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TAW - Tawana Resources NL - Annual Financial Report - 31 December 2008

Release Date: 01/04/2009 07:05:06      Code(s): TAW
TAW - Tawana Resources NL - Annual Financial Report - 31 December 2008          
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")                                                     
ANNUAL FINANCIAL REPORT - 31 DECEMBER 2008                                      
(A Pdf version of this report may be found on the company`s website             
www.tawana.com.au)                                                              
CHAIRMAN`S STATEMENT                                                            
The extreme turmoil and volatility on the world capital markets caused by       
the ongoing global financial crisis has brought devastation to a large          
number of mining related projects for various companies throughout the          
world.                                                                          
There appears to be no immediate respite to the onslaught of this financial     
crisis resulting in companies either being proactive in structuring their       
costs and operations to meet these extreme challenges or to go by the           
financial wayside.                                                              
Tawana has undertaken a large number of initiatives over the past 12 months     
to address the lack of liquidity in the financial markets and as a              
consequence, the declining asset values of it`s projects.                       
In the last Quarter 2008 there has been a substantial cost reduction in         
corporate overheads of Tawana. Specifically, as earlier released to the         
market, the head office in Melbourne has been closed, as has the laboratory     
which was running unprofitably. Corporate operating expenses have been          
pruned by approximately 80% and a continuous watch undertaken on costs to       
ensure that cash is directed to existing and potential projects to continue     
to safeguard asset values and shareholder value.                                
During this extremely difficult period Tawana was proactive on a number of      
corporate and financial strategies, some of which are detailed below.           
*    Tawana has set a new model for Black Empowerment involvement in South      
Africa whereby our Black Empowerment partners in South Africa, Seven Falls      
Trading Pty Ltd, have converted its 26% individual project interests into a     
direct 8% equity in the holding company. This initiative has truly              
incorporated the interests of Seven Falls within the umbrella of all            
Tawana`s total operations in South Africa, Botswana and Australia and           
thereby creating a model which will allow Tawana the flexibility to further     
joint venture individual projects on a case by case basis with potential        
investors.                                                                      
*    As a result of this transaction, we are pleased to announce the            
appointment of Ms Nonkqubela Mazwai to the Board of Tawana. 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.                                                        
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        
Black Empowerment partner and substantial shareholders of Seven Falls.          
Nonkqubela will make an outstanding contribution to the Board and her           
appointment clearly reflects the inclusion of our business partners at a        
corporate level.                                                                
*    Tawana announced to the market in November that we have reached an         
agreement with DeBeers which will allow a drilling program to commence on       
two highly prospective targets at St Augustine`s in the Kimberly of South       
Africa, which is approximately 500m from the Big Hole.                          
The Big Hole produced 14.5 million carats of diamonds from 22.5 million         
tonnes of a grade of 64 carats per 100 tonnes. Mining ceased at the Big Hole    
in 1914. The drilling program confirmed the geology of the area and now         
Tawana is evaluating strategies to undertake further exploration activity on    
St Augustine`s.                                                                 
Significant exploration continues by Aquila Resources Ltd (ASX-AQA) on its      
Avontuur projects, north west of Kuruman in the northern cape province of       
South Africa. Tawana has a 6.8% indirect interest in the project by virtue      
of our association with our Black Empowerment partners through a joint          
venture called Rakana Consolidated Mines Pty Ltd.                               
In early July, Aquila announced promising manganese drilling and sampling       
results from the project which is two mineralised prospects some 20km apart     
adjoining the northernmost farms on the main Kalahari Manganese Field.          
*    In an effort to diversify its exploration interests and take advantage     
of mineral opportunities Tawana has embarked on the extensive evaluation of     
gold, coal and iron ore projects in South Africa and Botswana.                  
The organisation has been trimmed down and focused to meet the challenges       
and opportunities which present themselves in a market where liquidity is       
extremely tight, but one which has seen the re-rating of asset values to        
realistic levels.                                                               
The future presents outstanding opportunities for Tawana across a broad         
range of resources on which the company will focus in the near term.            
We are extremely confident that a successful resolution will be made on our     
potential joint venture at our Kareevlei Wes project in which we were hoping    
to already be in trial mining but a default by our potential joint partners     
has meant a significant delay. We are working hard towards a resolution of      
this impasse with the potential joint venture partners and hopefully will be    
in a position to undertake further work on Kareevlei in the new year.           
The company is holding numerous discussions with potential investors to re-     
capitalise Tawana to allow it to achieve its strategic objectives of the        
development of cash flow through its existing projects and thorough             
investigation of new mineral opportunities.                                     
The commitment of your Board and employees during this extremely difficult      
period cannot be overstated.                                                    
Particular thanks go to Brian Phillips and Euan Luff for their selfless and     
untiring contribution as board members, to Adrian Horwitz our Attorney in       
South Africa and Director of our South African subsidiaries, to Knowledge       
Whacha our mining engineer who has risen to the occasion, to our employees      
who are the backbone of our company, and importantly, to our Black              
Empowerment partners for joining with us in forming a truly inclusive           
organisation.                                                                   
We look forward to better times ahead which I am sure will see Tawana           
realise its potential as a well positioned mining house.                        
Neil Barrie                                                                     
CHAIRMAN                                                                        
DIRECTORS` REPORT                                                               
Your Directors submit their report on the consolidated entity (or `Group`)      
consisting of Tawana Resources N.L. (the `Company` or `Parent Entity`), and     
the entities it controlled at the end of, or during the year ended 31           
December 2008.                                                                  
DIRECTORS                                                                       
Details of the Directors of the Company in office at any time during or         
since the end of the financial year and at the date of this report and their    
qualifications, experience and special responsibilities are as follows.         
Neil Barrie                  -   Executive Chairman                             
                                                                                
Appointed to the Board       -   20 June 2008                                   
                                                                                
Experience                   -   Neil Barrie has over 20 years                  
                                experience in mining evaluation                 
                                and corporate development                       
                                throughout Australia, South                     
African and Botswana. Neil was                  
                                also a former Director of KPMG.                 
                                                                                
Interest in Shares and       -   1,246,154 Ordinary Shares                      
Options *                                                                       
                            -   10,270,000 Options                              
                                                                                
Special Responsibilities     -   Nil                                            

Directorships held in other  -   He has not held directorships of               
listed entities                  other listed companies in the                  
                                past three years.                               

Brian Phillips               -   Non-Executive Director                         
                                                                                
Appointed to the Board       -   4 April 2005                                   

Qualifications               -   AWASM, FAusIMM, MIMMM                          
                                                                                
Experience                   -   Brian Phillips is a qualified                  
mining engineer and has over                    
                                40 years experience in the mining               
                                industry. Brian is a past                       
                                Director of The Australian Gold                 
Council and past President of the               
                                Victorian Minerals and Energy                   
                                Council.                                        
                                                                                
Interest in Shares and       -   508,700 Ordinary Shares                        
Options *                                                                       
                            -   2,312,500 Options                               
                                                                                
Special Responsibilities     -   He is a member of the Audit and                
                                Risk Management Committee, and                  
                                the Remuneration and Nomination                 
                                Committee.                                      

Directorships held in other  -   Brian is the Non-Executive                     
listed entities                  Chairman of Indophil Resources                 
                                N.L. and a Non-Executive Director               
of Panoramic Resources Ltd.  He                 
                                is a past Director of MPI Mines                 
                                Ltd, past Non-Executive Chairman                
                                of Leviathan Resources Ltd, and                 
past Non-executive Director of                  
                                Perseverance Corporation Ltd.                   
                                                                                
Euan Luff                    -   Non-Executive Director                         

Appointed to the Board       -   16 November 1998                               
                                                                                
Qualifications               -   B Juris, LL.B, AL, Arb.A.                      

Experience                   -   Euan Luff is Senior Partner of                 
                                WilmothFieldWarne, Solicitors. In               
                                his professional capacity he acts               
as a legal adviser to a number of               
                                private and public Companies.                   
                                                                                
Interest in Shares and       -   7,344,870 Ordinary Shares                      
Options *                                                                       
                            -   6,104,150 Options                               
                                                                                
Special Responsibilities     -   He is the Chairman of the Audit                
and Risk Management Committee,                  
                                and also Chairman of the                        
                                Remuneration and Nomination                     
                                Committee.                                      

Directorships held in other  -   He has not held directorships of               
listed entities                  other listed companies in the                  
                                past three years.                               

Nonkqubela Mazwai            -   Non-Executive Director                         
                                                                                
Appointed to the Board       -   30 October 2008                                

Experience                   -   Nonkqubela Mazwai is the CEO and               
                                founding shareholder of Motjoli                 
                                Resources Pty Ltd, a 100% black                 
owned, controlled and managed                   
                                company. She has advised blue                   
                                chip mining companies (including                
                                Anglo American and De Beers) on                 
mining compliance matters. She                  
                                has also designed business                      
                                processes for the implementation                
                                of the Mineral and Petroleum                    
Resources Development Act for the               
                                South African government`s                      
                                Department of Minerals and                      
                                Energy.                                         

                                                                                
Interest in Shares and       -   5,437,457 Ordinary Shares                      
Options *                                                                       

Special Responsibilities     -   Nil                                            
                                                                                
Directorships held in other  -   Nonkqubela was Deputy Managing                 
listed entities                  Director of Coal of Africa until               
                                22 January 2008                                 
                                                                                
Wolfgang Marx                -   Managing Director                              

Appointed to the Board       -   16 November 1998                               
Resigned from the Board      -   31 January 2009                                
                                                                                
Qualifications               -   BSc, BA, FAusIMM, CPGeo                        
                                                                                
Experience                   -   Wolf Marx is a qualified                       
                                geologist and has over 25 years                 
experience in geology,                          
                                particularly in the field of gold               
                                and diamond exploration.                        
                                                                                
Interest in Shares and       -   7,062,500 Ordinary Shares                      
Options *                                                                       
                            -   6,814,000 Options                               
*    The relevant interest of each Director in the shares or options over       
shares issued by the companies within the consolidated entity and other         
related body corporates as notified by the Directors to the Australian          
Securities Exchange as at the date of this report.                              
COMPANY SECRETARIAL                                                             
The name and details of the Company Secretaries in office during the            
financial year and until the date of this report, are as follows.               
Phillip Hains                -  Joint Company Secretary                         
                                                                                
Appointed                    -  18 December 2008                                
                                                                                
Experience                   -  Phillips Hains is a Chartered                   
                               Accountant and specialist in                     
the public company environment.                  
                               He has served the needs of a                     
                               number of public company boards                  
                               of directors and related                         
committees. He has over 20 years                 
                               experience in providing                          
                               accounting, administration,                      
                               compliance and general management                
services. He holds a Masters of                  
                               Business Administration from RMIT                
                               and a Public Practice Certificate                
                               from the Institute of Chartered                  
Accountants.                                     
                                                                                
Terri Bakos                  -  Joint Company Secretary                         
                                                                                
Appointed                    -  18 December 2008                                
                                                                                
Experience                   -  Terri Bakos is a Chartered                      
                               Secretary and holds a B. Bus                     
(Accounting) from RMIT                           
                               University. She has over 16 years                
                               experience providing accounting                  
                               and compliance services to listed                
and unlisted public companies.                   
                                                                                
Derek Ehmke                  -  Company Secretary                               
                                                                                
Appointed                    -  22 January 2007                                 
Resigned                     -  18 December 2008                                
                                                                                
Experience                   -  Derrick Ehmke has over 40 years                 
business experience in Finance,                  
                               Administration and Information                   
                               Technology in South Africa,                      
                               Australia and the United Kingdom.                
He is a Fellow of the Institute                  
                               of Corporate Managers,                           
                               Secretaries and Administrators.                  
MEETINGS OF DIRECTORS                                                           
During the financial year eleven meetings of Directors were held. The           
numbers of meetings, including meetings of Committees of Directors, attended    
by each of the Directors during the financial year were:                        
                  Board Meetings                                                

                  Number     Number                                             
                  eligible   attended                                           
                  to                                                            
attend                                                        
Neil Barrie        7          7                                                 
Nonkqubela Mazwai  6          0                                                 
Wolf Marx          11         11                                                
Euan Luff          11         11                                                
Brian Phillips     11         11                                                
                  Committee Meetings                                            
                  Audit, Risk &         Remuneration                            
Compliance Committee  Committee                               
                  Number     Number     Number   Number                         
                  eligible   attended   eligible attended                       
                  to attend             to                                      
attend                                  
Neil Barrie        0          0          0        0                             
Nonkqubela Mazwai  0          0          0        0                             
Wolf Marx          1          1          0        0                             
Euan Luff          1          1          1        1                             
Brian Phillips     2          2          1        1                             
PRINCIPAL ACTIVITIES                                                            
The principal activities of the consolidated entity consisted of mineral        
exploration, in particular diamond exploration. There was no significant        
change in the nature of the activities of the consolidated entity during the    
year.                                                                           
RESULT AND DIVIDEND                                                             
The operating loss of the consolidated entity for the financial year after      
income tax expense of $Nil (2007: $Nil) was $3,826,156 (2007 $7,386,000) and    
the operating loss of the Company after income tax of $Nil (2007: $Nil) was     
$4,446,719 (2007 $9,594,713).                                                   
The Directors do not recommend the payment of a dividend (2007: Nil) nor has    
one been recommended or paid since the end of the previous financial year.      
REVIEW OF OPERATIONS                                                            
In the opinion of the Directors, the operations of the consolidated entity,     
likely developments in the operations of the consolidated entity, and the       
expected results of those operations as known at the date of this report,       
have been covered generally in this Annual Report.                              
SIGNIFICANT CHANGES IN STATE OF AFFAIRS                                         
In the opinion of the Directors, the state of affairs of the consolidated       
entity has not been substantially affected by any material or unusual matter    
during the financial year other than that referred to in this Annual Report.    
ENVIRONMENTAL REGULATIONS                                                       
The operations of the consolidated entity are subject to various                
environmental regulations under both Commonwealth and State Government          
legislation in Australia, and under Government legislation in South Africa      
and Botswana. The Directors have complied with those regulations and are not    
aware of any material breaches of the legislation during the current            
financial year.                                                                 
SUBSEQUENT EVENTS                                                               
Date        Event                                                               
28/01/2008  The Company announced that payment for the                          
           sale of 26% of the Kareevlei project had been                        
           delayed.                                                             
31/01/2009  The Company announced that Mr Wolf Marx has                         
retired as Managing Director of the Company.                         
19/03/2009  $A 200,000 in funding has been raised by the                        
           Company for working capital purposes.                                
Other than the above items, there have not been any matters or circumstances    
that have arisen since the end of the year that have significantly affected,    
or may significantly affect, the operations of the consolidated entity, the     
results of those operations, or the state of affairs of the consolidated        
entity in subsequent financial years.                                           
FUTURE DEVELOPMENTS                                                             
The consolidated entity will continue to concentrate on mineral exploration     
particularly diamond exploration with emphasis on the development of its        
existing projects.                                                              
SHARE CAPITAL                                                                   
During the year the Company allotted 21,365,653 ordinary shares with            
consideration ranging from $0.07 to $0.08 cents each, raising a total of        
$1,627,996 before costs. The funds raised were applied towards the costs of     
the issue, ongoing exploration activities of the Company and to provide         
additional working capital.                                                     
The number of ordinary fully paid shares on issue at 31 December 2008 was       
113,763,134.                                                                    
SHARE OPTIONS                                                                   
During the year 13,240,053 listed options were issued as part of a rights       
issue. The options are exercisable at $0.10 per option, on or before 1 April    
2011.                                                                           
During the year 4,000,000 unlisted options were issued to a consultant.         
These options are exercisable at $0.07 on or before 18 June 2012.               
Subsequent to year end, 19,500,000 unlisted options were issued to employees    
and directors, exercisable at $0.07 to $0.10 up to 17 January 2014.  These      
options were granted on 18 December 2008.                                       
As at the 31 December 2008, the Company had 13,240,053 listed options and       
10,720,000 unlisted options on issue.                                           
No options were exercised during the year (2007: Nil).                          
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS                         
During the year, Tawana Resources N.L. insured the Directors and Company        
Secretaries of the Company and its Australian based controlled entities, and    
the managers of each of the consolidated subsidiary entities.                   
The liabilities insured are legal costs that may be incurred in defending       
civil or criminal proceedings that may be brought against the officers in       
their capacity as officers of entities in the Group and any other payments      
arising from liabilities incurred by the officers in connection with such       
proceedings. This does not include such liabilities that arise from conduct     
involving a wilful breach of duty by the officers or the improper use by the    
officers of their position or of information to gain advantage for              
themselves or someone else or to cause detriment to the Company. It is not      
possible to apportion the premium between amounts relating to the insurance     
against legal costs and those relating to other liabilities. The contract of    
insurance prohibits the disclosure of the nature of the premium paid.           
PROCEEDINGS ON BEHALF OF THE COMPANY                                            
No person has applied to the Court under section 237 of the Corporations Act    
2001 for leave to bring proceedings on behalf of the Company, or to             
intervene in any proceedings to which the Company is a party, for the           
purpose of taking responsibility on behalf of the Company for all or part of    
those proceedings.                                                              
No proceedings have been brought or intervened in on behalf of the Company      
with leave of the Court under section 237 of the Corporations Act 2001.         
LOANS TO DIRECTORS AND EXECUTIVES                                               
There are currently no loans (2007: Nil) to Directors or executives.            
NON-AUDIT SERVICES                                                              
The Company may decide to employ the auditor on assignments additional to       
their statutory audit duties where the auditor`s expertise and experience       
with the Company and/or the Group are important.                                
Details of the amounts paid or payable to the auditor, for audit and non-       
audit services provided during the year are set out below:                      
                                      Consolidated                              
2008          2007                        
Audit services                         $             $                          
PricewaterhouseCoopers Australian firm                                          
  Audit and review of financial       60,245        65,396                      
reports                                                                       
  Related practices of                17,938        35,214                      
  Pricewaterhousecoopers Australian                                             
  firm                                                                          
Total remuneration for audit services  78,183        100,610                    
                                                                                
Non-audit services                     -             -                          
Total remuenration for audit & non-    78,183        100,610                    
audit services                                                                  
The Board of Directors has considered the position and, in accordance with      
the advice received from the Audit and Risk Management Committee, is            
satisfied that the provision of the non-audit services is compatible with       
the general standard of independence for auditors imposed by the                
Corporations Act 2001. No non audit services were provided by the auditor       
during 2008 (2007: nil).                                                        
REMUNERATION REPORT                                                             
The Remuneration Report can be found on pages 17 to 22.                         
CORPORATE GOVERANCE                                                             
The Corporate Governance Report can be found on pages 23 to 28.                 
AUDITORS` INDEPENDENCE DECLARATION                                              
A copy of the Auditors` Independence Declaration as required under section      
307C of the Corporations Act 2001 is set out on page 29.                        
This report is made in accordance with a resolution of Directors.               
Neil Barrie                                                                     
Executive Chairman                                                              
Dated at Melbourne on this the 31st day of March 2009                           
MANAGEMENT REPORT- REVIEW OF OPERATIONS                                         
Background                                                                      
Tawana was incorporated as a public company on 16 November 1998 in              
Australia.  Operating through its various subsidiaries, the Company is          
involved in the exploration for, and evaluation of, diamondiferous              
kimberlites and alluvials, primarily in South Africa and Botswana. The          
Company`s objective is to establish viable ore reserves and turn such           
projects into profitable operations.                                            
Recently the company has expanded it`s interests in evaluating other            
resources, primarily manganese, gold, copper, coal and iron ore.                
Tawana listed on ASX (as a primary listing) in April 2001 and JSE (as a         
secondary listing) in November 2005.  The Company`s head office is located      
in Melbourne, Australia.                                                        
A brief overview of Tawana`s diamond projects, which are all located in         
prospective areas, follow.                                                      
Current Status of Projects in South Africa                                      
Kareevlei Wes Project, Kimberley Region                                         
(Operated by Tawana; 100% owned by Tawana.)                                     
In April 2007 the Company was granted a new order Mining Right over the         
Project by the Department of Minerals and Energy.                               
The Kareevlei Wes Project ("KWP") comprises a cluster of 5 kimberlitic pipes    
(KV1-KV5), which vary in surface area from a large 5.5 ha (KV3) to a small      
0.3 ha (KV4). Drilling to a depth of 100 meters showed that the tonnage of      
KV3 is 13Mt and that of KV2 is 2Mt. The surface area of KV1 has been            
determined by shallow drilling to be 1.2hectares. The key interest in this      
project relates to the generally good quality of the diamonds in the            
kimberlites.                                                                    
As a result of bulk sampling conducted by extracting 6,500 tonnes of            
kimberlite from the four largest pies, the grade of KV1 and KV2 was             
estimated to be 8.57 cpht. Subsequent statistical analyses of the diamonds      
suggested that the grade could be expected to be 11 cpht if larger parcels      
of diamonds could be produced.                                                  
The grade of KV3 is variable due to several different phases encountered in     
the top 30 - 40m as indicated by Bauer drilling. The northern 3 ha of the       
pipe is composed of an homogenous phase of kimberlite and has an estimated      
grade of 4.89cpht, based on processing the minus 6mm fraction.                  
Earlier 10.5 inch percussion drilling in the northern section of KV3            
achieved a higher grade of 6.10cpht. This discrepancy could be due to the       
fact that the percussion drilling sampled deeper sections of the kimberlite.    
The KV5 kimberlite was sampled with two Bauer holes. The estimated grade,       
based on the minus 6mm fraction from the two holes was 3.70cpht and             
8.06cpht, with an average grade of 5.70cpht.                                    
As previously reported (2007 Half Yearly Report) diamonds from KV1 and KV2      
were valued at US$110/ct by independent valuers. These valuers predicted        
substantially higher values for larger parcels of diamonds. This prediction     
is supported by subsequent statistical analysis of a parcel from the KV1 and    
KV2 kimberlites, which suggested that US$164/ct was a reasonable value          
estimate for diamonds from these kimberlites.                                   
To obtain a more realistic fair market value based on actual offers by          
diamond buyers as opposed to the previous exercise of a reserve price           
valuation, a parcel of 222.71 carats of diamonds from Tawana`s Kareevlei        
Project was placed on tender in August 2008 in Kimberley, South Africa.         
More than 50 independent diamond buyers were present over the tender period     
and all had equal access to the diamonds.                                       
The parcel was withdrawn from the sale after the close of the tender.           
The average value obtained from the exercise was US$169 per carat. One stone    
of 3.741 carats was valued at US$2,800 per carat.                               
Photo included in orginal document                                              
Kareevlei Wes diamonds.                                                         
On 27 October 2008 the Directors of Tawana announced the conclusion of 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 above mentioned payment has been delayed, and, as a potential               
contingency, the Company is pursuing alternate sources of funding. The          
Company is also holding discussions with different groups regarding possible    
joint ventures on the Company`s projects.                                       
In December Tawana commenced legal proceedings in the South African Supreme     
Court for full payment of the amount in question. Tawana are confident of a     
successful outcome in this litigation and shareholders will be kept informed    
of developments as they are available.                                          
The Company considers that any tonnage and grade estimates do not satisfy       
the definition of a Mineral Resource as set out in the JORC Code as             
insufficient work has been conducted to be able to determine the grade and      
tonnage of the deposit with greater accuracy. Further work may or may not       
establish a Mineral Resource on the property.  Accordingly, the estimate of     
grade is made as provided by paragraph 18 of the JORC Code in relation to an    
exploration target or exploration potential. The diamonds were recovered        
from the minus 19mm plus 1.5mm fractions of kimberlite sampled by 2.5m          
diameter Bauer drill holes. The kimberlite material was processed in a DMS      
plant with diamond recovery by a Flowsort x-ray plant and a grease table.       
Tawana Alluvial Project, Lime Acres District, Kimberley Region                  
(Operated by Tawana; 100% owned by Tawana).                                     
The Tawana Alluvial Project area encompasses two alluvial deposits, the         
Feeder Channel and the Eastern Gravels, which extend from 300 meters from       
the De Beers owned Finsch Mine for a distance of approximately 18 kilometres    
from the mine. (Figure 1) These deposits resulted from the discovery by         
Tawana during early exploration of targets generated by BHP Billiton.           
Figure 1: Image showing location of Tawana Alluvials immediately downstream     
of the De Beers owned Finsch diamond mine.                                      
Photo included in orginal document                                              
During 2004/2005/2006 large volumes of alluvial material were extracted by      
percussion and large diameter Bauer drilling and processed in the Company`s     
DMS plants. Remarkably, this resulted in the recovery of diamonds from all      
of the holes drilled and the identification of zones of enrichment in the       
channels. The Eastern Gravels were also identified as hosting higher quality    
diamonds although additional exploration is needed to define minable zones.     
The proposed next stage for the Tawana Alluvial Project is a large scale        
operating trial mining. As a precursor to this, it is proposed to               
investigate the most effective methods to extract diamonds from the channels    
and to determine the most effective processing methods. The Company has not     
activated this proposal and has limited expenditure to maintaining tenure.      
St. Augustines Kimberlite Project, Kimberley Region                             
(Operated by Tawana; Tawana 30% equity in Vecto Trade 436 (Pty) Ltd)            
Tawana announced on 27 September 2007 that it had acquired a 30% of the         
issued shares in Vecto Trade 436(Pty) Ltd ("Vecto") from the major              
shareholder, Galeshewe Mining Resources (Pty) Limited. In August 2007 Vecto     
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 was thought to be located in    
the northern half of the Prospecting Right due west of the Big Hole and this    
has been confirmed.                                                             
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 metres.                                                      
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.                                                       
A drilling program to confirm the presence or absence of kimberlite or          
related rock types in the two targets was completed during 2008.                
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.                                                     
Photo included in original document                                             
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.                                                 
Lexshell Alluvial Project, Kimberley Region                                     
(Tawana 50% and operator / Guma Resources 50%)                                  
The project is held under a Mining Right by Lexshell 366 Mining (Pty)           
Limited ("the Holder"). Tawana and Guma have entered into a Contractor`s        
Agreement with the Holder which will enable Tawana to assess the economic       
potential of the deposit and if warranted mine the diamonds on behalf of the    
joint venture partners. The Holder will retain a 12% share of revenue after     
State royalties and cost of sales.                                              
The project is located on a palaeo-channel of the Vaal/Harts River adjacent     
to established alluvial diamond mines.                                          
The section of the Vaal/Harts River alluvials in which this project is          
located is noted for the prolific production of large, high quality             
diamonds. Mining has taken place here for about 100 years and the area still    
hosts one of the largest alluvial diamond mines in the world.                   
No work was conducted on this project during 2008.                              
Current Status of Projects in Botswana                                          
Orapa Diamond Project                                                           
(100% owned by Tawana; Nowak Investments (Pty) Limited earning 51%)             
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. Applications for this Prospecting Licence were    
submitted by a number of companies on a competitive basis. The Prospecting      
Licence is held in the name of Seolo Pty Ltd, a 100% owned Botswana             
registered subsidiary of Tawana.                                                
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 is one of the largest producing kimberlites in the        
world and is 113 hectares in surface area.                                      
Drilling of the BK19 - BK26 kimberlites in the Orapa Project area in            
Botswana was completed by Tawana in November 2007.                              
On 19 February 2008 Tawana announced that it had signed a joint venture         
agreement with Nowak Investments (Pty) Limited over the Orapa, Borolong and     
Moshaiwa projects. Nowak is able to earn 51% interest in the projects by        
conducting and sole funding the first phase of exploration on the projects.     
At the completion of the first phase Tawana will have the option to             
participate and fund ongoing work pro-rata or to allow Nowak to continue        
sole funding exploration to completion of a bankable feasibility study to       
earn 70% interest in the project.                                               
Tawana has been advised by Nowak that the sinking of shafts on the BK24         
kimberlite commenced in June 2008 but was suspended during the December         
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 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 pending.                             
Since the beginning of 2009,Tawana has been concerned at the slow progress      
with this project. In the second quarter of 2009 Tawana will move to            
restructure the equity position in the project.                                 
BK24 Shaft sinking operations by Nowak.                                         
Photo included in original document                                             
Current Status of Projects in Australia                                         
Tawana currently has no active involvement in exploration in Australia. The     
status of projects in Australia is as follows:                                  
Flinders Island Project, South Australia                                        
(80% owned by Tawana and 20% owned by Orogenic Exploration/Flinders Diamonds    
Ltd earning in)                                                                 
Flinders Island is situated 28 km west of the Eyre Peninsula of South           
Australia.                                                                      
Tawana and Orogenic entered into a joint venture agreement with Flinders        
Mines Limited (FMS) in April 2007 under the terms of which FMS is able to       
earn a 70% interest in the project by spending $2 million on the combined       
Flinders Island and Eyre Peninsula Projects. In the event that FMS earns 70%    
interest in the project, Tawana`s interest will reduce to 15%.                  
FMS advised Tawana that it had conducted geophysical surveys over the island    
and had identified a number of targets which it intended to drill test.         
Eyre Peninsula Project, South Australia                                         
(80% owned by Tawana and 20% owned by Orogenic Exploration/Flinders Diamonds    
Ltd ("FMS") earning in.)                                                        
Tawana and Orogenic entered into a joint venture agreement with FMS in April    
2007 under the terms of which FMS is able to earn a 70% interest in the         
project by spending $2 million on the combined Flinders Island and Eyre         
Peninsula Projects. In the event that FMS earns 70% interest in the project,    
Tawana`s interest will reduce to 15%.                                           
FMS conducted an airborne geophysical survey over the project area and          
drilled a number of targets. No kimberlite was intersected.                     
Pilbara Exploration, Western Australia                                          
(Tawana 66.6%; De Beers Australia Exploration Limited 33.3%)                    
Stream sampling conducted by Tawana during 2006 resulted in the recovery of     
kimberlitic indicator minerals to the north east of the Blacktop Kimberlite.    
These indicator minerals were located in two discreet areas, which are          
considered likely to host two kimberlite fissures. In an attempt to verify      
this interpretation an airborne geophysical survey was conducted over the       
areas during 2007.                                                              
Results of this survey were received and interpreted during 2008. Although      
it was considered that kimberlite intrusives did occur in the area, it was      
considered unlikely that any sizable kimberlite pipes were present.             
Tawana withdrew from this Joint Venture after exploration work determined       
that it is unlikely that any sizeable kimberlite pipes are present in the       
Blacktop venture.                                                               
SCHEDULE OF MINING TENEMENTS                                                    
Mining tenements currently held by the consolidated entity are:                 
Location          Title Held   % Held by Tawana     Title                       
                  By                                                            
Daniel Project    BHP          Various              NC30/5/1/1/088PR            
South Africa      Billiton                                                      
                  World                                                         
                  Exploratio                                                    
n Inc                                                         
Kareevlei Wes     Diamond      74%                  NC30/5/1/2/2/081M           
South Africa      Resources                         R                           
                  P/L                                                           
St Augustines     Vecto        30% (indirect)       NC30/5/1/1/5/402P           
South Africa      Trade 436                         R                           
                  P/L                                                           
Perdevlei         Tawana       74%                  PP 59/2004                  
South Africa      Resources                                                     
                  (SA) P/L                                                      
Riverton          Taormina     Earning 70%          NC30/5/1/2/2/405P           
South Africa      Mining                            R                           
(Pty) Ltd                                                     
Lexshell          Lexshell     50%                  NC30/5/1/2/2/054M           
South Africa      366 Mining                        R                           
                  (Pty) Ltd                                                     
Timber Creek      Tawana       100%                 ERL 25981                   
N.T. Australia    Resources                                                     
                  NL                                                            
Flinders Island   Orogenic     80%                  EL3200                      
SA, Australia     Exploratio                                                    
                  n P/L                                                         
                  / Tawana                                                      
Eyre Peninsula    Orogenic     80%                  EL3928                      
SA, Australia     Exploratio                                                    
                  n P/L                                                         
                  / Tawana                                                      
Flinders Island   Orogenic     80%                  ELA06/648                   
SA, Australia     Exploratio                                                    
                  n P/L                                                         
                  / Tawana                                                      
Borolong/Mashaiw  Seolo        100%                 PL 37/2003,                 
a                 Botswana                          38/2003                     
Botswana          (Pty) Ltd                         PL 86/2007,                 
                                                    87/2007                     
Orapa             Seolo        100%                 PL61/2007                   
Botswana          Botswana                                                      
                  (Pty) Ltd                                                     
REMUNERATION REPORT                                                             
The Remuneration Report is set out under the following                          
main headings:                                                                  
A    Principles used to determine the nature and amount                         
     of remuneration                                                            
B    Details of remuneration                                                    
C    Service agreements                                                         
D    Share-based compensation                                                   
E    Additional information                                                     
The information provided in this Remuneration Report has been audited as        
required by section 308 (3c) of the Corporations Act 2001.                      
A:  Principles used to determine the nature and amount of remuneration          
The Board policy for determining the nature and amount of remuneration of       
Directors and Executives is agreed by the Board of Directors as a whole. The    
Board obtains professional advice where necessary to ensure that the Company    
attracts and retains talented and motivated Directors and employees who can     
enhance Company performance through their contributions and leadership.         
Remuneration policy is based on industry practice rather than Company           
performance and takes into account the risks and liabilities assumed by the     
directors and executives as a result of their involvement in the activities     
undertaken by the Company.                                                      
Executive Director Remuneration                                                 
In determining the level and make-up of executive remuneration, the Board       
negotiates a remuneration to reflect the market salary for a position and       
individual of comparable responsibility and experience. Remuneration is         
compared with the external market by reference to industry salary surveys.      
If required, the Board may engage an external consultant to provide             
independent advice in the form of a written report detailing market levels      
of remuneration for comparable executive roles.                                 
Remuneration consists of a fixed remuneration component as considered           
appropriate.                                                                    
Non-Executive Director Remuneration                                             
Non-Executive Directors` fees are paid within an aggregate limit which is       
approved by the shareholders from time to time. Retirement payments, if any,    
are determined in accordance with the rules set out in the Company`s            
Constitution and the Corporations Act at the time of the Director`s             
retirement or termination. Non-Executive Directors remuneration may include     
an incentive portion consisting of bonuses and/or options, as considered        
appropriate by the Board, which is subject to shareholder approval in           
accordance with the ASX Listing Rules.                                          
The aggregate remuneration, and the manner in which it is apportioned           
amongst Non-Executive Directors, is reviewed annually. The Board considers      
the amount of director fees being paid by comparable companies with similar     
responsibilities and levels of experience of the Non-Executive Directors        
when undertaking the annual review process.                                     
The current maximum amount of Non-Executive Directors fees payable is fixed     
at $100,000 in total, for each 12 month period commencing 1 January each        
year, until varied by ordinary resolution of shareholders.                      
Executive Pay                                                                   
Executive remuneration is paid according to experience and market               
conditions. Executive remuneration is reviewed annually by the Remuneration     
and Nomination Committee and recommendations made to the Board. Remuneration    
may include an incentive portion consisting of bonuses and/or options, as       
considered appropriate by the Board, which may be subject to shareholder        
approval in accordance with the ASX Listing Rules. There is currently no        
formal bonus scheme in place.                                                   
The Board considers the amount of executive remuneration being paid by          
comparable companies with similar responsibilities and levels of experience     
of the executive when undertaking the annual review process.                    
B:  Details of Remuneration                                                     
Amounts of remuneration                                                         
Details of the remuneration of the Directors and the Key Management             
Personnel (as defined in AASB 124 Related Party Disclosures) of Tawana          
Resources N.L. and its controlled entities, are set out in the following        
tables.                                                                         
The Key Management Personnel of Tawana Resources N.L. include the Directors     
as per page 3 to 4 above and the following executive officers, which are        
also the highest paid executives of the controlled entities:                    
*    C. Bailey                General Manager South African Operations          
*    A. Berryman         Laboratory Manager                                     
The group has no other executives.                                              
Details of Remuneration for Year Ended 31 December 2008                         
2008                  Short -    Post Employment   Share                        
                     Term       Benefits         Based                          
Benefits                    Payment                        
                     Cash       Superannuation   Options     Total              
                     Salary                                                     
                     and Fees                                                   
$          $                $           $                  
Executive Directors                                                             
W. Marx               201,840    18,165           10,257      230,262           
                                                                                
Non-Executive                                                                   
Directors                                                                       
B. Phillips           24,465     2,202            5,129       31,796            
E. Luff               25,000     -                17,999      42,999            
N. Barrie             35,833     -                2,559       38,392            
N. Mazwai             -          -                -           -                 
Sub Total Directors   287,138    20,367           35,944      343,449           
                                                                                
Other Key Management                                                            
Personnel                                                                       
A. Berryman           107,999    9,720            1,252       118,971           
C. Bailey             150,000    13,500           5,115       168,615           
Totals                545,137    43,587           42,311      631,035           
Options Issued as Part of Remuneration for the Year Ended 31 December 2008      
The details of options issued as part of remuneration during the year are       
detailed in Section D: Share Based Compensation.                                
Details of Remuneration for Year Ended 31 December 2007                         
The remuneration for each Director and each of the Executive Officers of the    
Group receiving the highest remuneration during the year, who are also the      
Key Management Personnel, was as follows:                                       
2007                  Short -    Post Employment  Share                        
                       Term       Benefits         Based                        
                       Benefits                    Payment                      
                       Cash       Superannuation   Options     Total            
Salary                                                   
                       and Fees                                                 
                       $          $                $           $                
 Executive Directors                                                            
W. Marx               141,837    78,163           -           220,000          
                                                                                
 Non-Executive                                                                  
 Directors                                                                      
B. Phillips           40,000     -                -           40,000           
 E. Luff               37,500     -                16,058      53,558           
 Sub Total Directors   219,337    78,163           16,058      313,558          
                                                                                
Other Key Management                                                           
 Personnel                                                                      
 A. Berryman           111,500    16,575           3,381       131,456          
 C. Bailey             150,000    13,500           10,986      174,486          
Totals                480,837    108,238          30,425      619,500          
Options Issued as Part of Remuneration for the Year Ended 31 December 2007      
The details of options issued as part of remuneration during the year are       
detailed in Section D: Share Based Compensation.                                
C:  Service Agreements                                                          
There are no contracts between the Company and the Directors, the Executives    
or the Consultants.                                                             
D:  Share Based Compensation                                                    
Options granted to Directors and Key Management Personnel are granted either    
under or outside of the Tawana Resources Employee Option Scheme (TREOS)         
which was approved by shareholders at the 2005 annual general meeting.          
All options issued to Directors and Key Management Personnel are issued for     
nil consideration.                                                              
Options issued under the TREOS are granted for a five year period, 1/3 vests    
on the date of granting of the options, 1/3 on the first anniversary of the     
date of granting and 1/3 on the second anniversary of the date of granting.     
Options issued outside of the TREOS during the 2008 year were granted for up    
to a five year period, vesting within 12 and 24 months from contract or         
issue date.                                                                     
All Options issued carry no dividend or voting rights. When exercised, each     
option is converted into one ordinary share pari passu with existing            
ordinary shares.                                                                
The terms and conditions of each grant of options affecting the remuneration    
of Directors and Key Management Personnel in this, or future reporting          
periods, are as follows:                                                        
D:  Share Based Compensation (continued)                                        
    Grant Date Expiry      Exercise  Value per   Quantity  Date                 
               Date        Price     option at             Exercisable          
date of                                    
                                     grant                                      
(a   30/11/2006 30/11/2011  $0.35     $0.057      50,000    30/11/2006          
)                                                                               
30/11/2006 30/11/2011  $0.35     $0.067      50,000    30/11/2007           
    30/11/2006 30/11/2011  $0.35     $0.075      50,000    30/11/2008           
                                                                                
(b   31/05/2007 30/11/2011  $0.35     $0.0515     166,666   31/05/2007          
)                                                                               
    31/05/2007 30/11/2011  $0.35     $0.0515     166,667   31/05/2008           
    31/05/2007 30/11/2011  $0.35     $0.0522     166,667   31/05/2009           
                                                                                
(c   25/06/2007 30/11/2011  $0.35     $0.0391     83,333    25/06/2007          
)                                                                               
    25/06/2007 30/11/2011  $0.35     $0.0391     83,333    25/06/2008           
    25/06/2007 30/11/2011  $0.35     $0.0391     83,334    25/06/2009           

(d   18/12/2008 17/01/2013  $0.10     $0.009      3,000,000 19/06/2009          
)                                                                               
    18/12/2008 17/01/2013  $0.10     $0.009      3,000,000 19/06/2010           

(e   18/12/2008 17/01/2013  $0.07     $0.011      5,000,000 17/01/2009          
)                                                                               
    18/12/2008 17/01/2014  $0.10     $0.011      5,000,000 17/01/2010           

(a) to (c)     Options issued to employees & Directors under the employee       
option scheme as part of their remuneration.                                    
(d)  Options granted to a Director as part of their remuneration. Options       
were granted outside of the employee option scheme.                             
(e)  Options granted to Directors as part of their remuneration. Options        
were granted outside of the employee option scheme.                             
Details of options over ordinary shares in the Company provided as              
remuneration to each Director and member of the Key Management Personnel of     
the consolidated entity, whilst in their position as a Director or Key          
Management Personnel, are set out below. When exercisable, each option is       
convertible into one ordinary share of Tawana Resources N.L. Further            
information on the options is set out in the notes to the financial             
statements.                                                                     
D:  Share Based Compensation (continued)                                        
*   These options granted during the 2008 year, were not issued to key          
management personnel until 18 January 2009.                                     
The assessed fair value at grant date of options granted to the individuals     
is allocated equally over the period from grant date to vesting date, and       
the amount is included in the remuneration tables above. Fair values at         
grant date are independently determined using a Binominal Tree option           
pricing model that takes into account the exercise price, the term of the       
option, the impact of dilution, the share price at grant date and expected      
price volatility of the underlying share, the expected dividend yield and       
the risk free interest rate for the term of the option.                         
The model inputs for the options                                                
granted during the 2008 year                                                    
were:                                                                           
Group A    Group B    Group C                 
Quantity                           6,000,000  5,000,000  5,000,000              
Grant date                         18/12/200  18/12/2008 18/12/2008             
                                  8                                             
Issue date                         17/01/200  17/01/2009 17/01/2009             
                                  9                                             
Expiry date                        17/01/201  17/01/2013 17/01/2014             
                                  3                                             
Share price at grant date           $0.03      $0.03      $0.03                 
Exercise price                      $0.10      $0.07      $0.10                 
Expected price volatility of       76%        76%        76%                    
the Company`s shares                                                            
Expected dividend yield            0%         0%         0%                     
Risk free rate at grant            3.57%      3.57%      3.57%                  
date                                                                            
Value per option                    $0.009     $0.011     $0.011                

                                                                                
Group A options vest 50% on 19/06/09 and 50% on 19/06/10                        
Group B options vested on date of issue.                                        
Group C options vest 12 months from date of issue.                              
No Directors or employees exercised options during 2008 (2007: nil).            
All options issued were granted for nil consideration.                          
D:  Share Based Compensation (continued)                                        
The model inputs for the options                                                
granted during the 2007 year were:                                              
                                        Group A       Group B                   
Quantity                                 500,000       250,000                  
Grant date                               31/05/2007    25/06/2007               
Expiry date                              30/11/2011    30/11/2011               
Share price at grant date                 $0.193        $0.167                  
Exercise price                            $0.35         $0.35                   
Expected price volatility of the         49%           49%                      
Company`s shares                                                                
Expected dividend yield                  0%            0%                       
Risk free rate at grant date             6.18%         6.39%                    

Group A & B options vest 1/3 on the date of granting and 1/3 on                 
each of the subsequent anniversaries of the initial grant date.                 
E: Additional Information                                                       
For each grant of options included in the tables on pages 20-21, the            
percentage of the available grant that was paid, or that vested, in the         
financial year, and the percentage that was forfeited because the person did    
not meet the service and performance criteria is set out below. The maximum     
value of the options yet to vest has been determined as the amount at the       
grant date fair value of the options that is yet to be expensed.                
Further details relating to options are set out below:                          
Name         A             B            C           D           E               
Remuneration  Value at     Value at    Value at    Total            
            consisting    grant date   exercise    lapse date  of               
            of options    $            date        $           Column           
                                       $                       (B-D)            
B. Phillips  16.10%        5,129        -           -           5,129           
W. Marx      4.50%         10,257       -           -           10,257          
N. Barrie    6.70%         2,559        -           -           2,559           
E. Luff      41.90%        17,999       -           -           17,999          
A. Berryman  1.10%         1,252        -           (3,000)     (1,748)         
C. Bailey    3.00%         5,115        -           -           5,115           
A    = The percentage of the value of remuneration consisting of options,       
based on the value at grant date set out in column B.                           
B    =    The value at grant date calculated in accordance with AASB 2 Share    
based payment of options granted during the year as part of remuneration.       
C    =    The value at exercise date of options that were granted as part of    
remuneration and were exercised during the year.                                
D    =    The value at lapse date of options that were granted as part of       
remuneration and that lapsed during the year.                                   
CORPORATE GOVERNANCE STATEMENT                                                  
Tawana Resources N.L. and the Board are committed to achieving and              
demonstrating the highest standards of corporate governance. An extensive       
review of the Company`s corporate governance framework was completed in         
light of the best practice recommendations released by the Australian           
Securities Exchange (ASX) Corporate Governance Council in March 2003. In        
August 2007, the ASX Corporate Governance Council released a 2nd edition of     
the principals. The Board continues to review the framework and practices to    
ensure they meet the interests of shareholders. The Company and its             
controlled entities together are referred to as the consolidated entity in      
this statement.                                                                 
The relationship between the Board and Senior Management is critical to the     
consolidated entity`s long-term success. The Directors are responsible to       
the shareholders for the performance of the Company in both the short and       
the longer term and seek to balance sometimes competing objectives in the       
best interests of the consolidated entity as a whole. Their focus is to         
enhance the interests of shareholders and other key stakeholders and to         
ensure the consolidated entity is properly managed.                             
Day to day management of the consolidated entity`s affairs and the              
implementation of the corporate strategy and policy initiatives are formally    
delegated by the board to the Managing Director and Senior Executives as set    
out in the consolidated entity`s Delegated Authorised Policy.                   
A description of the Company`s main corporate governance practices is set       
out below. All these practices, unless otherwise stated, were in place for      
the entire year.                                                                
Foundations for Management and Oversight                                        
The Board has the overall responsibility to shareholders for all governance     
matters of the consolidated entity. The Board remains primarily responsible     
for the strategic direction and financial aspirations of the consolidated       
entity, whilst delegating the responsibility of management to the Managing      
Director and/or the senior management team.                                     
The Board aims to fulfil its responsibilities by creating value for all         
stakeholders that is sustainable and beneficial. Stakeholders include           
shareholders, employees, customers, the community and the environment. The      
Board has adopted a Charter that includes amongst other items, the specific     
roles and responsibilities of the Board. Without limiting the Board`s           
function, their specific responsibilities include:                              
*    Approving objectives, strategies and financial plans and monitoring the    
Company`s performance against these plans;                                      
*    Appointment of the Managing Director and reviewing his performance and     
remuneration;                                                                   
*    Monitoring compliance with the regulatory requirements, ensuring all       
consolidated entity employees act with integrity and due diligence in the       
interests of the Company and stakeholders, and                                  
*    Review and approval of all significant policies and procedures across      
the consolidated entity.                                                        
Board Composition                                                               
The Board, with the assistance of the Remuneration and Nomination Committee,    
reviews from time to time the size, structure and composition of the Board,     
taking into consideration the balance of skills, experience and knowledge of    
Board members.                                                                  
The Board was chaired by a Non-Executive Director until 20 June 2008 when       
Brian Phillips stepped down as Chairman and Neil Barrie took the role of        
Executive Chairman.                                                             
The Company has adopted a definition of independence consistent with the        
guidance provided by the ASX Corporate Governance Council. Such a definition    
provides that an Independent Director is a Non-Executive Director and is not    
a member of management and:                                                     
*    is not a substantial shareholder of the Company or an officer of, or       
otherwise associated directly with, a substantial shareholder of the            
Company;                                                                        
*    within the last three years has not been employed in an executive          
capacity by the Company or another member of the consolidated entity, or        
been a Director after ceasing to hold such employment;                          
*    within the last three years has not been a principal or a material         
adviser or a material consultant to the Company or member of the                
consolidated entity, or an employee materially associated with the service      
provided;                                                                       
*    is not a material supplier or customer of the Company or other member      
of the consolidated entity, or an officer of or otherwise associated            
directly with a material supplier or customer;                                  
*    has no material contractual relationship with the Company or another       
member of the consolidated entity other than as a Director of the Company;      
*    has not served on the Board for a period which could, or could             
reasonably be perceived to, materially interfere with the Director`s ability    
to act in the best interests of the Company; and                                
*    is free from any interest and any business or other relationship which     
could, or could reasonably be perceived to, materially interfere with the       
Director`s ability to act in the best interests of the Company.                 
A substantial shareholder is defined to be a person or Company that has an      
interest of 5% or more of the voting rights of the Company.                     
The Board has reviewed the position of all current Directors in light of the    
Company`s adopted definition of independence. The Board acknowledges that it    
is not comprised of a majority of Independent Non-Executive Directors. Non-     
compliance with the best practice recommendation of the ASX Council`s           
requirements is attributable to the Company`s small size, emerging rate of      
growth since listing, and identifying and attracting suitable qualified         
Directors with the right combination of skills.                                 
Due to the stage of the Company`s development, the Board believes that the      
most appropriate person for the position of Chairman is an Executive Officer    
of the Company. The Executive Officer`s overall expertise is crucial to the     
Company`s development and negates any perceived lack of independence.           
The following were Directors during the 2008 year:                              
Director  Capacity          Position        Held Office      Held Office        
from             to                  
W. Marx   Managing          Non-            16 November      31 January         
         Director          Independent     1998             2009                
B.        Non- Executive    Independent     4 April 2005     Current            
Phillips  Director                                                              
E. Luff   Non- Executive    Non-            16 November      Current            
         Director          Independent     1998                                 
N.        Executive         Non-            20 June 2008     Current            
Barrie    Chairman          Independent                                         
N.        Non-Executive     Non-            30 October 2008  Current            
Mazwai    Director          Independent                                         
At each annual general meeting one-third of the Directors or, if their          
number is a multiple of three, then the number nearest to but not more than     
one-third of the Directors must retire from office as follows:                  
The Directors to retire by rotation at an annual general meeting are those      
Directors who have been longest in office since their last election or          
appointment.                                                                    
Directors elected or appointed on the same day may agree among themselves       
which of them must retire.                                                      
A Director must retire from office at the conclusion of the third annual        
general meeting after which the Director was elected, even if his or her        
retirement results in more than one-third of all Directors retiring from        
office. A retiring Director will be eligible for re-election.                   
Responsibilities                                                                
The responsibilities of the board include:                                      
*    providing strategic guidance to the company;                               
*    reviewing and approving business and financial plans;                      
*    monitoring organisational and financial performance;                       
*    liaising with company`s auditors;                                          
*    appointing the Managing Director and reviewing his performance;            
*    enhancing and protecting the reputation of the organisation, and           
*    overseeing the operation of the systems and processes for compliance       
and risk management reporting to shareholders.                                  
Independent Professional Advice                                                 
Directors and Board committees have the right, in connection with their         
duties and responsibilities, to seek independent advice at the Company`s        
expense. Prior written approval of the Chairman is required, but this will      
not be unreasonably withheld.                                                   
Performance Assessment                                                          
The full Board is responsible for reviewing the performance of the Chairman.    
It is the responsibility of the Chairman, with advice from the Remuneration     
and Nomination Committee, to assess the performance of each of the Directors    
and Senior Executives. The Board has conducted its annual performance           
reviews for the 2008 year which involved open and constructive dialogue         
between the respective parties taking account of the objectives and             
measurable results that have been achieved.                                     
Corporate Reporting                                                             
The Chairman and Company Secretary have made attestations recommended by the    
ASX Corporate Governance Council as to the Company`s financial condition        
prior to the Board signing this report.                                         
Board Committees                                                                
The Board has established a number of committees to assist in the execution     
of its duties and to allow detailed consideration of complex issues.            
Currently there are two committees in place being the Remuneration and          
Nomination Committee and the Audit and Risk Management Committee. Each is       
comprised of Non-Executive Directors. All matters determined by committees      
are submitted to the full Board as recommendations for Board decisions.         
Remuneration and Nomination Committee                                           
The current members are:                                                        
*    E. Luff (Chairman)                                                         
*    B. Phillips                                                                
The committee is responsible for making recommendations to the Board with       
respect to the Company`s compensation policies, including equity based          
programs. The committee is also responsible for making recommendations to       
the Board for identifying individuals suitably qualified to become Board        
members. Particulars concerning Directors` and Executives` remuneration are     
set out in the Directors` Report.                                               
The Remuneration and Nomination Committee is comprised of Non-Executive         
Directors but a majority are not independent and the chair of the committee     
is not independent. In light of the Company`s current stage and constraints     
on the number of independent Non-Executive Directors the board believes that    
this committee composition is optimal in the circumstances.                     
Audit and Risk Management Committee                                             
The current members of the committee are:                                       
*    E. Luff (Chairman)                                                         
*    B. Phillips                                                                
The committee is responsible for risk management and oversight of the           
Company`s financial reporting policies and other operational risk areas.        
Furthermore, the committee monitors the internal controls and the integrity     
of the Company`s financial statements in compliance with the regulatory         
requirements. The committee is also responsible for the appointment,            
evaluation and oversight of the external auditor, ensuring that the             
independence of the external assurance function is maintained.                  
The Audit and Risk Management Committee is comprised of Non-Executive           
Directors but a majority are not independent and the chair of the committee     
is not independent. In light of the Company`s current stage and constraints     
on the number of independent Non-Executive Directors the board believes that    
this committee composition is optimal in the circumstances.                     
External Auditors                                                               
The Company`s audit committee policy is to appoint external auditors who        
clearly demonstrate quality and independence. The performance of the            
external auditor is reviewed annually and applications for tender of            
external audit services are requested as deemed appropriate, taking into        
consideration assessment of performance, existing value and tender costs.       
PricewaterhouseCoopers was appointed as the external auditor in 2006. It is     
PricewaterhouseCoopers policy to rotate audit engagement partners on listed     
companies at least every five years.                                            
An analysis of fees paid to the external auditors, including a breakdown of     
fees for non - audit services, is provided in the Directors` Report and in      
the notes to the financial statements. It is the policy of the external         
auditor to provide an annual declaration of their independence to the audit     
committee.                                                                      
The external auditor is requested to attend the annual general meeting and      
be available to answer shareholder questions about the conduct of the audit     
and the preparation and content of the audit report.                            
Risk Assessment and Management                                                  
The Board, through the Audit and Risk Management Committee, is responsible      
for ensuring there are adequate policies in relation to risk management,        
compliance and internal control systems. In summary, the company policies       
are designed to ensure strategic, operational, legal, reputation and            
financial risks are identified, assessed, effectively and efficiently           
managed and monitored to enable achievement of the consolidated entity`s        
business objectives.                                                            
Considerable importance is placed on maintaining a strong control               
environment. There is an organisation structure with clearly drawn lines of     
accountability and delegation of authority. Adherence to the Code of Conduct    
is required at all times and the Board actively promotes a culture of           
quality and integrity.                                                          
The Company`s risk management policy and the operation of the risk              
management and compliance system is managed by the Company`s Risk Management    
Group which consists of senior executives chaired by the Company Secretary.     
Detailed control procedures cover management accounting, financial              
reporting, project appraisal, environment, health and safety, IT security,      
compliance and other risk management issues.                                    
In addition, the Board requires that each major proposal submitted to the       
Board for decision is accompanied by a comprehensive risk assessment and,       
where required, management`s proposed mitigation strategies.                    
Safety, Health and Environment Management System (SHEMS)                        
The Company recognises the importance of environmental and occupational         
health and safety (OH&S) issues and is committed to the highest levels of       
performance. To help meet this objective the SHEMS was established to           
facilitate the systematic identification of environmental and OH&S issues       
and to ensure they are managed in a structured manner. This system has been     
operating for a number of years and allows the company to:                      
*    monitor its compliance with all relevant legislation;                      
*    continually assess and improve the impact of its operations on the         
environment;                                                                    
*    encourage employees to actively participate in the management of           
environmental and OH&S issues; and                                              
*    use energy and other resources efficiently.                                
Information on compliance with significant environmental regulations is set     
out in the Directors` Report.                                                   
Code of Conduct                                                                 
These policies set out the ethical standards that govern the conduct of all     
Directors and employees. The Company recognises the interests of all            
stakeholders in the community and their role in creating shareholder value.     
Every Director and employee is required at all times, to conduct themselves     
in a manner consistent with the principles of honesty and integrity.            
The Code requires Directors and employees, amongst other things, to comply      
with the law, to disclose relevant interests that they may have and to act      
in the best interests of the Company. The Code also covers confidentiality      
of information and respect of privacy.                                          
Continuous Disclosure and Shareholder Communication                             
The Company has policies and procedures on information disclosure that focus    
on continuous disclosure of any information concerning the consolidated         
entity that a reasonable person would expect to have a material effect on       
the price of the Company`s securities. These policies and procedures also       
include the arrangements the Company has in place to promote communication      
with shareholders and encourage effective participation at general meetings.    
All information disclosed to the ASX is posted on the Company`s website as      
soon as it is disclosed to the ASX. When analysts are briefed on aspects of     
the consolidated entity`s operations, the material used in the presentation     
is released to the ASX and posted on the Company`s website.                     
Procedures have also been established for reviewing whether any price           
sensitive information has been inadvertently disclosed and, if so, this         
information is also immediately released to the market.                         
Securities Policy                                                               
This policy provides guidance to all Directors`, officers and staff dealing     
in Tawana`s securities. The Securities Policy prohibits trading for all         
persons aware of unpublished price sensitive information about the Company.     
In addition, it specifically limits the trade of Tawana`s securities by the     
Company`s officers during certain periods of time prior to the release of       
both the half year and full year results.                                       
Significant Accounting Policies                                                 
Details of significant accounting policies are set out in Note 1 of the         
notes forming part of the financial statements.                                 
Directors` and Executives` Remuneration                                         
The performance of the Company depends upon the quality of its Directors and    
executives. To prosper, the Company must attract, motivate and retain highly    
skilled Directors and executives.                                               
The Remuneration and Nomination Committee undertakes a review of the            
remuneration packages of all Directors and executive officers on an annual      
basis and makes recommendations to the Board. Remuneration packages are         
reviewed with due regard to performance and other relevant factors.             
In order to retain and attract executives of sufficient calibre to              
facilitate the efficient and effective management of the Company`s              
operations, the Remuneration and Nomination Committee may seek the advice of    
external advisors in connection with the structure of remuneration packages.    
Remuneration packages contain the following key elements:                       
*    Primary benefits, including salary/fees;                                   
*    Post employments benefits, including superannuation and prescribed         
retirement benefits, and                                                        
*    Other benefits                                                             
Details of Directors and Key Management Personnel are contained within the      
Directors` Report.                                                              
Non-Executive Directors` fees are determined by the Board based on external     
advice that is received from time to time and with reference to fees paid to    
other Non-Executive Directors of comparable companies, taking account of the    
specific duties in relation to the Company. Non-Executive Director`s fees       
are within the limit agreed to by shareholders and represent the                
responsibilities of the time spent by the Non-Executive Directors` in           
fulfilling their duties to the Board.                                           
Publicly Available Information                                                  
In accordance with the ASX Corporate Governance Council, the best practice      
recommendations provide that specific documents should be publicly              
available, ideally on the Company`s website. The Company makes available on     
the web-site, within a reasonable time, any public statements by the            
Company.                                                                        
All policies referred to in this section are available by contacting the        
Company.                                                                        
Auditor`s Independence Declaration                                              
As lead auditor for the audit of Tawana Resources N.L. for the year ended 31    
December 2008, I declare that to the best of my knowledge and belief, there     
have been:                                                                      
no contraventions of the auditor independence requirements of the               
Corporations Act 2001 in relation to the audit; and                             
no contraventions of any applicable code of professional conduct in relation    
to the audit.                                                                   
This declaration is in respect of Tawana Resources and the entities it          
controlled during the period.                                                   
Tim Goldsmith  Melbourne                                                        
Partner   31 March 2009                                                         
PricewaterhouseCoopers                                                          
Tawana Resources N.L.                                                           
ABN: 69 085 166 721                                                             
Annual Financial Report - 31 December 2008                                      
Financial report                                                                
This financial report covers both Tawana Resources N.L. as an individual        
entity and the consolidated entity consisting of Tawana Resources N.L. and      
its subsidiaries. The financial report is presented in the Australian           
currency.                                                                       
Tawana Resources N.L. is a company limited by shares, incorporated and          
domiciled in Australia. Its registered office and principal place of            
business is:                                                                    
Tawana Resources N.L.                                                           
Suite 1, 1233 High Street                                                       
Armadale, Victoria, 3143                                                        
Australia                                                                       
A description of the nature of the consolidated entity`s operations and its     
principal activities is included in the Management Report on page 9 and in      
the Directors` Report on pages 3 to 8, both of which are not part of this       
financial report.                                                               
The financial report was authorised for issue by the Directors on 31st March    
2009. The Company has the power to amend and reissue the financial report.      
Through the use of the internet, we have ensured that our corporate             
reporting is timely, complete, and available globally at minimum cost to the    
Company. All press releases, financial reports and other information are        
available on our website: www.tawana.com.au.                                    
INCOME STATEMENTS                                                               
For The Year Ended 31 December 2008                                             
                                                                                
                  Consolidated                Parent Entity                     
Not   2008          2007          2008        2007                  
            e                                                                   
                  $             $             $           $                     
                                                                                

Revenue      4     56,996        120,034       47,039      41,727               
                                                                                
Corporate          (674,389)     (488,460)     (595,211)   (273,943)            
costs                                                                           
Depreciatio        (294,353)     (436,789)     (212,647)   (257,977)            
n                                                                               
Employee           (512,293)     (686,814)     (344,666)   (611,055)            
benefits                                                                        
expense                                                                         
Exploration        (1,651,383)   (5,288,919)   (1,649,647) (5,288,919)          
expenses                                                                        
written off                                                                     
Foreign            18,700        -             18,700      -                    
exchange                                                                        
gain                                                                            
Impairment         -             -             (955,237)   (2,670,612)          
of                                                                              
financial                                                                       
assets                                                                          
Prospecting        -             -             (211,928)   (212,415)            
fee                                                                             
Travel             (135,344)     (70,200)      (100,346)   -                    
costs                                                                           
Other        5     (634,090)     (534,852)     (442,776)   (321,519)            
expenses                                                                        
Loss before        (3,826,156)   (7,386,000)   (4,446,719) (9,594,713)          
income tax                                                                      
expense                                                                         
Income tax   6     -             -             -           -                    
expense                                                                         
Net loss           (3,826,156)   (7,386,000)   (4,446,719) (9,594,713)          
attributabl                                                                     
e to                                                                            
shareholder                                                                     
s of the                                                                        
parent                                                                          
entity                                                                          
Earnings per share                                                              
                                          Not  2008      2007                   
e                                     
Basic loss per share (cents per share)     25   (3.71)    (8.32)                
Diluted loss per share (cents per share)   25   (3.71)    (8.32)                
The above Income Statements should be read in conjunction with the              
accompanying notes.                                                             
BALANCE SHEETS                                                                  
As at 31 December 2008                                                          
                                                                                
Consolidated                                       
                       Note  2008              2007                             
                             $                 $                                
                                                                                

Current assets                                                                  
Cash and cash           7     18,090            149,862                         
equivalents                                                                     
Trade and other         8     30,996            88,981                          
receivables                                                                     
Inventories             9     81,268            76,818                          
Total current                 130,354           315,661                         
assets                                                                          
                                                                                
Non-current assets                                                              
Trade and other         8     82,095            47,423                          
receivables                                                                     
Investments in          10    16,640            16,640                          
Associates                                                                      
Other financial         11    -                 -                               
assets                                                                          
Property, plant and     12    495,222           850,889                         
equipment                                                                       
Exploration             13    5,883,355         7,971,366                       
expenditure                                                                     
Total non-current             6,477,312         8,886,318                       
assets                                                                          
                                                                                
Total assets                  6,607,666         9,201,979                       
                                                                                
Current liabilities                                                             
Trade and other         15    424,389           142,761                         
payables                                                                        
Provisions              16    40,575            116,389                         
Total current                 464,964           259,150                         
liabilities                                                                     

Non-current                                                                     
liabilities                                                                     
Trade and other         15    80,689            -                               
payables                                                                        
Provisions              16    28,299            30,784                          
Borrowings              17    -                 -                               
Total non-current             108,988           30,784                          
liabilities                                                                     
                                                                                
Total liabilities             573,952           289,934                         
                                                                                
Net assets                    6,033,714         8,912,045                       
                                                                                
Equity                                                                          
Contributed equity      18    34,708,732        33,339,335                      
Reserves                19    (2,570,305)       (2,148,733)                     
Accumulated losses      20    (26,104,713)      (22,278,557)                    
Total equity                  6,033,714         8,912,045                       
                                                                                
BALANCE SHEETS                                                                  
(Continued)                                                                     
                                                                                
                             Parent Entity                                      
Note  2008              2007                             
                             $                 $                                
                                                                                
                                                                                
Current assets                                                                  
Cash and cash           7     4,995             134,031                         
equivalents                                                                     
Trade and other         8     25,265            77,417                          
receivables                                                                     
Inventories             9     -                 -                               
Total current                 30,260            211,448                         
assets                                                                          

Non-current assets                                                              
Trade and other         8     38,500            -                               
receivables                                                                     
Investments in          10    16,640            16,640                          
Associates                                                                      
Other financial         11    3,045,550         3,887,738                       
assets                                                                          
Property, plant and     12    206,648           442,862                         
equipment                                                                       
Exploration             13    3,146,194         4,531,948                       
expenditure                                                                     
Total non-current             6,453,532         8,879,188                       
assets                                                                          
                                                                                
Total assets                  6,483,792         9,090,636                       

Current liabilities                                                             
Trade and other         15    321,122           54,510                          
payables                                                                        
Provisions              16    40,575            116,389                         
Total current                 361,697           170,899                         
liabilities                                                                     
                                                                                
Non-current                                                                     
liabilities                                                                     
Trade and other         15    80,689            -                               
payables                                                                        
Provisions              16    -                 -                               
Borrowings              17    7,692             7,692                           
Total non-current             88,381            7,692                           
liabilities                                                                     

Total liabilities             450,078           178,591                         
                                                                                
Net assets                    6,033,714         8,912,045                       

Equity                                                                          
Contributed equity      18    34,708,732        33,339,335                      
Reserves                19    459,314           260,323                         
Accumulated losses      20    (29,134,332)      (24,687,613)                    
Total equity                  6,033,714         8,912,045                       
The above Balance Sheets should be read in conjunction with the accompanying    
notes.                                                                          
STATEMENTS OF CHANGES IN EQUITY                                                 
Year Ended 31 December 2008                                                     
                                                                                
                       Issued     Reserves     Accumulated  Total               
capital                 losses                           
Consolidated            $          $            $            $                  
                                                                                
Balance as at 1         32,544,335 (1,484,642)  (14,892,557) 16,167,136         
January 2007                                                                    
Shares issued net of    795,000    -            -            795,000            
costs                                                                           
Options issued          -          53,876       -            53,876             
Currency translation    -          (717,967)    -            (717,967)          
differences                                                                     
Net loss for the        -          -            (7,386,000)  (7,386,000)        
period                                                                          
Balance at 31           33,339,335 (2,148,733)  (22,278,557) 8,912,045          
December 2007                                                                   
                                                                                
Shares issued net of    1,369,397  -            -            1,369,397          
costs                                                                           
Options issued          -          198,991      -            198,991            
Net loss for the        -          -            (3,826,156)  (3,826,156)        
period                                                                          
Currency translation    -          (620,563)    -            (620,563)          
differences                                                                     
Balance at 31           34,708,732 (2,570,305)  (26,104,713) 6,033,714          
December 2008                                                                   

                       Issued     Reserves     Accumulated  Total               
                       capital                 losses                           
Parent Entity           $          $            $            $                  

Balance as at 1         32,544,335 206,447      (15,092,900) 17,657,882         
January 2007                                                                    
Shares issued net of    795,000    -            -            795,000            
costs                                                                           
Options issued          -          53,876       -            53,876             
Net loss for the        -          -            (9,594,713)  (9,594,713)        
period                                                                          
Balance at 31           33,339,335 260,323      (24,687,613) 8,912,045          
December 2007                                                                   
                                                                                
Shares issued net of    1,369,397  -            -            1,369,397          
costs                                                                           
Options issued          -          198,991      -            198,991            
Net loss for the        -          -            (4,446,719)  (4,446,719)        
period                                                                          
Balance at 31           34,708,732 459,314      (29,134,332) 6,033,714          
December 2008                                                                   
The above Statements of Changes in Equity should be read in conjunction with    
the accompanying notes.                                                         
CASH FLOW STATEMENTS                                                            
For The Year Ended 31 December 2008                                             
                         Consolidated             Parent Entity                 
                   Note  2008        2007         2008      2007                
$           $            $         $                   
                                                                                
                                                                                
Cash flows from                                                                 
operating                                                                       
activities                                                                      
Receipts from             40,943      104,513      40,943    105,534            
customers                                                                       
Payments to               (1,298,519) (1,536,683)  (998,867) (1,147,835)        
suppliers and                                                                   
employees                                                                       
Interest received         10,122      81,088       165       2,781              
Other (provide            5,931       -            5,931     -                  
details if                                                                      
material)                                                                       
Net cash outflow    30    (1,241,523) (1,351,082)  (951,828) (1,039,520)        
from operating                                                                  
activities                                                                      
                                                                                
Cash flows related to                                                           
investing activities                                                            
Proceeds from             23,567      52,961       23,567    46,667             
sales of plant and                                                              
equipment                                                                       
Payment for               (341)       (44,726)     -         -                  
purchases of plant                                                              
and equipment                                                                   
Payment for               (537,650)   (1,223,083)  (263,893) (889,420)          
exploration                                                                     
Advances to               -           -            (637,959) (196,188)          
related entities                                                                
Advances from             -           -            461,772   1,155,574          
related entities                                                                
Investments in            -           (16,640)     -         (16,640)           
Associates                                                                      
Net cash flow from        (514,424)   (1,231,488)  (416,513) 99,993             
investing                                                                       
activities                                                                      
                                                                                
Cash flows related to                                                           
financing activities                                                            
Proceeds from             1,497,904   795,000      1,497,904 795,000            
issues of                                                                       
securities                                                                      
Capital raising           (258,599)   -            (258,599) -                  
costs                                                                           
Net cash inflow           1,239,305   795,000      1,239,305 795,000            
from financing                                                                  
activities                                                                      
Net decrease in           (516,642)   (1,787,570)  (129,036) (144,527)          
cash and cash                                                                   
equivalents                                                                     

Cash and cash             149,862     2,655,399    134,031   278,558            
equivalents at the                                                              
1st January 2008                                                                
Effects of                384,870     (717,967)    -         -                  
exchange rate                                                                   
changes on cash                                                                 
and cash                                                                        
equivalents                                                                     
Cash and cash       7     18,090      149,862      4,995     134,031            
equivalents at 31                                                               
December, 2008                                                                  
The above Cash Flow Statements should be read in conjunction with the           
accompanying notes.                                                             
NOTE 1    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                            
The principal accounting policies adopted in the preparation of the             
financial report are set out below. These policies have been consistently       
applied to all the years presented, unless otherwise stated. The financial      
report includes separate financial statements for Tawana Resources N.L. as      
an individual entity and the consolidated entity consisting of Tawana           
Resources N.L. and its subsidiaries.                                            
(a)  Basis of preparation                                                       
This general purpose financial report has been prepared in accordance with      
Australian Accounting Standards, other authoritative pronouncements and the     
Australian Accounting Standards Board, Urgent Issues Group Interpretations      
and the Corporations Act 2001.                                                  
The financial report is presented in Australian dollars and rounded to the      
nearest dollar.                                                                 
The financial report is prepared on a going concern basis. Refer to Note 31     
for further details.                                                            
These financial statements have been prepared under the historical cost         
convention.                                                                     
Compliance with AIFRS                                                           
The financial report complies with Australian Accounting Standards, which       
include Australian equivalents to International Financial Reporting             
Standards ("AIFRS"). Compliance with AIFRS ensures that the financial           
report, comprising the financial statements and notes thereto, complies with    
International Financial Reporting Standards ("IFRS").                           
The consolidated entity has not elected to early adopt any standards in the     
annual reporting period beginning 1 January 2008.                               
Critical accounting estimates                                                   
The preparation of financial statements in conformity with AIFRS requires       
the use of certain critical accounting estimates. It also requires              
management to exercise its judgement in the process of applying the             
consolidated entity`s accounting policies. The areas involving a higher         
degree of judgement or complexity, or areas where assumptions and estimates     
are significant to the financial statements, are disclosed in Note 3.           
(b)  Principles of consolidation                                                
(i) Subsidiaries                                                                
The consolidated financial statements incorporate the assets and liabilities    
of all subsidiaries of Tawana Resources N.L. as at 31 December 2008 and the     
results of all subsidiaries for the year then ended. Tawana Resources N.L.      
and its subsidiaries together are referred to in this financial report as       
the Group or the consolidated entity.                                           
Subsidiaries are all those entities, including special purpose entities,        
over which the consolidated entity has the power to govern the financial and    
operating policies, generally accompanying a shareholding of more than          
one-half of the voting rights. The existence and effect of potential voting     
rights that are currently exercisable or convertible are considered when        
assessing whether the consolidated entity controls another entity.              
Subsidiaries are fully consolidated from the date on which control is           
transferred to the consolidated entity. They are de-consolidated from the       
date that control ceases.                                                       
The purchase method of accounting is used to account for the acquisition of     
subsidiaries by the consolidated entity.                                        
Intercompany transactions, balances and unrealised gains on transactions        
between consolidated entity companies are eliminated. Unrealised losses are     
also eliminated unless the transaction provides evidence of the impairment      
of the asset transferred. Accounting policies of subsidiaries have been         
changed where necessary to ensure consistency with the policies adopted by      
the consolidated entity.                                                        
Investments in subsidiaries are carried at cost less impairment losses in       
the individual financial statements of Tawana Resources N.L.                    
(ii)  Associates                                                                
Associates are all entities over which the consolidated entity has              
significant influence but not control, generally accompanying a shareholding    
of between 20% and 50% of the voting rights. Investments in associates are      
accounted for in the parent entity financial statements using the cost          
method and in the consolidated financial statements using the equity method     
of accounting, after initially being recognised at cost.                        
The consolidated entity`s share of its associates` post acquisition profits     
or losses is recognised in the income statement, and its share of post-         
acquisition movement in reserves is recognised in reserves. The cumulative      
post-acquisition movements are adjusted against the carrying amount of the      
investment. Dividends receivable from associates are recognised in the          
parent entity`s income statement, while in the consolidated financial           
statements they reduce the carrying amount of the investment.                   
When the consolidated entity`s share of losses in an associate equals or        
exceeds its interest in the associate, including other unsecured long-term      
receivables, the consolidated entity does not recognise further losses,         
unless it has incurred obligations or made payment on behalf of the             
associate.                                                                      
Unrealised gains on transactions between the consolidated entity and its        
associate are eliminated to the extent of the consolidated entity`s interest    
in the associate. Unrealised losses are also eliminated unless the              
transactions provide evidence of an impairment of the asset transferred.        
Accounting policies of associates have been changed where necessary to          
ensure consistency with the policies adopted by the consolidated entity.        
(iii) Joint ventures- jointly controlled assets                                 
The proportionate interests in the assets, liabilities and expenses of a        
joint venture activity have been incorporated in the financial statements       
under the appropriate headings. Details of the joint venture are set out in     
Note 14.                                                                        
(c)  Segment reporting                                                          
A business segment is a group of assets and operations engaged in providing     
products or services that are subject to risks and returns that are             
different to those of other business segments. A geographical segment is        
engaged in providing products or services within a particular economic          
environment and is subject to risks and returns that are different from         
those of segments operating in other economic environments.                     
(d)  Foreign currency translation                                               
The presentation currency of Tawana Resources N.L. and its subsidiaries is      
Australian dollars (A$). The functional currency of Tawana Resources N.L. is    
Australian dollars and the functional currency of the overseas subsidiaries     
is South African Rand (Tawana Resources S.A. (Pty) Ltd and Diamond Resources    
(Pty) Ltd) and Botswana Pula (Seolo Botswana Pty Ltd).                          
Transactions in foreign currencies are initially recorded in the functional     
currency at the exchange rates prevailing at the date of the transaction.       
Monetary assets and liabilities denominated in foreign currencies are           
revalued at the rate of exchange prevailing at the balance sheet date.          
As at the reporting date the assets and liabilities of these overseas           
subsidiaries are translated into the presentation currency of Tawana            
Resources N.L. at the rate of exchange prevailing at the balance sheet date     
and the income statements are translated at the weighted average exchange       
rates for the period. Translation differences on non-monetary assets are        
included in the fair value reserve in equity.                                   
On disposal of a foreign entity, the deferred cumulative amount recognised      
in equity relating to that particular foreign entity is recognised in the       
income statement.                                                               
(e)  Revenue recognition                                                        
Revenue is measured at the fair value of consideration received or              
receivable.  Revenue is recognised to the extent that it is probable that       
the economic benefits will flow to the consolidated entity and the revenue      
can be reliably measured. The following specific recognition criteria must      
also be met before revenue is recognised.                                       
Sale of goods and provision of services                                         
Revenue is recognised when the significant risks and rewards of ownership of    
the goods have passed to the buyer or when the service has been provided,       
and can be measured reliably. Risks and rewards are considered passed to the    
buyer at the time of delivery of the goods to the customer.                     
Interest                                                                        
Interest is recognised on a time proportion basis using the effective           
interest method.                                                                
(f)  Income tax                                                                 
The income tax expense or revenue for the period is the tax payable on the      
current period`s taxable income based on the applicable income tax rate for     
each jurisdiction adjusted by changes in deferred tax assets and liabilities    
attributable to temporary differences and to unused tax losses.                 
Deferred income tax is provided in full using the liability method on           
temporary differences arising between the tax bases of assets and               
liabilities with the carrying amounts in the consolidated financial             
statements. However, the deferred income tax is not accounted for if it         
arises from initial recognition of an asset or liability in a transaction       
other than a business combination, that at the time of the transaction,         
affects neither accounting nor taxable profit or loss. Deferred income tax      
is determined using tax rates (and laws) that have been enacted or              
substantially enacted at the reporting date and are expected to apply when      
the related deferred income tax asset is realised or the deferred income tax    
liability is settled.                                                           
Deferred tax assets are recognised for deductible temporary differences and     
unused tax losses only if it is probable that future taxable amounts will be    
available to utilise those temporary differences and losses.                    
Deferred tax liabilities and assets are not recognised for temporary            
differences between the carrying amount and the tax base of investments in      
controlled entities where the parent entity is able to control the timing of    
the reversal of temporary differences and it is probable that the               
differences will not be reversed in the foreseeable future.                     
Deferred tax assets and liabilities are offset when there is a legally          
enforceable right to offset current tax assets and liabilities, and when the    
deferred tax balances relate to the same taxation authority. Current tax        
assets and tax liabilities are offset where the entity has a legally            
enforceable right to offset and intends either to settle on a net basis, or     
to realise the asset and settle the liability simultaneously.                   
Current and deferred tax balances that are attributable to amounts              
recognised directly in equity, are also recognised directly in equity.          
(g)  Impairment of assets                                                       
Assets, except for exploration and evaluation (refer to Note 1 (h)) are         
reviewed for impairment whenever events or changes in circumstances indicate    
that the carrying amount may not be recoverable. An impairment loss is          
recognised for the amount by which the asset`s carrying amount exceeds its      
recoverable amount. The recoverable amount is the higher of an asset`s fair     
value less costs to sell and value in use. For the purposes of assessing        
impairment, assets are grouped at the lowest levels for which there are         
separately identifiable cash inflows which are largely independent of the       
cash inflows from other assets or groups of assets (cash-generating units).     
Non-financial assets, other than goodwill that suffered an impairment, are      
reviewed for possible reversal of the impairment at each reporting date.        
(h) Exploration and evaluation expenditure                                      
Exploration and evaluation expenditure incurred is accumulated in respect of    
each identifiable area of interest. The costs are only carried forward to       
the extent that they are expected to be recouped through the successful         
development of the area or where activities in the area have not yet reached    
a stage that permits reasonable assessment of the existence of economically     
recoverable resources and further work is intended to be performed.             
Accumulated costs in relation to an abandoned area will be written off in       
full against profit in the year in which the decision to abandon the area is    
made.                                                                           
When production commences, the accumulated costs for the relevant area of       
interest will be amortised over the life of the area according to the rate      
of depletion of the economically recoverable resources.                         
A regular review is undertaken of each area of interest to determine the        
appropriateness of continuing to carry forward costs in relation to that        
area of interest.                                                               
(i)  Property, plant and equipment                                              
Plant and equipment is stated at cost less accumulated depreciation and any     
impairment in value. Land and buildings are stated at cost less accumulated     
depreciation and any impairment in value. Depreciation is calculated on a       
straight line basis over the estimated useful life of the asset except for      
motor vehicles which is on a diminishing value as follows:                      
Freehold Buildings                 over 10 years                                
Plant and equipment                over 7 years                                 
Motor Vehicle (Australia)               22.5%                                   
Motor Vehicle (Overseas)           over 4 years                                 
The carrying values of plant and equipment are reviewed for impairment when     
events or changes in circumstances indicate the carrying value may not be       
recoverable in accordance with note 1 (g).                                      
(j)  Other financial assets                                                     
Investments in subsidiaries are accounted for at cost. Such investments         
include both investments in shares issued by the subsidiary and other parent    
entity interests that in substance form part of the parent entity`s             
investment in the subsidiary. These include investments in the form of          
interest-free loans which have no fixed repayment terms and which have been     
provided to subsidiaries as an additional source of long term capital.          
(k)  Inventories                                                                
Inventories consisting of rough diamonds are stated at lower of cost or         
estimated net realisable value. Cost comprises direct materials, direct         
labour, and an appropriate proportion of variable and fixed overhead            
expenditure.                                                                    
(l)  Trade and other receivables                                                
Trade receivables are recognised initially at fair value and subsequently       
measured at amortised cost using the effective interest method, less            
provision for impairment. Trade receivables are generally due for settlement    
within 30 days.                                                                 
Collectability of trade receivables is reviewed on an ongoing basis. Debts      
which are known to be uncollectible are written off by reducing the carrying    
amount directly. An allowance account is used when there is objective           
evidence that the consolidated entity will not be able to collect all           
amounts due according to the original terms of the receivables. Significant     
financial difficulties of the debtor, probability that the debtor will enter    
bankruptcy or financial reorganisation, and default or delinquency in           
payments, are considered indicators that the trade receivable is impaired.      
The amount of the impairment allowance is the difference between the asset`s    
carrying amount and the present value of estimated future cash flows,           
discounted at the original effective interest rate. Cash flows relating to      
short-term receivables are not discounted if the effect of discounting is       
immaterial.                                                                     
The amount of the impairment loss is recognised in the income statement         
within other expenses.                                                          
When a trade receivable, for which an impairment allowance had been             
recognised, becomes uncollectible in a subsequent period, it is written off     
against the allowance account. Subsequent recoveries of amounts previously      
written off are credited against other expenses in the income statement.        
(m)  Cash and cash equivalents                                                  
Cash and short-term deposits in the balance sheet comprise cash at bank and     
in hand and short-term deposits with an original maturity of three months or    
less that are readily converted into known amounts of cash. For the purposes    
of the cash flow statement, cash and cash equivalents consist of cash and       
cash equivalents as defined above, net of outstanding bank overdrafts.          
(n)  Employee entitlements                                                      
(i)  Wages and Salaries, Annual Leave and Sick Leave                            
Liabilities for wages and salaries, including non-monetary benefits and         
annual leave expected to be settled within 12 months of the reporting date      
are recognised in other payables in respect of employees` services up to the    
reporting date and are measured at the amounts expected to be paid when the     
liabilities are settled.                                                        
(ii) Share-based payments                                                       
Share-based compensation benefits are provided to employees via the Tawana      
Resources Employee Option Plan, an employee share scheme. Information           
relating to this scheme is set out in Note 27.                                  
The fair value of options granted under the Tawana Resources Employee Option    
Plan is recognised as an employee benefit expense with a corresponding          
increase in equity. The fair value is measured at grant date and recognised     
over the period during which the employees become unconditionally entitled      
to the options. The Tawana Resource Employee Options Plan was approved at       
the 2005 Annual General Meeting.                                                
(iii) Long Service Leave                                                        
Liabilities for long service leave are recognised, and are measured as the      
present value of expected future payments to be made in respect of services     
provided by employees.                                                          
(o)  Provisions                                                                 
Provisions are recognised when the consolidated entity has a present            
obligation, legal or constructive, as a result of a past event and it is        
probable that an outflow of resources embodying economic benefits will be       
required to settle the obligation and a reliable estimate can be made of the    
amount of the obligation.                                                       
(p)  Leases                                                                     
Leases in which a significant portion of the risks and rewards of ownership     
are retained by the lessor are classified as operating leases. Payments made    
under operating leases, net of any incentives received from the lessor, are     
charged to the Income Statement on a straight-line basis over the period of     
the lease.                                                                      
q)   Provision for rehabilitation                                               
Environmental obligations associated with the retirement or disposal of long    
lived assets will be recognised when the disturbance occurs and is based on     
the extent of damage incurred. The provision is measured at the present         
value of the future expenditure, and a corresponding rehabilitation asset is    
also recognised. On an ongoing basis, the rehabilitation liability will be      
re-measured in line with the changes in the time value of money, (recognised    
as an expense in the Income Statement and an increase in the provision), and    
additional disturbances will be recognised as additions to a corresponding      
asset and rehabilitation liability. The rehabilitation asset will be            
accounted for in accordance with the accounting policy applicable to the        
asset to which it relates (i.e. exploration expenditure).                       
(r)  Trade and other payables                                                   
These amounts represent liabilities for goods and services provided to the      
consolidated entity prior to the end of financial year which are unpaid. The    
amounts are unsecured and are usually paid within 30 days of recognition.       
(s)  Other taxes                                                                
Revenues, expenses and assets are recognised net of the amount of GST           
except:                                                                         
*    where the GST incurred on a purchase of goods and services is not          
recoverable from the taxation authority, in which case the GST is recognised    
as part of the cost of acquisition of the asset or as part of the expense       
item as applicable; and                                                         
*    receivables and payables are stated with the amount of GST included.       
The net amount of GST recoverable from, or payable to, the taxation             
authority is included as part of receivables or payables in the Balance         
Sheet.                                                                          
Cash flows are included in the Cash Flow Statement on a gross basis and the     
GST component of cash flows arising from investing and financing activities,    
which is recoverable from, or payable to, the taxation authority, are           
classified as operating cash flows.                                             
Commitments and contingencies are disclosed net of the amount of GST            
recoverable from, or payable to, the taxation authority.                        
(t)  Contributed equity                                                         
Ordinary shares are classified as equity. Incremental costs directly            
attributable to the issue of new shares are shown in equity as a deduction,     
net of tax, from the proceeds. Incremental costs directly attributable to       
the issue of new shares for the acquisition of a business are not included      
in the cost of the acquisition as part of the purchase consideration.           
(u)  Earnings per share                                                         
(i) Basic earnings per share                                                    
Basic earnings per share is calculated by dividing the profit/(loss)            
attributable to equity holders of the Company, excluding any costs of           
servicing equity other than ordinary shares, by the weighted average number     
of ordinary shares outstanding during the financial year, adjusted for bonus    
elements in ordinary shares issued during the year.                             
(ii)  Diluted earnings per share                                                
Diluted earnings per share adjusts the figures used in the determination of     
basic earnings per share to take into account the after income tax effect of    
interest and other financing costs associated with dilutive potential           
ordinary shares and the weighted average number of shares assumed to have       
been issued for no consideration in relation to dilutive potential ordinary     
shares.                                                                         
(v)  New accounting standards and interpretations                               
Certain new accounting standards and interpretations have been published        
that are not mandatory for the current reporting period. The consolidated       
entity`s assessment of the impact of these new standards and interpretations    
is set out below:                                                               
(i)  AASB 8 Operating Segments and AASB 2007-3 Amendments to Australian         
Accounting Standards AASB 8 (effective from 1 January 2009)                     
AASB 8 will result in a significant change in the approach to segment           
reporting as it requires the adoption of a `management approach` to             
reporting on financial performance. The information being reported will be      
based on what the key decision makers use internally for evaluating segment     
performance and deciding how to allocate resources to operating segments.       
The consolidated entity will adopt AASB 8 from 1 January 2009. Application      
of AASB 8 is not anticipated to result in different segments, segment           
results, and different types of information being reported in the segment       
note of the 2009 financial report than is presented in this Annual Report.      
(ii) Revised AASB 123 Borrowing Costs and AASB 2007-6 Amendments to             
Australian Accounting Standards arising from AASB 123 (effective from 1         
January 2009)                                                                   
The standard has removed the option to expense all borrowing costs, and when    
adopted, it will require the capitalisation of all borrowing costs directly     
attributable to the acquisition, construction, or production of a qualifying    
asset. There will be no impact on the financial report of the consolidated      
entity, as the consolidated entity already capitalises borrowing costs          
relating to qualifying assets.                                                  
(iii) Revised AASB 101 Presentation of Financial Statements and AASB 2007-8     
Amendments to Australian Accounting Standards arising from AASB 101             
(effective from 1 January 2009)                                                 
The revised AASB 101 requires the presentation of a statement of                
comprehensive income and makes changes to the statement of changes in           
equity, but will not affect any of the amounts recognised in the financial      
statements. If the consolidated entity makes a prior period adjustment or       
reclassifies items in the financial statements, it will need to disclose a      
third Balance Sheet, being as at the beginning of the comparative period.       
The consolidated entity intends to apply the revised standard from 1 January    
2009.                                                                           
(iv) AASB 2008-1 Amendments to Australian Accounting Standard - Share-based     
Payments: Vesting Conditions and Cancellations (effective from 1 January        
2009)                                                                           
AASB 2008-1 clarifies that vesting conditions are service conditions and        
performance conditions only and that other features of a share-based payment    
are not vesting conditions. It also specifies that all cancellations,           
whether by the entity or by other parties, should receive the same              
accounting treatment. The consolidated entity will apply the revised            
standard from 1 January 2009, but it is not expected to affect the              
accounting for the consolidated entity`s share-based payments.                  
(v) Revised AASB 3 Business Combinations, AASB 127 Consolidated and Separate    
Financial Statements and AASB 2008-3 Amendments to Australian Accounting        
Standards arising from AASB 3 and AASB 127 (effective 1 July 2009)              
The revised AASB 3 continues to apply the acquisition method of business        
combinations, but with some significant changes. For example, all payments      
to purchase a business are to be recorded at fair value at the acquisition      
date, with contingent payments classified as debt subsequently remeasured       
through the income statement. There is a choice on an acquisition-by-           
acquisition basis to measure the non-controlling interest in the acquiree       
either at fair value or at the non-controlling interest`s proportionate         
share of the acquiree`s net assets. All acquisition-related costs must be       
expensed.                                                                       
The revised AASB 127 requires the effects of all transactions with non-         
controlling interest to be recorded in equity if there is no change in          
control and these transactions will no longer result in goodwill or gains       
and losses. The standard also specifies the accounting treatment when           
control is lost. Any remaining interest in the entity is remeasured to fair     
value, and a gain or loss is recognised as a profit or a loss. This is          
consistent with the consolidated entity`s current accounting policy.            
The consolidated entity will apply the revised standards prospectively to       
all business combinations and transactions with non-controlling interests       
from 1 January 2010.                                                            
(vi) AASB 2008-6 Further Amendments to Australian Accounting Standards          
arising from the Annual Improvements Project (effective 1 July 2009)            
The amendments to AASB 5 Discontinued Operations and AASB 1 First-Time          
Adoption of Australian-Equivalents to International Financial Reporting         
Standards are part of the IASB`s annual improvements project published in       
May 2008. They clarify that all of a subsidiary`s assets and liabilities are    
classified as held for sale if a partial disposal sale plan results in loss     
of control. Relevant disclosures should be made for this subsidiary if the      
definition of a discontinued operation is met. The consolidated entity will     
apply the amendments prospectively to all partial disposals of subsidiaries     
from 1 January 2010.                                                            
(vii) AASB 2008-7 Amendments to Australian Accounting Standards - Cost of an    
Investment in a Subsidiary, Jointly Controlled Entity or Associate              
(effective 1 July 2009)                                                         
In July 2008, the AASB approved amendments to AASB 1 First-time Adoption of     
International Financial Reporting Standards and AABS 127 Consolidated and       
Separate Financial Statements. The consolidated entity will apply the           
revised rules prospectively from 1 January 2010. After that date, all           
dividends received from investments in subsidiaries, jointly controlled         
entities, or associates will be recognised as revenue, even if they are paid    
out of pre-acquisition profits, but the investments may need to be tested       
for impairment as a result of the dividend payment. Under the entity`s          
current policy, these dividends are deducted from the cost of the               
investment. Furthermore, when a new intermediate parent entity is created in    
internal reorganisations, it will measure its investment in subsidiaries at     
the carrying amounts of the net assets of the subsidiary rather than the        
subsidiary`s fair value.                                                        
(viii) AASB 2008-8 Amendment to IAS 39 Financial Instruments: Recognition       
and Measurement (effective 1 July 2009)                                         
AASB 2008-8 amends AASB 139 Financial Instruments: Recognition and              
Measurement and must be applied retrospectively in accordance with AASB 108     
Accounting Policies, Changes in Accounting Estimates and Errors. The            
amendment makes two significant changes. It prohibits designating inflation     
as a hedgeable component of a fixed rate debt, and it also prohibits            
including time value in the one-sided hedged risk when designating options      
as hedges. The consolidated entity will apply the amended standard from 1       
January 2010. It is not expected to have a material impact on the               
consolidated entity`s financial statements.                                     
(ix) AASB Interpretation 17 Distribution of Non-cash Assets to Owners and       
AASB 2008-13 Amendments to the Australian Accounting Standard arising from      
AASB Interpretation 17                                                          
AASB-I 17 applies to situations where an entity pays dividends by               
distributing non-cash assets to its shareholders. These distributions will      
need to be measured at fair value and the entity will need to recognise the     
difference between the fair value and the carrying amount of the distributed    
assets in the income statement on distribution. The interpretation further      
clarifies when a liability for the dividend must be recognised, and that it     
is also measured at fair value. The consolidated entity will apply the          
interpretation prospectively from 1 January 2010.                               
NOTE 2    FINANCIAL RISK MANAGEMENT                                             
The consolidated entity`s exploration activities are being funded by equity     
and do not expose the consolidated entity to significant financial risks.       
There are no speculative or financial derivative instruments. Funds are         
invested for various short term periods to match forecast cash flow             
requirements.                                                                   
Market risk                                                                     
Foreign currency risk                                                           
The consolidated entity operates internationally and is exposed to foreign      
risk arising from currency exposure to the South African Rand (ZAR) and         
Botswana Pula (BWP). Exposure is limited to maintaining sufficient funds in     
the particular countries to meet expenditure commitments.                       
Management does not actively manage foreign exchange risk.                      
The consolidated entity`s exposure to foreign currency risk at the reporting    
date was a follows:                                                             
31 December 2008        31 December 2007                  
Financial Assets and   ZAR         BWP         ZAR          BWP                 
Liabilities                                                                     
                      $           $           $            $                    
Trade receivables      34          1,633       12,427       1,197               
Cash and cash          11,515      1,575       (14,690)     30,517              
equivalents                                                                     
Trade payables         (38,998)    (64,249)    (42,695)     (47,622)            
Net exposure           (27,449)    (61,041)    (44,958)     (15,907)            
The carrying amounts of the parent entity`s financial assets and liabilities    
are denominated in Australian dollars (AUD).                                    
Sensitivity analysis                                                            
The consolidated entity has conducted a sensitivity analysis of its exposure    
to foreign currency risk. The sensitivity analysis below is conducted on a      
currency by currency basis based on the year-end spot rates average annual      
movement in the AUD/ZAR and AUD/BWP exchange rate over the past 5 years,        
being 1% and 2% respectively.                                                   
This analysis assumes that all other variables, in particular interest          
rates, remain consistent.                                                       
The analysis is performed on the same basis for 2007.                           
31 December 2008     31 December 2007            
           Financial Assets    AUD       AUD        AUD       AUD               
           and Liabilities     +/- 1%    +/- 2%     +/- 1%    +/- 2%            
Increase    Trade receivables   -         33         124       24               
Cash and cash       115       31         (147)     610               
           equivalents                                                          
           Trade payables      (390)     (1,285)    (427)     (952)             
Decrease    Trade receivables   -         (33)       (124)     (24)             
Cash and cash       (115)     (31)       147       (610)             
           equivalents                                                          
           Trade payables      390       1,285      427       952               
The foreign denominated balances are not accounted for as hedges in             
accordance with AASB 139 therefore all foreign exchange movements would be      
recognised within the current period income statement and within retained       
earnings.                                                                       
Credit risk                                                                     
Management does not actively manage credit risk.                                
The consolidated entity has no significant exposure to credit risk from         
external parties at period end given all the counterparties to its credit       
exposures are related entities of the consolidated entity. The maximum          
exposure to credit risk from related entities of the consolidated entity at     
the reporting date is equal to the carrying value of financial assets at 31     
December 2008.                                                                  
Other receivables are of a low value. Activity with trade debtors is limited    
and the recoverability has not been brought into question. There is no          
history of bad debts.                                                           
Liquidity and capital risk management                                           
The consolidated entity`s objectives when managing capital are to safeguard     
their ability to continue as a going concern, so that they can continue to      
provide returns for shareholders and benefits for other stakeholders and to     
maintain an optimal capital structure to reduce the cost of capital. In         
order to maintain or adjust the capital structure, the consolidated entity      
may adjust the amount of dividends paid to shareholders, return capital to      
shareholders, issue new shares or sell assets to reduce debt.                   
During 2008, the consolidated entity`s strategy, which was unchanged from       
2007, was to keep borrowings to a minimum. The Company`s equity management      
is determined by funds required to undertake exploration activities and meet    
its corporate and other costs. Where joint venture partners participate in      
particular projects the partners contribute monthly cash calls in proportion    
to their respective interests or as agreed under any buy-in agreement.          
Cash flow and fair value interest rate risk                                     
As the consolidated entity has no significant interest-bearing assets, the      
consolidated entity`s income and operating cash flows are not materially        
exposed to changes in market interest rates.                                    
Fair value estimation                                                           
The carrying amount of financial assets and financial liabilities recorded      
in the financial statements represents their respective fair values             
determined in accordance with the accounting policies disclosed in Note 1.      
NOTE 3    CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS                          
Estimates and judgements are continually evaluated and are based on             
historical experience and other factors, including expectation of future        
events that may have a financial impact on the entity and that are believed     
to be reasonable under the circumstances.                                       
Critical accounting estimates and assumptions                                   
The consolidated entity makes estimates and assumptions concerning the          
future. The resulting accounting estimates, will by definition, seldom equal    
the related actual results. The estimates that have a significant risk of       
causing a material adjustment to the carrying amounts of assets and             
liabilities within the next financial year are discussed below.                 
Recoverability of exploration expenditure                                       
The consolidated entity tests annually whether the exploration and              
evaluation expenditure incurred in identifiable areas of interest is            
expected to be recouped through the successful development of the area or       
where activities in the area have not yet reached a stage that permits          
reasonable assessment of the existence of reserves and further work is          
expected to be performed. All expenditure that does not meet these criteria     
is expensed in accordance with Note 1(h).                                       
Activity at the following projects ceased during 2007 & 2008; Pilbara, Black    
Top, Daniel Kimberlite, Riverton and Vleiplaats. Consequently the Company       
has decided to write-off exploration expenditure relating to these projects     
that was previously capitalised. Refer to Note 13 for details.                  
Impairment of assets                                                            
The consolidated entity tests annually whether assets have suffered any         
impairment, in accordance with Note 1(g). The recoverable amount is based on    
the net asset value of the investment in the subsidiary. Refer to Note 11       
for details.                                                                    
NOTE 4   REVENUE & OTHER INCOME                                                 
                                                                                
                      Consolidated          Parent Entity                       
                      2008       2007       2008        2007                    
$          $          $           $                       
                                                                                
Revenue from continuing                                                         
operations                                                                      
Interest received      10,122     81,088     165         2,781                  
                      40,943     38,946     40,943      38,946                  
Laboratory income                                                               
                      51,065     120,034    41,108      41,727                  

Other Income                                                                    
Profit on sale of      5,931      -          5,931       -                      
assets                                                                          
5,931      -          5,931       -                       
NOTE 5    EXPENSES                                                              
                          Consolidated          Parent Entity                   
                          2008      2007        2008         2007               
$         $           $            $                  
                                                                                
Other expenses from                                                             
continuing operations                                                           
includes:                                                                       
Administration costs       89,368    154,531     57,260       113,975           
Auditors remuneration      78,183    100,610     60,245       65,396            
Listing fees               74,151    48,129      74,151       48,129            
Occupancy costs            198,251   111,265     128,839      47,258            
Loss on sale of assets     -         75,634      -            -                 
Repairs and maintenance    46,273    24,549      -            30,908            
Other expenses             147,864   20,134      122,281      15,853            
634,090   534,852     442,776      321,519            
NOTE 6    INCOME TAX                                                            
                        Consolidated            Parent Entity                   
                        2008        2007        2008         2007               
$           $           $            $                  
b)   Numerical                                                                  
    reconciliation of                                                           
    income tax expense                                                          
to prima facie tax                                                          
    payable                                                                     
    Loss before income  (3,826,156  (7,386,000  (4,446,719)  (9,594,713         
    tax expense         )           )                        )                  
Tax at the          (1,147,847  (2,215,800  (1,334,016)  (2,878,414         
    Australian rate of  )           )                        )                  
    30%                                                                         
                                                                                
Tax effect of                                                               
    amounts that are                                                            
    not                                                                         
    deductible/(taxable                                                         
) in calculating                                                            
    income tax:                                                                 
     - Impairment of    -           -           286,571      801,184            
    assets                                                                      
- Exploration      97,716      -           79,689       -                  
    expenditure                                                                 
     -                  27,340      -           27,340       -                  
    Other                                                                       
Benefit of tax      1,010,676   2,180,204   940,416      2,077,230          
    losses not brought                                                          
    to account                                                                  
                        (12,115)    (35,596)    -            -                  
Difference in       12,115      35,596      -            -                  
    overseas tax rates                                                          
    Income tax expense  -           -           -            -                  
c)   Amounts Recognised directly in equity                                      
No amounts in respect of tax expense or benefit have been included directly     
in equity.                                                                      
d)   Tax losses                                                                 
                                                                                
Consolidated             Parent Entity                  
                        2008        2007         2008        2007               
                        $           $            $           $                  
                                                                                
Unused tax losses     34,230,135  31,228,288   22,882,731  19,386,12          
  for which no benefit                                       8                  
  has been recognised                                                           
                                                                                
Potential tax         10,155,293  9,231,257    6,864,819   5,815,838          
  benefit at                                                                    
  applicable rate (30%                                                          
  Australia, 29% South                                                          
Africa, 15%                                                                   
  Botswana)                                                                     
  The future income tax benefit attributable to these losses has not            
  been brought to account because the benefit is not probable of                
realisation.  The potential future income tax benefits which may              
  arise from these losses will only be realised if:                             
  - the consolidated entity derives future assessable income of a               
    nature and sufficient amount to enable the benefit of losses to be          
realised;                                                                   
  - the consolidated entity continues to comply with the conditions of          
    deductibility imposed in each legislative environment, and                  
  - no changes in tax legislation adversely affect the consolidated             
entity in realising the benefit from the deduction for the losses.          
NOTE 7    CASH AND CASH EQUIVALENTS                                             
                                                                                
                          Consolidated           Parent Entity                  
2008        2007       2008       2007                
                          $           $          $          $                   
                                                                                
Cash at bank and in hand   18,090      145,227    4,995      129,396            
Deposits at call           -           4,635      -          4,635              
                          18,090      149,862    4,995      134,031             
a)  Reconciliation of cash at the end of the year                               
The above figures are reconciled to cash at the end of the financial year as    
shown in the statement of cash flows as follows:                                
                                                                                
                           Consolidated         Parent Entity                   
                           2008       2007      2008       2007                 
$          $         $          $                    
 Balance as                18,090     149,862   4,995      134,031              
 above                                                                          
 Balance per statement of  18,090     149,862   4,995      134,031              
cash flows                                                                     
NOTE 8    TRADE AND OTHER RECEIVABLES                                           
                                                                                
                            Consolidated         Parent Entity                  
2008       2007      2008       2007                
                            $          $         $          $                   
                                                                                
Current                                                                         
Trade debtors (a)            23,595     23,990    21,923     12,426             
VAT/GST receivable           7,401      -         3,342      -                  
Other debtors (b)            -          64,991    -          64,991             
                            30,996     88,981    25,265     77,417              

Non-current                                                                     
Other (c)                    82,095     47,423    38,500     -                  
                            82,095     47,423    38,500     -                   

Trade debtors are non-interest bearing and have repayment terms between 30      
and 90 days. Their cost approximates fair value.                                
Other debtors consist of prepayments and are non-interest bearing.              
Non-current assets include: i) Deposit with the South African Department of     
Minerals and Energy Affairs from Tawana Resources S.A. (Pty) Ltd for mine       
rehabilitation costs which is refundable once the rehabilitation has been       
completed, and ii) Deposit held by a landlord for rental premises in            
Australia which is only refundable once lease expires.                          
NOTE 9    INVENTORIES                                                           
NOTE 10   INVESTMENT IN ASSOCIATE                                               
Tawana Resources N.L. acquired 30% of the issued shares in Vecto Trade 436      
(Pty) Ltd in September 2007 for the purpose of pursuing the St Augustines       
Project. No expenditure has been committed to date. The associate has been      
dormant in its operations pending the outcome of a Judicial Review over the     
Prospecting Rights for this project area.                                       
NOTE 11   OTHER FINANCIAL ASSETS                                                
The investment in subsidiaries includes non-interest bearing long-term          
receivables, which have no fixed repayment terms. The investment in             
subsidiaries has been written down to the recoverable value of the              
subsidiaries. The current year impairment expense is $955,237 (2007:            
$2,670,612).                                                                    
                           Consolidated         Parent Entity                   
                           2008       2007      2008         2007               
$          $         $            $                  
                                                                                
Movement in impairment                                                          
Foreign currency            -          -         -            1,651,625         
translations                                                                    
Tawana Sa (Pty) Ltd         -          -         821,790      1,018,987         
Diamond Resources (Pty)     -          -         56,367       -                 
Ltd                                                                             
Seolo Botswana (Pty) Ltd    -          -         77,080       -                 
                           -          -         955,237      2,670,612          
Investments have been impaired to their recoverable value.                      
NOTE 12   PROPERTY, PLANT & EQUIPMENT                                           

                             Consolidated             Parent Entity             
                             2008         2007        2008       2007           
                             $            $           $          $              

                                                                                
Freehold land and buildings   343,868      369,865     -          -             
- at cost                                                                       
Accumulated depreciation      (119,759)    (95,715)    -          -             
                             224,109      274,150     -          -              
                                                                                
Plant and equipment - at      1,740,059    2,153,231   822,437    1,151,233     
cost                                                                            
Accumulated depreciation      (1,496,675)  (1,642,784) (615,789)  (708,371)     
                             243,384      510,447     206,648    442,862        
                                                                                
Motor vehicles - at cost      170,351      185,308     -          -             
Accumulated depreciation      (142,622)    (119,016)   -          -             
                             27,729       66,292      -          -              
                                                                                
495,222      850,889     206,648    442,862        
                                                                                
                             Consolidated             Parent Entity             
                             2008         2007        2008       2007           
$            $           $          $              
Movement in carrying                                                            
value                                                                           
Freehold land and                                                               
buildings                                                                       
Carrying value at 1           274,150      333,888     -          -             
January                                                                         
Foreign currency              (20,525)     (24,726)    -          -             
translation                                                                     
Depreciation expense          (29,516)     (35,012)    -          -             
Carrying value at             224,109      274,150     -          -             
31 December                                                                     

Plant and equipment                                                             
Carrying value at 1           510,447      913,611     442,862    778,414       
January                                                                         
Addition                      341          44,726      -          -             
s                                                                               
Disposals                     (23,567)     (78,475)    (23,567)   (77,575)      
Foreign currency              (10,232)     (3,940)     -          -             
translation                                                                     
Depreciation expense          (233,605)    (365,475)   (212,647)  (257,977)     
Carrying value at             243,384      510,447     206,648    442,862       
31 December                                                                     

Motor vehicles                                                                  
Carrying value at 1           66,292       124,048     -          -             
January                                                                         
Disposals                     -            (12,271)    -          -             
Foreign currency              (7,331)      (9,183)     -          -             
translation                                                                     
Depreciation expense          (31,232)     (36,302)    -          -             
Carrying value at 31          27,729       66,292      -          -             
December                                                                        
                                                                                
                             495,222      850,889     206,648    442,862        
NOTE 13   EXPLORATION EXPENDITURE                                               
The exploration and evaluation expenditure relates to the consolidated          
entity`s projects in South Africa, Botswana and Australia. Exploration in       
Australia is operated under a joint venture as set out in Note 14.              
NOTE 14   INTEREST IN JOINT VENTURE                                             
During the financial year, Tawana Resources N.L. informed its joint venture     
partner, De Beers, that it had decided to withdraw from its majority            
interest in its one and only unincorporated exploration joint venture, the      
Pilbara Joint Venture, under the terms allowed in the joint venture. The        
total expenditure of $498,226 that had been previoulsy captialised in the       
balance sheet as exploration expenditure was written off to the income          
statement during the period.                                                    
All expenditure commitments for this joint venture have been extinguished.      
Pilbara Joint                                                                   
Venture                                                                         
                                                                                
Consolidated        Parent Entity                   
                            2008      2007      2008        2007                
                            %         %         %           %                   
                                                                                
% of interest held           -         66.66%    -           66.66%             
in JV                                                                           
                                                                                
                                                                                

                            Consolidated        Parent Entity                   
                            2008      2007      2008        2007                
                            $         $         $           $                   

Carrying amount of           -         498,226   -           498,226            
investment                                                                      
                                                                                
Share of joint venture                                                          
assets/liabilities                                                              
Non-current assets           -         498,226   -           498,226            
Net assets                   -         498,226   -           498,226            

Share of joint venture                                                          
revenue/expenses                                                                
Revenues                     -         -         -           -                  
Expenses                     -         -         -           -                  
Loss before income           -         -         -           -                  
tax                                                                             
                                                                                
Share of joint venture                                                          
commitments                                                                     
Expenditure                  -         116,988   -           116,988            
commitments                                                                     
Total commitments            -         116,988   -           116,988            
NOTE 15   TRADE AND OTHER PAYABLES                                              
Trade creditors and other creditors are non-interest bearing and are            
normally settled on 30 day terms. Their carrying value approximates their       
fair value.                                                                     
Non-hedged foreign currency payables consist of $A103,267 or South African      
Rand ($ZAR) of 675,098. These are non-interest bearing and their carrying       
value approximates their fair value.                                            
Other creditors include an equity allotment deposit of $236,300 which will      
be discharged through the issue of additional share capital during 2009 and     
$20,482 owing to the Directors for which arrangements have been made to         
defer or waive payment until the company has sufficient funds to repay the      
debts and remain a going concern.                                               
                        Consolidated        Parent Entity                       
                        2008      2007      2008        2007                    
                        $         $         $           $                       
Non Current                                                                     
Other creditors          80,689    -         80,689      -                      
                        80,689    -         80,689      -                       
Non current other creditors are non-interesting bearing and are payable in      
greater than 12 months.                                                         
NOTE 16   PROVISIONS                                                            
                             Consolidated        Parent Entity                  
                             2008      2007      2008       2007                
$         $         $          $                   
                                                                                
Curren                                                                          
t                                                                               
Provision for employee        40,575    116,389   40,575     116,389            
entitlements                                                                    
                                                                                
Movement in provision for                                                       
employee entitlements                                                           
Carrying amount at start of   116,389   71,760    116,389    71,760             
year                                                                            
Leave taken or provision      (93,507)  (46,088)  (93,507)   (46,088)           
written back                                                                    
Annual leave provision        17,693    57,717    17,693     57,717             
recognised                                                                      
Long service leave            -         33,000    -          33,000             
provision recognised                                                            
Carrying amount at end of     40,575    116,389   40,575     116,389            
year                                                                            
Nature and obligation of provision                                              
The employee entitlements relate to annual leave which has accrued and is       
due and payable.                                                                
                            Consolidated         Parent Entity                  
                            2008      2007       2008       2007                
$         $          $          $                   
                                                                                
Non Current                                                                     
Provision for                28,299    30,784     -          -                  
rehabilitation                                                                  
                                                                                
Movement in provision for                                                       
rehabilitation                                                                  
Carrying amount at start of  30,784    51,291     -          -                  
year                                                                            
Unused amounts reversed      -         (16,639)   -          -                  
Foreign currency             (2,485)   (3,868)    -          -                  
translation and other                                                           
movements                                                                       
Additional provisions        -         -          -          -                  
recognised                                                                      
Carrying amount at end of    28,299    30,784     -          -                  
year                                                                            
Nature and obligation of provision                                              
The provision has been raised with regard to exploration sites which are        
required to be rehabilitated once the exploration activity ceases.              
NOTE 17   BORROWINGS                                                            
NOTE 18   CONTRIBUTED EQUITY                                                    
                                                                                
Consolidated            Parent Entity                   
                  Note  2008        2007        2008         2007               
                        $           $           $            $                  
Issued and paid                                                                 
up capital                                                                      
Ordinary           18a   34,708,732  33,339,335  34,708,732   33,339,335        
Shares                                                                          
Options over       18b   -           -           -            -                 
ordinary shares                                                                 
                        34,708,732  33,339,335  34,708,732   33,339,335         
Ordinary shares participate in dividends and the proceeds on winding up of      
the parent entity in proportion to the number of shares held. At                
shareholders meetings each ordinary share is entitled to one vote when a        
poll is called, otherwise each shareholder has one vote on a show of hands.     
(i)  2008       Details                    Number     Issue    $                
                                                     price $                    

    3/04/2008  Rights issue to raise      6,990,053  0.08     559,204           
               working capital                                                  
    17/06/2008 Issue to BEE partner to    2,125,600  0.07     148,792           
satisfy South African                                            
               BEE requirements                                                 
    17/06/2008 Rights issue to raise      1,250,000  0.08     100,000           
               working capital                                                  
7/07/2008  Rights issue to raise      2,000,000  0.08     160,000           
               working capital                                                  
    22/07/2008 Rights issue to raise      3,000,000  0.08     240,000           
               working capital                                                  
13/10/2008 Issue to BEE partner to    6,000,000  0.07     420,000           
               satisfy South African                                            
               BEE requirements                                                 
                                                                                
21,365,653          1,627,996         
The shares allotted as part of the rights issue were to institutional and       
sophisticated investors. Each share was issued with a free attaching option     
exercisable at 10 cents on or before 1 April 2011. Funds raised were used       
for all projects in South Africa and Australia, and working capital             
requirements.                                                                   
The shares allotted were the result of a placement to institutional and         
sophisticated investors. Each share was issued with a free attaching option     
exercisable at 15 cents on or before 11 September 2011. The funds were used     
for the Riverton Project, for the construction of the trail mining project      
at Kareevlei and working capital.                                               
                                                                                
2008                  2007                           
                      Not  No.           $       No.         $                  
                      e                                                         
                                                                                
b   Options over fully paid ordinary                                            
)   shares                                                                      
                                                                                
   At 1 January            27,644,144    -       22,344,144  -                  
Options issued     (i)  13,240,053    -       5,300,000   -                  
   during year                                                                  
   Expiration of      (ii  (22,344,144)  -       -           -                  
   options            )                                                         
At 31 December          18,540,053    -       27,644,144  -                  
No voting or other rights are attached to options.                              
(i   2008       Detail                  Number       Issue    $                 
)               s                                    price $                    

    3/04/2008  Listed free attaching   6,990,053    0.00     -                  
               options to rights                                                
               issue                                                            
17/06/2008 Listed free attaching   1,250,000    0.00     -                  
               options to rights                                                
               issue                                                            
    7/07/2008  Listed free attaching   2,000,000    0.00     -                  
options to rights                                                
               issue                                                            
    22/07/2008 Listed free attaching   3,000,000    0.00     -                  
               options to rights                                                
issue                                                            
                                       13,240,053            -                  
  2007        Detail                   Number       Issue    $                  
              s                                     price $                     
21/09/2007  Unlisted free            5,300,000    0.00     -                  
              attaching options to                                              
              rights issue                                                      
                                       5,300,000             -                  
(ii  2008        Detail                 Number        Issue    $                
)                s                                    price $                   
                                                                                
    30/04/2008  Expiration of listed   (22,344,144)  0.00     -                 
options                                                         
                                       (22,344,144)  -        -                 
NOTE 19   RESERVE                                                               
                           Consolidated              Parent Entity              
Not   2008        2007          2008      2007             
                     e                                                          
                           $           $             $         $                
                                                                                
Foreign currency      19a   (3,029,619) (2,409,056)   -         -               
translation reserve                                                             
Option reserve        19b   436,430     237,439       436,430   237,439         
Asset revaluation     19c   22,884      22,884        22,884    22,884          
reserve                                                                         
                           (2,570,305) (2,148,733)   459,314   260,323          
                                                                                
                                                                                
a   Foreign currency translation                                                
)   reserve                                                                     
   Exchange differences arising from the translation of foreign                 
   controlled entities are taken to the foreign currency translation            
reserve, as described in Note 1(d).                                          
                                                                                
                           Consolidated              Parent Entity              
                           2008        2007          2008      2007             
$           $             $         $                
                                                                                
   Movement during the                                                          
   year                                                                         
At 1 January            (2,409,056) (1,691,089)   -         -                
   Currency                (620,563)   (717,967)     -         -                
   translation                                                                  
   differences                                                                  
At 31 December          (3,029,619) (2,409,056)   -         -                
NOTE 20   ACCUMULATED LOSSES                                                    
                                                                                
                      Consolidated             Parent Entity                    
2008        2007         2008        2007                 
                      $           $            $           $                    
                                                                                
At 1 January           22,278,557  14,892,557   24,687,613  15,092,900          
Current period losses  3,826,156   7,386,000    4,446,719   9,594,713           
At 31                  26,104,713  22,278,557   29,134,332  24,687,613          
December                                                                        
NOTE 21   KEY MANAGEMENT PERSONNEL DISCLOSURES                                  
Directors                                                                       
The following persons were Directors of Tawana Resources NL during the          
financial year:                                                                 
Key management personnel                                                        
The following persons also had authority and responsibility for planning,       
directing and controlling the activities of the consolidated entity,            
directly or indirectly, during the financial year:                              
Key management personnel compensation                                           
The Company has taken advantage of the relief provided by Corporation           
Regulations 2M.6.04 and has transferred the detailed remuneration               
disclosures to the Directors` Report. The relevant information can be found     
in pages 17 to 22 of the Remuneration Report.                                   
Aggregate Key Management Personnel compensation by category is as follows:      
Equity instrument disclosures relating to key management personnel              
(i)  Options Provided as Remuneration and Shares Issued on Exercise of such     
Options                                                                         
Details of options provided as remuneration and shares issued on the            
exercise of such options, together with terms and conditions of the options,    
can be found in the Remuneration Report on pages 17 to 22.                      
(ii) Option Holdings                                                            
The numbers of options over ordinary shares in the Company held during the      
financial year by each Director of Tawana Resources N.L. and other Key          
Management Personnel of the consolidated entity, including their personally     
related parties are set out below:                                              
2008                  Balance at  Granted       Exercised                       
                     start of    during the    during the                       
                     year        year          year                             
                                                                                

                                                                                
Directors                                                                       
Neil Barrie#          4,270,000   6,000,000     -                               
Brian Phillips        41,133      2,000,000     -                               
Euan Luff             3,021,462   4,000,000     -                               
Nonkquebela Mazwai    -           -             -                               
Wolfgang Marx         1,999,500   4,000,000     -                               

Key Management Personnel                                                        
A Berryman            100,000     -             -                               
C Bailey              400,000     -             -                               

(Continued)                                                                     
2008                  Other       Balance at    Vested and                      
                     acquisition end of year   exercisable                      
s/disposals               at end of                        
                     during the                year                             
                     year *                                                     
                                                                                
Directors                                                                       
Neil Barrie#          -           10,270,000    4,270,000                       
Brian Phillips        271,367     2,312,500     312,500                         
Euan Luff             (917,312)   6,104,150     1,937,483                       
Nonkquebela Mazwai    -           -             -                               
Wolfgang Marx         814,500     6,814,000     2,814,000                       
                                                                                
Key Management Personnel                                                        
A Berryman            -           100,000       100,000                         
C Bailey              -           400,000       316,666                         
*    Other acquisitions/disposals during the year refers to options acquired    
as part of a rights issue or those that lapsed.                                 
#    Balance of Mr Barrie`s options at start of year represents the balance     
of options held on commencement as a director.                                  
(Continued)                                                                     
2007              Other         Balance at  Vested and                          
acquisition   end of year exercisabl                           
                 s during                  e at end                             
                 the year*                 of year                              
                                                                                
Directors                                                                       
Wolfgang Marx     -             1,999,500   1,999,500                           
Brian Phillips    -             41,133      41,133                              
Euan Luff         666,650       3,021,462   2,688,128                           
Key Management Personnel                                                        
A Berryman        -             100,000      66,666                             
C Bailey          -             400,000      183,333                            
*    Other acquisitions/disposals during the year refers to options acquired    
as part of a rights issue or those that lapsed.                                 
(iii)     Shareholdings                                                         
The number of shares in the Company held during the financial year by each      
Director of Tawana Resources N.L. and other Key Management Personnel of the     
consolidated entity, including their related parties, are set out below.        
There were no shares granted during the reporting period as compensation.       
Loans to Key Management Personnel                                               
There were no loans to Key Management Personnel of the consolidated entity,     
including their personally related parties (2007: nil).                         
Other transactions with Key Management Personnel                                
NOTE 22   DETAILS OF CONTROLLED ENTITIES AND THE COMPANY                        
                              Country of     Book value of                      
incorporation  investment                         
                                             2008        2007                   
                                             $           $                      
                                                                                
Economic entity:                                                                
Tawana Resources N.L.          Australia                                        
                                                                                
Controlled entities:                                                            
Seolo Botswana (Pty) Ltd       Botswana       77,080      555,080               
Tawana Resources (Pty) Ltd     South Africa   2,968,465   3,332,653             
Diamond Resources (Pty) Ltd    South Africa   -           -                     
                                             3,045,545   3,887,733              

Joint venture                                                                   
Tawana Diamonds                Australia      5           5                     
Australia Pty Ltd                                                               
5           5                      
(Continued)                                                                     
                              Country of     Interest held by the               
                              incorporation  economic entity                    
2008        2007                   
                                             %           %                      
                                                                                
Economic entity:                                                                
Tawana Resources N.L.          Australia                                        
                                                                                
Controlled entities:                                                            
Seolo Botswana (Pty) Ltd       Botswana       100         100                   
Tawana Resources (Pty) Ltd     South Africa   100         100                   
Diamond Resources (Pty) Ltd    South Africa   100         100                   
                                                                                
Joint venture                                                                   
Tawana Diamonds                Australia      67          67                    
Australia Pty Ltd                                                               
                                                                                
NOTE 23   SEGMENT INFORMATION                                                   
The consolidated entity operated predominantly in the mineral exploration       
industry in South Africa, Botswana and within Australia.                        
Primary reporting - Geographic segments                                         
                            Australia                                           
2008            2007                                
                            $               $                                   
                                                                                
Segment Revenue                                                                 
External sales               46,874          38,946                             
Intersegment sales           -               -                                  
Other revenue                165             2,781                              
Total segment revenue        47,039          41,727                             

Segment Expenses                                                                
Segment expenses             (3,579,956)     (4,527,786)                        
Intersegment expenses        (211,928)       -                                  
Unallocated expenses         -               -                                  
Total Segment Expense        (3,791,884)     (4,527,786)                        
Total Segment Result         (3,744,845)     (4,486,059)                        
                                                                                
Segment Assets                                                                  
Segment assets               7,185,664       855,258                            
Unallocated assets           -               -                                  
Total Segment assets         7,185,664       855,258                            

Segment Liabilities                                                             
Segment liabilities          (450,078)       (170,899)                          
Unallocated liabilities      -               -                                  
Total Segment Liabilities    (450,078)       (170,899)                          
Primary reporting - Geographic segments (Continued)                             
                            Africa                                              
                            2008            2007                                
$               $                                   
                                                                                
Segment Revenue                                                                 
External sales               -               -                                  
Intersegment sales           13,899          212,415                            
Other revenue                9,957           78,307                             
Total segment revenue        23,856          290,722                            
                                                                                
Segment Expenses                                                                
Segment expenses             (556,559)       (5,648,860)                        
Intersegment expenses        -               (212,415)                          
Unallocated expenses         -               -                                  
Total Segment Expense        (556,559)       (5,861,275)                        
Total Segment Result         (532,703)       (5,570,553)                        
                                                                                
Segment Assets                                                                  
Segment assets               4,799,327       12,242,151                         
Unallocated assets            -              -                                  
Total Segment assets         4,799,327       12,242,151                         
                                                                                
Segment Liabilities                                                             
Segment liabilities          (14,867,296)    (4,014,465)                        
Unallocated liabilities      -               -                                  
Total Segment Liabilities    (14,867,296)    (4,014,465)                        
Primary reporting - Geographic segments (Continued)                             
                            Eliminations                                        
                            2008            2007                                
                            $               $                                   

Segment Revenue                                                                 
External sales               -               -                                  
Intersegment sales           (13,899)        (212,415)                          
Other revenue                -               -                                  
Total segment revenue        (13,899)        (212,415)                          
                                                                                
Segment Expenses                                                                
Segment expenses             253,363         2,670,612                          
Intersegment expenses        211,928         212,415                            
Unallocated expenses         -               -                                  
Total Segment Expense        465,291         2,883,027                          
Total Segment Result         451,392         2,670,612                          
                                                                                
Segment Assets                                                                  
Segment assets               (5,377,325)     (3,895,430)                        
Unallocated assets           -               -                                  
Total Segment assets         (5,377,325)     (3,895,430)                        
                                                                                
Segment Liabilities                                                             
Segment liabilities          14,743,422      3,895,430                          
Unallocated liabilities      -               -                                  
Total Segment Liabilities    14,743,422      3,895,430                          
Primary reporting - Geographic segments (Continued)                             
Consolidated                                        
                            2008            2007                                
                            $               $                                   
                                                                                
Segment Revenue                                                                 
External sales               46,874          38,946                             
Intersegment sales           -               -                                  
Other revenue                10,122          81,088                             
Total segment revenue        56,996          120,034                            
                                                                                
Segment Expenses                                                                
Segment expenses             (3,883,152)     (7,506,034)                        
Intersegment expenses        -               -                                  
Unallocated expenses         -               -                                  
Total Segment Expense        (3,883,152)     (7,506,034)                        
Total Segment Result         (3,826,156)     (7,386,000)                        

Segment Assets                                                                  
Segment assets               6,607,666       9,201,979                          
Unallocated assets           -               -                                  
Total Segment assets         6,607,666       9,201,979                          
                                                                                
Segment Liabilities                                                             
Segment liabilities          (573,952)       (289,934)                          
Unallocated liabilities      -               -                                  
Total Segment Liabilities    (573,952)       (289,934)                          
NOTE 23   SEGMENT INFORMATION continued                                         
                            Australia                                           
2008            2007                                
                            $               $                                   
Other                                                                           
Acquisition of                                                                  
non-current segment                                                             
assets                                                                          
- exploration assets        263,893         318,121                             
- property, plant &         -               -                                   
equipment                                                                       
Depreciation                 212,647         257,977                            
Foreign exchange             (18,700)        -                                  
losses/(gain)                                                                   
Impairment of assets         955,237         2,670,612                          
Exploration expenses         572,989         3,063,292                          
written off                                                                     
                                                                                
(Continued)                                                                     
                            Africa                                              
                            2008            2007                                
                            $               $                                   
Other                                                                           
Acquisition of                                                                  
non-current segment                                                             
assets                                                                          
- exploration assets        273,757         904,962                             
- property, plant &         341             -                                   
equipment                                                                       
Depreciation                 81,706          178,812                            
Foreign exchange             -               -                                  
losses/(gain)                                                                   
Impairment of assets         -               -                                  
Exploration expenses         1,078,394       2,225,627                          
written off                                                                     
                                                                                
(Continued)                                                                     
                            Eliminations                                        
2008            2007                                
                            $               $                                   
Other                                                                           
Acquisition of non-current                                                      
segment assets                                                                  
- exploration assets        -               -                                   
- property, plant &         -               -                                   
equipment                                                                       
Depreciation                 -               -                                  
Foreign exchange             -               -                                  
losses/(gain)                                                                   
Impairment of assets         (955,237)       (2,670,612)                        
Exploration expenses         -               -                                  
written off                                                                     
                                                                                
(Continued)                                                                     
Consolidated                                        
                            2008            2007                                
                            $               $                                   
Other                                                                           
Acquisition of non-current                                                      
segment assets                                                                  
- exploration assets        537,650         1,223,083                           
- property, plant &         341             -                                   
equipment                                                                       
Depreciation                 294,353         436,789                            
Foreign exchange             (18,700)        -                                  
losses/(gain)                                                                   
Impairment of assets         -               -                                  
Exploration expenses         1,651,383       5,288,919                          
written off                                                                     
                                                                                
Secondary Reporting - Business Segments                                         
The entity operates solely in the area of mineral exploration.                  
NOTE 24   AUDITORS` REMUNERATION                                                
                                                                                
Consolidated       Parent Entity               
                                 2008     2007      2008     2007               
                                 $        $         $        $                  
                                                                                

PricewaterhouseCoopers                                                          
Australian firm                                                                 
  Audit and review of financial  60,245   65,396    60,245   65,396             
reports                                                                       
  Related practices of           17,938   35,214    -        -                  
  Pricewaterhousecoopers                                                        
  Australian firm                                                               
78,183   100,610   60,245   65,396             
Total remuneration for audit                                                    
services                                                                        
NOTE 25   LOSS PER SHARE                                                        
Consolidated                          
                                          2008           2007                   
                                          cents          cents                  
                                                                                
Basic loss/Headline loss per share         (3.71)         (8.32)                
                                                                                
Diluted loss/Headline loss per share       (3.71)         (8.32)                
                                                                                
No.            No.                    
                                                                                
Weighted average number of ordinary        103,028,406    88,723,782            
shares outstanding during the year used                                         
in calculating basic and diluted EPS.                                           
NOTE 26   RELATED PARTY TRANSACTIONS                                            
Parent entity                                                                   
Tawana Resources N.L. is the ultimate Australian parent company                 
Subsidiaries                                                                    
Interests in subsidiaries are set out in Note 22.                               
Key Management Personnel                                                        
Disclosures relating to Key Management Personnel are set out in Note 21.        
Outstanding balances arising from sale/purchase of goods and services           
No balances are outstanding at the reporting date in relation to                
transactions with related parties other than those disclosed in Note 21.        
Terms and conditions                                                            
All related party transactions were made on normal commercial terms and         
conditions except that there are no fixed terms for repayment of loans          
between the parties and no interest is charged on loans.                        
(f)  Transactions with related parties                                          
The following transactions occurred with related parties:                       
(g)  Loans to/from related parties                                              
Loans to subsidiaries                                                           
At 1 January             -         -          3,810,164  7,652,577              
Loans advanced           -         -          637,959    196,188                
Loans repaid             -         -          (461,773)  (1,367,989)            
Impairment recognised    -         -          (955,237)  (2,670,612)            
At 31 December           -         -          3,031,113  3,810,164              
These loans are included in the net investments in subsidiaries.  Refer Note    
11.                                                                             
Loans from                                                                      
subsidiaries                                                                    
At 1 January             -          -         7,692       7,692                 
At 31 December           -          -         7,692       7,692                 
                                                                                
These loans are included in non-current liabilities.  Refer to Note             
17.                                                                             
NOTE 27   SHARE-BASED PAYMENTS                                                  
a)                                                                              
Share based payments issued during the year                                     
Employee option plan                                                            
The establishment of the Tawana Resources Employee Option Plan was approved     
by shareholders at the 2005 annual general meeting.                             
All staff are eligible to participate in the plan.  Options are granted         
under the plan for no consideration.  Options are granted for a five year       
period, and 1/3 vest on the date of granting of the options, 1/3 on the         
first anniversary of the date of granting and 1/3 on the second anniversary     
of the date of granting.  Options are granted under the plan carry no           
dividends or voting rights.  When exercisable, each option is converted into    
one ordinary share.                                                             
Other issues of options                                                         
The following options were granted during the year:                             
4,000,000 options were granted to a Consultant during the period.  The terms    
of the options were:                                                            
Expiry date: 18/06/2012                                                         
No dividends or voting rights attached                                          
Exercise Price: $0.07                                                           
6,000,000 options were granted to Directors during the period.  The terms of    
the options were:                                                               
Expiry date: 17/01/2013                                                         
No dividends or voting rights attached                                          
Exercise Price: $0.10                                                           
Vesting: 3,000,000 12 months from contract date & 3,000,000 24 months from      
contract date.                                                                  
13,500,000 options were granted to Directors & consultants during the           
period.  The terms of the options were:                                         
Expiry date: 6,750,000 at 17/01/2013 & 6,750,000 at 17/01/2014.                 
No dividends or voting rights attached                                          
Exercise Price: 6,750,000 at $0.07 & 6,750,000 at $0.10.                        
Vesting: 6,750,000 12 months from date of issue & 6,750,000 24 months from      
date of issue.                                                                  
b)  Summary of outstanding share based payment options on issue                 

   Issue         Quantity    Grant       Expiry     Exercise    Value at        
   Date                      date        date       price       grant           
                                                                date            

   30/11/20  *   140,000     30/11/200   30/11/2011 0.35        0.057           
   06                        6                                                  
   30/11/20  **  140,000     30/11/200   30/11/2011 0.35        0.067           
06                        6                                                  
   30/11/20  **  140,000     30/11/200   30/11/2011 0.35        0.075           
   06        *               6                                                  
   30/11/20  *   1,000,000   30/11/200   30/11/2011 0.50        0.039           
06                        6                                                  
   31/05/20  *   166,666     31/05/200   30/11/2011 0.35        0.0515          
   07                        7                                                  
   31/05/20  **  166,667     31/05/200   30/11/2011 0.35        0.0515          
07                        7                                                  
   31/05/20  **  166,667     31/05/200   30/11/2011 0.35        0.0522          
   07        *               7                                                  
   25/06/20  *   166,666     25/06/200   30/11/2011 0.35        0.0391          
07                        7                                                  
   25/06/20  **  166,667     25/06/200   30/11/2011 0.35        0.0391          
   07                        7                                                  
   25/06/20  **  166,667     25/06/200   30/11/2011 0.35        0.0391          
07        *               7                                                  
   18/06/20  *   4,000,000   18/06/200   18/06/2012 0.07        0.035           
   08                        8                                                  
   17/01/20  =   3,000,000   18/12/200   17/01/2013 0.10        0.009           
09                        8                                                  
   17/01/20  ==  3,000,000   18/12/200   17/01/2013 0.10        0.009           
   09                        8                                                  
   17/01/20  #   6,750,000   18/12/200   17/01/2013 0.07        0.011           
09                        8                                                  
   17/01/20  ##  6,750,000   18/12/200   17/01/2014 0.10        0.011           
   09                        8                                                  
                 25,920,000                                                     

   * Options vest upon issue                                                    
   ** Options vest 1 year from grant date                                       
   *** Options vest 2 years from grant date                                     
# Options vest 1 year from issue date                                        
   ## Options vest 2 years from issue date                                      
   = Options vest year from contract date                                       
   == Options vest 2 years from contract date                                   

   All options are to be settled with the physical delivery of ordinary         
   shares                                                                       
                                                                                
c)  Fair value of options granted during the year                               
   The assessed fair value at grant date of options granted to the              
   individuals is allocated equally over the period from grant date to          
   vesting date.  Fair values at grant date are independently determined        
using a Binomial Tree option pricing model that takes into account           
   the exercise price, the term of the option, the impact of dilution,          
   the share price at grant date and expected price volatility of the           
   underlying share, the expected dividend yield and the risk free              
interest rate for the term of the option.                                    
                                                                                
   The model inputs for the options granted during the 2008                     
   year were:                                                                   
A           B          C           D                 
   Quantity                                                                     
                           4,000,000   6,000,000  6,750,000   6,750,000         
   Grant date              18/06/2008  18/12/200  18/12/2008  18/12/2008        
8                                        
   Expiry date             18/06/2012  17/01/201  17/01/2013  17/01/2014        
                                       3                                        
   Share price at grant     $           $          $           $                
date                    0.07        0.03       0.03        0.03              
   Exercise price           $           $          $           $                
                           0.07        0.10       0.07        0.10              
   Expected price          76%         76%        76%         76%               
volatility of the                                                            
   Company`s shares                                                             
   Option life             4 years     4 years    4 years     5 years           
   Expected dividend       0%                     0%                            
yield                               0%                     0%                
   Risk free rate at       6.69%       3.57%      3.57%       3.57%             
   grant date                                                                   
                                                                                
The weighted average fair value of options granted during                    
   the year is $0.0104.                                                         
d)  Reconciliation of outstanding                                               
   options granted                                                              

                           2008                   2007                          
   Consolidated and        No. of     Weighted    No. of      Weighted          
   parent entity           options    Average     options     Average           
Exercise                Exercise          
                                      Price                   Price             
   Outstanding at 1        2,640,000  $0.4068     1,640,000   $0.4415           
   January                                                                      
Granted                 23,500,000 $0.0896     1,000,000   $0.3500           
   Lapsed                  (220,000)  $0.3500     -           -                 
   Outstanding at 31       25,920,000 $ 0.1167    2,640,000   $0.4068           
   December                                                                     

                                                                                
   No options were exercised during the current year or the previous            
   year.                                                                        

   The share options outstanding at the end of the year had an exercise         
   price in the range of $0.07 to $0.35 (2007: $0.35 to $0.50).                 
                                                                                

e)  Current year expense arising from share based                               
   payments.                                                                    
   The value of share based payments expensed to the Income Statement           
during the year is $198,991 (2007: $53,876).  This amount appears in         
   the Employee Benefit Expense line of the Income Statement.                   
NOTE 28   SUBSEQUENT EVENTS                                                     
The following events occurred subsequent to balance date:                       
Other than the above items there have not been any matters or circumstances     
that have arisen since the end of the year that have significantly affected     
or may significantly affect the operations of the consolidated entity, the      
results of those operations, or the state of affairs of the consolidated        
entity in subsequent financial years.                                           
NOTE 29   CONTINGENT LIABILITIES AND COMMITMENTS                                
An Indemnity Guarantee of $7,500 is held by the bank for Tawana Resources       
N.L. for the Timber Creek Project mining tenement held in the Northern          
Territory.                                                                      
Commitments                                                                     
In order to maintain current rights of tenure to exploration tenements, the     
Company and consolidated entity is required to outlay lease rentals and to      
meet the minimum expenditure requirements for the Mines Department. These       
obligations, which relate only to the parent company Tawana Resources N.L.,     
are subject to renegotiation upon expiry of the exploration leases or when      
application for a mining licence is made.                                       
There is also a five year lease on the premises occupied by the parent          
entity at 60 Wilson Street, South Yarra, signed 25 April 2006.  These           
obligations are not provided for in the accounts and are payable as follows:    
                                        Parent Entity                           
2008          2007                      
                                        $             $                         
                                                                                
- not later than 12 months              256,988       256,988                   
- between 12 months and 5 years         69,679        326,667                   
                                                                                
NOTE 30   NOTES TO STATEMENTS OF CASH FLOWS                                     
                                                                                
Consolidated                        
                                            2008        2007                    
                                            $           $                       
                                                                                
a   Reconciliation of loss after                                                
)   income tax to cash flow from operations                                     
   Loss for the                             (3,826,156) (7,386,000)             
   period                                                                       
Depreciation expense                     294,353     436,789                 
   Option expense                           198,991     53,876                  
   Exploration expense written off          1,651,383   5,288,919               
   Foreign exchange loss                    (18,700)    -                       
Prospecting                              -           -                       
   fees                                                                         
   Profit on sale of assets                 -           -                       
   Loss on sale of assets                   -           75,634                  
Impairment of assets                     -           -                       
                                                                                
                                                                                
   Increase/(decrease) in trade and other   511,109     (337,903)               
payables                                                                     
   Increase/(decrease) in provisions        (75,814)    24,122                  
   Decrease/(increase) in inventories       -           17,363                  
   Decrease/(increase) in non current       (34,673)    3,868                   
receivables                                                                  
   Decrease/(increase) in trade and other   57,985      472,250                 
   receivables                                                                  
                                                                                
Cash flow from operations                (1,241,523) (1,351,082)             
                                                                                
   (Continued)                                                                  
                                            Parent Entity                       
2008        2007                    
                                            $           $                       
                                                                                
a   Reconciliation of loss after income tax                                     
)   to                                                                          
   cash flow from operations                                                    
   Loss for the                             (4,446,719) (9,594,713)             
   period                                                                       
Depreciation expense                     212,647     257,977                 
   Option expense                           198,991     53,876                  
   Exploration expense written off          1,651,383   5,288,919               
   Foreign exchange loss                    (18,700)    -                       
Prospecting                              211,928     212,415                 
   fees                                                                         
   Profit on sale of assets                 -           -                       
   Loss on sale of assets                   -           30,908                  
Impairment of assets                     955,237     2,670,612               
                                                                                
                                                                                
   Increase/(decrease) in trade and other   345,565     (65,380)                
payables                                                                     
   Increase/(decrease) in provisions        (75,814)    44,629                  
   Decrease/(increase) in inventories       (1)         -                       
   Decrease/(increase) in non current       (38,500)    -                       
receivables                                                                  
   Decrease/(increase) in trade and other   52,155      61,237                  
   receivables                                                                  
                                                                                
Cash flow from operations                (951,828)   (1,039,520)             
b)   Reconciliation of cash                                                     
For the purposes of this statement of cash flows, cash includes cash on hand    
and `at call` in deposits with banks, net of bank overdrafts. Cash at the       
end of the year is shown in the Balance Sheet as:                               
Error! Not a valid link.c)    Non-cash investing and financing activities       
There are no non-cash investing or financing activities (2007: nil).            
NOTE 31   GOING CONCERN                                                         
The consolidated entity has incurred a loss of $3,826,156 for the year ended    
31 December 2008, has net assets of $6,033,714 and net current liabilities      
of $334,610. Of the net current liabilities, $236,300 will be equity settled    
(Refer Note 15) resulting in a net cash settled liability of $98,310.           
Existing cash resources and additional cash raisings subsequent to year end     
(Refer to Note 28) will provide the consolidated entity with sufficient         
resources to discharge the remaining balance.                                   
The financial report has been prepared on the basis of going concern which      
contemplates continuity of normal business activities and the realisation of    
assets and settlement of liabilities in the ordinary course of business.        
The Directors believe this basis to be appropriate.                             
The ability of the consolidated entity to continue as a going concern and       
meet its debts and commitments as they fall due is dependent on obtaining       
additional funding to finance ongoing activities, including future              
production, mine development and exploration activities. The Directors          
believe that they can raise additional funding to enable the consolidated       
entity to continue to pursue its business activities through the issue of       
additional equity, joint venturing arrangements and disposal of surplus         
assets.                                                                         
If the Company is unable to implement its plans, it could be forced to          
modify, curtail, or cease operations.                                           
As a result of these matters, there is a significant uncertainty whether the    
Company will continue as a going concern and therefore, whether it will         
realise its assets and settle its liabilities and commitments in the normal     
course of business and at the amounts stated in the financial report.           
However, the Directors believe that the Company will be successful in the       
above matters and accordingly have prepared the financial report on a going     
concern basis. At this time, the Directors are of the opinion that no asset     
is likely to be realised for an amount less than the amount at which it is      
recorded in the financial statement at 31 December 2008.                        
Accordingly, the accompanying financial statements do not include any           
adjustments relating to the recoverability and classification of the asset      
carrying amount or the amount and classification of liabilities that might      
be necessary if the Company is unable to continue as a going concern.           
DIRECTORS` DECLARATION                                                          
In the Directors` opinion:                                                      
(a)  The financial statements and notes set out on pages 31 to 68 and the       
remuneration disclosures on pages 17 to 22, are in accordance with the          
Corporations Act 2001 including:                                                
(i)  complying with Accounting Standards, the Corporations Regulations 2001     
and other mandatory professional reporting requirements; and                    
(ii) giving a true and fair view of the Company`s and consolidated entity`s     
financial position as at 31 December 2008 and of their performance for the      
financial year ended on that date; and                                          
(b)  there are reasonable grounds to believe that the consolidated entity       
will be able to pay its debts as and when they become due and payable;          
The Directors have been given the declarations by the Chairman and the          
Company Secretary required by section 295A of the Corporations Act 2001.        
This declaration is made in accordance with a resolution of the board of        
Directors.                                                                      
On behalf of the Directors                                                      
Neil Barrie                                                                     
Chairman                                                                        
Dated at Melbourne this the 31st day of March 2009.                             
Independent auditor`s report to the members of Tawana Resources N.L.            
Report on the financial report                                                  
We have audited the accompanying financial report of Tawana Resources N.L.      
(the `company`) and Tawana Resources Group (the `consolidated entity`),         
which comprises the balance sheets as at 31 December 2008, and the income       
statements, statements of changes in equity and cash flow statements for the    
year ended on that date, a summary of significant accounting policies, other    
explanatory notes and the directors` declaration for both Tawana Resources      
N.L. and the Tawana Resources Group. The consolidated entity comprises the      
company and the entities it controlled at the year`s end or from time to        
time during the financial year.                                                 
Directors` responsibility for the financial report                              
The directors of the company are responsible for the preparation and fair       
presentation of the financial report in accordance with Australian              
Accounting Standards (including the Australian Accounting Interpretations)      
and the Corporations Act 2001. This responsibility includes establishing and    
maintaining internal controls relevant to the preparation and fair              
presentation of the financial report that is free from material                 
misstatement, whether due to fraud or error; selecting and applying             
appropriate accounting policies; and making accounting estimates that are       
reasonable in the circumstances. In Note 1, the directors also state, in        
accordance with Accounting Standard AASB 101 Presentation of Financial          
Statements, that compliance with the Australian equivalents to International    
Financial Reporting Standards ensures that the financial report, comprising     
the financial statements and notes, complies with International Financial       
Reporting Standards.                                                            
Auditor`s responsibility                                                        
Our responsibility is to express an opinion on the financial report based on    
our audit. We conducted our audit in accordance with Australian Auditing        
Standards. These Auditing Standards require that we comply with relevant        
ethical requirements relating to audit engagements and plan and perform the     
audit to obtain reasonable assurance whether the financial report is free       
from material misstatement.                                                     
An audit involves performing procedures to obtain audit evidence about the      
amounts and disclosures in the financial report. The procedures selected        
depend on the auditor`s judgement, including the assessment of the risks of     
material misstatement of the financial report, whether due to fraud or          
error. In making those risk assessments, the auditor considers internal         
control relevant to the entity`s preparation and fair presentation of the       
financial report in order to design audit procedures that are appropriate in    
the circumstances, but not for the purpose of expressing an opinion on the      
effectiveness of the entity`s internal control. An audit also includes          
evaluating the appropriateness of accounting policies used and the              
reasonableness of accounting estimates made by the directors, as well as        
evaluating the overall presentation of the financial report.                    
Our procedures include reading the other information in the Annual Report to    
determine whether it contains any material inconsistencies with the             
financial report.                                                               
For further explanation of an audit, visit our website                          
http://www.pwc.com/au/financialstatementaudit.                                  
Our audit did not involve an analysis of the prudence of business decisions     
made by directors or management.                                                
We believe that the audit evidence we have obtained is sufficient and           
appropriate to provide a basis for our audit opinions.                          
Independence                                                                    
In conducting our audit, we have complied with the independence requirements    
of the Corporations Act 2001.                                                   
Auditor`s opinion                                                               
In our opinion:                                                                 
(a)  the financial report of Tawana Resources N.L. and Tawana Resources         
Group is in accordance with the Corporations Act 2001, including:               
(i)  giving a true and fair view of the company`s and consolidated entity`s     
financial position as at 31 December 2008 and of their performance for the      
year ended on that date; and                                                    
(ii) complying with Australian Accounting Standards (including the              
Australian Accounting Interpretations) and the Corporations Regulations         
2001; and                                                                       
the financial report also complies with International Financial Reporting       
Standards as disclosed in Note 1.                                               
Significant uncertainty regarding continuation as a going concern               
Without qualification to the opinion expressed above, we draw attention to      
Note 31 in the financial report which indicates that the consolidated entity    
incurred a net loss of $3,826,156 and has negative cashflows from operations    
during the year ended 31 December 2008. As at 31 December the consolidated      
entity has net current liabilities of $334,610. The consolidated entity`s       
continuation as a going concern depends on its success in obtaining             
additional capital or other funds and ultimately its ability to generate        
revenues. These conditions, along with other matters set forth in Note 31,      
indicate there is significant uncertainty as to whether the company will        
continue as a going concern and, therefore whether it will realise its          
assets and extinguish its liabilities in the normal course of business and      
at the amounts stated in the financial report.                                  
Report on the Remuneration Report                                               
We have audited the Remuneration Report included in pages 17 to 22 of the       
directors` report for the year ended 31 December 2008.  The directors of the    
company are responsible for the preparation and presentation of the             
Remuneration Report in accordance with section 300A of the Corporations Act     
2001.  Our responsibility is to express an opinion on the Remuneration          
Report, based on our audit conducted in accordance with Australian Auditing     
Standards.                                                                      
Auditor`s opinion                                                               
In our opinion, the Remuneration Report of Tawana Resources N.L. for the        
year ended 31 December 2008, complies with section 300A of the Corporations     
Act 2001.                                                                       
Matters relating to the electronic presentation of the audited financial        
report                                                                          
This auditor`s report relates to the financial report and remuneration          
report of Tawana Resources N.L. (the company) for the year ended 31 December    
2008 included on the Tawana Resources N.L. web site. The company`s directors    
are responsible for the integrity of the Tawana Resources N.L. web site. We     
have not been engaged to report on the integrity of this web site. The          
auditor`s report refers only to the financial report and remuneration report    
named above. It does not provide an opinion on any other information which      
may have been hyperlinked to/from these statements or the remuneration          
report. If users of this report are concerned with the inherent risks           
arising from electronic data communications they are advised to refer to the    
hard copy of the audited financial report and remuneration report to confirm    
the information included in the audited financial report and remuneration       
report presented on this web site.                                              
PricewaterhouseCoopers                                                          
Tim Goldsmith  Melbourne                                                        
Partner   31 March 2009                                                         
Shareholder Information                                                         
as at 10th March 2009                                                           
Ordinary Shares                                                                 
113,763,134 fully paid ordinary shares are held by 1,898 individual             
shareholders                                                                    
All ordinary shares carry one vote per share.                                   
Options                                                                         
-   6,000,000 options exercisable at $0.10 on or before 17/01/2013 held by 1    
individual holders                                                              
- 13,240,053 options exercisable at $0.10 on or before 01/04/2011 held by       
286 individual holders                                                          
-   5,300,000 options exercisable at $0.15 on or before 11/09/2009 held by 4    
individual holders                                                              
-   4,000,000 options exercisable at $0.07 on or before 18/06/2012 held by 1    
individual holders                                                              
-   1,420,000 options exercisable at $0.35 on or before 30/11/2011 held by 8    
individual holders                                                              
-   6,750,000 options exercisable at $0.07 on or before 17/01/2013 held by 6    
individual holders                                                              
-   6,750,000 options exercisable at $0.10 on or before 17/01/2014 held by 6    
individual holders                                                              
All options do not carry a right to vote. Voting rights will be attached to     
the unissued shares when the options have been exercised.                       
Distribution of Equity Securities                                               
The distribution of members and their holdings are as follows:                  
                                                                                
Fully paid                                      
                                ordinary shares                                 
                                                                                
1 - 1,000                        218                                            
1,001 - 5,000                    534                                            
5,001 - 10,000                   347                                            
10,001 - 100,000                 654                                            
100,001 - and over               145                                            
Total number of shareholders     1,898                                          
Unmarketable parcels             1,272                                          
Twenty Largest Ordinary Shareholders                                            
Pos.   Holder                      Number         %                             
1      National Nominees Ltd       8,314,597      7.31                          
2      Seven Falls Trading 155     5,437,457      4.78                          
      (Pty) Ltd                                                                 
3      Nomathata Diamonds Inc      5,350,000      4.70                          
4      ITA Nominees Pty Ltd        5,268,118      4.63                          
5      Lufgan Nominees Pty Ltd     3,843,904      3.38                          
                                                         
6      Hudson Holdings Pty Ltd     3,617,500      3.18                          
                                                                      
7      Hudson Holdings Pty Ltd     3,445,000      3.03                          
8      Lufgan Nominees Pty Ltd     2,500,000      2.20                          
9      Pro Direct Investments      2,125,600      1.87                          
      189 (Pty) Ltd                                                             
10     HSBC Custody Nominees       1,723,882      1.52                          
      (Australia) Ltd                                                           
11     Mr Ian Gallash & Mrs        1,340,000      1.18                          
      Helen Gallash                                                             
12     Katherine Pastoral          1,246,154      1.10                          
      Company Pty Ltd                                                           
13     JP Morgan Nominees          1,236,036      1.09                          
      Australia                                                                 
14     Mrs Sally Clatworthy        1,200,000      1.05                          
15     Merrill Lynch               1,075,178      0.95                          
(Australia) Nominees Pty                                                  
      Ltd                                                                       
16     GRBK Investments Pty Ltd    1,010,145      0.89                          
                                                                 
17     Walker & Hall Fine Gifts    1,004,527      0.88                          
      Ltd                                                                       
18     Mr Geoffrey Clatworthy      1,000,000      0.88                          
19     Clatworthy Nominees Ltd                    0.88                          
1,000,000                                     
20      Mr Kirthi Hemachandra      950,000        0.84                          
                                  52,688,098     46.31                          
Shareholder Information                                                         
as at 10th March 2009                                                           
Twenty Largest Listed Option Holders                                            
Options Expire 30 November 2011 and are exercisable at $0.35                    
Pos.   Holder                                Number       %                     
1      National Nominees Ltd                 1,656,789    12.51                 
2      Mr Geoffrey Clatworthy                1,000,000    7.55                  
3      Clatworthy Nominees Ltd               1,000,000    7.55                  
4      Mrs Sally Clatworthy                  1,000,000    7.55                  
5      ITA Nominees Pty Ltd                  1,000,000    7.55                  
6      Walker & Hall Fine Gifts Ltd          1,000,000    7.55                  
7      Lufgan Nominees Pty Ltd               937,500      7.08                  
8      Hudson Holdings Pty Ltd               625,000      4.72                  
9      PLC Nominess (Pty) Ltd                454,293      3.43                  
10     Mrs Natalie Laufmann                  352,500      2.66                  
11     Mr Brian Phillips                     312,500      2.36                  
12     Mr John Rowe                          312,500      2.36                  
13     Katherine Pastoral Company Pty Ltd    270,000      2.04                  
14     Doman Carpet Mills Pty Ltd < ELM Mgmt 252,537      1.91                  
      Consultants S/F A/c>                                                      
15     Rare Earths & Minerals Pty Ltd        250,000      1.89                  
16     Hudson Holdings Pty Ltd               189,000      1.43                  
17     Mr Ian Gallash & Mrs Helen Gallash    182,010      1.37                  
18     Mr Frank Wong & Mrs Lee Wong & Mr     150,000      1.13                  
      Mark Chui                                                                 
19     Bristen Pty Ltd                       100,000      0.76                  
20     Fitba Pty Ltd                                                                       
      Total:                                11,144,629   84.17                  
Unquoted Equity Securities Holdings Greater than 20%                            
There are no unquoted equity securities holding greater than 20%.               
Substantial Shareholders                                                        
The names of substantial shareholders who have notified the Company in          
accordance with Section 671B of the Corporations Act are:                       
-    Hudson Holdings Pty Ltd & Associate                                        
    7,062,500 ordinary shares                                                   
-    ITA Nominees Pty Ltd  & Associates                                         
6,245,733 ordinary shares                                                   
-    R.E.Luff & Associates                                                      
    7,244,870 ordinary shares                                                   
-    Nomathata Diamonds Inc.                                                    
5,417,000 ordinary shares                                                   
Escrowed Securities                                                             
There are no securities subject to escrow.                                      
Voting Rights                                                                   
A registered holder of shares in the Company may attend general meetings of     
the Company in person or by proxy and on a poll may exercise one vote for       
each share held. There are no voting rights attached to options for ordinary    
shares until the options have been exercised.                                   
Corporate Details                                                               
The Company Secretaries are Phillip Hains and Terri Bakos.                      
A Register of Securities is held at Computershare Investor Services Pty Ltd.    
Yarra Falls, 452 Johnston Street, Abbotsford 3067, Victoria, Australia.         
Telephone Number: +61 (0)3 9415 5000, Facsimile : +61 (0)3 9473 2500.           
The address of the Principal Registered Office in Australia is:                 
Suite 1, 1233 High Street, Armadale 3143, Victoria, Australia.                  
Telephone : +61 (0)3 9824 5254, Facsimile: +61 (0)3 9822 7735.                  
Stock Exchange Listing                                                          
The Company`s shares are listed on the Australian Securities Exchange Ltd       
and the ASX code is TAW and on the Johannesburg Stock Exchange where the JSE    
code is TAW.                                                                    
The Company`s options are listed on the Australian Securities Exchange Ltd      
and the ASX code is TAWO and on the Johannesburg Stock Exchange where the       
code is TAWO.                                                                   
CORPORATE DIRECTORY                                                             
DIRECTORS                                                                       
Neil Barrie         Executive Chairman                                          
Brian Phillips      Non-Executive Director                                      
Euan Luff           Non-Executive Director                                      
Nonkqubela Mazwai   Non-Executive Director                                      
COMPANY SECRETARIAL                                                             
Phillip Hains                                                                   
Terri Bakos                                                                     
REGISTERED OFFICE                                                               
Suite 1, 1233 High Street                                                       
Armadale, Victoria, 3143                                                        
Australia                                                                       
Telephone: +61(0)3 9824 5254                                                    
Facsimile:   +61(0)3 9822 7735                                                  
Website www.tawana.com.au                                                       
SHARE REGISTRY                                                                  
Computershare Investor Services Pty Ltd                                         
Yarra Falls                                                                     
452 Johnston Street                                                             
Abbotsford, Victoria, 3067                                                      
Australia                                                                       
AUDITORS                                                                        
PricewaterhouseCoopers                                                          
2 Southbank Boulevard                                                           
Southbank, Victoria, 3006                                                       
Australia                                                                       
SOLICITORS                                                                      
WilmothFieldWarne                                                               
Level 13, 440 Collins Street                                                    
Melbourne, Victoria, 3000                                                       
Australia                                                                       
BANKERS                                                                         
ANZ Banking Group Limited                                                       
1401 Toorak Road                                                                
Burwood, Victoria, 3124                                                         
Australia                                                                       
STOCK EXCHANGE LISTING                                                          
Home Exchange is the Australian Securities Exchange (ASX)                       
Secondary Listing on the Johannesburg Stock Exchange (JSE)                      
ASX/JSE Code: Shares TAW                                                        
ASX/JSE Code: Options TAWO                                                      
31 March 2009                                                                   
Sponsor                                                                         
PricewaterhouseCoopers Corporate Finance (Pty) Ltd                              
Date: 01/04/2009 07:05:01 Supplied by www.sharenet.co.za                     
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