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TAW - Tawana Resources NL - Half-Year Financial Report For the half-year ended
30 June 2010
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"
Tawana Resources NL
ABN 69 085 166 721
Half-Year Financial Report For the half-year ended 30 June 2010
Corporate Directory 3
Directors` Report 4
Auditor`s Independence Declaration 7
Consolidated Statement of Comprehensive Income 8
Consolidated Statement of Financial Position 9
Consolidated Statement of Cash Flows 10
Consolidated Statement of Changes in Equity 11
Notes to the Financial Statements 12
Directors` Declaration 16
Independent Auditor`s Review Report 15
Directors Solicitors to the Company
Mr Warwick Grigor Non- Wilmoth Field Warne
Executive Chairman Level 13
Mr Euan Luff Non-Executive 440 Collins Street
Director Melbourne VIC 3000
Mr Julian Babarczy Non-
Executive Director Share Registry
Mr Harry Hill Non-Executive
Director Computershare Investor
Services Pty Ltd
Joint Company Secretaries GPO Box 2975
Melbourne VIC 3001
Mr Winton Willesee
Mr Aaron Finlay Tel: +61 3 9415 5000
Fax: +61 3 9473 2500
Principal Place of Business
and Registered Office Auditors
Level 1 William Buck
2 Ross Place Level 1
South Melbourne VIC 3205 465 Auburn Road
Hawthorn East VIC 3123
Contact Details
Website: www.tawana.com.au Stock Exchange
Tel: +61 3 9602 4133
Fax: +61 3 9670 6643 Australian Securities Exchange
ASX Code: TAW
Your Directors present their report on the Company and its controlled entities
("consolidated entity") for the half-year ended 30 June 2010.
Directors
The names of the Directors in office at any time during or since the end of the
half-year are as follows. All Directors have been in office for this entire
period unless otherwise stated.
Mr Warwick Grigor - Non-Executive Director (appointed 20 April 2010)
Mr Euan Luff - Non-Executive Director
Mr Julian Babarczy - Non-Executive Director
Mr Harry Hill - Non-Executive Director
Results
The loss of the consolidated entity for the half-year ended 30 June 2010 after
providing for income tax amounted to $553,571 (30 June 2009: $476,256).
No dividends were declared or paid during the half-year ended 30 June 2010.
Review of Operations
Background
Tawana was incorporated as a public company on 16 November 1998 in Australia.
Tawana listed on the ASX (as a primary listing) in April 2001 and JSE (as a
secondary listing) in November 2005. The Company`s head office is located in
Melbourne, Australia. Operating through its various subsidiaries, the Company is
involved in the exploration of diamondiferous kimberlites and alluvials, in
South Africa, Botswana and Australia.
The Company is in the process of rationalising its diamond projects and
reviewing gold and base metal projects throughout Africa on a continuing basis.
Brief overviews of Tawana`s diamond projects, which are all located in
prospective areas, follow.
South Africa
Kareevlei Wes Project, Kimberley Region
(Operated by Tawana; 100% owned by Tawana)
No field work was carried out on this project during the reporting period. The
Company is holding discussions with different groups regarding possible joint
ventures on this project.
Tawana Alluvial Project, Lime Acres District, Kimberley Region
(Operated by Tawana; 100% owned by Tawana)
The Tawana Alluvial Project encompasses three alluvial deposits; the Feeder
Channel, Main Channel and Eastern Gravels, which extend from 300 meters from the
De Beers owned Finsch Mine for a distance of approximately 18 kilometres from
the mine. This deposit was discovered after airborne geophysics surveys
exploring for kimberlites with BHP Billiton.
No field work has been completed during the reporting period. The Company is
seeking joint venture partners to conduct trial mining on this project.
St Augustine Kimberlite Project, Kimberley
(Operated by Tawana; Tawana 30% equity in Kimberley Diamond Mining and
Exploration (formerly Vecto Trade 436 (Pty) Ltd)
No field work has been completed during the reporting period. The Company is
reviewing the project.
Lexshell Alluvial Project, Kimberley Region
(Tawana 50% and operator / Guma Resources 50%)
The project is held under a Mining Right by Lexshell 366 Mining (Pty) Ltd ("the
Holder"). Tawana and Guma have entered into a Contractor`s Agreement with the
Holder which will enable Tawana to assess the economic potential of the deposit
and if warranted mine diamonds on behalf of the joint venture partners. The
Holder will retain a 12% share of revenue after State royalties and cost of
sales.
The project is located on a PALAEO-channel of the Vaal and Harts Rivers adjacent
to established alluvial diamond mines.
No work has been conducted on this project during the reporting period.
Perdevlei Kimberlite Project, Kimberley Region
(Tawana owner and operator)
No work has been completed on this project during the reporting period. The
Company is seeking a joint venture partner to progress the project.
Rakana Consolidated Mines Pty Ltd (26% owned by Tawana; 74% owned by Seven
Falls)
Rakana owns 26% of a joint venture with Aquila Resources Limited in the
Thabazimbi Joint Venture including the Avontuur Manganese Project and Meletse
Iron Ore Project. This gives Tawana an indirect interest of 6.8% in the
projects.
On 11 May 2010 Aquila Resources announced a JORC compliant resource upgrade at
Avontuur of 66.7Mt at 39.3% Mn at a >35wt% Mn cut-off. A maiden JORC compliant
resource of 21.9Mt of 63.2% Fe Direct Shipping Ore was announced at the Meletse
Iron Ore Project by Aquila Resources on 15 April 2010.
Botswana
Orapa Diamond Project
(100% owned by Tawana; Firestone Diamonds Plc operator and earning in 70% by
carrying out exploration costs)
In December 2009 Tawana entered into a Joint Venture Agreement with Firestone
Diamonds Plc ("Firestone"), a diamond and exploring company, over its kimberlite
exploration and evaluation projects in Botswana. Under this agreement Firestone
has the right to earn up to a 70% interest in any kimberlites in the prospecting
licences controlled by Tawana. The Orapa Diamond Project covers the Orapa and
Francistown prospecting licences.
Firestone conducted a review of the historical data available from work carried
out by Tawana and other operators in this area. No field work has been completed
during the reporting period. On 18 May 2010 Firestone notified Tawana that they
did not wish to proceed work on the Francistown prospecting licence, after the
renewal submission date. Tawana subsequently submitted a licence renewal
application for Francistown on 29th June 2010.
Australia
Flinders Island / Venus Bay Projects, South Australia
(80% owned by Tawana and 20% owned by Orogenic Exploration, Flinders Mines Ltd
operator and earning in 50%)
Flinders Mines have not completed any work on these projects during the
reporting period. Flinders Mines have spent over 970,000AUD to date, nearly
fulfilling their farm-in agreement of 1,000,000AUD expenditure over 4 years to
earn a 50% project interest.
Auditor`s independence declaration
The lead auditor`s independence declaration for the half-year ended 30 June 2010
is included within this half-year report.
Signed in accordance with a resolution of the Board of Directors.
WARWICK GRIGOR
Director
Dated at Melbourne this 13th day of September 2010
Auditor`s Independence
In accordance with section 307C of the Corporations Act 2001, I am pleased to
provide the following declaration of independence to the directors of Tawana
Resources NL.
As lead audit partner for the review of the financial report of Tawana Resources
NL for the half-year ended 30 June 2010, 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
any applicable code of professional conduct in relation to the review
Yours Faithfully
Jeffrey Luckins
Director
William Buck Audit (VIC) Pty Ltd
Dated in Melbourne, Australia on this 13th day of September 2010
Consolidated Statement of Comprehensive Income
For the half-year ended 30 June 2010
30-Jun 30-Jun
2010 2009
$ $
Revenue 27,855 16,903
Other income - 41,174
Corporate costs -387,807 -177,794
Depreciation expense -60,634 -94,628
Employee benefits -126,822 -97,961
expense
Finance costs - -4,043
Occupancy costs - -65,527
Other expenses -6,163 -94,380
Loss before income tax -553,571 -476,256
expense
Income tax expense - -
Loss after income tax -553,571 -476,256
expense attributable
to members of the
Company
Other comprehensive
income
Foreign currency -87,363 129,574
translation
Total comprehensive -640,934 -346,682
income for the period
Total comprehensive -640,934 -346,682
income attributable to
members of the Company
Basic and diluted loss -0.13 -0.42
per share (cents)
The accompanying notes form part of these financial statements.
Consolidated Statement of Financial Position
For the half-year ended 30 June 2010
Note 30-Jun 31-Dec
2010 2009
$ $
Current assets
Cash and cash 2 799,706 348,609
equivalents
Trade and other 45,654 55,474
receivables
Inventories 77,939 77,131
Other current 10,080 -
assets
Total current 933,379 481,214
assets
Non-current
assets
Trade and other 42,083 43,021
receivables
Investment in 16,640 16,640
associate
Property, plant 245,543 310,769
and equipment
Exploration 5,819,055 5,950,734
expenditure
Total non-current 6,123,321 6,321,164
assets
Total assets 7,056,700 6,802,378
Current
liabilities
Trade and other 307,586 357,763
payables
Borrowings 200,000 200,000
Provisions - 14,992
Total current 507,586 572,755
liabilities
Non-current
liabilities
Borrowings 350,000 350,000
Provisions 28,219 -
Total non-current 378,219 350,000
liabilities
Total liabilities 885,805 922,755
Net assets 6,170,895 5,879,623
Equity
Contributed 4 36,261,007 35,356,374
equity
Reserves -2,456,942 -2,397,152
Accumulated - -27,079,599
losses 27,633,170
Total equity 6,170,895 5,879,623
The accompanying notes form part of these financial statements
Consolidated Statement of Cash Flows
For the half-year ended 30 June 2010
30-Jun 30-Jun
2010 2009
$ $
Cash flows from
operating activities
Receipts from 8,896 10,961
customers
Cash payments in the -467,772 -135,203
course of operations
Interest received 18,959 5,942
Net cash (used in) -439,917 -118,300
operating activities
Cash flows from
investing activities
Proceeds from sale 6,671 41,174
of plant and
equipment
Payments for -20,215 -137,359
exploration
Net cash (used in) -13,544 -96,185
investing activities
Cash flows from
financing activities
Proceeds from issue 1,041,670 -
of shares
Share issue costs -137,037 -
Proceeds from - 200,000
borrowings
Net cash provided by 904,633 200,000
financing activities
Net increase / 451,172 -14,485
(decrease) in cash
and cash equivalents
held
Cash and cash 348,609 18,090
equivalents at the
beginning of the
financial period
Net foreign exchange -75 -1,501
differences on cash
holdings
The accompanying notes form part of these financial statements.
Consolidated Statement of Comprehensive Income
For the half-year ended 30 June 2010
Contributed Reserves Accumulated Total
equity losses
$ $ $ $
Balance at 1 35,356,374 -2,397,152 -27,079,599 5,879,623
January 2010
Loss after income - - -553,571 -553,571
tax expense
Currency - -87,363 - -87,363
translation
differences
Shares / options 1,041,670 27,573 - 1,069,243
issued
Share issue costs -137,037 - - -137,037
Balance at 30 36,261,007 -2,456,942 -27,633,170 6,170,895
June 2010
Notes to the Financial Statements
For the half-year ended 30 June 2010
1. Basis of preparation
The half-year consolidated financial statements are general purpose financial
statements prepared in accordance with the requirements of the Corporations Act
2001, Australian Accounting Standard AASB 134: Interim Financial Reporting,
Australian Accounting Interpretations and other authoritative pronouncements of
the Australian Accounting Standards Board ("AASB").
It is recommended that these financial statements be read in conjunction with
the annual financial report for the year ended 31 December 2009 and any public
announcements made by Tawana Resources NL and its controlled entities during the
half-year in accordance with continuous disclosure requirements arising under
the Corporations Act 2001.
The half-year financial statements do not include full disclosures of the type
normally included in annual financial statements.
The same accounting policies and methods of computation have been followed in
these interim financial statements as were applied in the most recent annual
financial statements except for the adoption of the following new and revised
Accounting Standards, as noted below:
Accounting Standards not Previously Applied
The consolidated entity has adopted the following new and revised Australian
Accounting Standards issued by the AASB which are mandatory to apply to the
current interim period. Disclosures required by these Standards that are deemed
material have been included in these financial statements on the basis that they
represent a significant change in information from that previously made
available.
Operating Segments
From 1 January 2009, operating segments are identified and segment information
disclosed on the basis of internal reports that are regularly provided to, or
reviewed by, the consolidated entity`s chief operating decision maker which, for
the consolidated entity, is the board of directors. The company has only one
operating segment which is presented in the Consolidated Statement of
Comprehensive Income and Consolidated Statement of Financial Position.
Business Combinations and Consolidation Procedures
Revised AASB 3 is applicable prospectively from 1 July 2008. Changes introduced
by this Standard, or as a consequence of amendments to other Standards relating
to business combinations which are expected to affect the consolidated entity,
include the following:
1. Basis of preparation (continued)
All business combinations, including those involving entities under common
control, are accounted for by applying the acquisition method which prohibits
the recognition of contingent liabilities of the acquiree at acquisition date
that do not meet the definition of a liability. Costs incurred that relate to
the business combination are expensed instead of comprising part of the goodwill
acquired on consolidation. Changes in the fair value of contingent consideration
payable are not regarded as measurement period adjustments and are recognised
through profit or loss unless the change relates to circumstances which existed
at acquisition date.
Unrecognised deferred tax assets of the acquiree may be subsequently
realised within 12 months of acquisition date on the basis of facts and
circumstances existing at acquisition date with a consequential reduction in
goodwill. All other deferred tax assets subsequently recognised are accounted
for through profit or loss.
The proportionate interest in losses attributable to non-controlling
interests is assigned to non-controlling interests irrespective of whether this
results in a deficit balance. Previously, losses causing a deficit to non-
controlling interests were allocated to the parent entity.
Where control of a subsidiary is lost, the balance of the remaining
investment account shall be remeasured to fair value at the date that control is
lost.
Reporting Basis and Conventions
The half-year financial statements have been prepared on an accruals basis and
are based on historical costs modified by the revaluation of selected non-
current assets, financial assets and financial liabilities for which the fair
value basis of accounting has been applied.
2. Cash and cash equivalents
For the purposes of the half-year statement of cash flows, cash and cash
equivalents comprised of the following:
30 June 31 December
2010 2009
$ $
Cash at bank and in hand 799,706 348,609
3. Dividends
No dividend has been declared or paid during the half-year or the previous
corresponding period.
The Company does not have any franking credits available for current or future
years as it is not in a tax paying position.
Contributed equity
(a) Movements in share capital
Ordinary shares, fully 36,261,007 35,356,374
paid
Movement in ordinary
shares on issue
Number $
Balance at beginning of 217,138,854 35,356,374
period
Rights issue 224,277,175 1,041,670
Share issue costs - (137,037)
Balance at end of period 441,416,029 36,261,007
4. Contributed equity (continued)
(b) Share options
Exer Expir Balance Issued Expired Balance
cise y at during or at end
pric date beginni the forfeit of
e ng of period ed period
period during
the
period
Number Number Number Number
Listed $0.1 1 Apr 13,240, - - 13,240,
options 0 11 053 053
Unlisted $0.3 30 1,420,0 - - 1,420,0
options 5 Nov 00 00
11
Unlisted $0.1 17 6,750,0 - - 6,750,0
options 0 Jan 00 00
14
Unlisted $0.0 18 4,000,0 - - 4,000,0
options 7 Jun 00 00
12
Unlisted $0.1 17 6,000,0 - - 6,000,0
options 0 Jan 00 00
13
Unlisted $0.0 17 6,750,0 - - 6,750,0
options 7 Jan 00 00
13
Unlisted $0.0 23 - 50,000, - 50,000,
options 1 Feb 000 000
13
38,160, 50,000, - 88,160,
053 000 053
5. Segment reporting
The Board of Directors has considered the operating segments standard but does
not currently have operating segments at this time. As the Company operates
wholly in one business segment, being mineral exploration and in one
geographical segment, being Africa, the Company has not identified and
therefore, not disclosed, any segment information on the basis of the internal
reports being provided to the chief decision maker, which is the board as a
whole.
6. Contingent assets and liabilities
The consolidated entity does not have any material contingent assets or
liabilities other than as disclosed in this report.
7. Events subsequent to the end of the reporting period
On 20 July 2010, the Company announced that it had completed the placement of 66
million shares at 1 cent per share to raise $660,000 as announced to ASX on 1
July 2010. The new capital raised will be used to fund the Company`s
exploration programs, for the review of new projects and for general working
capital purposes.
On 18 August 2010, the Company announced that it had signed binding Heads of
Agreement ("HoA") for the sale of its Kareevlei Wes Tenement in South Africa,
the key terms of which are as follows:
1. Payment of a R150,000, non-refundable deposit within 14 days of the
signing
of the HoA;
2. 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; and
3. Payment of R23.5 million 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;
1. approval by the board of Tawana (which has been achieved),
2. Rolatseng Mining CC achieving funding approval, to the satisfaction of
Tawana, within 30 days of signing,
3. 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
4. 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 and base metal
project throughout Africa.
Tawana maintains its valuable interests in iron ore and manganese projects in
South Africa, held through its shareholding in Rakana.
On 9 September 2010, the Company announced that, pursuant to the resolutions
passed at the General Meeting of Members held 30 August 2010, it had completed
the placement of 23 million shares at 1 cent per share to raise $230,000 and
granted 60 million Options. It has also granted 50 million options (1c, 30 July
2013) pursuant to the Company`s capacity under Listing Rule 7.1.
The new capital raised will be used to fund the Company`s exploration programs,
for the review of new projects and for general working capital purposes.
Director`s Declaration
In accordance with a resolution of the Board of Directors, I state that:
In the opinion of the Directors:
The financial statements and notes are in accordance with the Corporations Act
2001 and:
Comply with Accounting Standard AASB 134 Interim Financial Reporting and the
Corporations Regulations 2001; and
Giving a true and fair view of the financial position of the consolidated entity
as at 30 June 2010 and of its performance for the half-year ended on that date.
There are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
On behalf of the Board.
WARWICK GRIGOR
Chairman
Dated at Melbourne this 13th day of September 2010.
Independent Auditor`s Report
Report on the Half-Year Financial Report
We have reviewed the accompanying half-year financial report of Tawana Resources
NL and the entities it controlled during the period, which comprises the
statement of financial position as at 30 June 2010, statement of comprehensive
income, statement of changes in equity and statement of cash flows for the half-
year ended 30 on that date, a statement of accounting policies, other selected
explanatory notes and director`s declarations.
Director`s Responsibility for the Half-Year Financial Report
The directors of the company are responsible for the preparation and fair
presentation of the half-year financial report in accordance with the Australian
Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Act 2001. This responsibility includes designing, implementing
and maintaining internal controls relevant to the preparation and fair
presentation of the half-year financial report that is free from material
misstatements, 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. We conducted our review in accordance with Auditing
Standard on Review Engagements ASRE 2410 Review of the Interim Financial Report
Performed by the Independent Auditors 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 half-year financial report is not in accordance
with the Corporations Act 2001 including: giving a true and fair view of the
consolidated entity`s financial position
S at 30 June 201- and its performance for the half-year ended on that date; and
complying with Accounting Standard AAB134 Interim Financial Reporting and the
Corporations Regulations 2001 and other mandatory financial reporting
requirements in Australia. As the auditor of Tawana Resources NL and entities it
controlled during the period, ASRE 2410 requires that we comply with ethical
requirements relevant to the audit of the annual financial report.
A review of the half-year financial report consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is substantially less
in scope that the 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 identified in an audit.
Accordingly, we do not express an audit opinion.
Matters Relating to the Electronic Presentation of the Audited Financial Report
This review report relates to the financial report of the consolidated entity
for the half-year ended 30 June 2010 included on the website of Tawana Resources
NL. The directors of the consolidated entity are responsible for the integrity
of the website and we have not been engaged to report on its integrity.
The review report refers only to the half-year financial report identified above
and it does not provide an opinion on any other information which may have been
hyperlinked to or from the financial report. If users of this report are
concerned with the inherent risks arising from electronic data communications
they are advised to refer to the hard copy of the reviewed financial report to
confirm the information included in the reviewed financial report presented on
the company`s website.
Independence
In conducting our review, which is not an audit, we have not become aware of any
matter that makes us believe that the half-year financial report of Tawana
Resources NL and the entities it controlled during the period is not in
accordance with:
a.
the Corporations Act 2001, including
(i)giving a true and fair view of the consolidated entity`s financial position
as at 30 June 2010 and its performance for the half-year ended on that
date; and
(ii)complying with Accounting Standard AAB134 Interim Financial Reporting and
Corporations Regulations 2001; and
b.
other mandatory financial reporting requirements in Australia.
Yours faithfully
Jeffrey Luckins
Director
William Buck Audit (VIC) Pty Ltd
ABN 59 116 151 136
Date: 13/09/2010 17:46:52 Supplied by www.sharenet.co.za
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