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

Release Date: 31/07/2007 11:28:02      Code(s): TAW
TAW - Tawana Resources NL - Quarterly activities and cash flow report           
                           1 April - 30 June 2007                               
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 April - 30 June 2007                                                          
Key Points                                                                      
*Trial Mining of Kareevlei Wes progressing on schedule                          
25 tph DMS plant being commissioned on site                                     
Excavation of kimberlites to commence Q4 2007                                   
Kimberlites known to be diamondiferous                                          
*Lexshell alluvial diamond project Mining Right finalised                       
Drilling of alluvial channel to commence Q4 2007                                
*Carter Block Joint Venture signed                                              
Drilling of Falcon targets to commence Q3 2007                                  
*Riverton Joint Venture signed                                                  
10tph DMS plant moved to site                                                   
Bulk sampling of kimberlite to commence Q3 2007                                 
*Orapa Prospecting Licence granted                                              
Geophysical surveys completed over known kimberlites                            
South Africa                                                                    
Kareevlei Wes Project, Kimberley Region, South Africa                           
(74% owned and operated by Tawana; 26% Seven Falls)                             
The Kareevlei Wes Project comprises a cluster of 5 kimberlitic pipes (KV1-KV5), 
which vary in surface area from 5.5 ha to less than 0.1 ha. Previous drilling   
and bulk sampling by Tawana has shown that KV1 and KV2 are potentially economic.
Establishing the plant and facilities to undertake the trial mining program,    
aimed at mining up to 20,000 tonnes from kimberlites KV1 and KV2, commenced     
during the quarter with the transport of the Company`s dense media separation   
plant to site. The plant and infrastructure is on schedule for the commissioning
early Q4 2007, when excavation of the KV1 and KV2 kimberlites will commence.    
Lexshell Diamond Project, Kimberley Region, South Africa                        
(Tawana 44% and operator /Guma Resources 44%/ Lexshell 12% revenue share)       
As previously announced, Tawana entered into a joint venture with its strategic 
alliance partner, Guma Resources Pty Limited, to explore and mine the Lexshell  
alluvial diamond project in the Northern Cape Province of South Africa. The     
project is located on a palaeo-channel of the Vaal River adjacent to established
alluvial diamond mines.                                                         
The section of the Vaal River alluvials in which this project is located is     
noted for the prolific production of large high quality diamonds. Mining has    
taken place for about 100 years and the area still hosts one of the largest     
alluvial diamond mines in the world.                                            
All statutory requirements relating to the granting of the new order Mining     
Right over project have been completed. Drilling of the palaeo-channel is       
scheduled to commence during Q4 2007.                                           
Carter Block Project, Lime Acres, South Africa                                  
(Tawana earning 40% and operator/Kimberley Consolidated Mining Limited diluting 
to 60%)                                                                         
A joint venture (the Carter Block Joint Venture) was signed with Kimberley      
Consolidated Mining Limited (KCM), an unlisted South African company which has  
advanced plans to list shortly on the JSE Limited and is considering listing on 
the Alternative Investment Market of the London Stock Exchange in due course.   
The Carter Block Joint Venture has been formed to prospect and evaluate         
kimberlites situated on a 266 square kilometer new order Prospecting Right      
surrounding the De Beers owned Finsch Mine, South Africa (The Carter Block).    
The granted tenement incorporates three known kimberlites, fourteen BHP         
generated Falcon targets, and four aero-magnetic survey targets. The Joint      
Venture`s initial focus is the BHP Billiton - generated Falcon Targets and the  
aero-magnetic survey targets.                                                   
Tawana has access to the Falcon data by virtue of the separate Daniel Joint     
Venture with BHP Billiton. BHP Billiton is not participating in the Carter Block
Joint Venture but has consented to Tawana using the Falcon data in return for a 
2.5% royalty on any future diamond revenue generated by Tawana from the use of  
the data in the Carter Block.                                                   
Tawana is able to earn 40% equity in each individual Falcon and aero-magnetic   
target by identifying kimberlites through drilling and conducting bulk sampling.
Expenditure on further evaluation work will be contributed by KCM and Tawana on 
a pro-rata basis. Tawana will manage the project.                               
The three known kimberlites are currently being prospected by KCM and early     
indicator mineral sampling has been positive. Several G10 pyrope garnets were   
recovered from the Shoan kimberlite, indicating that this kimberlite is likely  
to be diamondiferous. The agreement provides that should Tawana wish to         
participate in the exploration of these known kimberlites, Tawana would be      
entitled, subject to contract, to take up an agreed participating interest      
The Carter Block also incorporates known diamondiferous alluvial deposits which 
while they will remain wholly-owned and operated by KCM are adjacent to the     
Tawana alluvials. An opportunity for future co-operation between Tawana and KCM 
with respect to parallel development of the alluvials is being considered.      
Riverton Kimberlite Project, Kimberley Region, South Africa                     
(Operated by Tawana; Tawana earning 70%,Taormina Mining (Pty) Ltd diluting to   
Tawana entered into a joint venture with Taormina Mining (Pty) Limited          
("Taormina"), an unlisted South African company,  to prospect and evaluate a    
kimberlite situated 25 kilometers north of Kimberley, South Africa.             
The kimberlite is a 4 hectare pipe known locally as the Riverton Mine and is    
anecdotally reported to have produced good quality diamonds when it was mined by
small scale diggers during the 1990`s. Mining is reported to have ceased due to 
permitting and safety issues. No professionally controlled mining has taken     
place at Riverton, and Tawana will apply modern exploration and mining          
techniques to evaluate the potential of this project.                           
Tawana is able to earn 51% equity in the project by conducting a 2000 tonnes    
bulk sampling program followed by an 8000 tonnes evaluation program if          
warranted. Thereafter Tawana has the option to increase its equity to 70% by    
paying Taormina Rand 1.5million (approx. A$260,000).                            
The Company`s 10 tonne per hour dense media separation plant has been moved to  
site and construction is on schedule for the commencement of bulk sampling in Q3
Melbourne Laboratory                                                            
Activity within the Melbourne Laboratory during the quarter was primarily       
focused on the examination of the Pilbara exploration samples.                  
Treatment, examination and reporting of third party exploration samples was also
Botswana Projects                                                               
Orapa Project, Botswana                                                         
(Tawana 100%)                                                                   
In April 2007 the Company was granted a new prospecting licence over an area of 
approximately 57 square kilometers, covering 8 kimberlites in the Orapa         
kimberlite field in Botswana. Applications for this Prospecting Licence were    
submitted by a number of companies on a competitive basis. The Prospecting      
Licence is held by Seolo Pty Ltd, a 100% owned Botswana registered subsidiary of
The Orapa kimberlite field is located in north eastern Botswana, and includes   
the Orapa, Letlhakane and Damtshaa diamonds mines, which produce in excess of 13
million carats of diamonds per year. The Orapa kimberlite field is one of the   
largest diamondiferous kimberlite fields in the world, containing 79 known      
kimberlites, of which the majority has been proven to be diamondiferous. Orapa, 
some 15km from Tawana`s project area, is one of the largest producing           
kimberlites in the world and is 113 hectares in surface area.                   
The Company plans to undertake a program of evaluation which will entail        
detailed geophysics, trenching and drilling to establish the size of the        
kimberlites, followed by bulk sampling to determine the grade and diamond       
quality of the kimberlites. Initial indications are that the diamondiferous BK24
is in excess of 3 hectares in surface area and at least one other kimberlite has
a surface area of 2 hectares. No previous bulk sampling has been conducted on 7 
of the eight kimberlites.  An initial review of available airborne geophysical  
data has indicated the possible presence of at least one new kimberlite in the  
Prospecting Licence area.                                                       
Ground-based gravity and magnetic surveys were conducted during the quarter.    
Preliminary interpretation of the data collected by these surveys indicates that
the kimberlite BK20 is larger in surface area that previously thought. Drilling 
to verify this interpretation will be conducted in the second half of 2007.     
Melbourne Laboratory                                                            
Activity within the Melbourne Laboratory during the quarter was focused on the  
completion of examination of the Pilbara exploration samples and samples from   
the Riverton and Daniel Kimberlite Projects in South Africa.                    
Treatment, examination and reporting of third party exploration samples was also
At the end of March, the Company`s cash reserves were $1.227M.                  
Wolf Marx                                                                       
Tel: +61 (0)3 98635222                                                          
Mob: + 61 (0)428 398446                                                         
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"                                
All press releases and announcements may be inspected on the Company`s web site,
namely: www.tawana.com.au                                                       
31 July 2007                                                                    
PricewaterhouseCoopers Corporate Finance (Pty) Ltd                              
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 2007                          
Consolidated statement of cash flows                                            
                                                  Current      Year to          
Cash flows related to operating activities    quarter      date ( 6         
                                                  $A`000       months)          
    1.1   Receipts from product sales and related (12)         29               
    1.2   Payments for   (a)  exploration and     (581)        (827)            
(b)  development                                            
                    (c)  production                                             
                    (d)  administration           (422)        (871)            
    1.3   Dividends received                                                    
1.4   Interest  received                       2           2                
    1.5   Interest and other costs of finance                                   
    1.6   Income taxes paid                                                     
1.7   Other (provide details if material)     (25)         412              
          (VAT Refund from SARS)                                                
                                                  (1,038)      (1,255)          
          Net Operating Cash Flows                                              

          Cash flows related to investing                                       
    1.8   Payment for purchases of:                                             
          (b)equity investments                   (1)          (4)              
          (c) other fixed assets                                                
    1.9   Proceeds from sale of:                                                
          (b)equity investments                                                 
    1.10  Loans to other entities                                               
    1.11  Loans repaid by other entities                                        

          Net investing cash flows                (1)          (4)              
    1.13  Total operating and investing cash      (1,039)      (1,259)          
flows (carried forward)                                               
    1.13  Total operating and investing cash      (1,039)     (1,259)           
          flows (brought  forward)                                              
Cash flows related to financing                                       
    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) in cash held    (1,039)     (1,259)           

    1.20  Cash at beginning of quarter/year to    2,317       2,653             
    1.21  Exchange rate adjustments to item 1.20  (51)        (167)             
1.22  Cash at end of quarter                  1,227       1,227             
Payments to directors of the entity and associates of the directors             
Payments to related entities of the entity and associates of the related        
1.23  Aggregate amount of payments to the parties         74                
          included in item 1.2                                                  
    1.24  Aggregate amount of loans to the parties included   Nil               
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                                                     
    2.2  Details of outlays made by other entities to establish or increase     
         their share in projects in which the reporting entity has an           
Financing facilities available                                                  
Add notes as necessary for an understanding of the position.                    
                                                  Amount      Amount used       
                                                  available   $A`000            
    3.1  Loan facilities                          Nil         Nil               
    3.2  Credit standby arrangements              Nil         Nil               

Estimated cash outflows for next quarter                                        
    4.1  Exploration and evaluation                           1,000             

    4.2  Development                                          0                 
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                      211        411           
    5.2  Deposits at call                            1,016      1,906           
5.3  Bank overdraft                                 -          -            
    5.4  Other (provide details)                        -          -            
         Total: cash at end of quarter (item       1,227      2,317             
Changes in interests in mining tenements                                        
                        Tenement          Nature of      Interest  Interest     
                        reference         interest       at        at end       
                                          (note (2))     beginning of           
of        quarter      
   6.1 Interests in     EL9722            Sole interest  100%      Nil          
       mining           (Packsaddle NT)                                         
       relinquished,    EL2927 (Elliston                                        
       reduced or       South Australia)  Joint Venture  80%       Nil          
       lapsed                             Interest                              
                        Australia)                       66.6%     Nil          
Joint Venture                         
                        PL36/2003         Interest                              
100%      Nil          
                                          Sole interest                         
   6.2 Interests in     PL61/2007         Sole Interest  Nil       100%         
       mining           Orapa                                                   
       acquired or                                                              
PL86/2007         Sole Interest  Nil       100%         
                        PL87/2007         Sole interest  Nil       100%         
                        NC                Joint Venture  Nil       100%         
30/5/1/2/2/081MR  Interest                              
                        Kareevlei Wes                                           
                        NC                Earning Joint  Nil       Nil          
                        30/5/1/2/2/405    Venture                               
PR                Interest                              
                        NC                Joint Venture  Nil       44%          
                        30/5/1/2/2/054    Interest                              
MR                (Share of                             
                        Lexshell          revenue)                              
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.                           
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           
  7.1   Preference                                                              
+securities            Nil         Nil                                  
  7.2   Changes during                                                          
(a)  Increases                                                          
        through issues                                                          
        (b)  Decreases                                                          
        through returns of                                                      
capital, buy-backs,                                                     
  7.3   +Ordinary securities   87,097,481  87,097,481  various    Various       
7.4   Changes during         Nil         Nil                                  
        (a)  Increases                                                          
        through issues                                                          
(b)  Increase through                                                   
        exercise of options                                                     
  7.5   +Convertible debt                                                       
        securities             Nil         Nil                                  
  7.6   Changes during                                                          
        (a)  Increases                                                          
through issues                                                          
        (b)  Decreases                                                          
        through securities                                                      
        matured, converted                                                      
7.7   Options  (description                          Exercise   Expiry        
        and conversion         23,934,843  22,344,843  price      date          
        factor)                                        $1.00      30 April      
7.8   Issued during quarter  Nil         Nil                                  
  7.9   Exercised during       Nil         Nil                                  
  7.10  Expired during         Nil         Nil                                  
  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:      31 July 2007                      
Print name:    W.T.Marx                                                         
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: 31/07/2007 11:28:01 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  

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