Tawana - South African and Australian Project Update Release Date: 21/11/2005 07:29:01 Code(s): TAW
Tawana - South African and Australian Project Update
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")
21 November 2005
South African and Australian Project Update
As a matter of course, the Company regularly releases information updating
shareholders on recent developments to both its South African and Australian
projects. In respect of such projects, no adverse changes have occurred since
the publication of the Pre-listing Statement of the Company on 3 November 2005
in regard to the Company"s listing on the JSE Limited.
In the last six months Tawana has commenced trial mining on its major, near
surface, alluvial diamond project - the Eastern Gravels. Grade and valuation
data is being used by Snowdens to finalise a scoping study. Tawana has also
completed initial drilling and processing of Kareevlei Wes kimberlite pipes now
the subject of a pre-feasibility study by Snowdens. In Australia, Tawana has
finalised a deal with De Beers to form a 50:50 JV for all exploration activities
in Australia. The major focus is the recently discovered diamond bearing
kimberlite fissure in the Pilbara known to extend over several kilometers.
South African Projects
Processing of Eastern Gravels continues with trial mining in a section of the
gravels down to a depth of 8m; expected extent of mining is 15m.
New kimberlites identified by drilling on Falcon targets A1 and A2 in the Daniel
Processing of minus 6mm material from Kareevlei Wes kimberlites completed.
Processing of crushed plus 6mm material commenced confirming previous grade
Prospecting Rights over additional kimberlite targets near Eastern Gravels
expected to be granted soon.
Ground based gravity survey completed over Blacktop kimberlite to define extent.
Follow up sampling on anomalous drainages in Pilbara Project completed.
South African Projects
Daniel Kimberlite Project
(Tawana 22.2% and operator, BHP Billiton 51.8% , Seven Falls 26%)
Directors are pleased to advise that percussion drilling has confirmed the
presence of kimberlite on both Falcon targets A1 and A2. These are the first
kimberlites to be positively identified by Tawana in the Daniel Kimberlite
Project ("DKP") in South Africa. A review of the entire Falcon database of the
DKP has been conducted by BHP Billiton and numerous additional kimberlite
targets have been identified.
The Falcon data and drilling suggest that the kimberlites are part of at least
two extensive dyke/fissure structures with A1 and A2 being pipes or "blows"
located on the structures.
Drilling has shown that the kimberlites are covered by 2 to 5 meters of calcrete
overburden. No kimberlitic indicator minerals were recovered from a 30kg soil
sample collected by Tawana over A2 recently, while only a small amount of
atypical indicators were recovered over A1. This probably explains why previous
explorers had not found these kimberlites. Numerous Falcon targets of a similar
nature to A1 and A2 in the DKP area will be tested when Prospecting Rights and
access agreements have been completed.
Samples of the A1 and A2 kimberlite drill cuttings will be analysed for micro-
diamonds and kimberlitic indicator minerals to get an indication of the diamond
potential of the kimberlites. Results should be known late Q1, 2006.
The kimberlites are located approximately 20 km north-east of the De Beers owned
Finsch Diamond Mine and only 8 km from the Tawana regional office and diamond
recovery plant in Danielskuil.
Soil samples have been collected over two of the four accessible Falcon targets
in the vicinity of the Eastern Gravels. These targets are considered to be
potential kimberlites and could be the source of the non-Finsch diamonds found
in the Eastern Gravels. The soil samples contained kimberlitic indicator
minerals in similarly small quantities to samples collected over A1 by Tawana
recently. Further sampling and drilling will be conducted over the targets when
Prospecting Rights and access agreements have been granted.
Tawana Alluvial Diamond Project
(Tawana 74% and operator; Seven Falls 26%; BHP Billiton 2.5% gross royalty)
To date a total of approximately 3,260 cubic meters of gravels from a trial
mining pit in the Eastern Gravels has been processed. The excavation has shown
that several layers of gravels are present in the area of the pit and that the
upper layers have been subjected to re-mobilisation. This has necessitated the
careful selection of gravels to be processed and has delayed the estimation of
overall grade of the gravels.
The upper layers were interpreted by Tawana geologists to be composed of gravel
or "scree" that was introduced subsequent to the main period of diamond bearing
gravel deposition and this appears to have been confirmed by the expected
erratic diamond grades in these layers.
Processing of the gravels in the lower (5-8m) sections in the pit has commenced
and an indication of grades in each of the sampled horizons will be released
Snowden Mining Consultants ("Snowdens") noted in the Competent Persons Report in
the Pre-listing Statement prepared for the JSE listing of Tawana; "... that the
occurrence of diamonds in the surface zone of the Eastern Gravels could have
favourable financial implications during initial stages of mining. It is
Snowden"s opinion that the Eastern Gravels merit further expenditure and that
the planned trial mining exercise will give a clearer indication of the
potential of the gravels within that area."
Snowdens is conducting a scoping study on the Eastern Gravels and have advised
that they expect it to be completed by the end of November.
3000 cubic meters of gravels were extracted during 2005 from the Eastern Gravels
by Bauer drilling, resulting in the recovery of 236 diamonds weighing a total of
34.04 carats. Diamonds recovered from the top 15 meters of the Eastern Gravels
have been valued at US$274 per carat. (See Tawana release 24 August 2005)
Operating costs for large scale alluvial diamonds mines in South Africa are
estimated at US$3.60 per cubic metre. The Eastern Gravels deposit is estimated
at 80 million tonnes, which gives the potential for large scale mining. At a
value of US$274 per carat, the breakeven grade of the Eastern Gravels is 1.32
carats per 100m3.
Industry experience with Bauer drilling is that the relatively large volumes
extracted with such drilling and the regular spacing of drill holes, provides
the most reliable evidence of grade distribution in an alluvial deposit.
Tawana"s regular spaced Bauer drill holes returned grades of up to 3.07 carats
per 100 cubic meters near the trial pit. The grades are more than twice the
estimated breakeven grade (1.32 ct per 100 tonne) of the Eastern Gravels
providing strong encouragement for the economic potential of this deposit.
Trial mining will continue over previous Bauer hole sites to more accurately
correlate grades between the pits and the Bauer holes.
(Tawana 74%, Seven Falls 26%)
Kareevlei Wes project comprises a cluster of 5 kimberlite pipes, which vary in
surface area from a large 5.8 ha to 0.35 ha. Previous work shows that three of
these kimberlites, KV1, KV2 and KV3 are diamondiferous. One of the remaining two
kimberlites, KV5 has now been tested for diamonds and has been shown to also be
diamondiferous. The small 0.35ha KV4 remains to be tested.
First pass processing of 6500 tonnes of Bauer drilled bulk samples from four of
the five kimberlites in the Kareevlei cluster has been completed. Crushing and
processing of the resultant plus 6mm material has commenced. The plus 6mm
material comprises approximately one third of the tonnage excavated by Bauer
drilling from the kimberlites.
Crushing of this material is being carefully monitored to avoid any diamond
breakage. This approach has resulted in the crushing circuit throughput being
gradually increased to match the Dense Media Separation ("DMS") plant throughput
of 20 tonne per hour.
The grade of KV1 and KV2, estimated from the recovered diamonds and the expected
recoveries from the oversize material, is 8.57 carats per hundred tonnes. The
grade reported to date from the crushed plus 6mm material is confirming this
expectation. This is considered to be the minimum grade before a multiplier is
established from a future mining operation.
Diamonds from KV1 and KV2 were valued at US$110 per carat with the valuers
predicting substantially higher values of up to US$150 per carat if larger
parcels could be provided. This prediction was supported by subsequent
statistical analysis of the diamond size distribution of the parcel from the KV1
and KV2 kimberlites, which suggested that a value of US$164 per carat was a
reasonable expectation for diamonds from these kimberlites. (see Tawana release
5 October, 2005) The same statistical analysis also suggested that the grade
would be increased by 25% if larger parcels could be provided. Applying the
suggested 25% uplift raises the estimated grade to very near the historic 11
The value per tonne of KV1 and KV2 from the valuations and the estimated grade
is between US$9.35 per tonne and US$13.94 per tonne with a possible higher
value, based on statistical analysis, of US$18.00 per tonne. The estimated
operating cost of open cut kimberlite mining and processing in South Africa is
US$7.70 per tonne
The 1.4 hectare KV2 pipe is estimated to contain 2 million tonnes to a depth of
100m. The size of KV1 has been determined by drilling to accurately determine
the surface area occupied by the kimberlite pipe at 1.2 hectares. This drilling
also showed that KV1 and KV2 are connected and part of the same larger pipe with
A parcel of 33.24 carats of diamonds from KV3 was valued by Mr Katz, a licensed
wholesale diamond trader in Johannesburg, at US$170 per carat. (see Tawana
release 5 October, 2005)
At the estimated operating cost of open cut kimberlite mining and processing in
South Africa of US$7.70 per tonne, the required breakeven grade at a diamond
value of US$170 per carat is 4.53 carats per hundred tonne ("cpht").
The grade of KV3 is variable due to the presence of various different phases
encountered in the top 30 - 40m intersected by the Bauer drilling. The northern
3 hectares of the pipe is composed of a homogenous phase of kimberlite and has
been shown to have an estimated grade of 4.89cpht, based on the recovered grade
from the minus 6mm fraction. No statistical analysis of the KV3 diamonds has
Earlier 10.5 inch percussion drilling in this northern section of KV3 achieved a
higher grade of 6.10cpht. This discrepancy could be due to the fact that the
percussion drilling sampled deeper sections of the kimberlite.
The KV5 kimberlite was sampled by drilling two Bauer holes. The estimated grade,
based on the recovered grade from the minus 6mm fraction, from these two holes
was 3.7cpht and 8.06cpht, with an average grade of 5.70cpht. No valuations of
the diamonds recovered from KV5 have been conducted.
Kimberlite Size* Grade Diamond Value*** Value Cost****
Ha cpht US$/carat US$/t US$/t
KV1 1.2 11** 164 18.04 7.70
KV2 1.4 11** 164 18.04 7.70
KV3 5.8 4.89-6.10 170 8.31-10.37 7.70
KV5 2.1 5.70 N/A NA 7.70
*Based on 10.5 inch drilling to 100m for KV2 and KV3, surface percussion
drilling for KV1 and geophysical interpretation for KV5.
** Based on statistical analysis of a parcel of diamonds recovered from the
minus 6mm fraction of material excavated by Bauer drilling. Not JORC/SAMREC
compliant. See note below.
*** Based on best estimate. Larger parcels of diamonds may change the given
**** Estimated mining and operating costs of open cut kimberlite mines in South
Snowdens is conducting a scoping study on the Kareevlei Wes kimberlites and have
advised it will be completed by the end of November. This will give an
independent evaluation of the deposits. As data become available from further
work, the scoping study will be upgraded to a pre-feasibility study status.
(Tawana 74%, Seven Falls 26%)
Approximately 500 tonnes of kimberlite tailings from a previous bulk sampling
program were re-processed by the DMS plant at Kareevlei Wes to check on the
efficiency of a rented DMS used previously. An insignificant amount of
additional diamonds was recovered, which shows that the rented DMS was efficient
and that the previously reported grade of 15-20cpht remains valid.
(Tawana 50%; De Beers Australia Exploration 50%)
A two-pronged exploration program is currently being completed over the Pilbara
project area by Tawana personnel, having previous experience in the Pilbara
region and familiarity with De Beers techniques.
A ground based gravity survey has been conducted over the Blacktop kimberlite
dyke/fissure to more accurately define its extent.
In addition, a helicopter supported stream and soil sampling program has been
completed to follow up previous positive De Beers results, with the aim of
locating additional kimberlites. Results are expected early in 2006.
The only bulk sample taken by De Beers from the Blacktop kimberlite produced 135
diamonds weighing 5.27 carats from 32.85 tonnes. The 16 cpht grade of that
sample is considered encouraging, considering the relatively small size of the
sample. The diamonds from this sample have not been valued.
*Note; The Company considers that any tonnage and grade estimates in this report
do not satisfy the definition of a Mineral Resource as set out in the JORC and
SAMREC Codes as insufficient work has been conducted to be able to determine the
grade and tonnage of the deposit with greater accuracy. Further work may or may
not establish a Mineral Resource on the property. Accordingly, the estimate of
grade is released as provided by paragraph 18 of the JORC Code of 2004 in
relation to an exploration target or exploration potential. The diamonds were
recovered from the minus 19mm plus 1.5mm fractions of gravelsand kimberlite
sampled by 1.5m or 2.5m diameter Bauer drill holes and excavations. The Eastern
Gravels and Kareevlei Wes kimberlites were processed in one of the Company"s
Dense Media Separation plants with diamond recovery by a Flowsort x-ray plant
and a grease table. The Blacktop kimberlite diamonds were recovered by
proprietary De Beers recovery methods.
W T Marx (BSc, BA, FAusIMM, CPGeo)
The information in this report is based on information compiled by Wolf Marx
BSc, BA, FAusIMM, CPGeo, Managing Director of Tawana Resources NL. He has
sufficient experience relevant to the style of mineralization and types of
deposits under consideration, and to the activity undertaken, to qualify as a
competent person as defined in the 2004 addition of the "Australasian Code for
Reporting of Mineral Resources and Ore Reserves"
For enquires contact:
Tel: +61 3 99097551
Mob: 0961 428398446
Tel: 08 82768794
Mob: 0961 0428265205
PricewaterhouseCoopers Corporate Finance
Tel: +27 (0)11 7974440 or 797 4906
All press releases and announcements may be inspected on the Company"s web site,
Date: 21/11/2005 07:29:11 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department