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TAW - Tawana Resources NL - Quarterly activities and cash flow report

Release Date: 25/01/2007 10:55:05      Code(s): TAW
TAW - Tawana Resources NL - Quarterly activities and cash flow 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")                                                     
Quarterly Activities and Cash Flow Report                                       
1 October - 31 December 2006                                                    
Key Points                                                                      
+Results of Blacktop kimberlite dyke bulk sampling                              
-2320 diamonds weighing 163.89 diamonds recovered                               
-Diamonds valued at US$52.56 per carat                                          
-Grade of kimberlite variable up to 8.63 cpht                                   
+Pilbara Exploration samples being processed                                    
-Results due Q1 2007                                                            
+Mining Right Application for Kareevlei Wes awaited                             
-Social and Labour Plan awaiting approval by DME                                
+Strategic Alliance signed with Guma Resources (Proprietary) Limited            
Australia                                                                       
Blacktop Kimberlite Project                                                     
(Tawana 66.6% and operator /De Beers Australia Exploration 33.3%)               
A dense media separation (DMS) plant was commissioned on 8 September 2006, and  
the on-site processing was completed by mid-November 2006. The DMS concentrates 
were processed by x-ray diamond recovery methods in Perth and the diamonds      
sorted and weighed in the Company`s Melbourne laboratory. A total of 2320       
diamonds, weighing 163.89 carats were recovered. The majority of the stones are 
white dodecahedrons, with the largest stone weighing 1.41 carats.  All diamonds 
were recovered from the +1mm to -19mm size fractions of the material processed. 
Approximately 6,000 tonnes were excavated and trucked to the DMS plant. While   
additional blows may exist along strike of Blacktop 01, costeaning was in areas 
which were readily accessible. Figure 1 shows the locations of the bulk sample  
sites along the strike of the Blacktop 1 kimberlite fissure. Table 1 and 2      
summarise the results of the bulk sampling. The grade of the kimberlite varies  
along strike but the quality of the diamonds remained consistent. The variable  
grade is interpreted as being the result, mainly, of contamination of the       
kimberlite in near-surface exposures by surrounding country rocks. In narrow    
sections of the kimberlite contamination of the samples was greatest. During an 
early evaluation stage it is common practice to excavate kimberlite from        
costeans with minimal cutting back of the surrounding country rocks. This       
practice minimizes environmental disturbance of the area but can result in the  
contamination of the samples and consequential dilution of the recovered grade. 
Table 1 summarises the results of the relatively uncontaminated kimberlite      
excavated from wider sections of the kimberlite fissure (known as "blows") and  
Table 2 summarises the results of the samples collected from the narrower       
sections.                                                                       
It has been previously reported that De Beers recovered 135 diamonds weighing   
5.27 carats from a 32.8t sample.This sample was collected at the BTB01/03 site. 
The small size of the sample enabled De Beers to collect that sample free of any
contamination. The larger samples collect by Tawana however have provided a     
large enough parcel of diamonds for valuation purposes.                         
The diamonds were valued by Diamdel, a De Beers diamond trading and marketing   
company, at US$52.56 per carat. Commenting on the diamonds the valuers said that
the parcel was unusual in that it contained no boart (low quality industrial)   
diamonds and that the presence of larger diamonds in a larger parcel would      
result in a higher valuation.                                                   
Exploration in the area around Blacktop has given strong indications of the     
presence of extensions to the Blacktop kimberlite. Indicator minerals recovered 
from one of these sites, known as Blacktop East, display mineral chemistry      
signatures typical of diamondiferous kimberlites.                               
The future program for Blacktop will be formulated once the results of the      
regional exploration have been received.                                        
Table 1: Summary of Blacktop 1 Bulk Sampling Results - Kimberlite Blows         
HMS     Diamonds Carats  Avg.  Grade                                      
      feed                     Size                                             
      tonnes  Number   ct      ct    cpht                                       
BTB01  457     396      29.18   0.07  6.39                                      
BTB03  636     667      51.33   0.08  8.07                                      
BTB10  443     612      38.24   0.06  8.63                                      
TOTALS 1536    1675     118.75  0.07  7.73                                      
Table 2: Summary of Blacktop 1 Bulk Sampling Results - Diluted Kimberlite       
HMS     Number   Carats  Avg.  Grade                                      
      feed                     Size                                             
      tonnes  Diamonds ct      ct    cpht                                       
BTB02  594     151      10.97   0.07  1.85                                      
BTB04  198     7        1.49    0.21  0.75                                      
BTB05  1908    473      30.80   0.07  1.61                                      
BTB06  702     4        0.23    0.06  0.03                                      
BTB07  277     3        0.15    0.05  0.06                                      
BTB08  622     5        0.32    0.06  0.05                                      
BTB09  118     2        1.18    0.59  1.00                                      
TOTALS 4419    645      45.14   0.07  1.02                                      
Figure 1:  Contour map showing costeans and bulk sample sites over Blacktop 01. 
(This Figure 1 can be viewed on the Tawana website at www.tawana.com.au)        
Samples were also taken over the Blacktop 02 dyke (figure 1) for heavy mineral  
analysis. These samples have been analysed in Tawana`s laboratory and the       
diamondiferous nature of this sub-parallel dyke has been confirmed.             
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 Code 
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 1mm fractions of kimberlite excavated. The kimberlites 
were processed in a rented Dense Media Separation plant with diamond recovery by
a Flowsort x-ray plant and manual sorting.                                      
Pilbara Regional Exploration                                                    
Helicopter supported regional reconnaissance and follow-up sampling within the  
17 granted De Beers tenements commenced on 26 September and was completed by 11 
October 2006.  This program included reconnaissance stream sampling and the     
follow up of anomalies generated from aeromagnetic surveys and heavy mineral    
anomalies from previous De Beers sampling.                                      
This helicopter sampling program was based out of Blacktop camp and included    
Tawana geologists and a geologist on secondment from De Beers.  The sampling    
area covered approximately 4000 square km.                                      
The 266 samples collected during the program are being processed and examined in
the Melbourne Laboratory. Results are expected during Q1 2007.                  
South Africa                                                                    
Kareevlei Wes Project                                                           
(Tawana 74% and operator/Seven Falls 26%)                                       
As previously reported the Company`s South African and Australian based mining  
consultants have completed the detailed planning for the trial mining of the KV2
kimberlite at Kareevlei Wes.                                                    
The Mining Right application has progressed to the stage where it has been      
approved by the Northern Cape Provincial Departmental stakeholders and is still 
being assessed by the Kimberley regional branch of the Department of Minerals   
and Energy (DME). Once this process has been completed the application will be  
referred to the DME headquarters in Tshwane (formerly Pretoria). Guidelines     
recently announced by the DME indicate that the DME allows for a 12 month       
completion of processing of Mining Right Applications.                          
The Company has been advised that the Financial, Environmental Impact and       
Statutory sections of the Mining Right Application have been approved by the    
Kimberley Branch of the DME. However one remaining section, regarding the Social
and Labour Plan for mining at Kareevlei Wes, has yet to be approved and sent to 
Tshwane.                                                                        
Management has met with officials of the DME in Kimberley and Tshwane during the
quarter to establish and implement additional requirements by the DME. Tawana is
unable to forecast when the approval process will be completed.                 
Daniel Kimberlite Project                                                       
(Tawana 22.2% and operator/ BHP Billiton 51.8% /Seven Falls 26 %)               
Negotiations with a black empowered group holding Prospecting Rights over a     
large area within the Daniel Project Area are continuing. This area is not      
included within the Tawana/BHP Billiton/Seven Falls joint venture area.         
Tawana Alluvials                                                                
(Tawana 70% and operator/Seven Falls 30 %)                                      
Eastern Gravels and Feeder Channel                                              
Negotiations with third parties to participate in the continuation of the       
economic assessment of the Eastern Gravels and Feeder Channel alluvial diamond  
deposits have not reached a concluded position. While several proposals have    
been considered, none has provided a satisfactory commercial basis for an       
agreement.  Discussions are continuing.                                         
Corporate                                                                       
Guma Strategic Alliance                                                         
The Company has formed a strategic alliance with Guma Resources (Proprietary)   
Limited ("Guma Resources"), a subsidiary of Guma Capital (Proprietary) Limited  
("Guma"). The Guma group of companies is a diversified investment group based in
Johannesburg that is black owned and managed. The Guma group was established in 
1997 by successful South African entrepreneur Robert Matana Gumede.             
Guma focuses on multi-faceted businesses where it can add value and assist in   
their growth potential.  In addition to several private investments in          
diversified sectors, Guma owns 36.6% of GijimaAST that is one of South Africa`s 
largest IT companies and is listed on the JSE.  GijimaAST posted revenues of    
R1.95 billion (A$344.4 million) in the last financial year and received 8th     
place overall in the Financial Mail/Empowerdex Top 200 Empowerment Companies    
Survey 2006.  In 2005, Robert Gumede, chairman of Guma, was runner up in the    
South African Chapter of the World Entrepreneur of the Year.                    
The strategic alliance provides Tawana with a black-controlled business partner 
with the ability to leverage of its sizeable net asset base and introduce       
resource projects via its strong networks throughout Africa.                    
The purpose of the strategic alliance is to combine the exploration and mining  
skills of Tawana with the financial, entrepreneurial, accounting and business   
skills of Guma to explore for, develop and mine diamond and other mineral       
deposits in South Africa, Botswana, Namibia, Mozambique and other countries as  
agreed by the parties.                                                          
The alliance will comprise two stages. The first will be to identify, assess and
acquire mineral rights to projects deemed to be worthy of progressing. The      
second stage will involve the formation of joint ventures on a project by       
project basis with the aim to confirm the economic merit of the projects via the
completion of definitive feasibility studies adequate to secure debt financing. 
The participation in Stage One will be on a 50:50 basis and thereafter the      
participating interests will be dependent on the nature of the specific         
projects. Tawana will lead the alliance with Guma`s hands-on involvement.       
Tawana`s long standing relationship with Seven Falls will continue on the       
existing projects in South Africa and Botswana and will be further strengthened 
with the appointment of Seven Falls Chairman, Thabo Makweya (former MEC for     
Economic Affairs in the Northern Cape), as CEO of Guma Resources.               
Staff Changes                                                                   
Harry Hill resigned effective 22 January 2007 as Company Secretary of the       
Company to pursue other interests.                                              
Edward Derrick Ehmke was appointed Company Secretary. Derrick has over 40 years 
business experience in Finance, Administration, IT Supply Chain Management and  
Marketing. He has been involved predominantly in Retailing and Manufacturing    
public companies in South Africa, United Kingdom and Australia. He is a Fellow  
of the Institute of Corporate Managers, Secretaries and Administrators. He      
currently runs his own consultancy company.                                     
Basil Tambanis resigned effective 31 December 2006 as Corporate Operations      
Officer to pursue other interests.                                              
Melbourne Laboratory                                                            
Activity within the Melbourne Laboratory during the quarter was primarily       
focused on the examination of Flowsort concentrate from the Blacktop bulk       
sampling program, and the recovery and classification of macrodiamonds from     
these samples.                                                                  
Treatment, examination and reporting of third party exploration samples was     
undertaken.                                                                     
Contact:                                                                        
Wolf                                                                            
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 edition of the "Australasian Code for the         
Reporting of Mineral Resources and Ore Reserves"                                
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 December 2006                    

                                                                                
                                            2006                                
Consolidated statement of cash flows                                            
Current        Year to date          
Cash flows related to operating activities  quarter        (12 months)          
                                           $A`000         $A`000                
1.1   Receipts from product sales and       45             45                   
related debtors                                                            
                                                                                
1.2   Payments for(a)exploration and        (1520)         (5209)               
     evaluation                                                                 
(b)  development                                                    
            (c)  production                                                     
            (d)  administration            (720)          (2059)                
1.3   Dividends received                    -              -                    
1.4   Interest  received                    24             75                   
1.5   Interest and other costs of finance                                       
     paid                                                                       
1.6   Income taxes paid                                                         
1.7   Other (provide details if material)                                       
                                           (2171)         (7148)                
     Net Operating Cash Flows                                                   
                                                                                
Cash flows related to investing                                            
     activities                                                                 
1.8   Payment for purchases of:                                                 
     (a)prospects                                                               
(b)equity investments                                                      
     (c) other fixed assets                -              (95)                  
1.9   Proceeds from sale of:                                                    
     (a)prospects                                                               
(b)South Yarra Building               -              1,870                 
1.10  Loans to other entities                                                   
1.11  Loans repaid by other entities                                            
                                                                                

     Net investing cash flows              -              (1,775)               
1.13  Total operating and investing cash    (2171)         (5373)               
     flows (carried forward)                                                    

1.13  Total operating and investing cash    (2171)         (5373)               
     flows (brought  forward)                                                   
                                                                                
Cash flows related to financing                                            
     activities                                                                 
1.14  Proceeds from issues of shares,       -              6,806                
     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                 
                                                                                
Net increase (decrease) in cash held  (2171)         1433                  
                                                                                
1.20  Cash at beginning of quarter/year to  4944           1,340                
     date                                                                       
1.21  Exchange rate adjustments to item     (120)          (120)                
     1.20                                                                       
1.22  Cash at end of quarter                2653           2653                 
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   66                                  
     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 arrangements           Nil            Nil                  

Estimated cash outflows for next quarter                                        
                                           $A`000                               
4.1   Exploration and evaluation            450                                 

4.2   Development                           Nil                                 
                                                                                
                                                                                
Total                                 450                                  
Reconciliation of cash                                                          
Reconciliation of cash at the end of the    Current        Previous             
quarter (as shown in the consolidated       quarter        quarter              
statement of cash flows) to the related     $A`000         $A`000               
items in the accounts is as follows.                                            
5.1  Cash on hand and at bank               185            29                   
5.2  Deposits at call                       2468           4915                 
5.3  Bank overdraft                         -              -                    
5.4  Other (provide details)                -              -                    
    Total: cash at end of quarter (item    2653           4944                  
    1.22)                                                                       
Changes in interests in mining tenements                                        
                    Tenement     Nature of   Interest at    Interest at         
                    reference    interest    beginning of   end of              
                                 (note (2))  quarter        quarter             
6.1  Interests in                                                               
    mining                                                                      
    tenements                                                                   
    relinquished,                                                               
reduced or                                                                  
    lapsed                                                                      
                                                                                
                                                                                
6.2  Interests in    Blacktop     Joint       50%            66.6%              
    mining          Pilbara      Venture                                        
    tenements       Various      Interest                                       
    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 paid         
                    number       quoted      per security   up per              
                                                            security            
7.1   Preference     Nil          Nil                                           
+securities                                                                
     (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        Nil          Nil                                           
during                                                                     
     quarter                                                                    
     (a)                                                                        
     Increases                                                                  
through                                                                    
     issues                                                                     
     (b)  Increase                                                              
     through                                                                    
exercise of                                                                
     options                                                                    
7.5   +Convertible   Nil          Nil                                           
     debt                                                                       
securities                                                                 
     (description)                                                              
7.6   Changes                                                                   
     during                                                                     
quarter                                                                    
     (a)                                                                        
     Increases                                                                  
     through                                                                    
issues                                                                     
     (b)                                                                        
     Decreases                                                                  
     through                                                                    
securities                                                                 
     matured,                                                                   
     converted                                                                  
7.7   Options        23,934,843   22,344,843  Exercise       Expiry date        
(description                            price          30 April 2008       
     and                                     $1.00                              
     conversion                                                                 
     factor)                                                                    
7.8   Issued during  475,000      475,000     $1.00          30 April 2008      
     quarter        1,590,000                $0.35          30 November         
                                                            2011                
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:     January 2007                            
             (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.                                                              
25 January 2007                                                                 
Sponsor                                                                         
PricewaterhouseCoopers Corporate Finance (Pty) Ltd                              
Date: 25/01/2007 10:55:02 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  



                                        
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