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Tawana Resources NL - March 2006 quarterly report

Release Date: 28/04/2006 08:13:38      Code(s): TAW
Tawana Resources NL - March 2006 quarterly report                               
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")                                                     
March 2006 Quarterly Report                                                     
Highlights                                                                      
-    Trial mining of Perdevlei commenced                                        
-    Application for Mining Right over Kareevlei Wes lodged                     
-    Initial results of sampling of targets in Pilbara encouraging              
-    Melbourne Laboratory freehold sold with leaseback agreement                
-    Prospectus lodged for underwritten 1:3 non-renounceable Rights Issue       
-    Management boosted by employment of Basil Tambanis as Corporate Operations 
Officer                                                                         
Shareholders are urged to view the Rights Issue Prospectus at www.tawana.com.au 
for a full review of all of the Company"s activities.                           
South African Projects                                                          
Daniel Kimberlite Project                                                       
(Tawana 22.2% and operator/ BHP Billiton 51.8% /Seven Falls 26%)                
Falconr Targets                                                                 
Following the discovery of kimberlites A1, A2 and A95 during Q4 2005, the BHP   
Billiton Falconr data was reviewed and all of the previously identified targets 
were reassessed. BHP Billiton subsequently confirmed its intention of           
contributing its share of expenditure on the ongoing drilling of the Falconr    
targets.                                                                        
A program for this exploration has been agreed by the joint venture partners    
with the first phase entailing drilling approximately 20 Falconr targets        
identified by BHP Billiton. Subsequently an additional 19 targets were          
identified for drilling during the first phase.                                 
The first phase of this program has commenced on currently accessible targets   
and is expected to be completed by the end of 2Q 2006.                          
Drilling will be conducted in several phases during 2006 as access becomes      
available.                                                                      
A95 Kimberlite                                                                  
Tawana has completed a small bulk sampling program designed to determine whether
the kimberlite A95 is diamondiferous. 500 tonnes of calcretised kimberlite were 
excavated from the top 2 metres of two sections of A95 and processed in the     
Company"s Dense Media Separation plant. Four small diamonds were recovered      
weighing a total 0.14cts proving that the kimberlite is diamondiferous but      
giving no indication of the grade. (See Comment )                               
Further drill testing of this kimberlite is planned.                            
Comment: Shareholders should be aware that kimberlites in the Limeacres region  
of South Africa, such as Perdevlei, Kareevlei and A95, are characterised by a   
surface alteration known as "calcretisation". This occurs when the exposed      
portions of the kimberlite are indurated by calcium carbonates deposited by     
circulating ground waters. This has the effect of coating any diamonds in the   
surficial, calcretised part of the kimberlite with carbonates, which may have an
adverse affect on the recovery of diamonds by conventional methods. Bulk        
sampling of exposed calcretised kimberlite, therefore, only provides information
as to whether the kimberlite is diamondiferous or not. Samples of deeper        
sections of the kimberlite can then be collected, if warranted, to determine the
grade of the deposit.                                                           
Kareevlei Wes                                                                   
(Tawana 74% and operator, Seven Falls 26%.)                                    
An application for a Mining Right for Kareevlei has been submitted to the South 
African Department of Minerals and Energy. The Company has been advised that the
Mining Right can be expected to be granted during 3Q 2006.                      
The Company has commenced preparation of a commercial operating plan for the    
Kareevlei Wes operation.                                                        
Perdevlei                                                                       
(Tawana 74% and operator, Seven Falls 26 %.)                                    
The Company-owned 10 tonne per hour dense media separation plant has been moved 
from Kareevlei Wes to Perdevlei and has commenced the processing of 2000 tonnes 
of kimberlite excavated from the K1 kimberlite during the quarter. Results of   
this processing are expected to be available by the end of the second quarter.  
Australian Projects                                                             
Pilbara Project                                                                 
(Tawana 50%, De Beers Australia 50%)                                            
Tawana Diamonds Australia Limited (TDAL) is the company formed jointly by De    
Beers and Tawana to explore and develop Australian diamond projects. TDAL is    
managed by Tawana Resources NL.                                                 
A helicopter supported sampling program was completed during Q4 2005 during     
which 304 samples were collected over areas in which previous De Beers sampling 
had identified kimberlitic indicator mineral anomalies. These samples are being 
processed and examined in the Company"s Melbourne Laboratory.                   
Initial results have been very encouraging. Kimberlitic indicator minerals have 
been recovered from two discrete areas. In the one area a microdiamond was      
recovered from a sample containing kimberlitic minerals, which are interpreted  
as being derived from a kimberlite close to the sample site. This is an         
excellent result for such an early stage of the exploration program, which is   
focused on an area some 40km from the Blacktop project area.                    
The other positive area is approximately 5km to the west of the Blacktop        
kimberlite.                                                                     
The DMS plant hired for processing the proposed bulk samples of the Blacktop    
kimberlite is being prepared for transport to site. This will be done as soon as
statutory approvals have been granted and the dry season has commenced.         
Melbourne Laboratory                                                            
During December 2005 Tawana acquired the De Beers diamond laboratory in         
Melbourne. In March 2006 the building containing the laboratory was sold with a 
long term lease-back agreement. The proceeds of this sale, being $1.87million,  
will be used to support the funding of Tawana"s exploration and development     
programs. The laboratory is now fully operational, and while primarily          
concentrating on the Company"s sample determinations, there is also capacity to 
handle third party work.                                                        
Corporate                                                                       
1:3 Underwritten Non-renounceable Rights Issue                                  
On 13 April 2006 the Company announced a non-renounceable rights issue on the   
basis of 1 new share for every 3 fully paid ordinary shares held on the Record  
Date to issue up to 21,493,747 shares at $0.35 (Rand1.61) per share.            
The rights issue is underwritten by ABN AMRO Morgans Corporate Limited and will 
raise approximately A$7.5 million (before expenses).                            
It is anticipated that the net proceeds raised from the rights issue, will be   
applied by the Company to fund exploration on existing tenements, the           
development of the Kareevlei Wes Project and working capital requirements of the
Company.                                                                        
Details and timing of the rights issue                                          
As indicated, the rights issue will take place in the ratio of 1 new share for  
every 3 fully paid shares held at the close of business on Friday, 5 May 2006   
("Record Date").  In addition, shareholders will also be able to apply for new  
shares in excess of their allocated entitlement; such shares to be allocated at 
the discretion of the Directors.                                                
The issue price for the new shares will be A$0.35 per share. The issue price    
payable for new shares by South African registered eligible shareholders will be
R1,61 per new share being the Rand equivalent of A$0.35 as at 11 April 2006,    
being the last practicable date prior to the finalisation of the terms of this  
announcement.  The Rand equivalent of A$0.35 has been set based on Standard     
Bank"s quoted selling rate for A$ - Cheques and Telegraphic Transfers.  All     
subscription monies from South African shareholders will be retained for use in 
Tawana"s South African operations.                                              
The Prospectus was lodged with the Australian Securities Investment Commission  
("ASIC") on 20 April 2006. The dates of the rights issue are as follows:        
2006                                 
   Last day to trade in shares on the JSE  Wednesday, 26 April                  
   in order to be entitled to participate                                       
   in the rights issue                                                          
South African public holiday            Thursday, 27 April                   
   Last day to trade in shares on the ASX  Friday, 28 April                     
   in order to be entitled to participate                                       
   in the rights issue                                                          
Shares trade `ex" rights issue          Friday, 28 April                     
   participation on JSE                                                         
   South African public holiday            Monday, 1 May                        
   Shares trade `ex" rights issue          Monday, 1 May                        
participation on ASX                                                         
   Record Date on ASX and JSE to determine                                      
   shareholders of Tawana entitled to      Friday, 5 May                        
   participate in the rights issue                                              
Rights issue opens and Prospectus and                                        
   Entitlement and Acceptance Form         Wednesday, 10 May                    
   dispatched to entitled Tawana eligible                                       
   shareholders                                                                 
Rights issue closes as to acceptance                                         
   and payment in South Africa at          Wednesday, 24 May                    
   12:00**** and at 17:00 AEST in                                               
   Australia                                                                    
Shares quoted on ASX (with deferred     Thursday, 25 May                     
   settlement)                                                                  
   Updating by Computershare Investor                                           
   Services 2004 (Pty) Limited of                                               
shareholders accounts and anticipated   Friday, 2 June                       
   date for commencement of trading of new                                      
   shares on JSE                                                                
Notes:                                                                          
*    All or any of the above dates are subject to change.  Subject to the       
     Australian Corporations Act, the ASX, the JSE and the ASIC, the Company,   
     with prior written consent of the Underwriter, reserves the right to vary  
     any or all such dates as set out above.  Any changes to the above dates    
will be communicated to shareholders in the appropriate manner as required 
     by the ASX and in the case of the JSE, by release over SENS and by         
     publication in the South African press.                                    
**   Shareholders are advised that trading in shares on the JSE in Tawana is    
settled within the STRATE environment five business days following a trade.
***  In South Africa, no dematerialsation or rematerialisation of Tawana share  
     certificates may take place from Friday, 28 April 2006 to Friday, 5 May    
     2006, both days inclusive.                                                 
**** South African shareholders should note that although in the dematerialised 
     environment payment usually takes place on delivery, in this instance,     
     dematerialised shareholders will be required to make payment for their     
     rights on or before 12:00 on the closing date of the rights issue, namely, 
Wednesday, 24 May 2006, with share delivery/updating of accounts only      
     taking place on Friday, 2 June 2006.  Dematerialised shareholders should   
     consult with their CSDP or broker with regard to the deadline that the CSDP
     or broker requires payment to be made by.                                  
Documentation regarding the rights issue                                        
It is anticipated that the Prospectus dated 20 April 2006 and Form of           
Entitlement and Acceptance providing detailed information on the rights issue   
will be dispatched to registered shareholders on or about 10 May 2006. Eligible 
shareholders should note that they will be required to complete the Entitlement 
and Acceptance Form in order to acquire shares in terms of the rights issue.    
Appointment of Corporate Operations Officer                                     
On 12 April 2006 the Company announced the appointment of Basil Tambanis as     
Corporate Operations Officer effective 22 May 2006.                             
Basil is an experienced corporate adviser with significant Australian and       
international transaction expertise in business analysis, valuations, strategic 
business development and fund raising. He joins us from Intersuisse Corporate   
where he established strong ties to the resource sector and financial market.   
Prior to entering the equity capital markets, Basil spent 8 years in the mining 
sector managing the construction and commissioning of a variety of mining       
projects including crushing circuits, alluvial processing plants and CIP        
processing plants. He has also supervised the implementation of exploration     
programs in Australia and PNG.  Basil holds a Bachelor of Business in Financial 
Risk and Risk Management.                                                       
At Tawana, Basil will combine his extensive corporate finance and mining        
experience to accelerate final feasibility and development of the Kareevlei Wes 
project and bulk sample testing at Blacktop.                                    
Cash Position                                                                   
The attached Appendix 5B shows the cash position of the Company as at 31 March  
2006 to be $605,000. This excludes the $1.87million received from the sale of   
the Melbourne laboratory building in April 2006 and the anticipated $7.5million 
(before costs) to be received from the rights issue described above.            
For further information please contact:                                         
Wolf Marx                                                                       
Tel:   +61 (0)3 98635222                                                        
Mob: +61 (0)428 398446                                                          
Email: wolf.marx@tawana.com.au                                                  
Andrew Smith                                                                    
Tel:   +61 (0)8 82768794                                                        
Mob: +61 (0)417 265205                                                          
Email: andrew.smith@tawana.com.au                                               
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 mineralisation and types of deposits under             
consideration, and to the activities undertaken, to qualify as a competent      
person as defined in the 2004 addition of the "Australasian Code for the        
Reporting of Mineral Resources and Ore Reserves"                                
ASX Rule 5.3                                                                    
Appendix 5B                                                                     
Mining exploration entity quarterly report                                      
Introduced 1/7/96.  Origin:  Appendix 8.  Amended 1/7/97, 1/7/98, 30/9/2001.    
Name of entity                                                                  
Tawana Resources N.L.                                                           
ABN                                  Quarter ended                              
                                     ("current quarter")                        
69 085 166 721                       31 March 2006                              
Consolidated statement of cash flows                                            
Current       Year to date                    
Cash flows related to operating   quarter       ( 3 months)                     
activities                        $A"000        $A"000                          
1.1    Receipts from product      -                                             
sales and related                                                        
       debtors                                                                  
1.2    Payments for   (a)         (487)         (487)                           
       exploration and                                                          
evaluation                                                               
                 (b)                                                            
       development                (154)         (154)                           
                 (c)                                                            
production                                                               
                 (d)                                                            
       administration                                                           
1.3    Dividends received         -             -                               
1.4    Interest  received         1             1                               
1.5    Interest and other costs                                                 
       of finance paid                                                          
1.6    Income taxes paid                                                        
1.7    Other (provide details                                                   
       if material)                                                             
                                  (640)         (640)                           
       Net Operating Cash Flows                                                 
Cash flows related to                                                    
       investing activities                                                     
1.8    Payment for purchases                                                    
       of:  (a)prospects          (95)          (95)                            
(b)equity investments                                                    
       (c) other fixed assets                                                   
1.9    Proceeds from sale of:                                                   
       (a)prospects                                                             
(b)equity investments                                                    
1.10   Loans to other entities                                                  
1.11   Loans repaid by other                                                    
       entities                                                                 
Net investing cash flows   (95)          (95)                            
1.13   Total operating and        (735)         (735)                           
       investing cash flows                                                     
       (carried forward)                                                        
1.13   Total operating and        (735)         (735)                           
       investing cash flows                                                     
       (brought  forward)                                                       
       Cash flows related to                                                    
financing activities                                                     
1.14   Proceeds from issues of                   -                              
       shares, options, etc.                                                    
1.15   Proceeds from sale of      -              -                              
forfeited shares                                                         
1.16   Proceeds from borrowings   -              -                              
1.17   Repayment of borrowings    -              -                              
1.18   Dividends paid             -              -                              
1.19   Other (provide details     -              -                              
       if material)                                                             
       Net financing cash flows                                                 
       Net increase (decrease)    (735)         735                             
in cash held                                                             
1.20   Cash at beginning of       1,340         1,340                           
       quarter/year to date                                                     
1.21   Exchange rate              -             -                               
adjustments to item 1.20                                                 
1.22   Cash at end of quarter     605           605                             
Payments to directors of the entity and associates of the directors             
Payments to related entities of the entity and associates of the related        
entities                                                                        
                                                Current                         
                                                quarter                         
                                                $A"000                          
1.23   Aggregate amount of payments to the      88                              
       parties included in item 1.2                                             
1.24   Aggregate amount of loans to the         Nil                             
       parties included in item 1.10                                            
1.25   Explanation necessary for an understanding of the                        
       transactions                                                             
Non-cash financing and investing activities                                     
2.1   Details of financing and investing transactions which                     
have had a material effect on consolidated assets and                     
      liabilities but did not involve cash flows                                
      Nil                                                                       
2.2   Details of outlays made by other entities to establish                    
or increase their share in projects in which the                          
      reporting entity has an interest                                          
      Nil                                                                       
Financing facilities available                                                  
Add notes as necessary for an understanding of the position.                    
                                 Amount         Amount used                     
                                 available      $A"000                          
                                 $A"000                                         
3.1   Loan facilities            Nil            Nil                             
3.2   Credit standby             Nil            Nil                             
      arrangements                                                              
Estimated cash outflows for next quarter                                        
$A"000                                 
4.1   Exploration and evaluation         1,400                                  
4.2   Development                        Nil                                    
      Total                              1,400                                  
Reconciliation of cash                                                          
Reconciliation of cash at the   Current       Previous                          
end of the quarter (as shown    quarter       quarter                           
in the consolidated statement   $A"000        $A"000                            
of cash flows) to the related                                                   
items in the accounts is as                                                     
follows.                                                                        
5.1  Cash on hand and at bank   214           482                               
5.2  Deposits at call           391           858                               
5.3  Bank overdraft             -             -                                 
5.4  Other (provide details)    -             -                                 
     Total: cash at end of      605           1,340                             
quarter (item 1.22)                                                        
Changes in interests in mining tenements                                        
                         Tenement       Nature of     Interest at   Interest    
                         reference      interest      beginning of  at end of   
(note (2))    quarter       quarter     
6.1  Interests in                                                               
     mining tenements                                                           
     relinquished,                                                              
reduced or lapsed                                                          
6.2  Interests in                                                               
     mining tenements                                                           
     acquired or                                                                
increased                                                                  
Issued and quoted securities at end of current quarter                          
Description includes rate of interest and any redemption or conversion rights   
together with prices and dates.                                                 
Total       Number       Issue price Amount         
                            number      quoted       per         paid up        
                                                     security    per            
                                                                 security       
7.1   Preference                                                                
      +securities           Nil         Nil                                     
      (description)                                                             
7.2   Changes during                                                            
quarter                                                                   
      (a)  Increases                                                            
      through issues                                                            
      (b)  Decreases                                                            
through returns of                                                        
      capital, buy-backs,                                                       
      redemptions                                                               
7.3   +Ordinary             65,609,529  65,609,529   various     various        
securities                                                                
7.4   Changes during                                                            
      quarter                                                                   
      (a)  Increases                                                            
through issues                                                            
      (b)  Increase                                                             
      through exercise of                                                       
      options                                                                   
7.5   +Convertible debt                                                         
      securities            Nil         Nil                                     
      (description)                                                             
7.6   Changes during                                                            
quarter                                                                   
      (a)  Increases                                                            
      through issues                                                            
      (b)  Decreases                                                            
through securities                                                        
      matured, converted                                                        
7.7   Options                                        Exercise    Expiry         
      (description and      21,869,843  21,869,843   price       date           
conversion factor)                             $1.00       30 April       
                                                                 2008           
7.8   Issued during         Nil         Nil                                     
      quarter                                                                   
7.9   Exercised during      Nil         Nil                                     
      quarter                                                                   
7.10  Expired during        Nil         Nil                                     
      quarter                                                                   
7.11  Debentures            Nil         Nil                                     
      (totals only)                                                             
7.12  Unsecured notes       Nil         Nil                                     
      (totals only)                                                             
Compliance statement                                                            
1    This statement has been prepared under accounting policies which comply    
     with accounting standards as defined in the Corporations Act or other      
     standards acceptable to ASX (see note 4).                                  
2    This statement does give a true and fair view of the matters disclosed.    
Sign here:            W.T.Marx     Date:  27   April, 2006                      
(Director)                                                                      
Print name:    W.T.Marx                                                         
Notes                                                                           
1    The quarterly report provides a basis for informing the market how the     
     entity"s activities have been financed for the past quarter and the effect 
     on its cash position.  An entity wanting to disclose additional information
is encouraged to do so, in a note or notes attached to this report.        
2    The "Nature of interest" (items 6.1 and 6.2) includes options in respect of
     interests in mining tenements acquired, exercised or lapsed during the     
     reporting period.  If the entity is involved in a joint venture agreement  
and there are conditions precedent which will change its percentage        
     interest in a mining tenement, it should disclose the change of percentage 
     interest and conditions precedent in the list required for items 6.1 and   
     6.2.                                                                       
3    Issued and quoted securities. The issue price and amount paid up is not    
     required in items 7.1 and 7.3 for fully paid securities.                   
4    The definitions in, and provisions of, AASB 1022: Accounting for Extractive
     Industries and AASB 1026: Statement of Cash Flows apply to this report.    
5    Accounting Standards ASX will accept, for example, the use of International
     Accounting Standards for foreign entities.  If the standards used do not   
     address a topic, the Australian standard on that topic (if any) must be    
     complied with.                                                             
27 April, 2006                                                                  
Date: 28/04/2006 08:13:55 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
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