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TAW - Tawana - Quarterly Activities and Cash Flow Report

Release Date: 30/04/2009 10:16:02      Code(s): TAW
TAW - Tawana - Quarterly Activities and Cash Flow Report                        
Tawana Resources NL                                                             
(Incorporated in Australia)                                                     
(Registration number ACN 085 166 721)                                           
Share code on the JSE Limited: TAW                                              
ISIN: AU000000TAW7                                                              
Share code on the Australian Stock Exchange Limited: TAW                        
ISIN: AU000000TAW7                                                              
("Tawana" or "the Company")                                                     
ACN 085 166 721                                                                 
Quarterly Activities and Cash Flow Report                                       
1 January - 31 March 2009                                                       
Key Points                                                                      
    Kareevlei Wes                                                               
    -    Funding delayed for Trial Mining but successful litigation outcome     
predicted                                                              
    Orapa                                                                       
    -    Tawana to discontinue Joint Venture and move to speed up assessment    
         on the highly prospective BK24 kimberlite                              
Corporate                                                                   
    -    $200,000 raised to keep the company working                            
    -    Corporate holding costs slashed to preserve funds and surplus          
         assets will be liquidated to strengthen financial position whilst      
not impacting on the ability to commence trial mining at short         
         notice.                                                                
    -    Large number of potential deals assessed during the                    
         Quarter                                                                
South Africa                                                                    
Kareevlei Wes Project, Kimberley Region, South Africa                           
(100% owned and operated by Tawana)                                             
As reported during the September quarter, Tawana concluded an agreement with    
Risk Free Investments 2 (Proprietary) Limited t/a  Agio Diamond Investments     
("Agio") for the sale of a 26% interest in Tawana`s Kareevlei Project  for      
Rand 12 Million (approximately A$1.7million at current exchange rates). The     
Agreement required Agio to effect payment of the purchase price within 30       
days of signature, ie, by 25 November 2008. Payment was not completed by the    
due date and a High Court Summons has been executed. Tawana expects that the    
matter will be favourably resolved in the near future which will provide a      
capital input to further enhance shareholder value and allow  further           
assessment of resource opportunities.                                           
St. Augustines Kimberlite Project, Kimberley, South Africa                      
(Operated by Tawana; Tawana 30% equity in Vecto Trade 436 (Pty) Ltd)            
In late 2007 Tawana acquired a 30% of the issued shares in Vecto Trade          
436(Pty) Ltd ("Vecto") which was granted a New Order Prospecting Right over     
the St Augustines kimberlite located 600 metres west of the world famous        
Kimberley Mine or "Big Hole" in Kimberley, South Africa. The St Augustines      
mine is located in the northern half of the Prospecting Right due west of the   
Big Hole.                                                                       
The Kimberley Mine produced 14.5 million carats of diamonds from 22.5 million   
tons at a grade of 64 carats per hundred tons. Mining ceased in 1914. The St    
Augustines kimberlite was mined in the late 1890`s and records show that the    
diamond quality was considered identical and the grade similar to that of the   
nearby Kimberley Mine. Geological records indicate that the two kimberlite      
pipes of the Kimberley Mine and St Augustines are located on the same           
structure and are connected by a kimberlite fissure.                            
Mining at St Augustines ceased in 1902. Subsequently the tailings of the        
Kimberley Mine were deposited over the St Augustines kimberlite. The removal    
of these tailings has recently exposed in-situ kimberlite at St Augustines.     
Records show that St Augustines was only partially mined to a depth of          
approximately 240 metres as compared to the Kimberley Mine which was mined to   
a depth of 1097 metres.                                                         
A non-invasive gravimetric survey conducted by Tawana in November 2007. The     
gravimetric survey was undertaken to confirm the exact position of the known    
kimberlite and to determine whether other kimberlites occurred in the           
Prospecting Right. In addition to confirming the location of the St             
Augustine`s mine, two new targets close to St Augustines were identified. The   
two new targets are in the southern half of the Prospecting Right and display   
similar gravity responses to that of the known St Augustines kimberlite.        
A drilling program to confirm the presence or absence of kimberlite or          
related rock types in the two targets was completed during the last Quarter     
of 2008 and Tawana is in discussions with several interested parties            
concerning further work.                                                        
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.                                                           
Picture available on copy lodged on company website.                            
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.                                                 
Botswana                                                                        
Orapa Project, Botswana                                                         
(Tawana 100%, Nowak Investments Pty Ltd previously earning 51%)                 
Tawana has been advised by Nowak that the sinking of shafts on the BK2          
kimberlite was suspended during the last quarter of 2008 to allow for the       
implementation of certain additional safety measures.  A small amount of        
fresh kimberlite sample was processed and results are pending.  Nowak aims to   
extract 100 tonnes from the base of each of the 3 shafts. Processing of this    
kimberlite is expected to re-commence in Q1 2009.                               
Nowak has also collected 120 soil samples in the Moshaiwa Prospecting Licence   
with the aim to locate the source of the kimberlitic indicator minerals         
(including diamonds) found here previously. Processing of these samples has     
been completed and results are expected during Q1 2009.                         
Tawana has moved to cancel the previous Joint Venture with Nowak and is in      
discussions with a number of interested parties concerning further evaluation   
of this highly prospective tenement.                                            
Australia                                                                       
South Yarra Office                                                              
The South Yarra Office should be leased by late April 2009 which will result    
in a major drain on operating overheads being eliminated without any            
disruption to corporate activity.                                               
Corporate                                                                       
Over the past quarter, there has been continued substantial cost reduction in   
the corporate overheads of Tawana. Specifically staffing levels within the      
company have been reduced substantially and a number of functions outsourced    
so that professional services are now engaged on an "as-needed" basis.          
Corporate operating expenses have been pruned by approximately 95% and a        
continuous watch will be undertaken on costs to ensure that cash is directed    
to actual or potential projects to continue to safeguard asset values.          
The Executive Chairman continues to undertake a large number of commercial      
discussions with potential joint venture partners both in Australia and South   
Africa and specific details will be released to the market when documentation   
has been put in place.                                                          
Funding                                                                         
During the Quarter $200,000 was raised through a convertible note issue .       
Tawana is looking at the sale of all surplus plant assets to strengthen its     
financial position whilst not impacting on the ability to commencing trial      
mining at short notice.                                                         
As detailed, the payment for the sale of 26% interest in Tawana`s Kareevlei     
project for Rand 12 million, (approximately AUD$1.7M at current exchange        
rates) has been delayed.                                                        
Tawana has applied for judgement in the High Court in South Africa and is       
confident of a favourable settlement.                                           
The market will be informed of progress on the litigation.                      
As a potential contingency, the company continues to pursue alternate sources   
of funding and is also holding discussions with various groups regarding        
possible joint ventures on the company`s projects.                              
Contact:                                                                        
Phillip Hains                                                                   
Tel: +61 (0)3 9824 5254                                                         
Technical sections of this report are based on information compiled by Wolf     
Marx BSc, BA, FAusIMM, CPGeo. He has sufficient experience relevant to the      
style of mineralisation and types of deposits under consideration, and to the   
activities undertaken, to qualify as a competent person as defined in the       
2004 edition of the "Australasian Code for the Reporting of Mineral Resources   
and Ore Reserves". Mr. Marx consents to the inclusion in the report of the      
matters based on his information in the form and context in which they          
appear.                                                                         
Tawana Resources- a world class diamond and mineral exploration company         
listed on the Australian and Johannesburg Stock Exchanges committed to the      
principles of enhancing shareholder value through being ethically, socially     
and environmentally conscious corporate citizens.                               
Rule 5.3                                                                        
Appendix 5B - 1st Quarter                                                       
Mining exploration entity quarterly report                                      
Introduced 1/7/96.  Origin:  Appendix 8.  Amended 1/7/97, 1/7/98, 30/9/2001.    
Name of entity                                                                  
Tawana Resources N.L.                                                           
ABN                                   Quarter ended                             
                                   ("current quarter")                          
69 085 166 721                        31 March 2009                             

Consolidated statement of cash flows                                            
                                  Current       Year to date                    
Cash flows related to operating   quarter       (3 months)                      
activities                     $A`000        $A`000                          
1.1  Receipts from product        -             -                               
     sales and related debtors                                                  
                                                                                
1.2  Payments for                                                               
            a)  exploration and   (30)           (30)                           
     evaluation                                                                 
            (b)  development      -             -                               
(c)  production       -             -                               
            (d)  administration   (44)          (44)                            
1.3  Dividends received                                                         
1.4  Interest  received                                                         
1.5  Interest and other costs                                                   
     of finance paid                                                            
1.6  Income taxes paid                                                          
1.7  Other (provide details if    6             6                               
material)                                                                  
     (VAT Refund from SARS)                                                     
                                  (68)          (68)                            
     Net Operating Cash Flows                                                   

     Cash flows related to                                                      
     investing activities                                                       
                                   Current       Year to date                   
quarter       (3 months)                     
                                   $A`000        $A`000                         
1.8   Payment for purchases of:                                                 
      (a)prospects                 -             -                              
(b)equity investments         -            -                              
      (c) other fixed assets       -             -                              
1.9   Proceeds from sale of:                                                    
      (a)prospects                 -                                            
(b)equity investments        -             -                              
      (c) other fixed assets       27            27                             
1.10  Loans to other entities      -             -                              
1.11  Loans repaid by other        -             -                              
entities                                                                  
                                                                                
                                   27            27                             
      Net investing cash flows                                                  
1.13  Total operating and                                                       
      investing cash flows         (41)          (41)                           
      (carried forward)                                                         
                                                                                
Cash flows related to                                                     
      financing activities                                                      
1.14  Proceeds from issues of      -                                            
      shares, options, etc.                                                     
1.15  Proceeds from sale of        -              -                             
      forfeited shares                                                          
1.16  Proceeds from borrowings     200           200                            
1.17  Repayment of borrowings      -             -                              
1.18  Dividends paid               -              -                             
1.19  Other (provide details if    -              -                             
      material)                                                                 
      Net financing cash flows     200           200                            

      Net increase (decrease) in   159           159                            
      cash held                                                                 
                                                                                
1.20  Cash at beginning of         13            13                             
      quarter/year to date                                                      
1.21  Exchange rate adjustments    -             -                              
      to item 1.20                                                              
1.22  Cash at end of quarter       172           172                            
Payments to directors of the entity and associates of the directors             
Payments to related entities of the entity and associates of the related        
entities                                                                        
Current                         
                                                quarter                         
                                                $A`000                          
                                                                                
1.23  Aggregate amount of payments to the      Nil                             
       parties included in item 1.2                                             
                                                                                
 1.24  Aggregate amount of loans to the         Nil                             
parties included in item 1.10                                            
                                                                                
 1.25  Explanation necessary for an understanding of the                        
       transactions                                                             
Director fees                                                            
                                                                                
                                                                                
                                                                                
Non-cash financing and investing activities                                     
2.1   Details of financing and investing transactions which                     
      have had a material effect on consolidated assets and                     
      liabilities but did not involve cash flows                                

      Nil                                                                       
                                                                                
2.2   Details of outlays made by other entities to establish                    
or increase their share in projects in which the                          
      reporting entity has an interest                                          
                                                                                
      Nil                                                                       

Financing facilities available                                                  
Add notes as necessary for an understanding of the position.                    
                                   Amount         Amount used                   
available      $A`000                        
                                   $A`000                                       
3.1   Loan facilities              Nil            Nil                           
                                                                                
3.2   Credit standby arrangements  Nil            Nil                           
                                                                                
Estimated cash outflows for next quarter                                        
                                           $A`000                               
4.1   Exploration and evaluation           0                                    
4.2   Development                          0                                    
4.3   Administration                       50                                   
                                                                                
Total                                50                                   
Reconciliation of cash                                                          
Reconciliation of cash at the     Current       Previous                        
end of the quarter (as shown in   quarter       quarter                         
the consolidated statement of     $A`000        $A`000                          
cash flows) to the related                                                      
items in the accounts is as                                                     
follows.                                                                        
5.1  Cash on hand and at bank     172           13                              
5.2  Deposits at call             -             -                               
5.3  Bank overdraft                                                             
                                  -             -                               
5.4  Other (provide details)      -             -                               
     Total: cash at end of        172           13                              
     quarter (item 1.22)                                                        
Changes in interests in mining tenements                                        
Tenement    Nature of   Interest at  Interest       
                            reference   interest    beginning    at end         
                                        (note (2))  of quarter   of             
                                                                 quarter        
6.1  Interests in mining                                                        
     tenements                                                                  
     relinquished, reduced                                                      
     or lapsed                                                                  
6.2  Interests in mining                                                        
     tenements acquired or                                                      
     increased                                                                  
The "Nature of interest" (items 6.1 and 6.2) includes options in respect of     
interests in mining tenements acquired, exercised or lapsed during the          
reporting period. If the entity is involved in a joint venture agreement and    
there are conditions precedent which will change its percentage interest in a   
mining tenement, it should disclose the change of percentage interest and       
conditions precedent in the list required for items 6.1 and 6.2.                
Issued and quoted securities at end of current quarter                          
Description includes rate of interest and any redemption or conversion rights   
together with prices and dates.                                                 
Total        Number        Issue      Amount            
                        number       quoted        price per  paid up           
                                                   security   per               
                                                              security          
7.1   Preference                                                                
      +securities       Nil          Nil                                        
      (description)                                                             
7.2   Changes during                                                            
quarter                                                                   
      (a)  Increases                                                            
      through issues                                                            
      (b)  Decreases                                                            
through returns                                                           
      of capital, buy-                                                          
      backs,                                                                    
      redemptions                                                               
7.3   +Ordinary         107,763,134  107,763,134   Various    Various           
      securities                                                                
7.4   Changes during                                                            
      quarter                                                                   
(a)  Increases                                                            
      through issues                                                            
      (b)  Increase                                                             
      through exercise                                                          
of options                                                                
7.5   +Convertible                                                              
      debt securities                                                           
      (description)                                                             
7.6   Changes during                                                            
      quarter                                                                   
      (a)  Increases                                                            
      through issues                                                            
(b)  Decreases                                                            
      through                                                                   
      securities                                                                
      matured,                                                                  
converted                                                                 
7.7   Options                                      Exercise   Expiry            
      (description and  13,240,053   13,240,053    price      date              
      conversion                                   $0.10      1 April           
factor)                                                 2011              
7.8   Issued during     Nil          Nil                                        
      quarter                                                                   
7.9   Exercised during  Nil          Nil                                        
quarter                                                                   
7.10  Expired during    Nil          Nil                                        
      quarter                                                                   
7.11  Debentures        Nil          Nil                                        
(totals only)                                                             
7.12  Unsecured notes   Nil          Nil                                        
      (totals only)                                                             
                                                                                
Compliance statement                                                            
1    This statement has been prepared under accounting policies which comply    
    with accounting standards as defined in the Corporations Act or other       
    standards acceptable to ASX (see note 4).                                   
2    This statement does give a true and fair view of the matters disclosed.    
Sign here:      Neil Barrie     Date:    30th April, 2009                       
(Director)                                                                      
Print name:     Neil Barrie                                                     
Notes                                                                           
1    The quarterly report provides a basis for informing the market how the     
    entity`s activities have been financed for the past quarter and the         
    effect on its cash position.  An entity wanting to disclose additional      
information is encouraged to do so, in a note or notes attached to this     
    report.                                                                     
2    The "Nature of interest" (items 6.1 and 6.2) includes options in respect   
    of interests in mining tenements acquired, exercised or lapsed during       
the reporting period.  If the entity is involved in a joint venture         
    agreement and there are conditions precedent which will change its          
    percentage interest in a mining tenement, it should disclose the change     
    of percentage interest and conditions precedent in the list required for    
items 6.1 and 6.2.                                                          
3    Issued and quoted securities.  The issue price and amount paid up is not   
    required in items 7.1 and 7.3 for fully paid securities.                    
4    The definitions in, and provisions of, AASB 1022: Accounting for           
Extractive Industries and AASB 1026: Statement of Cash Flows apply to       
    this report.                                                                
5    Accounting Standards.  ASX will accept, for example, the use of            
    International Accounting Standards for foreign entities.  If the            
standards used do not address a topic, the Australian standard on that      
    topic (if any) must be complied with.                                       
== == == == ==                                                                  
30 April 2009                                                                   
Sponsor                                                                         
PricewaterhouseCoopers Corporate Finance (Pty) Ltd                              
Date: 30/04/2009 10:16:01 Supplied by www.sharenet.co.za                     
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