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Tawana Resources NL - June 2006 Quarterly Report

Release Date: 25/07/2006 09:05:01      Code(s): TAW
Tawana Resources NL - June 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")                                                     
June 2006 Quarterly Report                                                      
25 July, 2006                                                                   
Highlights                                                                      
Drilling of Daniel Kimberlite targets re-commenced                              
Bulk sampling of Daniel Kimberlites commenced                                   
Trial mining of Perdevlei completed                                             
Application for Mining Right over Kareevlei Wes progressing                     
Access to Blacktop kimberlite established                                       
Underwritten 1:3 non-renounceable Rights Issue completed raising $7.5 million   
South African Projects                                                          
Daniel Kimberlite Project                                                       
(Tawana 22.2% and operator/ BHP Billiton 51.8% /Seven Falls 26%)                
Falcon Targets                                                                  
The drilling of Falcon targets has re-commenced after a short break during      
May. The number of targets identified for drilling has increased after          
additional reviews of data. The first phase now entails drilling                
approximately 31 Falcon targets located on granted Prospecting Rights.          
Eighteen of these targets have now been drilled. Some of the remaining          
accessible targets are located in close proximity to known kimberlites.         
Drilling will be conducted in several phases during 2006 as access becomes      
available. Tawana is contributing 30% of the costs of this drilling, while      
BHP Billiton is contributing 70%.                                               
A9/10 and A25 Kimberlites                                                       
Falcon targets A9/10 and A25 were recommended by BHP Billiton for ground        
inspection, which revealed that they were kimberlites on which previous         
explorers had conducted limited exploration. The A9/10 kimberlite has an        
exposed surface area of approximately 3 hectares, while A25 is about 1          
hectare.                                                                        
Tawana has bulk samples from A9/10 and A25 which are being processed in the     
Company"s dense media separation (DMS) plant. The results of this work are      
expected to be available at the end of the third quarter.                       
Under the joint venture agreement with BHP Billiton, Tawana is conducting the   
bulk sampling on A9/10 and A25 at its own cost, which will enable Tawana to     
increase its equity in a kimberlite to 29.6% on producing 400 carats of         
diamonds.                                                                       
Perdevlei                                                                       
(Tawana 74% and operator, Seven Falls 26 %.)                                    
The Company-owned 10 tonne per hour DMS plant has completed the processing of   
2,000 tonnes of kimberlite excavated from the K1 pipe. Results show that the    
material processed has a grade of approximately 5 carats per hundred tonnes.    
Previous results from drilling into the deeper (150m below surface) sections    
of the kimberlite indicated that the grade of the pipe could be substantially   
higher. The trial mining demonstrates that the upper portions of the            
kimberlite appear to be uneconomic. The Company will review the potential for   
the project.                                                                    
Kareevlei Wes                                                                   
 (Tawana 74% and operator, Seven Falls 26%.)                                    
The application for a Mining Right for Kareevlei has been accepted by the       
South African Department of Minerals and Energy. No objections to the grant     
of the Mining Right have been received. The Company has been advised that the   
Mining Right can be expected to be granted during 3Q 2006.                      
In anticipation of the granting of this Mining Right the Company has            
continued preparation of a commercial operating plan for the Kareevlei Wes      
project.                                                                        
Tawana Alluvials                                                                
 (Tawana 74% and operator, Seven Falls 26%.)                                    
Tawana has been approached by five companies interested in participating in     
the ongoing evaluation of the diamondiferous alluvials of the Feeder Channel    
and Eastern Gravels. Negotiations with the preferred bidders will be            
conducted during the third quarter.                                             
Australian Projects                                                             
Pilbara Project                                                                 
(Tawana 50%, De Beers Australia 50%)                                            
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 were processed and examined in the Company"s Melbourne Laboratory.      
Results have been very encouraging. Kimberlitic indicator minerals have been    
recovered from several discrete areas.                                          
The results which indicate probable extensions to the Blacktop kimberlite       
will be followed up as a matter of priority.                                    
Clearances for the DMS plant and camp sites and for the bulk sampling of the    
Blacktop kimberlite have been completed by the Aboriginal Traditional Owners.   
Road access to these sites has been improved and bulk sampling will commence    
once formal approval from the Department of Industry and Resources has been     
received. This is expected early in the third quarter.                          
Melbourne Laboratory                                                            
All samples generated by the Company continue to be treated in the Melbourne    
Laboratory. In addition samples from non-associated clients are now also        
being treated in this facility.                                                 
The laboratory and office have active management systems in both Occupational   
Health and Safety and Environment and are certified to AS/NZS ISO 14001:2004    
(Environmental Management System), AS/NZS 4801: 2001 and OHSAS 18001:1999       
(Occupational Health and Safety Management System), having successfully         
completed a recent external transfer audit with SAI Global.                     
Corporate                                                                       
1:3 Underwritten Non-renounceable Rights Issue                                  
A rights issue underwritten by ABN AMRO Morgans Corporate Limited was           
successfully completed during the quarter. The rights issue raised              
$7.5million before costs.                                                       
Directors of Tawana are particularly pleased to note that approximately 55%     
of the shortfall shares were allocated to South African institutions. Since     
its listing on the Johannesburg Stock Exchange (JSE) in November 2005, it has   
been the aim of the Company to increase its shareholder spread in South         
Africa and to increase the liquidity of Tawana shares on the JSE.               
For further information please contact:                                         
Wolf Marx                                                                       
Tel:   +61 (0)3 98635222                                                        
Mob: +61 (0)428 398446                                                          
Email: wolf.marx@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                                 
Images relating to this report can be viewed on the Company"s website:          
www.tawana.com.au                                                               
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                        30 June 2006                              
Consolidated statement of cash flows                                            
                                  Current        Year to date                   
Cash flows related to operating   quarter        ( 6 months)                    
activities                        $A"000         $A"000                         
1.1  Receipts from product sales  -                                             
     and related debtors                                                        
1.2  Payments for   (a)           (1,260 )       (1,747)                        
exploration and evaluation                                                 
               (b)  development                                                 
               (c)  production                                                  
               (d)                (705)          (859)                          
administration                                                             
1.3  Dividends received           -              -                              
1.4  Interest  received           10             11                             
1.5  Interest and other costs of                                                
finance paid                                                               
1.6  Income taxes paid                                                          
1.7  Other (provide details if                                                  
     material)                                                                  
(1,955)        (2,595)                        
     Net Operating Cash Flows                                                   
     Cash flows related to                                                      
     investing activities                                                       
1.8  Payment for purchases of:                                                  
     (a)prospects                 -                                             
     (b)equity investments                       (95)                           
     (c) other fixed assets                                                     
1.9  Proceeds from sale of:                                                     
     (a)prospects                                                               
     (b)South Yarra Building      1,870          1,870                          
1.10 Loans to other entities                                                    
1.11 Loans repaid by other                                                      
     entities                                                                   
     Net investing cash flows     1,870          (1,775)                        
1.13 Total operating and          (85)           (820)                          
investing cash flows                                                       
     (carried forward)                                                          
1.13 Total operating and          (85)           (820)                          
     investing cash flows                                                       
(brought  forward)                                                         
     Cash flows related to                                                      
     financing activities                                                       
1.14 Proceeds from issues of      6,806          6,806                          
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     6,806          6,806                          
     Net increase (decrease) in   6,721          5,986                          
     cash held                                                                  
1.20 Cash at beginning of         605            1,340                          
quarter/year to date                                                       
1.21 Exchange rate adjustments    -              -                              
     to item 1.20                                                               
1.22 Cash at end of quarter       7,326          7,326                          
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         110                            
     parties included in item 1.2                                               
1.24 Aggregate amount of loans to the parties    Nil                            
     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 arrangements  Nil            Nil                            
Estimated cash outflows for next quarter                                        
                                                 $A"000                         
4.1  Exploration and evaluation                  2,298                          
4.2  Development                                 Nil                            
Total                                       2,298                          
Reconciliation of cash                                                          
Reconciliation of cash at the    Current        Previous                        
end of the quarter (as shown in  quarter        quarter                         
the consolidated statement of    $A"000         $A"000                          
cash flows) to the related items                                                
in the accounts is as follows.                                                  
5.1  Cash on hand and at bank    209            214                             
5.2  Deposits at call            7,117          391                             
5.3  Bank overdraft              -              -                               
5.4  Other (provide details)     -              -                               
     Total: cash at end of       7,326          605                             
quarter (item 1.22)                                                        
Changes in interests in mining tenements                                        
                    Tenement    Nature of     Interest   Interest at            
                    reference   interest      at         end of                 
(note (2))    beginning  quarter                
                                              of                                
                                              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       Amount               
                     number      quoted        price 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      87,097,481  87,097,481    Various     various              
      securities                                                                
7.4   Changes                                                                   
      during                                                                    
      quarter        21,487,952  21,487,952                                     
      (a)                                                                       
Increases                                                                 
      through                                                                   
      issues                                                                    
      (b)  Increase                                                             
through                                                                   
      exercise of                                                               
      options                                                                   
7.5   +Convertible                                                              
debt           Nil         Nil                                            
      securities                                                                
      (description)                                                             
7.6   Changes                                                                   
during                                                                    
      quarter                                                                   
      (a)                                                                       
      Increases                                                                 
through                                                                   
      issues                                                                    
      (b)                                                                       
      Decreases                                                                 
through                                                                   
      securities                                                                
      matured,                                                                  
      converted                                                                 
7.7   Options                                  Exercise    Expiry               
      (description   21,869,843  21,869,843    price       date                 
      and                                      $1.00       30 April             
      conversion                                           2008                 
factor)                                                                   
7.8   Issued during  Nil         Nil                                            
      quarter                                                                   
7.9   Exercised      Nil         Nil                                            
during                                                                    
      quarter                                                                   
7.10  Expired        Nil         Nil                                            
      during                                                                    
quarter                                                                   
7.11  Debentures     Nil         Nil                                            
      (totals only)                                                             
7.12  Unsecured      Nil         Nil                                            
notes (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:     July, 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.                                      
Date: 25/07/2006 09:05:17 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
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