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TAW - Tawana Resources NL - Quarterly activities and cash flow report 1 July -

Release Date: 31/10/2007 07:35:12      Code(s): TAW
TAW - Tawana Resources NL - Quarterly activities and cash flow report 1 July -  
                           30 September 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 July - 30 September 2007                                                      
Key Points                              31 October 2007                         
Orapa Drilling in progress                                                      
Drilling on BK24 kimberlite commenced                                           
Trial Mining of Kareevlei Wes ready to commence                                 
25 tph DMS plant commissioned                                                   
Equity purchased in St Augustines kimberlite                                    
Prospecting Right over kimberlite granted                                       
Kimberlite located 600 metres from Big Hole                                     
Riverton Bulk Sampling in progress                                              
10tph DMS plant commissioned                                                    
Diamonds recovered from bulk sampling of kimberlite                             
Botswana                                                                        
Orapa Project, Botswana                                                         
(Tawana 100%)                                                                   
In April 2007 the Company was granted a new prospecting licence over an area of 
approximately 57 square kilometres, covering 8 kimberlites in the Orapa         
kimberlite field in Botswana.                                                   
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 diamond mine, 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 has commenced a program of evaluation which will entail detailed    
geophysics, trenching and drilling to establish the size and nature of the      
kimberlites, followed by bulk sampling to determine the grade and diamond       
quality of the kimberlites.                                                     
Ground-based gravity and magnetic surveys were completed during the quarter.    
Preliminary interpretation of the data collected by these surveys indicates that
the kimberlites BK20, BK23 and BK24 are larger in surface area than previously  
thought. Drilling to verify this interpretation has commenced with BK24 being   
targeted first. Drill cuttings from the kimberlites will be transported to the  
Company`s Flowsort x-ray unit in Kimberley in South Africa for analysis and     
diamond recovery.                                                               
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 diamondiferous kimberlite    
pipes (KV1-KV5). Previous drilling and bulk sampling by Tawana has shown that   
KV1 and KV2 are potentially economic.                                           
The Company`s 25 tph processing plant has been constructed on site and the Dense
Media Separation (DMS) section has been commissioned. The completion of the     
crushing circuit is awaiting the acquisition of a suitable secondary crusher.   
Tawana has received expressions of interest from companies wanting to           
participate in the Project, but no commitment has been made.                    
St Augustines Kimberlite Project, Kimberley, South Africa                       
(Tawana 30% equity in Vecto Trade 436(Pty) Ltd (Vecto))                         
In September 2007 the Company announced that it had acquired a 30% interest in  
the St Augustines kimberlite located 600 metres west of the famous Kimberley    
Mine, "the Big Hole", in Kimberley, South Africa.                               
"The Big Hole" produced 14.5 million carats of diamonds from 22.5 million tonnes
at a grade of 64 carats per hundred tonnes. Mining ceased at the Big Hole in    
1914.                                                                           
The St Augustines kimberlite was mined in the late 1890`s and records show that 
the diamond quality was considered identical and the grade similar to that of   
the nearby Kimberley Mine. Geological records indicate that the kimberlite pipes
of "the Big Hole" and St Augustines are located on the same structure and are   
connected by a kimberlite fissure.                                              
Mining at St Augustines ceased in 1902. Subsequently the tailings of the        
Kimberley Mine were deposited over the St Augustines kimberlite. The tailings   
have since been removed. Records show that St Augustines was only partially     
mined to a depth of approximately 240 metres as compared to the Kimberley Mine  
which was mined to a depth of 1097 metres.                                      
A new order Prospecting Right was granted to Vecto in August 2007. Tawana has   
agreed to purchase 30% of the issued shares in Vecto from the current major     
shareholder, Galeshewe Mining Resources (Pty) Limited (Galeshewe). The          
consideration for these shares is an initial payment of R100,000                
(approx.A$17,000), sole funding an agreed work program valued at R1,530,000     
(approx A$255,000), and paying Galeshewe R2 900 000,00 (approx. A$487,000),     
should a decision  to  mine  be taken,  not  later  than  the  last day of the  
eighth month following commencement of full scale mining operations.            
Riverton Kimberlite Project, Kimberley Region, South Africa                     
(Tawana earning 70% and operator, Taormina Mining (Pty) Ltd ("Taormina")        
diluting to 30%)                                                                
Tawana entered into a joint venture with Taormina, an unlisted South African    
company, to prospect and evaluate a kimberlite situated 25 kilometers north of  
Kimberley, South Africa.                                                        
The Company`s 10 tph DMS plant was constructed and commissioned on site during  
the quarter. A total of approximately 2300 tonnes of kimberlite was excavated   
from 6 separate locations on the kimberlite. These separate bulk sample         
locations were chosen as representative of the different kimberlite phases or   
types in the pipe. The bulk sampling program is designed to determine the       
diamond distribution in the pipe and to gain an understanding of the grade and  
diamond quality at Riverton.                                                    
The kimberlite samples vary in hardness and the degree of country rock          
inclusions. Processing is being conducted in stages with the free milling       
kimberlitic material, which breaks down autogenously to minus 6mm in the        
scrubber section of the plant, being completed first. The plus 6mm material     
needing crushing is stockpiled to be processed later. Comprehensive results will
be known when all of the material has been processed. This is expected in late  
Q4 2007.                                                                        
Initial results from the main, eastern lobe, of the pipe indicate that this     
section contains diamonds that are on average larger than diamonds recovered    
from other kimberlites in this region. Results from the smaller middle section  
of the pipe show that this section is diamondiferous but contains smaller       
diamonds. These variations are common in kimberlites.                           
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 Rand1.5million (approx. A$260,000.)                             
Carter Block Project, Lime Acres, South Africa                                  
(Tawana earning 40% and operator/Kimberley Consolidated Mining Limited diluting 
to 60%)                                                                         
Drilling was conducted during the quarter on a number of FalconRegistered       
targets in the Carter Block Prospecting Right. Kimberlitic indicators were      
recovered from some of the drill cuttings but no kimberlite has as yet been     
positively identified.                                                          
Mineral chemistry and petrographic data from the known kimberlites in the       
Prospecting Right indicate that these kimberlites are likely to be              
diamondiferous. Discussions with Kimberley Consolidated Mining Limited on the   
future program on these kimberlites are continuing.                             
Australia                                                                       
Pilbara Exploration, Western Australia                                          
(Tawana 66.6% and operator/De Beers Australia Exploration Limited 33.3%)        
Tawana has withdrawn from all but one Exploration Licence comprising the Pilbara
Joint Venture. The remaining licence covers the Black Top East kimberlite       
fissures. A small airborne electromagnetic survey was conducted over the        
kimberlites in an attempt to locate any "blows" or larger portions of the       
kimberlites which may warrant further work. The survey tied into a much larger  
survey being conducted over the general area by an iron ore exploration company.
Results of the survey will be known during Q4 2007.                             
Flinders Island                                                                 
(Flinders Diamonds Limited earning 70% and operator/Tawana 80% diluting,        
Orogenic Exploration Pty Ltd 20% diluting)                                      
Flinders Diamonds Limited (FDL) has conducted a high resolution electromagnetic 
survey over Flinders Island with the aim to locate buried diamondiferous        
kimberlites.                                                                    
Melbourne Laboratory                                                            
Activity within the Melbourne Laboratory during the quarter was focused on the  
examination of the Carter Block exploration samples and samples from the        
Riverton and Orapa kimberlites.                                                 
Treatment, examination and reporting of third party exploration samples from    
South Africa was also undertaken. Since there are numerous laboratories in South
Africa, Management views this development as positive and it is anticipated that
more business of this nature will be forthcoming.                               
Corporate                                                                       
The Company placed 5,300,000 shares to institutional and sophisticated investors
to raise $795,000                                                               
At the end of September, the Company`s cash reserves were $0.92M.               
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 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  30 September 2007                                               
Consolidated statement of cash flows                                            
                                              Current  Year to date             
Cash flows related to operating activities     quarter  ( 9 months)             
                                              $A`000   $A`000                   
1.1   Receipts from product sales and related  2        31                      
     debtors                                                                    
                                                                                
1.2   Payments for   (a)  exploration and      (786)    (1,613)                 
evaluation                                                                 
               (b)  development                                                 
               (c)  production                                                  
               (d)  administration            (251)    (1,122)                  
1.3   Dividends received                                                        
1.4   Interest  received                        1       3                       
1.5   Interest and other costs of finance                                       
     paid                                                                       
1.6   Income taxes paid                                                         
1.7   Other (provide details if material)      4        416                     
     (VAT Refund from SARS)                                                     
                                              (1,030)  (2,285)                  
Net Operating Cash Flows                                                   
                                                                                
     Cash flows related to investing                                            
     activities                                                                 
1.8   Payment for purchases of:                (16)     (16)                    
     (a)prospects                                                               
     (b)equity investments                    (16)     (20)                     
     (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                 (32)     (36)                     
1.13  Total operating and investing cash flows (brought (1,062)  (2,321)        
     forward)                                                                   
                                                                                
     Cash flows related to financing activities                                 
1.14  Proceeds from issues of shares, options, etc.     795       795           
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                          795      795             
                                                                                
Net increase (decrease) in cash held              (267)    (1,526)         
                                                                                
1.20  Cash at beginning of quarter/year to date         1,227    2,653          
1.21  Exchange rate adjustments to item 1.20            (38)     (205)          
1.22  Cash at end of quarter                            922      922            
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 parties included in      74           
     item 1.2                                                                   
                                                                                
1.24  Aggregate amount of loans to the parties included in item    Nil          
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 available  Amount used                   
$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 250                                             

4.2  Development                0                                               
                                                                                
                                                                                
Total                                                                       
Reconciliation of cash                                                          
Reconciliation of cash at the end of the quarter (as    Current    Previous     
shown in the consolidated statement of cash flows) to   quarter    quarter      
the related items in the accounts is as follows.        $A`000     $A`000       
5.1  Cash on hand and at bank                           719            211      
5.2  Deposits at call                                   203          1,016      
5.3  Bank overdraft                                                             
-          -        
5.4  Other (provide details)                                 -          -       
    Total: cash at end of quarter (item 1.22)          922        1,227         
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     Pilbara      JV                                    
    tenements               E47/1121     interest    66%         0              
    relinquished, reduced   E47/1122                 66%         0              
    or lapsed               E47/1123                 66%         0              
E47/1124                 66%         0              
                            E47/1126                 66%         0              
                            E47/1127                 66%         0              
                            E47/1128                 66%         0              
E47/1129                 66%         0              
                            E47/1107                 66%         0              
                            E47/1108                 66%         0              
                            E47/1110                 66%         0              
E47/1256                 66%         0              
                            E47/1262                 66%         0              
                            E47/1263                 66%         0              
                            E47/1264                 66%         0              
E47/1265                 66%         0              
                                                                                
6.2  Interests in mining     St           Equity      0           30%           
    tenements acquired or   Augustines                                          
increased               MPT                                                 
                            808/2007                                            
                            (PR)                                                
                                                                                

                                                                                
                            Carter       Joint       0           30%            
                            Block        venture                                
MPT          Interest                               
                            306/2006                                            
                             (PR)                                               
                                                                                
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 paid    
                              number      quoted      price per  up per         
                                                      security   security       
7.1   Preference +securities                                                    
     (description)            Nil         Nil                                   
7.2   Changes during quarter                                                    
     (a)  Increases through                                                     
issues                                                                     
     (b)  Decreases through                                                     
     returns of capital, buy-                                                   
     backs, redemptions                                                         
7.3   +Ordinary securities     92,397,481  92,397,481  various    Various       
                                                                                
7.4   Changes during quarter                                                    
     (a)  Increases through                                                     
issues                   5,300,000   5,300,000   15 cents   15cents        
     (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  (description                            Exercise   Expiry date   
     and conversion factor)   29,234,843  22,344,843  price      30 April       
                                                      $1.00      2008           
7.8   Issued during quarter    5,300,000   Nil         Exercise   Expiry date   
price      11             
                                                      $0.15      September      
                                                                 2009           
7.9   Exercised during         Nil         Nil                                  
quarter                                                                    
7.10  Expired during quarter   Nil         Nil                                  
7.11  Debentures               Nil         Nil                                  
     (totals only)                                                              
7.12  Unsecured notes (totals  Nil         Nil                                  
     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:       30 October 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.  
                        == == == == ==                                          
Date: 31/10/2007 07:35:11 Supplied by www.sharenet.co.za                     
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