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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
Kimberlite Project.                                                             
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.                                                    
Australian Projects                                                             
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)     
Eastern Gravels                                                                 
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    
when available.                                                                 
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.                          
Kareevlei Wes                                                                   
(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
two lobes.                                                                      
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$170 per carat is 4.53 carats per hundred tonne ("cpht").            
The grade of KV3 is variable due to the presence of various different phases    
encountered in the top 30 - 40m intersected by the Bauer drilling. The northern 
3 hectares of the pipe is composed of a homogenous phase of kimberlite and has  
been shown to have an estimated grade of 4.89cpht, based on the recovered grade 
from the minus 6mm fraction. No statistical analysis of the KV3 diamonds has    
been conducted.                                                                 
Earlier 10.5 inch percussion drilling in this northern section of KV3 achieved a
higher grade of 6.10cpht. This discrepancy could be due to the fact that the    
percussion drilling sampled deeper sections of the kimberlite.                  
The KV5 kimberlite was sampled by drilling two Bauer holes. The estimated grade,
based on the recovered grade from the minus 6mm fraction, from these two holes  
was 3.7cpht and 8.06cpht, with an average grade of 5.70cpht. No valuations of   
the diamonds recovered from KV5 have been conducted.                            
Kimberlite     Size*    Grade      Diamond Value*** Value       Cost****        
               Ha       cpht       US$/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     
values substantially.                                                           
**** 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.              
Australian Projects                                                             
Pilbara Project                                                                 
(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)                                              
MANAGING DIRECTOR                                                               
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:                                                           
Wolf Marx                                                                       
Tel: +61 3 99097551                                                             
Mob: 0961 428398446                                                             
Andrew Smith                                                                    
Tel: 08 82768794                                                                
Mob: 0961 0428265205                                                            
Email: ahs.taw@bigpond.net.au                                                   
PricewaterhouseCoopers Corporate Finance                                        
Tel: +27 (0)11 7974440 or 797 4906                                              
Email: raymond.manoim@za.pwc.com                                                
All press releases and announcements may be inspected on the Company"s web site,
namely: www.tawana.com.au                                                       
Date: 21/11/2005 07:29:11 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             

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