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TAW - Tawana Resources NL - Annual report for the year ended 31 December
2011
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")
ABN 69 085 166 721
ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2011
CONTENTS
Corporate Directory 3
Chairman`s Statement 4
Directors` Report 5
Corporate Governance Statement 23
Auditor`s Independence Declaration 28
Statement of Comprehensive Income 29
Statement of Financial Position 30
Statement of Changes in Equity 31
Statement of Cash Flows 32
Notes to the Financial Statements 33
Directors` Declaration 53
Independent Auditor`s Report to the Members 54
Schedule of Mining Tenements 56
ASX Additional Information 57
Directors
Mr Warwick Grigor Non-Executive Chairman
Mr Lennard Kolff Managing Director
Mr Euan Luff Non-Executive Director
Mr Julian Babarczy Non-Executive Director
Mr Matthew Bowles Non-Executive Director
Joint Company Secretaries
Mr Winton Willesee
Mr Aaron Finlay
Principal Place of Business
and Registered Office
Suite 25
145 Stirling Highway
Nedlands WA 6009
Contact Details
Website: www.tawana.com.au
Tel: +61 8 9389 3140
Fax: +61 8 9389 3199
Solicitors to the Company
Wilmoth Field Warne
Level 13
440 Collins Street
Melbourne VIC 3000
Share Registry
Computershare Investor Services Pty Ltd
GPO Box 2975
Melbourne VIC 3001
Tel: +61 3 9415 5000
Fax: +61 3 9473 2500
Auditor
William Buck
Level 1
465 Auburn Road
Hawthorn East VIC 3123
Stock Exchange
Australian Securities Exchange
ASX Code: TAW
JSE Limited
JSE Code: TAW
CHAIRMAN`S STATEMENT
Dear Shareholders
The year that we are reporting on, to December 2011, has been a testing one
- not just for Tawana, but for the entire world of stock exchange traded
companies. Never has the adage "sell in May and go away" been more
appropriate than it was last year. After reporting to you strong confidence
in the future of Tawana, aided by a $4.5m capital raising and the Liberia
initiative, we all tumbled headlong into a bear market driven by fears of a
European banking meltdown.
The bear market reached its nadir in mid-December, when equities everywhere
in the world were being shunned. Since then there has been a steady rise in
markets, on reduced volumes and volatility, to the point that it is almost
back to normal.
Your Company was fortunate that it didn`t have to go cap in hand to the
market to raise additional working capital during this period of bearish
sentiment. Instead, we concentrated on negotiating and building the
Company`s portfolio of exploration gold assets in Liberia, being careful to
not let the money that we had burn a hole in our pockets.
So, we now have a company with a portfolio of promising gold exploration
projects in Liberia, with the added sweetener of potentially very profitable
iron ore assets. We have commenced field activities and we will rapidly
progress to the drilling stage this year. The news flow promises to be
strong. Liberia is rapidly becoming a hot spot for junior mining companies
in West Africa, and we are positioned for success as well as anyone.
Strong companies are built by good management, and while good luck is a
desirable ingredient, it is also true that it is up to management to
manufacture its own good luck. In this regard we are fortunate to have Len
Kolff continue as CEO of the Company, and the Board was pleased to recently
announce that Len was promoted to the position of Managing Director. His
professional and capable management style will stand the Company in good
stead going forward. We are pleased with the positive feedback we receive
from shareholders and investors regarding his capabilities and credibility.
Whilst mentioning management, I would like to take this opportunity to thank
the Board of Tawana for continuing to work cohesively and constructively
during the year. Every board member is strongly focused on creating wealth
for Tawana shareholders, which should give all shareholders, large and
small, good comfort going forward.
I would also like to thank Euan Luff for his efforts on the Board and his
help in steering Tawana along a new path with a bright new future. Euan has
chosen to retire from the Board at the Annual General Meeting to pursue
other interests. We wish him well in the future.
Warwick Grigor
Non-Executive Chairman
DIRECTORS` REPORT
Your directors submit their report for the year ended 31 December 2011 for
Tawana Resources NL ("the "Company") and its controlled entities (the
"Consolidated Entity").
Directors
The names and details of the Company`s directors in office during the
financial year and until the date of this report are as follows. Directors
were in office for the entire period unless otherwise stated.
Mr Warwick Grigor - Non-Executive Chairman
Appointed 20 April 2010
Mr Grigor is a veteran of 30 years in Australian stockbroking, analysis and
corporate advisory functions, having first commenced employment with
Hamersley Iron Pty Ltd after completing degrees in law and economics. His
most recent venture is Canaccord BGF, a stockbroking business established in
2008. Mr Grigor is Executive Chairman and Head of Research.
Over the past 3 years, Mr Grigor has held directorships with the following
ASX-listed companies:
Company Commenced Ceased
Heritage Gold NZ Limited 19 Apr 2007 7 April 2010
Peninsula Energy Limited 11 Apr 2005 -
Mr Lennard Kolff - Managing Director
Appointed 27 October 2011
Mr Kolff joined Tawana initially as Chief Executive Officer in July 2010,
having worked at Rio Tinto over the past decade, where he was involved in a
range of high profile projects including the Simandou iron ore project and
the Northparkes Cu-Au mine. His responsibilities have encompassed a broad
range of disciplines, including the design, implementation and supervision
of multi-commodity exploration and pre-feasibility study resource drilling
programs, management of geological teams and collaboration with the mine
planning and development functions of major project teams.
Over the past 3 years, Mr Kolff has held no other directorships with ASX-
listed companies.
Mr Euan Luff - Non-Executive Director
Appointed 16 November 1998
Mr Luff is a Senior Partner of Wilmoth Field Warne, Solicitors. In his
professional capacity he acts as a legal adviser to a number of private and
public companies.
Over the past 3 years, Mr Luff has held no other directorships with ASX-
listed companies.
Mr Julian Babarczy - Non-Executive Director
Appointed 9 December 2009
Mr Babarczy is currently a Portfolio Manager at Regal Funds Management,
where he has primary responsibility for investments within the mining and
oil and gas sectors. Prior to this role, Mr Babarczy worked in investment
banking for Lazard, where he provided advice to both listed and unlisted
companies on capital raising and merger and acquisition transactions.
Before joining Lazard, Mr Babarczy held several roles in corporate finance,
where he was instrumental in a range of successful transactions including
IPOs, secondary market capital raisings, listed company advisory mandates
and equities research across a broad range of industry sectors. Julian
holds a Bachelor of Business from Monash University in Melbourne, is a
Chartered Financial Analyst charterholder, and has a graduate diploma in
Applied Finance and Investment from the Securities Institute of Australia.
Over the past 3 years, Mr Babarczy has held no other directorships with ASX-
listed companies.
Mr Matthew Bowles - Non-Executive Director
Appointed 30 May 2011
Mr Bowles has extensive commercial and corporate finance experience within
the resource sector, formerly being an Executive Director, Mergers and
Acquisitions with global advisory firm Ernst & Young. Prior to joining
Ernst & Young in 2004, Mr Bowles spent 8 years with Rio Tinto Limited in a
number of senior financial roles and 4 years in London in corporate finance
and investment banking.
Mr Bowles is currently the Chief Development Officer for Gryphon Minerals
Limited. He is a member of the Australian Society of Certified Practising
Accountants and the Financial Services Industry of Australasia.
Over the past 3 years, Mr Bowles has held no other directorships with ASX-
listed companies.
Mr Harry Hill - Non-Executive Director
Appointed 21 August 2009
Resigned 27 May 2011
Mr Hill is a Certified Practising Accountant and a Fellow of the Chartered
Institute of Secretaries. He has over 30 years` experience having been a
director of several Australian publicly listed companies involved in
minerals exploration, mine development and mining operations, where he was
involved in restructuring corporations and re-purposing businesses and
initial public offers. His skills encompass business and strategic
planning, finance and corporate secretarial functions.
Over the past 3 years, Mr Hill has held directorships with the following ASX-
listed companies:
Company Commenced Ceased
Future Corporation 17 Jun 2008 -
Australia Limited
Hawk Resources Limited 19 Apr 2006 28 July 2008
Interests in the shares and options of the Company
As at the date of this report, the interests of the directors in the shares
and options of Tawana Resources NL were:
Name Number of Number of
ordinary options over
shares ordinary
shares
Mr W Grigor 27,850,000 -
Mr L Kolff - 10,000,000
Mr E Luff 21,589,740 6,104,150
Mr J Babarczy 25,173,288 -
Mr M Bowles - 15,000,000
Company Secretaries
Mr Winton Willesee
Mr Willesee is an experienced Director in the small and medium
capitalisation sector of ASX. Mr Willesee brings a broad range of
experience in strategy, company administration, corporate governance,
company public listings, merger and acquisition transactions,
reconstructions and corporate finance from his background with listed and
unlisted public and other companies.
Mr Willesee holds a Master of Commerce, Post-Graduate Diploma in Business
(Economics and Finance), a Diploma in Education and a Bachelor of Business.
He is a Fellow of the Financial Services Institute of Australasia, a Member
of CPA Australia and a Chartered Secretary.
Mr Willesee is also the Chairman of BioProspect Limited, Cove Resources
Limited and Mining Group Limited, a Director of Coretrack Limited and
Torrens Energy Limited, a Director and Company Secretary of Base Resources
Limited, Newera Resources Limited and Otis Energy Limited, and Company
Secretary of Greenvale Mining NL and Mantle Mining Corporation Ltd, along
with a number of private and unlisted public companies.
Mr Aaron Finlay
Mr Finlay is a Chartered Accountant and Chartered Company Secretary with
over 20 years` experience in the accounting and finance profession.
Mr Finlay is Finance Director and Company Secretary for ASX-listed Cleveland
Mining Company Limited. Prior to this he was Chief Financial Officer and
Company Secretary for ASX listed Mayne Pharma Group Limited and previously
INVESCO Australia`s Chief Financial Officer where he had responsibility for
the operations of finance, as well as the compliance, legal, and human
resources functions. Prior to that position, Mr Finlay was head of group
tax and treasury for INVESCO`s global operations in London. Prior to
joining INVESCO, Mr Finlay worked for PricewaterhouseCoopers (then Price
Waterhouse) in London and Perth for 7 years.
Operating results
The loss of the Consolidated Entity for the year ended 31 December 2011
after providing for income tax amounted to $10,102,492 (2010: $2,214,397).
Financial position
The net assets of the Consolidated Entity are $8,918,805 as at 31 December
2011 (2010: $6,906,424).
Principal activities and significant changes in affairs
Tawana Resources NL`s principal activities consisted of mineral exploration,
in particular diamond and gold exploration. There were no significant
changes in the nature of the activities of the consolidated entity during
the year that have not been covered in this Annual Report.
REVIEW OF OPERATIONS
HIGHLIGHTS
Corporate
$4.5 million raised via placement of 100 million shares at 4.5c
Three permits granted; Nimba, Lofa and Mofe Creek
Binding Heads of Agreement for option to purchase outright Sinoe permit
New Managing Director and Non-Executive Director appointed
Sinoe Gold Project
Initial 800 x 100m soil sampling programme completed
Highly encouraging extensive artisanal alluvial and eluvial workings noted
in north of license area
Extensive outcropping pegmatites mapped within more prospective areas
Nimba/Lofa Gold Project
High-priority BLEG stream sediment anomalies defined
10 km strike length target generated at Nimba; 6 km strike length target at
Lofa
Soil sampling commenced
Mofe Creek Iron Ore Project
285 km2 Mineral Reconnaissance License granted (100% TAW)
10 km along strike from historic Bomi Hills mine; minimum 50 Mt high-grade
DSO magnetite lump produced
25 km from coast, adjacent to abandoned heavy-haul railway and 65 km from
deep sea port of Monrovia
Potential for rapid development of low capital intensity DSO Fe ore project
generating significant cash flow
Thabazimbi JV
Positive DFS completed over Gravenhage Manganese resource
Corporate
As a first move under the Strategic Alliance with Gryphon Minerals, two
mineral permits issued in December 2010 were formally approved to Gryphon
Minerals Ltd (ASX: GRY) on 23 February 2011.
On 16 March 2011 the Company raised $4.5 million via share placement of 100
million shares at 4.5 cents with BGF Equities Pty Ltd acting as the lead
manager.
Tawana Resources Liberia was incorporated in Liberia and is 100% held by
Kenema-Man Holdings Liberia Pty Ltd; an Australian subsidiary wholly owned
by Tawana Resources NL.
On 27 May 2011 Tawana Resources NL held its Annual General Meeting of
Members at Level 15, 9 Castlereagh Street, Sydney, New South Wales. All
Resolutions were passed unanimously on a show of hands; adoption of
Remuneration Report, re-election of Warwick Grigor as Chairman and increase
in Non-executive Directors` fee cap. Mr Harry Hill stepped down as a Non-
Executive Director of the Company at the Annual General Meeting.
On 30 May 2011 Matthew Bowles was appointed a Non-Executive Director of the
Company. Mr Bowles who is currently the Chief Development Officer for
Gryphon Minerals Limited, joined the Board as part of the strategic alliance
agreement with Gryphon Minerals and brings to Tawana a wealth of expertise
in strategy development and domestic and cross border corporate
transactions. He is a Member of the Australian Society of Certified
Practising Accountants and the Financial Services Institute of Australasia.
The Company recruited a Senior Geologist, Rockson Coffie accountable for
field programmes and target generation in Liberia as well as review and
assessment of prospective opportunities throughout West Africa.
The Company and Global Mineral Investments LLC (`GMI`), a private Liberian
company signed a binding Heads of Agreement on 28 June 2011 for an option to
purchase outright the mineral exploration licence over the Sinoe Project
held by GMI. Under the terms of the agreement the Company has the option to
purchase outright the mineral exploration licence after meeting the
following terms and conditions:
US$10,000 Option payment to secure exclusivity - PAID
US$40,000 Execution payment on successful due diligence - PAID
US$50,000 Execution payment within 6 months of the commencement of
exploration or announcing to market a significant exploration target - PAID
The Company is to fund exploration during the first year after which it has
the right to purchase the licence outright or walk away unencumbered.
Should the Company choose to purchase the licence outright it does so at the
following terms:
US$350,000 payment and 6 million shares in the Company
US$1 million payment at announcement of 1 Moz JORC compliant resource
Additional US$1 million payments for each additional 500 Koz JORC compliant
resource announced to market up to a maximum JORC compliant resource of 2.5
Moz
US$5 million payment at pouring first gold from a mining operation within
the licence area.
The Company adopted its renewed Corporate Governance Policy on 18 October
2011.
Len Kolff was appointed as a Managing Director on 27 October 2011 after
serving as CEO since 12 July 2010.
The Mofe Creek Mineral Reconnaissance license was awarded to Tawana Liberia
Inc., a locally incorporated company 100% owned by Tawana Resources NL. The
license covers a total area of 285 km2 approximately 100 km north-west of
the capital city of Monrovia.
Liberia
Grid soil sampling and geological mapping was completed over the Sinoe Gold
Project. Significant and prolific artisanal gold workings; both alluvial
and eluvial were discovered in the central northern portion of the license
area. Approximately 3500 soil samples were collected during the year on an
800x100m grid over the target areas and all samples submitted to SGS
laboratory in Monrovia for gold analysis.
The Company secured and commenced field exploration activities on the Mofe
Creek Iron ore Project in Western Liberia. Geological mapping and rock chip
sampling defined a 35 km long iron bearing unit within the reconnaissance
permit. The License is 10 km along strike from the historic Bomi Hills Fe
ore mine with historic production of 50 Mt high-grade DSO magnetite at 64-
66% Fe, 4-6% SiO2, 0.75-1.50% Al2O3 and 0.09-1.00% P. The License is
prospective for high-grade Direct Shipping Ore (DSO) lump magnetite and
weathered soft itabirite for beneficiation. Potential exists for rapid
development of a low capital intensity DSO Fe ore project generating
significant cash flow.
Several high priority stream sediment BLEG anomalies were identified on the
companies Nimba and Lofa projects during the year; two mineral permits
issued in December 2010 and formally approved to Gryphon Minerals Ltd (ASX:
GRY) on 23 February 2011. A large scale robust 10 km strike length target
was identified at Nimba and a 6 km strike length target at Lofa. Anomalous
target areas were enhanced by coincident artisanal workings, favourable
geology and major structures that host the 5 Moz Ity mine and 1.52 Moz New
Liberty resource.
(Map showing granted licenses (1880 km2) and JV license (400 km2)has been
removed for SENS purposes)
Sinoe Gold Project
Tawana has secured binding exclusivity and exclusive rights to purchase
outright the Sinoe license pending results of the first year field
exploration programme.
Access is via paved and laterite road from Monrovia to Greenville and
laterite road from Greenville to the project area. Under the terms of the
agreement, the Company has secured the services of the vendor`s expatriate
site manager to build access tracks, additional camp facilities and maintain
logistical supplies to facilitate exploration activities.
The mineral exploration license covers 400 km2 of Birimian aged rocks along
arguably the most prospective gold mineralised structure being explored in
Liberia today; the Dugbe Shear.
The project area is 25 km along strike from Hummingbird`s (AIM: HUM) 1.8 Moz
Dugbe Project and 40 km along strike from Equator Resources (ASX: EQU) Bukon
Jedeh Project. Both projects are hosted along secondary and tertiary
structures adjacent to the main Dugbe Shear. Similar structural targets
have been defined in the government regional aeromagnetics data over the
Sinoe Project area.
The area is characterised by numerous artisanal alluvial and eluvial gold
workings. The area is also characterised by numerous quartzite, graphite
and manganese occurrences on the USGS Geological map of Liberia; all
favourable indications for gold prospectivity.
(Image of Artisanal workings observed within the Sinoe project area has been
removed for SENS purposes)
(Sinoe Project area on regional total aeromagnetic imagery showing
approximate locations of advanced projects along strike to the east and
accesshas been removed for SENS purposes).
Since field work commenced in late August 2011, field teams have completed
soil sampling over the target area for a total of 3500 samples on an 800x100
m sampling grid during the reporting period. All samples were submitted to
SGS Laboratory Liberia for gold analysis by Aqua Regia.
Field mapping of access, artisanal workings and geology continued in
parallel with sampling activities. Mapping highlighted an interpreted fold
closure within biotite and biotite-garnet schists and increased pegmatite
intrusive sills and dykes in the central-northern portion of the license
area. This area coincides with increased artisanal activity over several
kilometres in both alluvial and eluvial settings. This area is considered
highly prospective with reconnaissance sampling returning up 1g/t gold in
soil samples.
Mofe Creek Iron Project
The mineral reconnaissance license covers 285 km2 over Grand Cape Mount and
Bomi Counties in Western Liberia and is approximately 100 km drive from
Monrovia on well-maintained sealed roads, 10 km from an historic heavy-haul
iron ore railway and deep sea port and 25 km from the coast. Access to the
project area is excellent with both sealed and laterite roads traversing the
license area which is characterised by low, undulating topography and
widespread shrub.
(Image of Project location relative to coast, infrastructure and Bomi Hills
mine. Image of Well-maintained sealed main road from Monrovia through
license area. Both images removed for SENS purpses)
The Mofe Creek license is 10 km along strike from the abandoned Bomi Hills
iron ore mine. Historic production at Bomi Hills is poorly documented;
however estimated historic production by the Government of Liberia is 50 Mt
of high-grade magnetite (Elenilto Minerals and Mining website).
Bomi Hills produced high-grade direct shipping ore (DSO) magnetite lump in
addition to magnetite concentrate beneficiated from itabirite (metamorphosed
and re-crystallised banded iron formation). DSO magnetite lump averaged
64.5% Fe, 4.5% SiO2, 1.5% Al2O3 and 0.13% P, of which 53% formed lump
material (average 11-37mm) and 47% formed fines (<11mm). The beneficiated
low grade itabirite concentrate averaged 64% Fe, 6% SiO2 and 0.04-0.05% P
and was used to produce sinter feed.
The genesis of the Bomi Hills magnetite deposit is not clearly understood,
however, general consensus is that it is hypogene and represents an
itabirite that has come into direct contact with rising gneissic fronts and
deep seated intrusions causing enrichment to coarse massive magnetite by
metamorphic differentiation. Alternate genetic models suggest a supergene
origin where enrichment to magnetite has been caused by continued flushing
of gangue minerals by meteoric fluids over a long time frame. Magnetite
mineralisation is in direct contact with gneissic basement and is partially
blind. Similar settings are noted at Mofe Creek.
(License area and sampling results relative to Bomi Hills mine and
infrastructure; underlay aeromagnetics analytical signal base map removed
for SENS purposes).
The iron formation is medium to coarse grained, sugary laminated quartz-
magnetite +/- hematite with an average grain size of 3-10mm at varying
degrees of weathering. Where strongly weathered, the material is less
magnetic and easily crumbled by hand to liberate iron oxides from quartz
gangue. From approximately 70 rock chips sampled to date, the iron formation
averages 35-50% Fe, 45-20% SiO2, 0.7% Al2O3, <0.01% P2O5, 1.32% LOI and has
been mapped over 35 km of strike. No sulphur and below detection or at
detection limit Ti, V or Cr was recorded within the samples.
Metre scale outcrops of massive magnetite were also observed within the
license area further enhancing the exploration model for massive magnetite
bodies like Bomi Hills. High-grade weathered friable hematite/magnetite and
massive magnetite sampled in outcrop within the license area returned on
average 63.8% Fe, 3% SiO2, 2.4% Al2O3, 0.08% P and 2.6% LOI in 2 samples.
This demonstrates the magnetite potential similar to Bomi Hills and further
enhances prospectivity.
(Image of coarse grained, laminated quartz-magnetite iron formation. Image
of weathered variety of similar rock type crushed by hand forming soft,
friable quartz-magnetite sands easily beneficiated by magnet pen.Both images
removed for SENS purposes)
(Image of outcropping iron formation with large magnetite segregations.
Image of weathered, softened magnetite from outcrop forming high-grade,
clean magnetite/hematite fines. Both images removed for SENS purposes)
All samples were assayed by SGS Liberia and were sourced from in-situ
outcropping material, were dried and crushed to a nominal 2 mm using a jaw
crusher then the whole sample pulverised in a LM2 to a nominal 85% passing
75 Picam. A 200g sample was then scooped, with iron ore analysis of majors
and minors by borate fusion-XRF.
On the basis of preliminary reconnaissance mapping and analogies drawn with
Bomi Hills 10 km along strike, the Company is targeting both massive, high-
grade DSO magnetite lump mineralisation and weathered, easily beneficiated
`soft` iron formation for high-grade beneficiated fines.
Both styles of mineralisation have been confirmed in the project area.
There is significant potential for this project to provide a rapid
development timeframe, with low capital intensity utilising the extensive
existing infrastructure and close proximity to major deep water ports and/or
transhipment solutions. Subject to further detailed geological confirmation,
a conceptual target is to quickly develop a high margin, low tonnage
operation that could generate significant cash flows for the Company.
The license area is well positioned for possible future infrastructure
scenarios; road or rail to the Monrovia deep sea port or road to coast and
transhipment via barge to deeper water for onward shipment. A well-
maintained 100 km long sealed road exists from the central licence area to
the city of Monrovia. In addition to this an historic heavy-haul iron ore
railway exists from the Bomi Hills mine to the port of Monrovia; 20 km east
from the easternmost magnetic anomaly. Rail distance from Mofe Creek to the
port of Monrovia is 65 km.
Nimba and Lofa Gold Project
Results for the stream sediment BLEG sampling programmes over Nimba and Lofa
were received during the year. Clustering of gold anomalies was observed in
the south of the Nimba tenement area. In addition gold anomalies were
scrutinised and ranked by evaluating their multi-element geochemical
signatures based on relative metal concentrations. Clear multi-element
geochemical signatures (Au+Ba+Ga/La+Pb and Au+Cu+Fe+Pb+Ti+V) were observed
with peak gold anomalism, providing confidence that the stream sediments
substantially sampled bedrock and that the gold anomalies are genuine. Peak
anomalies were recorded at 16 ppb; 16 times higher than background gold
levels of around 1ppb. These factors combined provide confidence that
results are robust and defining anomalism associated with upstream gold
mineralisation.
The strongest gold response in the SW corner of Nimba defined a +10 km
strike length ridge and two smaller sub-parallel ridges on either side of
the main trend. These target areas are further enhanced by increased
artisanal mining activity downstream, coincident topographic and magnetic
highs and favourable structural and lithological settings.
(Close up view of SW corner of Nimba license looking SW, along primary
central 10 km target ridge (white dashed line) and area for soils follow-up
(pink highlighted area). Secondary target area shown on western flank.
Catchments coloured by Au anomalism (pink, red, yellow, green, light blue,
dark blue, highest to lowest), sample point (floating ball) and Au assay (in
ppb). Note clustered anomalism in streams draining the southern and central
portions of the ridge line with dominant anomalism along the eastern flank.
Image draped over Google Earth imagery.Image removed for SENS purposes)
At Lofa peak gold anomalism was reported at 8.6 ppb; 8.5 times higher than
background gold levels of around 1ppb. Clustering of anomalies was observed
within streams draining a discrete 6x3 km area of hills in the north-west of
the tenement area. Anomalies were scrutinised further and multi-element
geochemical signatures defined, with the strongest gold response associated
with a Au+Ba+Ga/La+Pb signature as per Nimba in addition to a Cu-Ni-Cr-V-Ti-
Fe metal association suggesting a mafic/ultramafic lithological host.
Ultramafics have not been recorded on the government USGS regional
geological map; however, native Cu mineral occurrences are recorded on the
northern licence boundary immediately adjacent, further supporting and
enhancing the anomalous area.
(Lofa license overview looking SW draped over Google Earth imagery with
anomalous catchments circled (in white) and associated discrete 6x3 km area
of hills. License boundary in black, catchments coloured by Au anomalism
(red-orange-yellow-green-light blue-dark blue; highest to lowest), sample
point (floating ball) and Au assay (in ppb).Image removed for SENS purposes)
Stream sediment samples were collected using a Bulk Leach Extractable Gold
(BLEG) methodology which is designed to minimise "nugget effect" sampling
issues and increase repeatability. The BLEG methodology used was
specifically designed to highlight mineralisation signatures from large
hydrothermal gold systems whilst filtering out the effects of small, high-
grade systems that can generate costly and time consuming false anomalies.
It is effective in tropical environments where there has been long lived
deep weathering and erosion creating significant dispersion trains.
All samples were submitted to OMAC Stewart Group laboratory for gold and
multi-element geochemical analysis. Gold analysis was by low level BLEG
using accelerated active leach with leach aid (DL 0.1ppb) and multi-element
geochemical analysis was by Aqua Regia digest and combined Inductively
Coupled Plasma with Atomic Emission Spectrometry or Mass Spectrometry
(ICPAES/MS) finish.
Results received passed internal and external QA/QC procedures and are
within reporting error limits of certified standards providing confidence in
reported results.
Work Plan going forward
Infill soil sampling on a 400x50m and 200x50m grid in conjunction with
trenching is planned at Sinoe over the following quarter. Pending results
drilling of subsequent target areas is planned.
Field mapping will be completed at Mofe Creek along the western portion of
the license area. Pending results of mapping and rock chip sampling, an
aeromagnetic survey is planned over the license area to define iron
formation limits, lithology, structure and degree of weathering. Both the
geological mapping and airborne survey will be used to plan pitting and
trenching and pending results drilling of subsequent target areas is
planned.
A soil sampling programme has been planned to cover the newly identified
target areas at Nimba and Lofa. Field teams are currently being mobilised.
Pending results, infill soil sampling and trenching followed by drilling of
subsequent target areas is planned.
About Liberia
Liberia is a democratic country run by Her Excellency President Ellen
Johnson Sirleaf; Africa`s first elected female head of state in 2005 and
recently re-elected in November 2011 for her second term. The country is
hugely prospective and hosts several world class iron ore deposits but yet
is completely underexplored for gold and non-ferrous metals. Historically
Liberia was the major iron exporting hub of West Africa but Civil War and
dwindling reserves crippled the industry and export came to a standstill.
Subsequently Arcelor Mittal has rehabilitated the Nimba-Buchanan railway and
is currently mining and exporting iron ore, putting Liberia back in
business. Liberia has a modern and transparent mining code and the
government is supportive of foreign investment especially in the exploration
and mining industry to help unlock the value of its potential mineral
wealth. Tawana will be one of the first ASX listed junior companies into
Liberia following in the footsteps of mining majors BHP Billiton, Arcelor-
Mittal and Severstal.
Liberia is located in West Africa dominantly within the Archean aged Kenema
Man Domain and lesser Birimian sediments to the east. There are a large
number of world class mineral deposits located in the Archean and Birimian
rock types throughout West Africa including Obuasi (40 Moz+) and Tasiast (18
Moz+). West Africa is one of the fastest growing mineral provinces in the
world and Liberia currently hosts several world class iron ore deposits and
is underexplored for gold.
South Africa
Rakana Consolidated Mining Pty Ltd (TAW 26%)
The Company holds a 26% equity stake in Rakana Consolidated Mining Pty Ltd
("Rakana") the joint venture partner of Aquila Resources Ltd ("Aquila") in
the Thabazimbi Joint Venture (`TJV`). The Avontuur Manganese project which
includes the Gravenhage manganese resource and the Meletse iron ore resource
are incorporated under the TJV.
(Ownership structure of Rakana assets image removed for SENS purposes)
Avontuur Manganese Project (TAW indirect interest 6.7%)
The Avontuur high-grade Manganese Project is located in the Northern Cape
Province, South Africa and approximately 30 km north of the Kalahari
Manganese Field, South Africa`s premier manganese producing area.
Aquila Resources Ltd completed a Definitive Feasibility Study for the
Gravenhage Manganese Project during the quarter. In addition to this, Aquila
announced a resource upgrade for Gravenhage from 107 Mt to 117.9 Mt at 38.3%
Mn. For further technical detail please refer to Aquila`s Gravenhage DFS
completion announcement of 30th November 2011.
The Avontuur Project is incorporated under the Thabazimbi Joint Venture.
Category Tonnes Mn Fe Sio2
`000T % % %
Measured 31,924 39.35 12.24 8.96
Indicated 47,627 36.72 11.86 9.53
Inferred 38,321 36.91 12.07 11.03
Total 117,872 38.30 12.05 9.89
Category LOI CaO MgO AI2O3
% % %
Measured 8.07 6.76 3.25 0.33
Indicated 8.30 7.22 3.79 0.32
Inferred 8.38 7.35 4.17 0.32
Total 8.26 7.14 3.77 0.32
Category K2O P RD
% %
Measured 0.22 0.03 3.73
Indicated 0.14 0.03 3.72
Inferred 0.09 0.02 3.64
Total 0.15 0.03 3.70
Avontuur Resource Statement (>34 wt% Mn, AQA 30 Nov 2011)
Aquila announced in its December 2011 Quarterly Report that the divestment
process for the Avontuur Manganese Project continued during the Quarter and
final bids were expected during the March Quarter 2012.
Thabazimbi Iron Ore Project (TAW indirect interest 6.7%)
The Meletse Iron Ore Project has a JORC compliant indicated and inferred
resource estimate of 47.6 Mt at 62.9% Fe in the Limpopo Province, South
Africa. The Meletse Project is incorporated in the Thabazimbi Joint Venture.
Significant expansion potential exists as the deposit remains open at depth
and along strike.
MELETSE IRON ORE RESOURCES
Resource Tonnes Fe Sio2 AI2O3
Classification Mt % % %
Indicated 15.9 63.6 6.22 1.07
Inferred 31.7 62.5 8.89 0.82
Total 47.6 62.9 8.00 0.91
MELETSE IRON ORE RESOURCES
Resource P S MnO MgO LOI
Classification % % % % %
Indicated 0.031 0.045 0.783 0.076 1.00
Inferred 0.044 0.041 1.078 0.54 1.19
Total 0.040 0.043 0.979 0.061 1.13
Meletse Iron Ore Project Resource Estimate (AQA 30th Nov 2010)
Kareevlei Wes Project, Kimberley Region (TAW 100%)
The Kareevlei Project Area is comprised of a cluster of five kimberlites
located approximately 100 km northwest of Kimberley.
On 25 January 2011 the Company announced that an Addendum to the Heads of
Agreement for the sale of Kareevlei was signed with Rolatseng Mining CC. The
Purchase price was revised from ZAR 25 million to ZAR 22 million due to an
expectation of a lower grade as announced in the previous quarter.
Bar the first two monthly installments, Rolatseng failed to meet monthly
instalments as per the revised agreement due to delays in securing funding.
A 31 May 2011 deadline to secure guaranteed funding for the purchase price
was agreed. As this was not met Tawana exercised its right to terminate
exclusivity of the agreement.
Daniel Alluvial Project, Kimberley Region (TAW 100%)
The Daniel Alluvial Project is a large buried palaeo alluvial diamond
project 2 km south of the Finsch kimberlite diamond mine. It was discovered
in 2003 following a FALCOMTM survey by BHPB targeting satellite kimberlite
pipes around Finsch. The project consists of three diamondiferous palaeo
gravel channels; Feeder Channel, Main Channel and Eastern Gravels. The
Daniel diamonds are interpreted to be derived from eroded diamondiferous
Finsch kimberlite material.
Perdevlei Kimberlite Project, Kimberley Region (TAW 100%)
Closure was applied for over the Perdevlei kimberlite project during the
December Quarter as the license term expired in December 2011.
St Augustine (TAW 30%) and Lexshell Projects, Kimberley Region
The St Augustine kimberlite project is located approximately 600 m west of
the Big Hole in Kimberley. It is a historic surface and underground mine
reportedly mined to a depth of 800 ft (242 m). The conceptual target is
primary kimberlite at depth below historic workings and remains untested.
The Lexshell alluvial project is located 50 km north-east of Kimberley, at
the confluence of the Vaal and Harts rivers. The project has targeted and
confirmed the presence of diamondiferous palaeo alluvial channels.
The Company is seeking divestment opportunities for its South African
diamond projects as part of its ongoing rationalisation.
Botswana
Orapa Project (100% 0wned by Seolo Pty Ltd, a wholly owned subsidiary and
Firestone Diamonds Ltd (AIM: FDI) having the right to initially earn 70%
interest in the Project)
The Orapa project consists of the BK24 kimberlite 22 km north-north-east of
Lelthalkane and under joint venture with Firestone Diamonds (AIM: FDI).
Under the JVA Firestone has the right to initially earn 70% in the Project
through funding and execution of exploration activities including the
collection and processing of a bulk sample of kimberlite.
Australia
Flinders Island & Venus Bay Projects, South Australia (TAW 80%, 20% Orogenic
Exploration with Flinders Mines earning in)
The Flinders Island and Venus Bay Projects are located along the western
Eyre Peninsula coast line, South Australia. Licenses are held by Tawana
Resources NL (80%) and Orogenic Exploration Pty Ltd (20%) with Flinders
Mines Ltd earning equity under a farm in JV.
For further information, please contact Lennard Kolff van Oosterwijk,
Managing Director.
Competent Persons Statements
The information in this report in so far that it relates to Liberian Project
Exploration Results, Mineral Resources or Ore Reserves is based on
information compiled by Lennard Kolff van Oosterwijk, who is a Member of the
Australian Institute of Geoscientists included in a list promulgated by the
ASX from time to time. Lennard Kolff van Oosterwijk is a full-time employee
of the Company and has sufficient experience which is relevant to the style
of mineralisation and type of deposit under consideration and to the
activity which he is undertaking to qualify as a Competent Person as defined
in the 2004 Edition of the `Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves`. Lennard Kolff van Oosterwijk
consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.
The information in this report, insofar as it relates to the Meletse Iron
Ore Resource and the Gravenhage Manganese Resource was prepared under the
supervision of Mr Brent E Green who is a member of the Australian Institute
of Geoscientists and Mr Bernhard Siebrits who is a member of the
Australasian Institute of Mining and Metallurgy. Mr Green is full-time
employee of Aquila Resources Ltd and Mr Siebrits is a full-time employee of
Golder Associates Africa Ltd. Mr Green and Mr Siebrits have sufficient
experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which they are undertaking
to qualify as Competent Persons as defined in the 2004 Edition of the
`Australasian Code of Reporting of Exploration Results, Mineral Resources
and Ore Reserves`. Both Mr Green and Mr Siebrits consent to the inclusion in
the announcement of the above matters based on the information in the form
and context in which it appears.
Subsequent events
On 6 February 2012, the Company announced it has identified several high
priority soil anomalies from its maiden geological exploration program on
the Company`s Sinoe project in Liberia, West Africa. Coherent gold in soil
anomalies are open in multiple directions and further sampling and trenching
is underway to fast track target generation for future drilling.
On 15 February 2012, the Company announced it had entered into a binding
Heads of Agreement with a private Liberian company, to acquire the Gold
Rights to 1,996 km2 of highly prospective Archean geology in Grand Cape
Mount County, north-west Liberia, West Africa. The project hosts numerous
target areas, has historical drilling and sampling and access to
infrastructure.
On 12 March 2012, the Company announced, following further results, it has
extended and identified several high priority soil anomalies from its maiden
geological exploration program on the Company`s Sinoe project in Liberia,
West Africa.
Dividends paid or recommended
The Directors do not recommend the payment of a dividend and no amount has
been paid or declared by way of a dividend to the date of this report.
Future developments, prospects and business strategies
The consolidated entity will continue to concentrate on mineral exploration
particularly diamond exploration with emphasis on the development of its
existing projects.
Environmental issues
The Company is aware of its environmental obligations with regards to its
exploration activities and ensures that it complies with all regulations at
all times.
REMUNERATION REPORT (audited)
This report details the nature and amount of remuneration for each Director
of Tawana Resources NL, and for the executives receiving the highest
remuneration.
Remuneration policy
The Board policy for determining the nature and amount of remuneration of
Directors and Executives is agreed by the Board of Directors as a whole.
The Board obtains professional advice where necessary to ensure that the
Company attracts and retains talented and motivated Directors and employees
who can enhance Company performance through their contributions and
leadership.
Remuneration policy is based on industry practice rather than Company
performance and takes into account the risks and liabilities assumed by the
directors and executives as a result of their involvement in the activities
undertaken by the Company.
Executive Director Remuneration
In determining the level and make-up of executive remuneration, the Board
negotiates remuneration to reflect the market salary for a position and
individual of comparable responsibility and experience. Remuneration is
compared with the external market by reference to industry salary surveys.
If required, the Board may engage an external consultant to provide
independent advice in the form of a written report detailing market levels
of remuneration for comparable executive roles.
Remuneration consists of a fixed remuneration component as considered
appropriate.
Non-Executive Director Remuneration
Non-Executive Directors` fees are paid within an aggregate limit which is
approved by the shareholders from time to time. Retirement payments, if
any, are determined in accordance with the rules set out in the Company`s
Constitution and the Corporations Act at the time of the Director`s
retirement or termination. Non-Executive Directors remuneration may include
an incentive portion consisting of bonuses and/or options, as considered
appropriate by the Board, which is subject to shareholder approval in
accordance with the ASX Listing Rules.
The aggregate remuneration, and the manner in which it is apportioned
amongst Non-Executive Directors, is reviewed annually. The Board considers
the amount of director fees being paid by comparable companies with similar
responsibilities and levels of experience of the Non-Executive Directors
when undertaking the annual review process.
The current maximum amount of Non-Executive Directors fees payable is fixed
at $300,000 in total, for each 12 month period commencing 1 January each
year, until varied by ordinary resolution of shareholders.
Executive Remuneration
Executive remuneration is paid according to experience and market
conditions. Executive remuneration is reviewed annually by the Board.
Remuneration may include an incentive portion consisting of bonuses and/or
options, as considered appropriate by the Board, which may be subject to
shareholder approval in accordance with the ASX Listing Rules. There is
currently no formal bonus scheme in place.
The Board considers the amount of executive remuneration being paid by
comparable companies with similar responsibilities and levels of experience
of the executive when undertaking the annual review process.
Details of remuneration for year ended 31 December 2011
Details of the remuneration of the Directors of Tawana Resources NL and its
controlled entities, are set out in the following tables.
Details of remuneration for years ended 31 December 2011 and 31 December
2010
Short-term benefits Post Share- Total Perfor
employ based m-ance
ment paymen relate
ts d
Salary Cash Non- Super-
and bonus cash annuat
fees benefi ion
ts
2011 $ $ $ $ $ $ %
Directors
Mr W 40,000 - - 3,600 - 43,600 -
Grigor
Mr L 54,167 - - 4,875 - 59,042
Kolff (1)
Mr E Luff 40,000 - - - - 40,000 -
Mr J 40,000 - - - - 40,000 -
Babarczy
Mr H Hill 16,667 - - - - 16,667 -
(3)
Mr M 23,333 - - 2,100 - 25,433 -
Bowles
(4)
Key
Managemen
t
Personnel
Mr L 142,50 25,00 - 13,650 75,619 256,76 39.2
Kolff (2) 0 0 9
356,66 25,00 - 24,225 75,619 481,51
7 0 1
Remuneration from appointment as a Director on 27 October 2011
Remuneration while Chief Executive Officer to 26 October 2011. Share-based
payments during this period relates to options issued in the prior year that
vested during this period.
Resigned 27 May 2011
Appointed 30 May 2011
Short-term benefits Post Share- Total Perform-
employme based ance
nt payment related
s
Salary Cash Non- Super-
and bonus cash annuatio
fees benefi n
ts
2010 $ $ $ $ $ $ %
Directors
Mr W 27,889 - - - - 27,889 -
Grigor
Mr E Luff 63,000 - - - 11,513 74,513 15.5
Mr J 42,521 - - - - 42,521 -
Babarczy
Mr H Hill 40,000 - - - - 40,000 -
Mr S 4,166 - - - - 4,166 -
Horne
Key
Managemen
t
Personnel
Mr L 89,842 - - 21,971 34,208 146,02 23.4
Kolff 1
267,41 - - 21,971 45,721 335,11
8 0
Options granted as remuneration
All options issued to Directors and Key Management Personnel are issued for
nil consideration.
All options issued have been granted for up to a five year period, vesting
within 12 and 24 months from contract or issue date.
All options issued carry no dividend or voting rights. When exercised, each
option is converted into one ordinary share pari passu with existing
ordinary shares.
During the year ended 31 December 2011, no options were issued to Directors
or Key Management Personnel as remuneration.
Shares issued on exercise of compensation options
During the years ended 31 December 2011 and 2010, no share options were
exercised by Directors or Key Management Personnel.
Employment contracts of directors and senior executives
There are no contracts between the Company and the Directors. The Company
has entered into a standard appointment agreement with Mr Len Kolff which
provides for an appointment term of two years from 14 June 2010 and a notice
period of three months, together with an issue of options over fully paid
ordinary shares in the Company as noted above.
Meetings of directors
During the financial year, 13 meetings of Directors were held. Attendances
by each Director during the year were as follows:
Board meetings
Number Number
attended eligible
to
attend
Mr W Grigor 13 13
Mr L Kolff 1 2
Mr E Luff 12 13
Mr J 13 13
Babarczy
Mr M Bowles 5 5
Mr H Hill 7 7
Options
At the date of this report, the unissued ordinary shares of Tawana Resources
NL under option are as follows:
Grant date Date of Exercise Number
expiry price under
option
18 Jun 2008 18 Jun 2012 $0.07 4,000,000
17 Jan 2009 17 Jan 2013 $0.10 6,000,000
17 Jan 2009 17 Jan 2013 $0.07 6,750,000
17 Jan 2009 17 Jan 2014 $0.10 6,750,000
23 Feb 2010 23 Feb 2013 $0.01 50,000,000
9 Sep 2010 31 Jul 2012 $0.01 20,000,000
9 Sep 2010 9 Sep 2012 $0.03 5,000,000
9 Sep 2010 30 Jul 2013 $0.01 50,000,000
9 Sep 2010 9 Sep 2014 $0.05 5,000,000
8 Mar 2011 8 Mar 2014 $0.01 25,000,000
10 Nov 2011 10 Nov 2013 $0.03 1,250,000
10 Nov 2011 10 Nov 2015 $0.05 1,250,000
181,000,000
During the year ended 31 December 2011, 30,000,000 options were exercised at
a price of $0.01 per option. During the year ended 31 December 2010 no
options were exercised.
No person entitled to exercise an option had or has any right by virtue of
the option to participate in any share issue of any other body corporate.
Indemnifying officers or auditor
In accordance with the constitution, except as may be prohibited by the
Corporations Act 2001 every officer of the Company shall be indemnified out
of the property of the Company against any liability incurred by him in his
capacity as officer, auditor or agent of the Company or any related
corporation in respect of any act or omission whatsoever and howsoever
occurring or in defending any proceedings, whether civil or criminal. The
terms of the policy prevent disclosure of the amount of the premium payable
and the level of indemnification under the insurance contract.
Proceedings on behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of
the Company or intervene in any proceedings to which the Company is a party
for the purpose of taking responsibility on behalf of the Company for all or
any part of these proceedings.
The Company was not a party to any such proceedings during the year.
Non-audit services
CORPORATE GOVERNANCE STATEMENT
CORPORATE GOVERNANCE STATEMENT
The Company did not engage its external auditor to provide any non-audit
services during or since the end of the financial year.
Auditor`s independence declaration
The lead auditor`s independence declaration for the year ended 31 December
2011 has been received and is attached to this Directors` Report.
Signed in accordance with a resolution of the Board of Directors.
Mr Warwick Grigor
Non-Executive Chairman
Dated at Melbourne this 29th day of March 2012
The Board members of Tawana Resources NL are committed to achieving and
demonstrating the highest standards of corporate governance. An extensive
review of the Company`s corporate governance framework was completed in
light of the best practice recommendations released by the Australian
Securities Exchange (ASX) Corporate Governance Council in March 2003. In
August 2007, the ASX Corporate Governance Council released a second edition
of the principles, which was subject to further amendments in 2010. The
Board continues to review the framework and practices to ensure they meet
the interests of shareholders. The Company and its controlled entities
together are referred to as the consolidated entity in this statement.
The relationship between the Board and Senior Management is critical to the
consolidated entity`s long-term success. The Directors are responsible to
the shareholders for the performance of the Company in both the short and
the longer term and seek to balance sometimes competing objectives in the
best interests of the consolidated entity as a whole. Their focus is to
enhance the interests of shareholders and other key stakeholders and to
ensure the consolidated entity is properly managed.
Day to day management of the consolidated entity`s affairs and the
implementation of the corporate strategy and policy initiatives are formally
delegated by the Board to the Managing Director and Senior Executives as set
out in the consolidated entity`s Delegated Authority Policy.
A description of the Company`s main corporate governance practices is set
out below. All of these practices, unless otherwise stated, were in place
for the entire year.
Foundations for management and oversight
The Board has the overall responsibility to shareholders for all governance
matters of the consolidated entity. The Board remains primarily responsible
for the strategic direction and financial aspirations of the consolidated
entity, whilst delegating the responsibility of management to the Managing
Director and/or the senior management team.
The Board aims to fulfill its responsibilities by creating value for all
stakeholders that is sustainable and beneficial. Stakeholders include
shareholders, employees, customers, the community and the environment. The
Board has adopted a Charter that includes amongst other items, the specific
roles and responsibilities of the Board. Without limiting the Board`s
function, their specific responsibilities include:
Approving objectives, strategies and financial plans and monitoring the
Company`s performance against these plans;
Appointment of the Managing Director and reviewing his performance and
remuneration;
Monitoring compliance with the regulatory requirements, ensuring all
consolidated entity employees act with integrity and due diligence in the
interests of the Company and stakeholders; and
Review and approval of all significant policies and procedures across the
consolidated entity.
Board composition
The Board reviews from time to time the size, structure and composition of
the Board, taking into consideration the balance of skills, experience and
knowledge of Board members.
The Company has adopted a definition of independence consistent with the
guidance provided by the ASX Corporate Governance Council. Such a
definition provides that an Independent Director is a Non-Executive Director
and is not a member of management and:
- is not a substantial shareholder of the Company or an officer of,
or otherwise associated directly with, a substantial shareholder
of the Company;
- within the last three years has not been employed in an executive
capacity by the Company or another member of the consolidated
entity, or been a Director after ceasing to hold such employment;
- within the last three years has not been a principal or a material
adviser or a material consultant to the Company or member of the
consolidated entity, or an employee materially associated with the
service provided;
- is not a material supplier or customer of the Company or other
member of the consolidated entity, or an officer of or otherwise
associated directly with a material supplier or customer;
- has no material contractual relationship with the Company or
another member of the consolidated entity other than as a Director
of the Company;
- has not served on the Board for a period which could, or could
reasonably be perceived to, materially interfere with the
Director`s ability to act in the best interests of the Company;
and
- is free from any interest and any business or other relationship
which could, or could reasonably be perceived to, materially
interfere with the Director`s ability to act in the best interests
of the Company.
A substantial shareholder is defined to be a person or Company that has an
interest of 5% or more of the voting rights of the Company.
The Board has reviewed the position of all current directors in light of the
Company`s adopted definition of independence.
Throughout the whole of the financial year the Board was chaired by a Non-
executive (Independent) Chairman, and was comprised of a majority of
independent non-executive Directors.
The following were Directors during the 2011 year:
Director Capacity Position Held Held
office office
from to
W Grigor Non-Executive Independent 20 Apr Current
Chairman 2010
L Kolff Managing Non- 27 Oct Current
Director Independent 2011
E Luff Non-Executive Non- 20 Apr Current
Director Independent 2010
Executive Non- 31 Jul 20 Apr
Chairman Independent 2009 2010
Non-Executive Non- 16 Nov 31 Jul
Director Independent 1998 2009
J Non-Executive Independent 9 Dec Current
Babarczy Director 2009
M Bowles Non-Executive Independent 30 May Current
Director 2011
H Hill Non-Executive Independent 21 Aug 27 May
Director 2009 2011
At each annual general meeting one-third of the Directors or, if their
number is a multiple of three, then the number nearest to but not more than
one-third of the Directors (excluding the Managing Director) must retire
from office as follows:
The directors to retire by rotation at an annual general meeting are those
directors who have been longest in office since their last election or
appointment.
Directors elected or appointed on the same day may agree among themselves
which of them must retire.
A director must retire from office at the conclusion of the third annual
general meeting after which the director was elected, even if his or her
retirement results in more than one-third of all directors retiring from
office. A retiring director will be eligible for re-election.
Responsibilities
The responsibilities of the board include:
providing strategic guidance to the Company;
reviewing and approving business and financial plans;
monitoring strategy implementation and financial performance;
liaising with the Company`s auditors;
appointing the Managing Director and reviewing his performance;
enhancing and protecting the reputation of the organisation, and
overseeing the operation of the systems and processes for compliance and
risk management reporting to shareholders.
Independent professional advice
Directors and Board committees have the right, in connection with their
duties and responsibilities, to seek independent advice at the Company`s
expense. Prior written approval of the Chairman is required, but this will
not be unreasonably withheld.
Performance assessment
The full Board is responsible for reviewing the performance of the Chairman.
It is the responsibility of the Chairman, to assess the performance of each
of the Directors. Due to the changes to the Board, the Board did not
conduct performance reviews during the 2011 year.
Corporate reporting
The Chairman and Company Secretary have made attestations recommended by the
ASX Corporate Governance Council as to the Company`s financial condition
prior to the Board signing this report.
Board committees
In view of the Company`s current stage and the small size of the Board, the
roles that would otherwise be performed by an audit committee, remuneration
committee and nomination committee are performed by the full Board.
External auditors
Company policy is to appoint external auditors who clearly demonstrate
quality and independence. The performance of the external auditor is
reviewed annually and applications for tender of external audit services are
requested as deemed appropriate, taking into consideration assessment of
performance, existing value and tender costs. William Buck Audit (Vic) Pty
Ltd was appointed as the external auditor in 2009. It is William Buck Audit
(Vic) Pty Ltd policy to rotate audit engagement partners on listed companies
at least every five years.
An analysis of fees paid to the external auditors, including a breakdown of
fees for non-audit services, is provided in the Directors` Report and in the
notes to the financial statements. It is the policy of the external auditor
to provide an annual declaration of their independence to the Board.
The external auditor is requested to attend the annual general meeting and
be available to answer shareholder questions about the conduct of the audit
and the preparation and content of the audit report.
Risk assessment and management
The Board is responsible for ensuring there are adequate policies in
relation to risk management, compliance and internal control systems. In
summary, the Company policies are designed to ensure strategic, operational,
legal, reputation and financial risks are identified, assessed, effectively
and efficiently managed and monitored to enable achievement of the Company`s
business objectives.
Considerable importance is placed on maintaining a strong control
environment. There is an organisational structure with clearly drawn lines
of accountability and delegation of authority. Adherence to the Code of
Conduct is required at all times and the Board actively promotes a culture
of quality and integrity.
The Company`s risk management policy and the operation of the risk
management and compliance system is managed by the Board.
Detailed control procedures cover management accounting, financial
reporting, project appraisal, environment, health and safety, IT security,
compliance and other risk management issues.
In addition, the Board requires that each major proposal submitted to the
Board for decision is accompanied by a comprehensive risk assessment and,
where required, management`s proposed mitigation strategies.
Safety, Health and Environment Management System (SHEMS)
The Company recognises the importance of environmental and occupational
health and safety (OH&S) issues and is committed to the highest levels of
performance. To help meet this objective the SHEMS was established to
facilitate the systematic identification of environmental and OH&S issues
and to ensure they are managed in a structured manner. This system has been
operating for a number of years and allows the Company to:
- monitor its compliance with all relevant legislation;
- continually assess and improve the impact of its operations on the
environment;
- encourage employees to actively participate in the management of
environmental and OH&S issues; and
- use energy and other resources efficiently.
Information on compliance with significant environmental regulations is set
out in the Directors` Report.
Code of conduct
These policies set out the ethical standards that govern the conduct of all
Directors and employees. The Company recognises the interests of all
stakeholders in the community and their role in creating shareholder value.
Every Director and employee is required at all times, to conduct themselves
in a manner consistent with the principles of honesty and integrity.
The Code requires Directors and employees, amongst other things, to comply
with the law, to disclose relevant interests that they may have and to act
in the best interests of the Company. The Code also covers confidentiality
of information and respect of privacy.
Diversity policy
The Company has established a Workplace Diversity Policy which outlines the
Board`s commitment to promoting a corporate culture that is supportive of
diversity. This policy outlines the Company`s strategies for achieving
diversity within the Company.
Given the Company`s size and stage of development, the Company has not
adopted targets for the proportion of female employees within the
organisation as proportional targets are difficult to achieve with such low
employee numbers. However Company policy for vacancies at the Board and
Senior Management level is to ensure that a diverse candidate pool is
sought.
As at 31 December 2011 there were not any female employees within the
Company.
Continuous disclosure and shareholder communication
The Company has policies and procedures on information disclosure that focus
on continuous disclosure of any information concerning the consolidated
entity that a reasonable person would expect to have a material effect on
the price of the Company`s securities. These policies and procedures also
include the arrangements the Company has in place to promote communication
with shareholders and encourage effective participation at general meetings.
When analysts are briefed on aspects of the Company`s operations, the
material used in the presentation is released to the ASX. Procedures have
also been established for reviewing whether any price sensitive information
has been inadvertently disclosed and, if so, this information is also
immediately released to the market.
Securities policy
This policy provides guidance to all Directors`, officers and staff dealing
in Tawana`s securities. The Securities Policy prohibits trading for all
persons aware of unpublished price sensitive information about the Company.
In addition, it specifically limits the trade of Tawana`s securities by the
Company`s officers during certain periods of time prior to the release of
both the half-year and full year results.
Significant accounting policies
Details of significant accounting policies are set out in Note 1 of the
notes forming part of the financial statements.
Directors` and executives` remuneration
The performance of the Company depends upon the quality of its Directors and
executives. To prosper, the Company must attract, motivate and retain
highly skilled Directors and executives.
The Board undertakes a review of the remuneration packages of all Directors
and executive officers on an annual basis. Remuneration packages are
reviewed with due regard to performance and other relevant factors.
In order to retain and attract executives of sufficient experience to
facilitate the efficient and effective management of the Company`s
operations, the Board may seek the advice of external advisors in connection
with the structure of remuneration packages.
Remuneration packages contain the following key elements:
Primary benefits, including salary/fees;
Post employments benefits, including superannuation and prescribed
retirement benefits, and
Other benefits
Details of Directors and Key Management Personnel are contained within the
Directors` Report.
Non-Executive Directors` fees are determined by the Board based on external
advice that is received from time to time and with reference to fees paid to
other Non-Executive Directors of comparable companies, taking account of the
specific duties in relation to the Company. Non-Executive Director`s fees
are within the limit agreed to by shareholders and represent the
responsibilities of the time spent by the Non-Executive Directors` in
fulfilling their duties to the Board.
Publicly available information
In accordance with the ASX Corporate Governance Council, the best practice
recommendations provide that specific documents should be publicly
available.
All policies referred to in this section are available by contacting the
Company.
AUDITOR`S INDEPENDENCE DECLARATION
AUDITOR`S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS
ACT 2001 TO THE DIRECTORS OF TAWANA RESOURCES NL
I declare that, to the best of my knowledge and belief, during the year
ended 31 December 2011 there have been:
No contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
No contraventions of any applicable code of professional conduct in relation
to the audit
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
JC Luckins
Director
Dated this day 29th day of March 2012
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2011
Note Consolidated
2011 2010
$ $
Continuing operations
Revenue 4 173,413 68,751
Corporate costs (534,557) (1,291,848)
Depreciation (4,230) (99,496)
Employee benefits expense 5 (502,333) (454,986)
Exploration expenses written - (259,754)
off
Finance costs - (54,779)
Other expenses (109,052) (55,109)
Loss before income tax (976,759) (2,147,221)
expense
Income tax expense 6 - -
Net loss for the period after (976,759) (2,147,221)
tax from continuing
operations
Loss from discontinued 15 (9,125,733) (67,176)
operations after tax
Net loss for the period (10,102,492) (2,214,397)
attributable to Tawana
Resources NL
Other comprehensive income /
(loss)
Gain / (loss) on translation 2,734,408 (199,348)
of foreign operations
Other comprehensive income / 2,734,408 (199,348)
(loss) for the period, net of
tax
Total comprehensive income / (7,368,084) (2,413,745)
(loss) for the period
attributable to Tawana
Resources NL
Earnings per share from
continuing and discontinuing
operations
Basic and diluted loss 22 (1.26) (0.47)
(cents)
Earnings per share from
continuing operations
Basic and diluted loss 22 (0.12) (0.46)
(cents)
Earnings per share from
discontinued operations
Basic and diluted loss 22 (1.14) (0.01)
(cents)
The above Statement of Comprehensive Income should be read in conjunction
with the accompanying notes.
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2011
Note Consolidated
2011 2010
$ $
Current assets
Cash and cash equivalents 20(a) 3,722,991 835,470
Trade and other receivables 7 42,326 48,945
Other financial assets 8 - 2,960,354
Inventories 9 - 75,641
Assets held for sale 10 133,478 -
Total current assets 3,898,795 3,920,410
Non-current assets
Trade and other receivables 7 39,787 42,323
Investment in associate - 16,640
Property, plant and equipment 7,534 186,892
Exploration expenditure 11 5,081,927 2,923,147
Total non-current assets 5,129,248 3,169,002
Total assets 9,028,043 7,089,412
Current liabilities
Trade and other payables 12 83,223 148,726
Provisions 26,015 6,875
Total current liabilities 109,238 155,601
Non-current liabilities
Provisions - 27,387
Total non-current liabilities - 27,387
Total liabilities 109,238 182,988
Net assets 8,918,805 6,906,424
Equity
Contributed equity 13 45,431,150 36,482,279
Reserves 14 2,884,143 (281,859)
Accumulated losses (39,396,488) (29,293,996)
Total equity 8,918,805 6,906,424
The above Statement of Financial Position should be read in conjunction with
the accompanying notes.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2011
Consolidated
Issued Reserves Accumula Total
capital ted
losses
$ $ $ $
Balance at 1 January 36,482,2 (281,859 (29,293, 6,906,42
2011 79 ) 996) 4
Loss for the period - - (10,102, (10,102,
492) 492)
Other comprehensive - 2,734,40 - 2,734,40
income for the period 8 8
Total comprehensive loss - 2,734,40 (10,102, (7,368,0
for the period 8 492) 84)
Transactions with owners
in their capacity as
owners
Shares issued, net of 8,948,87 (398,290 - 8,550,58
costs 1 ) 1
Share options issued and - 829,884 - 829,884
vested
Balance at 31 December 45,431,1 2,884,14 (39,396, 8,918,80
2011 50 3 488) 5
Balance at 1 January 35,356,3 (2,397,1 (27,079, 5,879,62
2010 74 52) 599) 3
Loss for the period - - (2,214,3 (2,214,3
97) 97)
Other comprehensive - (199,348 - (199,348
income for the period ) )
Total comprehensive loss - (199,348 (2,214,3 (2,413,7
for the period ) 97) 45)
Disposal of foreign - 454,759 - 454,759
operations
Transactions with owners
in their capacity as
owners
Shares issued, net of 1,125,90 - - 1,125,90
costs 5 5
Share options issued and - 1,859,88 - 1,859,88
vested 2 2
Balance at 31 December 36,482,2 (281,859 (29,293, 6,906,42
2010 79 ) 996) 4
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2011
The above Statement of Changes in Equity should be read in conjunction with
the accompanying notes.
Note Consolidated
2011 2010
$ $
Cash flows from operating
activities
Receipts from customers 31,388 26,696
Payments to suppliers and (1,549,471) (1,172,155)
employees
Interest received 169,277 41,325
Interest paid - (25,666)
Net cash flows used in 20(b) (1,348,806) (1,129,800)
operating activities
Cash flows from investing
activities
Proceeds from sale of plant 34,653 9,276
and equipment
Purchase of plant and (11,764) (2,425)
equipment
Proceeds from sale of 13,906 57,544
discontinued operation
Payments for exploration (592,366) (11,527)
Net cash flows used in (555,571) 52,868
investing activities
Cash flows from financing
activities
Proceeds from issue of shares 5,050,000 1,851,670
Capital raising costs (256,350) (137,036)
Repayment of borrowings - (120,000)
Net cash from financing 4,793,650 1,594,634
activities
Net increase in cash and cash 2,889,273 517,702
equivalents
Cash and cash equivalents at 835,470 348,609
beginning of period
Effects of exchange rates on (1,752) (30,841)
cash holdings in foreign
currencies
Cash and cash equivalents at 3,722,991 835,470
end of period
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
The above Statement of Cash Flows should be read in conjunction with the
accompanying notes.
Summary of significant accounting policies
The principal accounting policies adopted in the preparation of these
financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
The financial statements include the consolidated entity consisting of
Tawana Resources NL and its subsidiaries.
(a) Basis of preparation
This general purpose financial report has been prepared in accordance with
Australian Accounting Standards, other authoritative pronouncements and the
Australian Accounting Standards Board, Urgent Issues Group Interpretations
and the Corporations Act 2001.
The financial report is presented in Australian dollars and rounded to the
nearest dollar.
The financial report is prepared on a going concern basis.
These financial statements have been prepared under the historical cost
convention.
Compliance with International Financial Reporting Standards
These financial statements comply with Australian Accounting Standards
("AASBs"). Compliance with AASBs ensures that these financial statements,
comprising the financial statements and notes thereto, comply with
International Financial Reporting Standards ("IFRS").
Critical accounting estimates
The preparation of financial statements in conformity with AASBs requires
the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the
consolidated entity`s accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and estimates
are significant to the financial statements, are disclosed in Note 3.
(b) Principles of consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities
of all subsidiaries of Tawana Resources NL as at 31 December 2011 and the
results of all subsidiaries for the year then ended. Tawana Resources NL
and its subsidiaries together are referred to in these financial statements
as the Group or the consolidated entity.
Subsidiaries are all those entities, including special purpose entities,
over which the consolidated entity has the power to govern the financial and
operating policies, generally accompanying a shareholding of more than one-
half of the voting rights. The existence and effect of potential voting
rights that are currently exercisable or convertible are considered when
assessing whether the consolidated entity controls another entity.
Subsidiaries are fully consolidated from the date on which control is
transferred to the consolidated entity. They are de-consolidated from the
date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions
between consolidated entity companies are eliminated. Unrealised losses are
also eliminated unless the transaction provides evidence of the impairment
of the asset transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by
the consolidated entity.
1. Summary of significant accounting policies (continued)
(b) Principles of consolidation (continued)
Associates
Associates are all entities over which the consolidated entity has
significant influence but not control, generally accompanying a shareholding
of between 20% and 50% of the voting rights. Investments in associates are
accounted for in the consolidated financial statements using the equity
method of accounting, after initially being recognised at cost.
The consolidated entity`s share of its associates` post acquisition profits
or losses is recognised in the Statement of Comprehensive Income, and its
share of post-acquisition movement in reserves is recognised in reserves.
The cumulative post-acquisition movements are adjusted against the carrying
amount of the investment. Dividends receivable from associates reduce the
carrying amount of the investment.
When the consolidated entity`s share of losses in an associate equals or
exceeds its interest in the associate, including other unsecured long-term
receivables, the consolidated entity does not recognise further losses,
unless it has incurred obligations or made payment on behalf of the
associate.
Unrealised gains on transactions between the consolidated entity and its
associates are eliminated to the extent of the consolidated entity`s
interest in the associate. Unrealised losses are also eliminated unless the
transactions provide evidence of an impairment of the asset transferred.
Accounting policies of associates have been changed where necessary to
ensure consistency with the policies adopted by the consolidated entity.
(c) Foreign currency translation
The presentation currency of Tawana Resources NL and its subsidiaries is
Australian Dollars (A$). The functional currency of Tawana Resources NL is
Australian Dollars and the functional currency of the overseas subsidiaries
is South African Rand (Tawana Resources SA (Pty) Ltd and Diamond Resources
(Pty) Ltd), Botswana Pula (Seolo Botswana Pty Ltd) and US Dollars (Kenema-Ma
Holdings Liberia Pty Ltd).
Transactions in foreign currencies are initially recorded in the functional
currency at the exchange rates prevailing at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are
revalued at the rate of exchange prevailing at the end of the reporting
period. Foreign exchange gains and losses resulting from the settlement of
such transactions and from translation at financial year end exchange rates
are recognised in the profit and loss.
As at the end of the reporting period the assets and liabilities of overseas
subsidiaries are translated into the presentation currency of Tawana
Resources NL at the rate of exchange prevailing at the end of the reporting
period and the Statement of Comprehensive Income is translated at the
weighted average exchange rates for the period. All translation differences
are recognised in the foreign currency translation reserve.
On disposal of a foreign entity, the deferred cumulative amount recognised
in equity relating to that particular foreign entity is recognised in the
Statement of Comprehensive Income.
1. Summary of significant accounting policies (continued)
(d) Revenue recognition
Revenue is measured at the fair value of consideration received or
receivable. Revenue is recognised to the extent that it is probable that
the economic benefits will flow to the consolidated entity and the revenue
can be reliably measured. The following specific recognition criteria must
also be met before revenue is recognised.
Sale of goods and provision of services
Revenue is recognised when the significant risks and rewards of ownership of
the goods have passed to the buyer or when the service has been provided,
and can be measured reliably. Risks and rewards are considered passed to
the buyer at the time of delivery of the goods to the customer or on
provision of the services.
Interest
Interest is recognised as it accrues using the effective interest method.
(e) Income tax
The income tax expense or revenue for the period is the tax payable on the
current period`s taxable income based on the applicable income tax rate for
each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
Deferred income tax is provided in full using the liability method on
temporary differences arising between the tax bases of assets and
liabilities with the carrying amounts in the consolidated financial
statements. However, the deferred income tax is not accounted for if it
arises from initial recognition of an asset or liability in a transaction
other than a business combination, that at the time of the transaction,
affects neither accounting nor taxable profit or loss. Deferred income tax
is determined using tax rates (and laws) that have been enacted or
substantially enacted at the reporting date and are expected to apply when
the related deferred income tax asset is realised or the deferred income tax
liability is settled.
Deferred tax assets are recognised for deductible temporary differences and
unused tax losses only if it is probable that future taxable amounts will be
available to realise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary
differences between the carrying amount and the tax base of investments in
controlled entities where the parent entity is able to control the timing of
the reversal of temporary differences and it is probable that the
differences will not be reversed in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets and liabilities, and when the
deferred tax balances relate to the same taxation authority. Current tax
assets and tax liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on a net basis, or
to realise the asset and settle the liability simultaneously.
Current and deferred tax balances that are attributable to amounts
recognised directly in equity, are also recognised directly in equity.
1. Summary of significant accounting policies (continued)
(f) Impairment of assets
Assets, except for exploration and evaluation (refer to Note 1(g)) are
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset`s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset`s fair
value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash inflows which are largely independent of the
cash inflows from other assets or groups of assets (cash-generating units).
Non-financial assets, other than goodwill that suffered an impairment, are
reviewed for possible reversal of the impairment at each subsequent
reporting date.
(g) Exploration and evaluation expenditure
Exploration and evaluation expenditure incurred is accumulated in respect of
each identifiable area of interest. The costs are only carried forward to
the extent that they are expected to be recouped through the successful
development of the area or where activities in the area have not yet reached
a stage that permits reasonable assessment of the existence of economically
recoverable resources and further work is intended to be performed.
Accumulated costs in relation to an abandoned area will be written off in
full against the profit and loss in the year in which the decision to
abandon the area is made.
When production commences, the accumulated costs for the relevant area of
interest will be amortised over the life of the area according to the rate
of depletion of the economically recoverable resources.
A regular review is undertaken of each area of interest to determine the
appropriateness of continuing to carry forward costs in relation to that
area of interest.
(h) Property, plant and equipment
Plant and equipment and buildings are stated at cost less accumulated
depreciation and any impairment losses. Land is stated at cost less any
impairment losses. Depreciation is calculated on a straight line basis over
the estimated useful life of the asset except for motor vehicles which is on
a diminishing value as follows:
Freehold buildings over 10 years
Plant and equipment over 7 years
Motor vehicle (Australia) 22.5%
Motor vehicle (overseas) over 4 years
The carrying values of all assets are reviewed for impairment when events or
changes in circumstances indicate the carrying value may not be recoverable
in accordance with Note 1(f).
The residual value, useful lives and depreciation methods are reviewed and
adjusted if appropriate, at the end of each reporting period.
Gains and losses on disposals are determined by comparing proceeds with the
carrying amount. These are included in the Statement of Comprehensive
Income.
1. Summary of significant accounting policies (continued)
(i) Other financial assets
Investments in subsidiaries are accounted for at cost. Such investments
include both investments in shares issued by the subsidiary and other parent
entity interests that in substance form part of the parent entity`s
investment in the subsidiary. These include investments in the form of
interest-free loans which have no fixed repayment terms and which have been
provided to subsidiaries as an additional source of long term capital.
(j) Inventories
Inventories consisting of rough diamonds are stated at lower of cost or
estimated net realisable value. Cost comprises direct materials, direct
labour, and an appropriate proportion of variable and fixed overhead
expenditure.
(k) Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method, less
provision for impairment. Trade receivables are generally due for
settlement within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts
which are known to be uncollectible are written off by reducing the carrying
amount directly. An allowance account is used when there is objective
evidence that the consolidated entity will not be able to collect all
amounts due according to the original terms of the receivables. Significant
financial difficulties of the debtor, probability that the debtor will enter
bankruptcy or financial realisation, and default or delinquency in payments,
are considered indicators that the trade receivable is impaired. The amount
of the impairment allowance is the difference between the asset`s carrying
amount and the present value of estimated future cash flows, discounted at
the original effective interest rate. Cash flows relating to short-term
receivables are not discounted if the effect of discounting is immaterial.
The amount of the impairment loss is recognised in the Statement of
Comprehensive Income within other expenses.
When a trade receivable, for which an impairment allowance had been
recognised, becomes uncollectible in a subsequent period, it is written off
against the allowance account. Subsequent recoveries of amounts previously
written off are credited against other expenses in the Statement of
Comprehensive Income.
(l) Cash and cash equivalents
Cash and short-term deposits in the Statement of Financial Position comprise
cash at bank and in hand and short-term deposits with an original maturity
of three months or less that are readily converted into known amounts of
cash. For the purposes of the statement of cash flows, cash and cash
equivalents consist of cash and cash equivalents as defined above, net of
outstanding bank overdrafts.
(m) Employee entitlements
Wages and Salaries, Annual Leave and Sick Leave
Liabilities for wages and salaries, including non-monetary benefits and
annual leave expected to be settled within 12 months of the reporting date
are recognised in other payables in respect of employees` services up to the
reporting date and are measured at the amounts expected to be paid when the
liabilities are settled.
1. Summary of significant accounting policies (continued)
(m) Employee entitlements (continued)
Share-based payments
Share-based compensation benefits are provided to employees in accordance
with the Tawana Resources Employee Option Plan, an employee share scheme.
The fair value of options granted under the Tawana Resources Employee Option
Plan is recognised as an employee benefit expense with a corresponding
increase in equity. The fair value is measured at grant date and recognised
over the period during which the employees become unconditionally entitled
to the options.
Long Service Leave
Liabilities for long service leave are recognised, and are measured as the
present value of expected future payments to be made in respect of services
provided by employees.
(n) Provisions
Provisions are recognised when the consolidated entity has a present
obligation, legal or constructive, as a result of a past event and it is
probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the
amount of the obligation.
(o) Leases
Leases in which a significant portion of the risks and rewards of ownership
are retained by the lessor are classified as operating leases. Payments
made under operating leases, net of any incentives received from the lessor,
are charged to the Statement of Comprehensive Income on a straight-line
basis over the period of the lease.
(p) Provision for rehabilitation
Environmental obligations associated with the retirement or disposal of long
lived assets will be recognised when the disturbance occurs and is based on
the extent of damage incurred. The provision is measured at the present
value of the future expenditure, and a corresponding rehabilitation asset is
also recognised. On an ongoing basis, the rehabilitation liability will be
re-measured in line with the changes in the time value of money (recognised
as an expense in the Statement of Comprehensive Income and an increase in
the provision), and additional disturbances will be recognised as additions
to a corresponding asset and rehabilitation liability. The rehabilitation
asset will be accounted for in accordance with the accounting policy
applicable to the asset to which it relates (i.e. exploration expenditure).
(q) Trade and other payables
These amounts represent liabilities for goods and services provided to the
consolidated entity prior to the end of financial year which are unpaid.
The amounts are unsecured and are usually paid within 30 days of
recognition.
(r) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST or VAT
except:
where the GST / VAT incurred on a purchase of goods and services is not
recoverable from the taxation authority, in which case the GST / VAT is
recognised as part of the cost of acquisition of the asset or as part of the
expense item as applicable; and
receivables and payables are stated with the amount of ST / VAT included.
1. Summary of significant accounting policies (continued)
(r) Other taxes (continued)
The net amount of GST recoverable from, or payable to, the taxation
authority is included as part of receivables or payables in the Statement of
Financial Position.
Cash flows are included in the Statement of Cash Flows on a gross basis and
the GST / VAT component of cash flows arising from investing and financing
activities, which is recoverable from, or payable to, the taxation
authority, are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST / VAT
recoverable from, or payable to, the taxation authority.
(s) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares are shown in equity as a deduction,
net of tax, from the proceeds. Incremental costs directly attributable to
the issue of new shares for the acquisition of a business are not included
in the cost of the acquisition as part of the purchase consideration.
(t) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit/(loss)
attributable to equity holders of the Company, excluding any costs of
servicing equity other than ordinary shares, by the weighted average number
of ordinary shares outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of
basic earnings per share to take into account the after income tax effect of
interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have
been issued for no consideration in relation to dilutive potential ordinary
shares.
(u) Preparation of financial statements in relation to the consolidated
entity
From 28 June 2010, the Corporations Act 2001 no longer requires the
preparation of parent entity accounts, for the purpose of streamlining
parent entity reporting. Where the entity is required to prepare financial
statements in relation to the consolidated entity, the Corporations
Regulations 2001 (the Principal Regulations) specify supplementary
information about the parent entity that is to be included in a note to the
consolidated financial statements. This information is disclosed in Note 25.
(v) New accounting standards and interpretations
The AASB has issued new and amended accounting standards and interpretations
that have mandatory applications for the current and reporting periods.
With the exception of those standards not available for early adoption for
these financial statements, the consolidated entity has decided to adopt all
of these accounting standards and interpretations. There was no significant
change to these financial statements arising from the adoption of those
standards and interpretations.
2. Financial risk management
The consolidated entity`s exploration activities are being funded by equity
and do not expose the consolidated entity to significant financial risks.
There are no speculative or derivative financial instruments. Funds are
invested for various short term periods to match forecast cash flow
requirements.
(a) Market risk
Foreign currency risk
The consolidated entity has foreign operations with functional currencies in
the South African Rand, the Botswana Pula and the United States Dollar.
Both the parent company and each subsidiary transacts predominantly in its
own functional currency with little or no foreign currency risk. Cash
invested into each foreign operation through intercompany loan accounts,
with no fixed date of maturity on those loans, from the parent to its
foreign operations is considered to form part of the parent company`s net
investment in its foreign operations and therefore is considered by the
parent company to not represent a foreign currency risk.
Cash flow and fair value interest rate risk
As the consolidated entity has no significant interest-bearing assets or
liabilities, the consolidated entity`s income and operating cash flows are
not materially exposed to changes in market interest rates.
(b) Credit risk
Management does not actively manage credit risk.
The consolidated entity has no significant exposure to credit risk from
external parties at period end given all the counterparties to its credit
exposures are related entities of the consolidated entity. The maximum
exposure to credit risk from related entities of the consolidated entity at
the reporting date is equal to the carrying value of financial assets at 31
December 2011.
Other receivables are of a low value. Activity with trade debtors is
limited and the recoverability has not been brought into question. There is
no history of bad debts.
(c) Liquidity and capital risk management
The consolidated entity`s objectives when managing capital are to safeguard
their ability to continue as a going concern, so that they can continue to
provide returns for shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost of capital. In
order to maintain or adjust the capital structure, the consolidated entity
may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares or sell assets to reduce debt.
During 2011, the consolidated entity`s strategy, which was unchanged from
2010, was to keep borrowings to a minimum. The Company`s equity management
is determined by funds required to undertake exploration activities and meet
its corporate and other costs. Where joint venture partners participate in
particular projects the partners contribute monthly cash calls in proportion
to their respective interests or as agreed under any buy-in agreement.
(d) Fair value estimation
The carrying amount of financial assets and financial liabilities recorded
in the financial statements approximate their respective fair values
determined in accordance with the accounting policies disclosed in Note 1.
3. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on
historical experience and other factors, including expectation of future
events that may have a financial impact on the entity and that are believed
to be reasonable under the circumstances.
Critical accounting estimates and assumptions
The consolidated entity makes estimates and assumptions concerning the
future. The resulting accounting estimates, will by definition, seldom
equal the related actual results. The estimates that have a significant
risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below.
(i) Recoverability of exploration expenditure
The consolidated entity tests annually whether the exploration and
evaluation expenditure incurred in identifiable areas of interest is
expected to be recouped through the successful development of the area or
where activities in the area have not yet reached a stage that permits
reasonable assessment of the existence of reserves and further work is
expected to be performed. All expenditure that does not meet these criteria
is expensed in accordance with Note 1(g).
(ii) Share based payment valuations
Details relating to the shares based payment valuations are detailed in Note
23.
4. Revenue and other income
Consolidated
2011 2010
$ $
Revenue from continuing
operations
Interest received 169,253 41,325
Other revenue 4,160 27,426
173,413 68,751
5. Expenses
Expenses from continuing
operations includes:
Auditors` remuneration 67,032 51,725
Compliance and regulatory 101,203 85,147
fees
Consultancy and legal fees 143,879 1,050,664
Travel expenses 106,554 61,188
Employee benefits expense
includes:
Salaries and wages 240,806 174,256
Superannuation 24,225 15,096
Directors` fees 160,000 177,575
Share-based payments 75,619 86,083
Other employee expenses 1,683 1,976
502,333 454,986
6. Income tax
Tax losses
The Group has unused tax losses for which no benefit has been recognised,
however the Directors are of the opinion that, given uncertainty around the
amount of such losses, it would be misleading to quantify these losses.
The future income tax benefit attributable to these losses has not been
brought to account because the benefit is not probable of realisation. The
potential future income tax benefits which may arise from these losses will
only be realised if:
- the consolidated entity derives future assessable income of a nature
and sufficient amount to enable the benefit of losses to be realised;
- the consolidated entity continues to comply with the conditions of
deductibility imposed in each legislative environment, and
- no changes in tax legislation adversely affect the consolidated entity
in realising the benefit from the deduction for the losses.
7. Trade and other receivables
Consolidated
2011 2010
$ $
Current
Trade debtors 10,686 5,175
GST and VAT receivable 7,226 19,043
Prepayments 24,414 24,727
42,326 48,945
Non-current
Other deposits 39,787 42,323
8. Other financial assets
Receivable for disposal of - 2,960,354
Kareevlei Project - at net
present value
Refer to Note 15 for further information on the write down of the Kareevlei
receivable.
9. Inventories
Rough diamonds - at lower - 75,641
of cost and recoverable
value
10. Assets held for sale
Property, plant and 126,689 -
equipment
Other assets 6,789 -
133,478 -
11. Exploration expenditure
The exploration and evaluation expenditure relates to the consolidated
entity`s projects in South Africa and Botswana.
Movement in carrying values
Consolidated
2011 2010
$ $
Balance at beginning of 2,923,147 5,950,734
year
Expenditure during the 5,081,927 11,527
year
Disposal of exploration - (2,633,499)
projects during the year
Expenditure written off (2,923,147) (259,754)
during the year
Foreign currency - (145,861)
translation
Balance at end of year 5,081,927 2,923,147
12. Trade and other payables
Current
Trade creditors 19,757 56,878
Other creditors and 63,466 91,848
accruals
83,223 148,726
13. Contributed equity
(a) Issued capital
Ordinary shares, fully 45,431,150 36,482,279
paid
(b) Movements in share capital
2011 2010 2011 2010
Number Number $ $
Balance at 601,455,75 217,138,85 36,482,2 35,356,3
beginning of 5 4 79 74
year
Shares issued 255,173,28 384,316,90 9,955,22 2,402,97
during year 8 1 1 5
Transaction - - (1,006,3 (1,277,0
costs relating 50) 70)
to share
issues
Balance at end 856,629,04 601,455,75 45,431,1 36,482,2
of year 3 5 50 79
(c) Terms and conditions of contributed equity
Holders of ordinary shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at shareholders`
meetings in a poll or one vote per shareholder on a show of hands.
In the event of winding up of the Company, ordinary shareholders rank after
all other shareholders and creditors and are fully entitled to any proceeds
of liquidation.
14. Reserves
Note Consolidated
2011 2010
$ $
Foreign currency (a) (555) (2,734,963)
translation
Options (b) 2,861,814 2,430,220
Asset revaluation (c) 22,884 22,884
2,884,143 (281,859)
(a) Foreign currency translation reserve
Exchange differences arising from the translation of foreign controlled
entities are taken to the foreign currency translation reserve, as described
in Note 1(c).
(b) Options reserve
The options reserve records the fair value of options issued but not
exercised.
Balance at beginning of 2,430,220 570,338
year
Options expense for year 23 829,884 1,859,882
Options exercised during (398,290) -
year
Balance at end of year 2,861,814 2,430,220
(c) Asset revaluation reserve
The asset revaluation reserve records revaluations of non-current assets.
This is a historical reserve and there have been no movements in the years
ended 31 December 2011 and 2010.
Balance at end of year 22,884 22,884
15. Discontinued operations
On 9 March 2011 the Group announced that it had commenced an ongoing
rationalisation program in respect of its existing interests in South Africa
and Botswana. The Group had originally announced a decision to sell its
interest in the Kareevlei project on 18 August 2010, which had been
classified as a discontinued operation in the prior financial year. As at
December 2011 the Group commenced a program to market and sell its remaining
interests in South Africa and Botswana. As such, the assets that formed
part of the disposal group have been reclassified as Assets Held for Sale in
the statement of financial position and all revenues and expenditures
relating to the disposal group have been reclassified as a discontinued
operation in the statement of comprehensive income. The assets held for
sale have been valued by the directors at cost, which in their estimation,
is below their net fair value less distribution costs. In the process of
reviewing those recoverable values, amounts previously capitalised as
exploration expenditure under tenements, which the Group still holds title
to, have been written down by $2,923,147 to $nil.
In addition to the above, the Group considered the likelihood of recouping
an amount receivable from Rolatseng Mining CC ("Rolatseng"), which at 31
December 2010 was stated at a value of $2,960,354. The receivable is
secured by the underlying title against the Kareevlei interest. Due to the
delay in receipting further payments from Rolatseng or to progress the
Kareevlei interest to trial mining phase which represents a key payment
milestone for the interest, the Group has decided to write down the
receivable to $nil. This write-down forms part of the discontinued
operation concerning the Kareevlei interest.
15. Discontinued operations (continued)
The financial performance of the discontinued operations, which is included
in the Statement of Comprehensive Income as loss from discontinued
operations, and adjusted to the previous year`s comparatives, is as follows:
Consolidated
2011 2010
$ $
Sale of Kareevlei interest - 3,017,792
Other revenues 51,617 26,696
Corporate costs (527,005) (46,099)
Employee benefits expense (31,881) -
Foreign currency translation (2,734,963) (454,759)
losses realised
Impairment of capitalised (2,923,147) (2,610,806)
area of interest
Impairment of receivable (2,960,354) -
from Rolatseng Mining CC
(9,125,733) (67,176)
16. Key management personnel disclosures
(a) Directors and other key management personnel
The following persons were directors of Tawana Resources NL during the
financial year:
Warwick Grigor
Lennard Kolff (appointed 27 October 2011)
Euan Luff
Julian Babarczy
Matthew Bowles (appointed 30 May 2011)
Harry Hill (resigned 27 May 2011)
Key management personnel of the group for the year was as follows:
Lennard Kolff (Chief Executive Officer, appointed director 27 October 2011)
(b) Compensation of key management personnel
Short-term employee 381,667 267,418
benefits
Post-employment benefits 24,225 21,971
Share-based payments 75,619 45,721
481,511 335,110
(c) Equity instrument disclosures relating to key management personnel
(i) Option holdings
The number of options over ordinary shares in the Company held during the
financial year by each director of Tawana Resources NL and other key
management personnel of the Company, including their personally related
parties, are set out below.
16. Key management personnel disclosures (continued)
(c) Equity instrument disclosures relating to key management personnel
(continued)
(i) Option holdings (continued)
2011
Name Balance Granted Exercised Other Balance Options
at during during changes at end vested
start year as year during of year and
of year remun- year exercisa
eration ble at
end of
year
Number Number Number Number Number Number
Directors
Mr W - - - - - -
Grigor
Mr L Kolff 10,000, - - - 10,000, 10,000,0
000 000 00
Mr E Luff 6,104,1 - - - 6,104,1 6,104,15
50 50 0
Mr J - - - - - -
Babarczy
Mr M 15,000, - - - 15,000, 15,000,0
Bowles * 000 000 00
Mr H Hill - - - - - -
31,104, - - 31,104, 31,104,1
150 150 50
* Opening balance at date of appointment
2010
Name Balance Granted Exercised Other Balance Options
at during during changes at end vested
start year as year during of year and
of year remun- year exercisa
eration ble at
end of
year
Number Number Number Number Number Number
Directors
Mr E Luff 6,104,1 - - - 6,104,1 6,104,15
50 50 0
Mr H Hill - - - - - -
Mr J - - - - - -
Babarczy
Mr W - - - - - -
Grigor
Mr S Horne - - - - - -
Key
management
personnel
Mr L Kolff - 10,000,0 - - 10,000, -
00 000
6,104,1 10,000,0 - - 16,104, 6,104,15
50 00 150 0
(ii) Shareholdings
The number of shares in the Company held during the financial year by each
director of Tawana Resources NL and other key management personnel,
including their personally related parties, is set out below. There were no
shares granted during the reporting year as remuneration (2010: Nil).
16. Key management personnel disclosures (continued)
(c) Equity instrument disclosures relating to key management personnel
(continued)
(ii) Shareholdings (continued)
2011
Name Balance Balance Received Other Balance Balance
at start at date during acquis at date at end
of the of the year ition of of the
year appoint- on of resignat year
ment exercise shares ion
of during
options the
year
Number Number Number Number Number Number
Directors
Mr W Grigor 27,850,0 - - - - 27,850,
00 000
Mr L Kolff - - - - - -
Mr E Luff 20,689,7 - - 900,00 - 21,589,
40 0 740
Mr J 25,000,0 - - 173,28 - 25,173,
Babarczy 00 8 288
Mr M Bowles - - - - - -
Mr H Hill - - - - - -
Key
management
personnel
Mr L Kolff - - - - - -
73,539,7 - - 1,073, - 74,613,
40 288 028
2010
Name Balance at Balance Received Other Balance Balance
start of at date during acquisit at date at end
the year of the year ion of of of the
appoint- on shares resignat year
ment exercise during ion
of the year
options
Number Number Number Number Number Number
Directors
Mr E Luff 7,344,870 - - 13,344,8 - 20,689,
70 740
Mr H Hill - - - - - -
Mr J 5,000,000 - - 20,000,0 - 25,000,
Babarczy 00 000
Mr W - 19,850,00 - 8,000,00 - 27,850,
Grigor 0 0 000
Mr S - - - - - -
Horne
Key
managemen
t
personnel
Mr L - - - - - -
Kolff
12,344,870 19,850,00 - 41,344,8 - 73,539,
0 70 740
(d) Loans to key management personnel
There were no loans to key management personnel of the consolidated entity,
including their personally related parties, as at 31 December 2011 or 31
December 2010.
(e) Other transactions with key management personnel
Mr E Luff, a director of the Company, is a senior partner of the legal firm
Wilmoth Field Warne, which received $50,003 (2010: $229,630) in fees for the
provision of legal services. Payments were based on commercial terms and
conditions.
17. Details of controlled entities
Name Country of Interest held by
incorporation the consolidated
entity
2011 2010
% %
Parent
Tawana Resources NL Australia
Controlled entities
Seolo Botswana (Pty) Ltd Botswana 100 100
Tawana Resources (Pty) South Africa 100 100
Ltd
Diamond Resources (Pty) South Africa 100 100
Ltd
Kenema-Man Holdings Australia 100 -
Liberia Pty Ltd
Tawana Liberia Inc Liberia 100 -
18. Contingent liabilities and commitments
The consolidated entity does not have any material contingent assets or
liabilities at 31 December 2011 (2010: Nil).
The consolidated entity does not have any material commitments at 31
December 2011 (2010: Nil).
19. Segment information
The consolidated entity operates wholly in one business segment, being
mineral exploration and within one geographical segment, being Africa.
20. Notes to the Statement of Cash Flows
(a) Reconciliation of cash and cash equivalents
For the purposes of the Statement of Cash Flows, cash includes cash on hand
and at call in deposits with banks, net of bank overdrafts. Cash at the end
of the year is shown in the Statement of Financial Position as:
Consolidated
2011 2010
$ $
Cash on hand and at bank 3,702,991 815,470
Cash on deposit 20,000 20,000
3,722,991 835,470
20. Notes to the Statement of Cash Flows (continued)
(b) Reconciliation of net loss after tax to net cash flows from operations
Consolidated
2011 2010
$ $
Net loss (10,102,492) (2,214,397)
Adjustments for:
Depreciation 4,230 99,496
Impairment and write off 9,998 259,754
of non-current assets
Profit on sale of (6,300) -
property, plant and
equipment
Discontinued operation 8,696,090 67,176
Share-based payments 79,884 799,564
Interest paid through - 29,113
share issues
Unrealised foreign - 10,544
currency gain / loss on
translation
Changes in assets and
liabilities
(Increase) / decrease in:
Trade and other (64,472) 7,227
receivables
Inventories 17,171 1,490
Increase / (decrease) in:
Trade and other payables (26,163) (209,037)
Interest-bearing 2,665 -
liabilities
Provisions 40,583 19,270
Net cash from operating (1,348,806) (1,129,800)
expenses
21. Auditors` remuneration
William Buck
Audit services 61,500 51,725
Non-audit services - -
61,500 51,725
Auditor of subsidiaries
Pricewaterhouse Coopers
Audit services 5,532 8,142
Non-audit services - -
5,532 8,142
22. Loss per share
Classification of securities as ordinary shares
The Company has only one category of ordinary shares included in basic loss
per share.
Classification of securities as potential ordinary shares
There are currently no securities to be classified as dilutive potential
ordinary shares on issue.
22. Loss per share (continued)
2011 2010
Number Number
801,529,216 468,512,169
Weighted average number of
ordinary shares used in the
calculation of basic loss per
share
$ $
(10,102,492) (2,214,397)
Net loss from continuing and
discontinuing operations
(976,759) (2,147,221)
Net loss from continuing
operations
The loss per share calculation as disclosed on the Statement of
Comprehensive Income does not include instruments that could potentially
dilute basic earnings per share in the future as these instruments were anti-
dilutive in the periods presented. A summary of such instruments is as
follows:
Equity securities Number of Number of
securities potential
ordinary
shares
181,000,000 181,000,000
Options over ordinary shares
No options have been issued subsequent to year end but prior to the date of
issue of these financial statements.
23. Share-based payments
Summary of options on issue
Issue date Quantity Grant date Expiry date Exercise
price
18 Jun 2008 4,000,000 18 Jun 2008 18 Jun 2012 $0.07
17 Jan 2009 6,000,000 18 Dec 2008 17 Jan 2013 $0.10
17 Jan 2009 6,750,000 18 Dec 2008 17 Jan 2013 $0.07
17 Jan 2009 6,750,000 18 Dec 2008 17 Jan 2014 $0.10
23 Feb 2010 50,000,000 23 Feb 2010 23 Feb 2013 $0.01
9 Sep 2010 20,000,000 9 Sep 2010 31 Jul 2012 $0.01
9 Sep 2010 5,000,000 9 Sep 2010 9 Sep 2012 $0.03
9 Sep 2010 50,000,000 9 Sep 2010 30 Jul 2013 $0.01
9 Sep 2010 5,000,000 9 Sep 2010 9 Sep 2014 $0.05
8 Mar 2011 25,000,000 8 Mar 2011 8 Mar 2014 $0.01
10 Nov 2011 1,250,000 10 Nov 2011 10 Nov 2013 $0.03
*
10 Nov 2011 1,250,000 10 Nov 2011 10 Nov 2015 $0.05
*
181,000,000
With the exception of the options marked with an asterisk, which vest on 10
November 2012, all share options are exercisable.
During the year ended 31 December 2011, the following options were
exercised:
9 Sep 2010 30,000,000 9 Sep 2010 31 Jul 2012 $0.01
23. Share-based payments (continued)
Fair value of options granted during the year
The assessed fair value at grant date of options granted to individuals is
allocated equally over the period from grant date to vesting date. Fair
values at grant date are independently determined using a Black Scholes
option pricing model that takes into account the exercise price, term of the
option, the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and the risk free interest
rate for the term of the option.
The following options were issued during the year ended 31 December 2011:
Issue Quantity Grant date Expiry Exercise Fair Total
date date price value fair
per value
option
8 Mar 11 25,000,000 8 Mar 11 8 Mar 14 $0.01 $0.0300 $750,000
10 Nov 11 1,250,000 10 Nov 11 10 Nov 13 $0.03 $0.0110 $13,795
10 Nov 11 1,250,000 10 Nov 11 10 Nov 15 $0.05 $0.0130 $16,225
27,500,000
The model inputs for the options granted during the year were as follows:
A B C
Quantity 25,000,000 1,250,000 1,250,000
Grant date 8 Mar 11 10 Nov 11 10 Nov 11
Expiry date 8 Mar 14 10 Nov 13 10 Nov 15
Grant date share $0.051 $0.027 $0.027
price
Exercise price $0.01 $0.03 $0.05
Expected 120% 120% 120%
volatility
Option life 3.0 1.9 3.7
(years)
Expected dividend 0% 0% 0%
yield
Risk free rate at 5.11% 3.46% 3.42%
grant date
The cost of the issue of options was recorded in the financial statements as
follows:
- options issued during the financial year for consulting work, with a
cost of $4,265 (2010: $747,690) were charged to the profit or loss;
- options issued during 2010, and not yet vested at the commencement of
the financial year for employee remuneration, with a cost of $75,619
(2010: $51,874) were charged to the profit or loss; and
- options issued in satisfaction of capital raising costs, with a value
of $750,000 (2010: $1,060,317) were charged directly to equity.
24. Subsequent events
On 6 February 2012, the Company announced it has identified several high
priority soil anomalies from its maiden geological exploration program on
the Company`s Sinoe project in Liberia, West Africa. Coherent gold in soil
anomalies are open in multiple directions and further sampling and trenching
is underway to fast track target generation for future drilling.
On 15 February 2012, the Company announced it had entered into a binding
Heads of Agreement with a private Liberian company, to acquire the Gold
Rights to 1,996 km2 of highly prospective Archean geology in Grand Cape
Mount County, north-west Liberia, West Africa. The project hosts numerous
target areas, has historical drilling and sampling and access to
infrastructure.
24. Subsequent events (continued)
On 12 March 2012, the Company announced, following further results, it has
extended and identified several high priority soil anomalies from its maiden
geological exploration program on the Company`s Sinoe project in Liberia,
West Africa.
25. Supplementary information about the parent entity
Parent
2011 2010
$ $
Assets
Current assets 3,724,429 865,010
Total assets 9,028,043 7,110,335
Liabilities
Current liabilities 77,549 103,425
Total liabilities 77,549 103,425
Net assets 8,918,805 7,006,910
Equity
Issued capital 45,032,860 36,482,279
Reserves 3,282,988 2,453,104
Total equity 8,918,805 7,006,910
Profit and loss
Profit / (loss) (7,468,570) (1,858,499)
Comprehensive income
Total comprehensive income (7,468,570) (1,858,499)
There were no contingent liabilities, guarantees or capital commitments of
the parent entity not otherwise disclosed in these financial statements.
DIRECTORS` DECLARATION
In accordance with a resolution of the directors of Tawana Resources NL, I
state that:
In the opinion of the directors:
the financial statements and notes as set out on pages 29 to 52 of the
Company and of the consolidated entity are in accordance with the
Corporations Act 2001, including:
- giving a true and fair view of the Company`s and the consolidated
entity`s financial position as at 31 December 2011 and of their
performance for the year ended on that date; and
- complying with Accounting Standards and Corporations Regulations 2001;
and
- there are reasonable grounds to believe that the Company will be able
to pay its debts as and when they become due and payable.
The attached financial statements and notes thereto comply with
International Financial Reporting Standards as issued by the International
Accounting Standards Board as described in Note 1 to the financial
statements.
This declaration has been made after receiving the declarations required to
be made to the directors in accordance with section 295A of the Corporations
Act 2001 for the financial year ended 31 December 2011.
On behalf of the Board
Mr Warwick Grigor
Non-Executive Chairman
Melbourne, 29 March 2012
INDEPENDENT AUDITOR`S REVIEW REPORT TO THE MEMBERS OF TAWANA RESOURCES NL
AND CONTROLLED ENTITIES
Report of the Financial report
We have audited the accompanying financial report of Tawana Resources NL
(the Company), which comprises the statement of financial position as at 31
December 2011, the statement of comprehensive income, the statement of
changes in equity and the statement of cash flows for the year then ended,
notes comprising a summary of significant accounting policies and other
explanatory information, and the directors` declaration of the company and
the consolidated entity comprising the company and the entities it
controlled at the year`s end or from time to time during the financial year.
Directors` Responsibility for the Financial Report
The directors of the Company are responsible for the preparation of the
financial report that gives a true and fair view in accordance with
Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the
preparation of the financial report that is free from material misstatement,
whether due to fraud or error. In Note 1, the directors also state, in
accordance with Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial statements comply with International
Financial Reporting Standards.
Auditor`s Responsibility
Our responsibility is to express an opinion on the financial report based on
our audit. We conducted our audit in accordance with Australian Auditing
Standards. Those standards require that we comply with relevant ethical
requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance about whether the financial report is free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financial report. The procedures selected
depend on the auditors` judgement, including the assessment of the risks of
material misstatement of the financial report, whether due to fraud or
error. In making those risk assessments, the auditor considers internal
control relevant to the entity`s preparation and fair presentation of the
financial report in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity`s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the directors, as well as
evaluating the overall presentation of the financial report.
We believe the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements
of the Corporations Act 2001.
Auditors opinion
In our opinion:
- The financial report of Tawana Resources NL is in accordance with the
Corporations Act 2011, including:
- Giving a true and fair view of the Company`s and consolidated entity`s
financial position as at 31 December 2011 and of its performance for
the year ended on that date; and
- Complying with Australian Accounting Standards (including the
Australian Accounting Interpretations) and the Corporations Regulations
2011; and
- The financial report also complies with International Financial
Reporting Standards as disclosed in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors` report
for the year ended 31 December 2011. The directors of the Company are
responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporation Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on
our audit conducted in accordance with Australian Auditing Standards.
Auditors Opinion
In our opinion the Remuneration report of Tawana Resources NL for the year
ended 31 December 2011, complies with section 300A of the Corporations Act
2001.
Matters relating to the Electronic Presentation of the Reviewed Financial
Report
This auditor`s report relates to the financial report of Tawana Resources NL
for the year ended 31 December 2011 included on Tawana Resources NL`s web
site. The company`s directors are responsible for the integrity of the
Tawana Resources NL web site. We have not been engaged to report on the
integrity of the Tawana Resource NL web site. The auditor`s report refers
only to the financial report. It does not provide an opinion on any other
information which may have been hyperlinked to/from these statements. 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 audited financial report to confirm the information included in the
audited financial report presented on this web site.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
JC Ludkins
Director
Dated this 29th day of March 2012
SCHEDULE OF MINERAL TENEMENTS
Mining tenements currently held by the consolidated entity are as follows:
Location Title held by % held by Title
Tawana group
Daniel BHP Billiton World Various NC
Project Exploration Inc 30/5/1/1/088
South PR
Africa
Kareevlei Diamond Resources Pty 100% NC
Wes Ltd 30/5/1/2/2/081
South MR
Africa
St Vecto Trade 436 Pty 30% NC
Augustines Ltd (indirect) 30/5/1/1/5/402
South PR
Africa
Flinders Orogenic Exploration 80% EL 3200
Island Pty Ltd / Tawana
SA, Resources NL
Australia
Eyre Orogenic Exploration 80% EL 3928
Peninsula Pty Ltd / Tawana
SA, Resources NL
Australia
Flinders Orogenic Exploration 80% ELA 06/648
Island Pty Ltd / Tawana
SA, Resources NL
Australia
Orapa Seolo Botswana (Pty) 100% PL 61/2007
Botswana Ltd
Nimba Gryphon Minerals Ltd 100% MEL 11059
(through
Gryphon
alliance)
Lofa Gryphon Minerals Ltd 100% MEL 11060
(through
Gryphon
alliance)
Sinoe Global Mineral Subject to MEL 11009
Investments LLC option
agreement to
purchase 100%
Mofe Creek Tawana Liberia Inc 100% MRL 13029
ASX ADDITIONAL INFORMATION
AS AT 27 MARCH 2012
Additional information included in accordance with the Listing Rules of the
Australian Securities Exchange Limited. The information is current as at 27
March 2012.
1. Substantial shareholders
The names of substantial shareholders who had notified the Company in
accordance with section 671B of the Corporations Act are:
Gryphon Minerals Limited 100,000,000 shares
Chalmsbury Nominees Pty Ltd 67,844,432 shares
Merriwee Pty Ltd 50,000,000 shares
Spring Plains Pastoral Co (VIC) Pty Ltd 40,000,000
shares
2. Statement of issued capital
(a) Distribution of fully paid ordinary shareholders
Size of holding Number of Shares held
holders
1 - 1,000 184 112,935
1,001 - 5,000 382 1,171,871
5,001 - 10,000 276 2,208,812
10,001 - 100,000 705 28,941,814
100,001 and over 428 824,193,611
1,975 856,629,043
(b) All ordinary shares (whether fully paid or not) carry one vote per
share without restriction.
(c) At the date of this report there were 869 shareholders who held less
than a marketable parcel of shares.
3. Options
Exercise Expiry date Number of Number of
price options holders
Unlisted options $0.07 18 Jun 2012 4,000,000 1
Unlisted options $0.10 17 Jan 2013 6,000,000 1
Unlisted options $0.07 17 Jan 2013 6,750,000 6
Unlisted options $0.10 17 Jan 2014 6,750,000 6
Unlisted options $0.01 23 Feb 2013 50,000,000 1
Unlisted options $0.01 31 Jul 2012 20,000,000 1
Unlisted options $0.03 9 Sep 2012 5,000,000 1
Unlisted options $0.01 30 Jul 2013 50,000,000 1
Unlisted options $0.05 9 Sep 2014 5,000,000 1
Unlisted options $0.01 8 Mar 2014 25,000,000 1
Unlisted options $0.03 10 Nov 2013 1,250,000 1
Unlisted options $0.05 10 Nov 2015 1,250,000 1
4. Quotation
Listed securities in Tawana Resources NL are quoted on the Australian
Securities Exchange and the Johannesburg Stock Exchange.
5. Twenty largest shareholders
The twenty largest shareholders hold 57.22% of the issued capital of the
Company as at 27 March 2012.
No Shareholder Number of Percentage of
shares issued
capital
1 Gryphon Minerals Limited 100,000,000 11.67%
2 Merriwee Pty Ltd
3 BT Portfolio Services 40,000,000 4.67%
Limited
4 Spring Plains Past Co (Vic) 40,000,000 4.67%
PL
5 HSBC Custody Nominees 28,685,108 3.35%
(Australia) Limited
6 Mr Julian Babarczy 25,173,288 2.94%
7 ABN Amro Clearing Sydney 24,423,998 2.85%
Nominees Pty Ltd
8 Trayburn Pty Ltd 20,350,000 2.38%
9 Gregorach Pty Ltd
10 Seven Falls Trading 155 17,626,354 2.06%
(Pty) Ltd
11 McTavish Industries Pty Ltd 15,000,000 1.75%
12 Symorgh Investments Pty Ltd 15,000,000 1.75%
13 Gryphon Minerals Limited 14,250,000 1.66%
14 UBS Wealth Management 13,977,016 1.63%
Australia Nominees Pty Ltd
15 I E Properties Pty Ltd 13,000,000 1.52%
16 RL Holdings Pty Ltd
17 Baystreet Pty Ltd
18 Mrs Margot Louise 10,000,000 1.17%
Brandenburg
19 Cambus Equities Pty Ltd 9,220,000 1.08%
20 Mr Neville James Miles 8,501,101 0.99%
490,086,001 57.22%
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Date: 29/03/2012 12:21:39 Supplied by www.sharenet.co.za
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