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TAW - Tawana Resources NL - Heads of Agreement for Sale of Kareevlei Diamond

Release Date: 18/08/2010 10:16
Code(s): TAW
Wrap Text

TAW - Tawana Resources NL - Heads of Agreement for Sale of Kareevlei Diamond Project 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" Heads of Agreement for Sale of Kareevlei Diamond Project The directors of Tawana Resources NL (ASX: TAW) ("Tawana" or "the Company") are pleased to announce the signing of a binding Heads of Agreement ("HoA") between Tawana`s wholly owned subsidiary Diamond Resources (PTY LTD) and Rolatseng Mining CC ("the Purchaser"), for the sale of its Kareevlei Wes Tenement, in South Africa. The key terms of the HoA are as follows; payment of a R150,000, non-refundable deposit within 14 days of the signing of the HoA, payment of R1,350,000 non-refundable sum within 30 days of the signing of the HoA, subject to the mining right being transferred to the purchaser, payment of R23,500,000 within seven days of the completion of a Trial Mining exercise. The Trial Mining will involve the mining and processing of a 20,000 tonne bulk sample, at the cost of the purchaser. It must commence within 30 days of the HoA signing and be completed no later than seven months after that signing. The final payment of R23,500,000 may vary up or down by 10% depending upon the results of the Trial Mining, with an expert valuator to determine the fair and equitable figure. The HoA price has been calculated on the assumption of an average grade of 10 cpht at an average value of US$145/ct. The Purchaser shall hire Tawana`s plant and equipment at a cost of R40,000 per month and shall be responsible for rehabilitation of the site. Diamonds recovered during the exercise shall be pledged as security for the payment of the balance of the purchase price. Conditions precedent to the HoA becoming binding include; approval by the board of Tawana (which has been achieved), Rolatseng Mining CC achieving funding approval, to the satisfaction of Tawana, within 30 days of signing, approval of an application for the transfer of title by the Department of Minerals and Petroleum Resources Act 2002, within 30 days of signing, and the completion of a comprehensive transaction agreement within 30 days of funding approval. The Kareevlei Project is not considered a core asset going forward. The proposed sale represents another step in the rationalisation of the Company`s diamond projects as the Board seeks to strengthen its financial position. The funds derived from the sale will be earmarked for promising initiatives being considered by Tawana, including but not restricted to gold projects in West Africa. Tawana maintains its valuable interests in iron ore and manganese projects in South Africa, held through its shareholding in Rakana. For further information, please contact: Warwick Grigor Chairman 18 August 2010 Sponsor PricewaterhouseCoopers Corporate Finance (Pty) Ltd Date: 18/08/2010 10:16:01 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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