also holding discussions with various groups regarding possible joint
ventures on the company`s projects.
The company is holding discussions with potential investors to recapitalise
Tawana to allow it to achieve its strategic objective of the development of cash
flow through getting the Kareevlei project to trial mining status.
Contact:
Phillip Hains
Tel: +61 (0)3 9824 5254
Technical sections of this report are based on information compiled by Wolf Marx
BSc, BA, FAusIMM, CPGeo. 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".
Mr. Marx consents to the inclusion in the report of the matters based on his
information in the form and context in which they appear.
Tawana Resources- a world class diamond and mineral exploration company listed
on the Australian and Johannesburg Stock Exchanges committed to the principles
of enhancing shareholder value through being ethically, socially and
environmentally conscious corporate citizens.
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 2008
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 23 71
sales and related debtors
1.2 Payments for
a) exploration and (272) (591)
evaluation - -
b) development - -
c) production (180) (1,333)
d) administration
1.3 Dividends received
1.4 Interest received 1 3
1.5 Interest and other costs
of finance paid
1.6 Income taxes paid
1.7 Other (provide details if - 1
material)
(VAT Refund from SARS)
(428) (1,849)
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 - 675
(b)equity investments - -
(c) other fixed assets 52 68
1.10 Loans to other entities (2) (19)
1.11 Loans repaid by other - -
entities
Net investing cash flows 50 724
1.13 Total operating and
investing cash flows (378) (1,125)
(carried forward)
1.13 Total operating and (378) (1,125)
investing cash flows
(brought forward)
Cash flows related to
financing activities
1.14 Proceeds from issues of - 949
shares, options, etc.
1.15 Proceeds from sale of - -
forfeited shares
1.16 Proceeds from borrowings 2 125
1.17 Repayment of borrowings - (88)
1.18 Dividends paid - -
1.19 Other (provide details if - -
material)
Net financing cash flows 2 986
Net increase (decrease) (376) (139)
in cash held
1.20 Cash at beginning of 387 150
quarter/year to date
1.21 Exchange rate adjustments 2 2
to item 1.20
1.22 Cash at end of quarter 13 13
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 50
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
Director fees
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 Nil Nil
arrangements
Estimated cash outflows for next quarter
$A`000
4.1 Exploration and evaluation 0
4.2 Development 0
4.3 Administration 25
Total 25
Reconciliation of cash
Reconciliation of cash at the Current Previous
end of the quarter (as shown in quarter quarter
the consolidated statement of $A`000 $A`000
cash flows) to the related
items in the accounts is as
follows.
5.1 Cash on hand and at bank 13 387
5.2 Deposits at call - -
5.3 Bank overdraft
- -
5.4 Other (provide details) - -
Total: cash at end of 13 387
quarter (item 1.22)
Changes in interests in mining tenements
Teneme Nature of Interes Interest
nt interest t at at end
refere (note (2)) beginni of
nce ng 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 Number quoted Issue Amount paid
price per up per
security 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 107,763,134 107,763,134 Various Various
securities
7.4 Changes during
quarter
(a) Increases
through issues
(b) Increase
through
exercise of
options
7.5 +Convertible l
debt
securities
(description)
7.6 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through
securities
matured,
converted
7.7 Options Exercise Expiry date
(description 13,240,053 13,240,053 price 1 April 2011
and conversion $0.10
factor)
7.8 Issued during Nil Nil
quarter
7.9 Exercised Nil Nil
during quarter
7.10 Expired during Nil Nil
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: Neil Barrie Date: 30 January 2009
(Director)
Print name: N Barrie
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.
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Date: 30/01/2009 09:42:02 Supplied by www.sharenet.co.za
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