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TAW - Tawana - Quarterly Activities And Cashflow Report

Release Date: 30/01/2009 09:42:03      Code(s): TAW
TAW - Tawana - Quarterly Activities And Cashflow 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 2008                                                    
30 January 2009                                                                 
Key Points                                                                      
-    Kareevlei Wes                                                              
    -    Funding delayed for Trial Mining                                       
-    Orapa                                                                      
    -    Bulk Sampling of BK24 kimberlite continuing                            
-    Corporate                                                                  
    -    Director appointed                                                     
-    Managing Director retirement                                           
    -    Melbourne Laboratory closed                                            
    -    Corporate holding costs minimised                                      
South Africa                                                                    
Kareevlei Wes Project, Kimberley Region, South Africa                           
(100% owned and operated by Tawana)                                             
As reported during the September quarter, Tawana concluded an agreement with    
Risk Free Investments 2 (Proprietary) Limited t/a  Agio Diamond Investments     
("Agio") for the sale of a 26% interest in Tawana`s Kareevlei Project  for Rand 
12Million (approximately A$1.7million at current exchange rates). The Agreement 
required Agio to effect payment of the purchase price within 30 days of         
signature, ie, by 25 November 2008. Payment was not completed by the due date   
and a High Court Summons has been executed.                                     
St. Augustines Kimberlite Project, Kimberley, South Africa                      
(Operated by Tawana; Tawana 30% equity in Vecto Trade 436 (Pty) Ltd)            
In late 2007 Tawana acquired a 30% of the issued shares in Vecto Trade 436(Pty) 
Ltd ("Vecto") which was granted a New Order Prospecting Right over the St       
Augustines kimberlite located 600 metres west of the world famous Kimberley Mine
or "Big Hole" in Kimberley, South Africa. The St Augustines mine is located in  
the northern half of the Prospecting Right due west of the Big Hole.            
The Kimberley Mine produced 14.5 million carats of diamonds from 22.5 million   
tons at a grade of 64 carats per hundred tons. Mining ceased 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 two kimberlite pipes
of the Kimberley Mine 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 removal of 
these tailings has recently exposed in-situ kimberlite at St Augustines. 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     
A non-invasive gravimetric survey conducted by Tawana in November 2007 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. In addition to confirming the location of the St Augustine`s 
mine, two new targets close to St Augustines were identified. 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.                
A drilling program to confirm the presence or absence of kimberlite or related  
rock types in the two targets was completed during the quarter.                 
A total of seven 6.5 inch holes were drilled using percussion air flush         
drilling. All holes were logged at 1m intervals and a total of 220m was drilled 
during the 3 day drilling program.  The location of the 7 drill holes is shown  
in Figure 1.                                                                    
Figure 1:  Gravity image showing location of 7 drill holes within Prospecting   
Right south of the St Augustine road.                                           
Of the 7 holes drilled, 6 were sited to determine the cause of the gravity low  
anomalies and one (hole 4) was sited to determine the cause of the gravity high.
The hole that was drilled into the gravity high was distinctly different to the 
remaining 6 holes in that it intersected 7m of weathered to fresh dolerite      
between 2 to 9m.  This is compatible with what can be observed in the sidewalls 
of the Kimberley mine. All other holes drilled were completely devoid of        
dolerite and intersected weathered shale below the dump debris.                 
The gravity low anomalies are therefore attributed to weathered shale and no    
kimberlitic material was intersected during the drilling program.               
Prospecting activities over the northern portion of the Prospecting Right will  
continue in order to evaluate the area associated with the old St Augustine     
kimberlite mine area.                                                           
Orapa Project, Botswana                                                         
(Tawana 100%, Nowak Investments Pty Ltd earning 51%)                            
Tawana has been advised by Nowak that the sinking of shafts on the BK2          
kimberlite was suspended during the quarter to allow for the implementation of  
certain additional safety measures.  A small amount of fresh kimberlite sample  
was processed and results are pending.  Nowak aims to extract 100 tonnes from   
the base of each of the 3 shafts. Processing of this kimberlite is expected to  
re-commence in Q1 2009.                                                         
Nowak has also collected 120 soil samples in the Moshaiwa Prospecting Licence   
with the aim to locate the source of the kimberlitic indicator minerals         
(including diamonds) found here previously. Processing of these samples has been
completed and results are expected during Q1 2009.                              
Melbourne Laboratory                                                            
The Melbourne Laboratory was closed during the quarter. The upper level has been
sub-let, and discussions have commenced with a third party to sub-let the ground
Corporate and Funding                                                           
Over the past quarter, there has been substantial cost reduction in the         
corporate overheads of Tawana. Specifically, the head office in Melbourne has   
been closed, as has the laboratory which was running unprofitably.              
Corporate operating expenses have been pruned by approximately 70% and a        
continuous watch will be undertaken on costs to ensure that cash is directed to 
actual or potential projects to continue to safeguard asset values.             
The Executive Chairman has undertaken a large number of commercial discussions  
with potential joint venture partners, and specific details will be released to 
the market when documentation has been put in place.                            
Director appointment                                                            
The Directors are pleased to announce the appointment of Ms Nonkquobela Mazwai  
to the Board of Tawana effective 20 October.                                    
Ms. Mazwai has extensive experience in the public and private sectors of the    
South African mining industry and has consulted for a number of major South     
African parastatal Corporations such as transport utility Spoornet, electricity 
generator Eskom, the Department of Justice and the Department of Minerals and   
Energy. While consulting to the latter Department, she was responsible for the  
design of Business Processes for the implementation of South Africa`s New Mining
Laws and the development of the monitoring and measurement mechanisms for the   
equity ownership pillar of the Mining Charter.                                  
Ms Mazwai and her business partner, Mr. Moloi, are the principal Shareholders in
Motjoli Resources Pty Ltd., which is the major shareholder in Tawana`s BEE      
partner and substantial shareholder, Seven Falls Trading 155 Pty Ltd.           
Director retirement                                                             
The Directors advise that Wolf Marx has retired as Managing Director of the     
company effective 31 January 2009. Wolf has had a long and distinguished career 
within the diamond exploration industry throughout Africa and Australia and his 
significant technical depth and experience will be retained by the company in a 
consultancy capacity. He will be available to evaluate current and new business 
opportunities and importantly maintain commercial relationships in Australia,   
South Africa and Botswana on behalf of Tawana.                                  
As detailed, the payment for the sale of 26% interest in Tawana`s Kareevlei     
project for Rand 12 million, (approximately AUD$1.7M at current exchange rates) 
has been delayed.                                                               
On 27 October 2008 Tawana announced to the market the conclusion of an agreement
with Risk Free Investments 2 (Pty) Limited t/as Agio Diamond Investments. Tawana
has issued a summons for payment in the High Court of South Africa and will     
pursue settlement vigorously.                                                   
The market will be informed of progress on the litigation.                      
As a potential contingency, the company is pursuing alternate sources of funding
and is also holding discussions with various groups regarding possible joint    
ventures on the company`s projects.                                             
The company is holding discussions with potential investors to recapitalise     
Tawana to allow it to achieve its strategic objective of the development of cash
flow through getting the Kareevlei project to trial mining status.              
Phillip Hains                                                                   
Tel: +61 (0)3 9824 5254                                                         
Technical sections of this report are based on information compiled by Wolf Marx
BSc, BA, FAusIMM, CPGeo. 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".
Mr. Marx consents to the inclusion in the report of the matters based on his    
information in the form and context in which they appear.                       
Tawana Resources- a world class diamond and mineral exploration company listed  
on the Australian and Johannesburg Stock Exchanges committed to the principles  
of enhancing shareholder value through being ethically, socially and            
environmentally conscious corporate citizens.                                   
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 2008                          
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       23            71                              
     sales and related debtors                                                  

1.2   Payments for                                                              
         a)  exploration and     (272)         (591)                            
     evaluation                  -             -                                
b)  development        -             -                                
          c)  production         (180)         (1,333)                          
          d)  administration                                                    
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   -             1                               
     (VAT Refund from SARS)                                                     
                                 (428)         (1,849)                          
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      -             -                                
1.9   Proceeds from sale of:                                                    
     (a)prospects                -             675                              
     (b)equity investments       -             -                                
     (c) other fixed assets      52            68                               
1.10  Loans to other entities     (2)           (19)                            
1.11  Loans repaid by other       -             -                               

     Net investing cash flows    50            724                              
1.13  Total operating and                                                       
     investing cash flows        (378)         (1,125)                          
(carried forward)                                                          
1.13  Total operating and         (378)         (1,125)                         
     investing cash flows                                                       
     (brought  forward)                                                         

     Cash flows related to                                                      
     financing activities                                                       
1.14  Proceeds from issues of     -             949                             
shares, options, etc.                                                      
1.15  Proceeds from sale of       -              -                              
     forfeited shares                                                           
1.16  Proceeds from borrowings    2             125                             
1.17  Repayment of borrowings     -             (88)                            
1.18  Dividends paid              -              -                              
1.19  Other (provide details if   -              -                              
Net financing cash flows    2             986                              
     Net increase (decrease)     (376)         (139)                            
     in cash held                                                               

1.20  Cash at beginning of        387           150                             
     quarter/year to date                                                       
1.21  Exchange rate adjustments   2             2                               
to item 1.20                                                               
1.22  Cash at end of quarter      13            13                              
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      50                              
      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                        
Director fees                                                             
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         Amount used                      
available      $A`000                           
3.1   Loan facilities            Nil            Nil                             
3.2   Credit standby             Nil            Nil                             
Estimated cash outflows for next quarter                                        
4.1   Exploration and evaluation         0                                      
4.2   Development                        0                                      
4.3   Administration                     25                                     

     Total                              25                                      
Reconciliation of cash                                                          
Reconciliation of cash at the     Current       Previous                        
end of the quarter (as shown in   quarter       quarter                         
the consolidated statement of     $A`000        $A`000                          
cash flows) to the related                                                      
items in the accounts is as                                                     
5.1  Cash on hand and at bank     13            387                             
5.2  Deposits at call             -             -                               
5.3  Bank overdraft                                                             
-             -                                
5.4  Other (provide details)      -             -                               
    Total: cash at end of        13            387                              
    quarter (item 1.22)                                                         
Changes in interests in mining tenements                                        
                    Teneme   Nature of        Interes   Interest                
                    nt       interest         t at      at end                  
                    refere   (note (2))       beginni   of                      
nce                       ng of     quarter                 
6.1  Interests in                                                               
    reduced or                                                                  
6.2  Interests in                                                               
    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 Number quoted  Issue       Amount paid       
                                                  price per   up per            
security    security          
7.1   Preference                                                                
     +securities      Nil          Nil                                          
7.2   Changes during                                                            
     (a)  Increases                                                             
     through issues                                                             
(b)  Decreases                                                             
     returns of                                                                 
     capital, buy-                                                              
7.3   +Ordinary        107,763,134  107,763,134    Various     Various          
7.4   Changes during                                                            
     (a)  Increases                                                             
     through issues                                                             
(b)  Increase                                                              
     exercise of                                                                
7.5   +Convertible                  l                                           
7.6   Changes during                                                            
     (a)  Increases                                                             
     through issues                                                             
(b)  Decreases                                                             
7.7   Options                                      Exercise    Expiry date      
     (description     13,240,053   13,240,053     price       1 April 2011      
     and conversion                               $0.10                         
7.8   Issued during    Nil          Nil                                         
7.9   Exercised        Nil          Nil                                         
during quarter                                                             
7.10  Expired during   Nil          Nil                                         
7.11  Debentures       Nil          Nil                                         
(totals only)                                                              
7.12  Unsecured        Nil          Nil                                         
     notes (totals                                                              

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:               Neil Barrie         Date:      30 January 2009         
Print name:    N Barrie                                                         
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.                                                      
PricewaterhouseCoopers Corporate Finance (Pty) Ltd                              
Date: 30/01/2009 09:42:02 Supplied by www.sharenet.co.za                     
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