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TAW - Tawana - Quarterly Activities and Cash Flow Report - 1 October -

Release Date: 31/01/2008 11:27:02      Code(s): TAW
TAW - Tawana - Quarterly Activities and Cash Flow Report - 1 October -          
              31 December 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 October - 31 December 2007                                                    
Key Points                              31 January 2008                         
Orapa results                                                                   
G10 garnets recovered from BK24 kimberlite                                      
St Augustines kimberlite exposed                                                
St Augustines kimberlite sampled at surface                                     
Gravity survey locates two anomalies                                            
Riverton Bulk Sampling completed                                                
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 to determine the grade and    
diamond quality of the kimberlites.                                             
Ground-based gravity and magnetic surveys were completed during the September   
quarter. Interpretation of the data collected by these surveys indicated that   
the kimberlites BK20, BK23 and BK24 are larger in surface area than previously  
thought. Drilling to verify this interpretation was completed during the        
December quarter. Drill cuttings from the kimberlites were transported to the   
Company`s Flowsort x-ray unit in Kimberley in South Africa for analysis and     
diamond recovery and selected samples from each of the kimberlites were sent to 
the Company`s Melbourne laboratory for mineral analyses.                        
Kimberlitic minerals were recovered from the samples and analysed by electron   
microprobe. 13% of the kimberlitic garnets from BK24 were reported to be "G10"  
garnets, which signify that this kimberlite has a high probability of being     
economically diamondiferous.                                                    
The processing of the drill cuttings in the Company`s Flowsort is continuing.   
Several Joint Venture proposals have been received from companies interested in 
participating in the Orapa project. The Directors of Tawana are considering     
these proposals.                                                                
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.   
The current mining boom being experienced in South Africa has made locating a   
crusher difficult but Management is confident that suitable equipment has been  
located and that appropriate terms of supply will be negotiated.                
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% indirect     
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    
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. 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.                       
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 and this has exposed the kimberlite at surface. Rock    
samples of the kimberlite have been collected and these are being               
mineralogically analysed in the Company`s Melbourne laboratory.                 
A non-invasive gravimetric survey conducted by Tawana in November 2007          
identified the location of the original pit of the St Augustine`s mine. Two new 
targets close to St Augustines have also been identified. The gravimetric survey
was undertaken to confirm the exact position of the known kimberlite and to     
determine whether other kimberlites occurred in the Prospecting Right. The two  
new targets are in the southern half of the Prospecting Right and display       
similar gravity responses to that of the known St Augustines kimberlite.        
In January 2008, the Company was advised that De Beers Consolidated Mines       
Limited (the surface owners of the land constituting the southern half of the St
Augustines Mine Prospecting Right) has applied for a Judicial Review and setting
aside of the Minister of Minerals and Energy`s administrative act in granting   
the Prospecting Right, or alternatively, that portion of the Prospecting Right  
in so far as it affects the southern half of the Prospecting Right.             
Tawana`s South African legal advisors have advised that it is too early to      
express an opinion as to the merits of the application or its prospects of      
success. The Department of Minerals and Energy, which is opposing the           
application on behalf of the Minister, has not yet replied to the allegations in
the founding papers nor made discovery of the documentation upon which the      
decision to grant the Prospecting Right was made.                               
Pending determination thereof, however, South African legal advisers have       
advised that the Prospecting Right remains registered and valid.  They have     
further pointed out that the original pit of the St Augustine`s mine is not     
located in the southern half of the Prospecting Right.                          
Riverton Kimberlite Project, Kimberley Region, South Africa                     
(Tawana earning 70% and operator, Taormina Mining (Pty) Ltd ("Taormina")        
diluting to 30%)                                                                
Bulk sampling of the Riverton kimberlite was completed during the quarter with  
the processing of 2,300 tonnes of material collected from 6 sites in the        
kimberlite pipe.                                                                
It is the opinion of Tawana that the results of the bulk sampling indicate that 
the Riverton kimberlite is uneconomic.                                          
Tawana, in conjunction with Taormina, is currently considering options for the  
future of the project.                                                          
Melbourne Laboratory                                                            
Activity within the Melbourne Laboratory during the quarter was focused on the  
examination of the Orapa exploration samples and samples from the St Augustines 
Treatment, examination and reporting of third party exploration samples from    
South Africa and Australia was also undertaken.                                 
The Directors of Tawana are reviewing the Company`s funding requirements for    
2008 and are in active discussions with various parties regarding funding       
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"                                
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 2007                          
Consolidated statement of cash flows                                            
                                         Current       Year to date             
Cash flows related to operating           quarter       (12 months)             
activities                                $A`000        $A`000                  
1.1   Receipts from product sales and     8             39                      
     related debtors                                                            
1.2   Payments for   (a)  exploration     (592)         (2,205)                 
     and evaluation                                                             
               (b)  development                                                 
               (c)  production                                                  
(d)  administration       (272)         (1,394)                  
1.3   Dividends received                                                        
1.4   Interest  received                   4            7                       
1.5   Interest and other costs of                                               
finance paid                                                               
1.6   Income taxes paid                                                         
1.7   Other (provide details if           12            428                     
(VAT Refund from SARS)                                                     
                                         (840)         (3,125)                  
     Net Operating Cash Flows                                                   
Cash flows related to investing                                            
1.8   Payment for purchases of:                                                 
     (a)prospects                        -             (16)                     
(b)equity investments                                                      
     (c) other fixed assets              -             (20)                     
1.9   Proceeds from sale of:                                                    
(b)equity investments                                                      
     (c) other fixed assets              29            29                       
1.10  Loans to other entities                                                   
1.11  Loans repaid by other entities                                            

     Net investing cash flows            29            (7)                      
1.13  Total operating and investing cash                                        
flows (carried forward)             (811)         (3,132)                  
1.13  Total operating and investing cash  (811)         (3,132)                 
     flows (brought  forward)                                                   
     Cash flows related to financing                                            
1.14  Proceeds from issues of shares,     -             795                     
     options, etc.                                                              
1.15  Proceeds from sale of forfeited     -              -                      
1.16  Proceeds from borrowings            -              -                      
1.17  Repayment of borrowings             -              -                      
1.18  Dividends paid                      -              -                      
1.19  Other (provide details if           -              -                      
     Net financing cash flows            -             795                      
     Net increase (decrease) in cash     (811)         (2,337)                  
1.20  Cash at beginning of quarter/year   922           2,653                   
     to date                                                                    
1.21  Exchange rate adjustments to item   55            (150)                   
1.22  Cash at end of quarter              166           166                     
Payments to directors of the entity and associates of the directors             
Payments to related entities of the entity and associates of the related        
                                                       Current quarter          

1.23  Aggregate amount of payments to the parties       54                      
     included in item 1.2                                                       
1.24  Aggregate amount of loans to the parties          Nil                     
     included in item 1.10                                                      
1.25  Explanation necessary for an understanding of the transactions            
Non-cash financing and investing activities                                     
2.1  Details of financing and investing transactions which have had a           
    material effect on consolidated assets and liabilities but did              
    not involve cash flows                                                      

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                                                             
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                                        
4.1  Exploration and evaluation 50                                              
4.2  Development                0                                               
Reconciliation of cash                                                          
Reconciliation of cash at the end of the quarter    Current    Previous         
(as shown in the consolidated statement of cash     quarter    quarter          
flows) to the related items in the accounts is as   $A`000     $A`000           
5.1  Cash on hand and at bank                       166        719              
5.2  Deposits at call                               -          203              
5.3  Bank overdraft                                                             
-          -                 
5.4  Other (provide details)                        -          -                
    Total: cash at end of quarter (item 1.22)      166        922               
Changes in interests in mining tenements                                        
Tenement     Nature of     Interest at Interest at        
                      reference    interest      beginning   end of             
                                   (note (2))    of quarter  quarter            
6.1  Interests in                                                               
mining tenements                                                            
    reduced or                                                                  

6.2  Interests in                                                               
    mining tenements                                                            
acquired or                                                                 
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                                                    
     (description)               Nil         Nil                                
7.2   Changes during quarter                                                    
(a)  Increases through                                                     
     (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                                                     
     (b)  Increase through                                                      
     exercise of options                                                        
7.5   +Convertible debt                                                         
securities (description)    Nil         Nil                                
7.6   Changes during quarter                                                    
     (a)  Increases through                                                     
(b)  Decreases through                                                     
     securities matured,                                                        
7.7   Options  (description and                            Exercise   Expiry    
conversion factor)          29,234,843  22,344,843   price      date       
                                                          $1.00      30 April   
7.8   Issued during quarter       Nil         Nil                               
7.9   Exercised during quarter    Nil         Nil                               
7.10  Expired during quarter      Nil         Nil                               
7.11  Debentures                  Nil         Nil                               
(totals only)                                                              
7.12  Unsecured notes (totals     Nil         Nil                               
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:                                   Date: 31 January 2008              
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    
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.                                                              
31 January 2008                                                                 
PricewaterhouseCoopers Corporate Finance (Pty) Ltd                              
Date: 31/01/2008 11:27:01 Supplied by www.sharenet.co.za                     
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