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TAWANA RESOURCES NL - Annual Report for the year ended 31 December 2012

Release Date: 28/03/2013 10:20:00      Code(s): TAW       PDF(s):  
Annual Report for the year ended 31 December 2012

TAWANA RESOURCES NL 
Australian Securities Exchange
ASX Code: TAW
JSE Code: TAW

ABN 69 085 166 721 

ANNUAL REPORT 
FOR THE YEAR ENDED 31 DECEMBER 2012
CONTENTS

Corporate Directory                            3
Chairman's Statement                           4
Directors' Report                              5
Corporate Governance Statement                24
Auditor's Independence Declaration            29
Statement of Comprehensive Income             30
Statement of Financial Position               31
Statement of Changes in Equity                32
Statement of Cash Flows                       33
Notes to the Financial Statements             34
Directors' Declaration                        54
Independent Auditor's Report to the Members   55
Schedule of Mining Tenements                  57
ASX Additional Information                    58

CORPORATE DIRECTORY

Directors                                   Solicitors to the Company

Mr David Frances Executive Chairman         Steinepreis Paganin
Mr Lennard Kolff   Managing Director        Level 4, The Read Buildings
Mr Julian Babarczy Non-Executive Director   16 Milligan Street
Mr Matthew Bowles Non-Executive Director    Perth WA 6000

Joint Company Secretaries                   Price Sierakowski
                                            Level 224, St Martin's Tower
Mr Winton Willesee                          44 St George's Terrace
Mr Aaron Finlay                             Perth WA 6000

Principal Place of Business
and Registered Office                       Share Registry

Suite 25                                    Computershare Investor Services Pty Ltd
145 Stirling Highway                        GPO Box 2975
Nedlands WA 6009                            Melbourne VIC 3001

Contact Details                             Tel:      +61 3 9415 5000
                                            Fax:      +61 3 9473 2500
Website: www.tawana.com.au
Tel:     +61 8 9389 3140                    Auditor
Fax:     +61 8 9389 3199
                                            William Buck Audit (Vic) Pty Ltd
                                            Level 20
                                            181 William Street
                                            Melbourne VIC 3000

                                            Stock Exchange

                                            Australian Securities Exchange
                                            ASX Code: TAW

                                            JSE Limited
                                            JSE Code: TAW

CHAIRMAN'S STATEMENT

Dear Shareholders

It is with pleasure that I write to you as the new Chairman of your Company; 2013 is shaping up to be a
very interesting and potentially Company changing year.

With the discovery of the exciting new Mofe Creek iron ore play in Liberia the focus of your Company is
now firmly on taking this project to the next level. Although early days, the Mofe Creek discovery appears
to have the hallmarks of an economically significant project. Exceptional results from the maiden drill
programme indicate an overall project exploration target of over 500Mt contained iron ore, situated only
20km from the Liberian coast, this is an outstanding achievement.

I believe the next stage for your Company is one of the most exciting and professionally rewarding for the
management team, and potentially financially significant for shareholders. The success of the Company at
this stage is driven by technical excellence, which is evidenced by the identification of this new discovery
by the Managing Director Lennard Kolff. His almost exclusively Liberian in-country team's dedication and
eagerness to achieve is a credit to them. The respect and rapport this team has with the local community
is inspiring to see, and goes a long way to developing a social license to operate - something critical to
success and which your Board and Management strives to achieve.

Liberia is emerging as an important iron exporting country with renewed interest from the Indian iron ore
and steel majors. ArcelorMittal having already spent over US$1B to produce 4Mt/year are now
anticipating increasing production to 15Mt/year, Sesa Goa have intimated that they will spend up to
US$2.4B to develop their iron ore assets in the country. With these majors straddling the Mofe Creek
project your Company is well placed to take advantage of this renewed interest.

As we embark on resource definition work, further prospect identification, and high-level feasibility studies
this year we recognise the importance of maintaining good corporate governance and will look to augment
the existing board and management team commensurate with the new challenges facing the Company.

Further detail on activities to date, and future work plans can be found in the "Review of Operations" in
this Annual Report.

I look forward to working with the board and management over the next twelve months to deliver a
maiden resource and hopefully provide a positive high-level economic assessment of the Mofe Creek
project for you.

David J. Frances
Chairman

DIRECTORS' REPORT

Your directors submit their report for the year ended 31 December 2012 for Tawana Resources NL
("the "Company") and its controlled entities (the "Consolidated Entity").

Directors

The names and details of the Company's directors in office during the financial year and until the date
of this report are as follows. Directors were in office for the entire period unless otherwise stated.

Mr David Frances  Executive Chairman
Appointed 28 January 2013

Mr Frances has been involved in the international mining industry for over 20 years. He was, most
recently, President and CEO of Mawson West Ltd (TSX:MWE), a position he held for seven years
during which he led Mawson through the transition from a Western Australian gold explorer to an
international copper explorer, developer, and producer in the Democratic Republic of Congo. Mr
Frances' experience in funding and developing projects in Africa and his knowledge of international
equity capital markets is a useful addition to the skills of the Tawana team. Mr Frances is currently a
non-executive director of Orrex Resources Ltd.

Over the past 3 years, Mr Frances has held directorships with the following ASX-listed companies:

Company                                     Commenced              Ceased
Orrex Resources Limited                     30 Nov 2010            -

Mr Warwick Grigor  Non-Executive Chairman
Appointed 20 April 2010
Resigned 28 January 2013

Mr Grigor is a veteran of 30 years in Australian stockbroking, analysis and corporate advisory
functions, having first commenced employment with Hamersley Iron Pty Ltd after completing degrees
in law and economics. His most recent venture is Canaccord BGF, a stockbroking business
established in 2008, where Mr Grigor is Executive Chairman and Head of Research.

Over the past 3 years, Mr Grigor has held directorships with the following ASX-listed companies:

Company                                     Commenced              Ceased
Heritage Gold NZ Limited                    19 Apr 2007            7 April 2010
Peninsula Energy Limited                    11 Apr 2005            -

Mr Lennard Kolff  Managing Director
Appointed 27 October 2011

Mr Kolff joined Tawana initially as Chief Executive Officer in July 2010, having worked at Rio Tinto
over the past decade, where he was involved in a range of high profile projects including the
Simandou iron ore project and the Northparkes Cu-Au mine. His responsibilities have encompassed
a broad range of disciplines, including the design, implementation and supervision of multi-commodity
exploration and pre-feasibility study resource drilling programs, management of geological teams and
collaboration with the mine planning and development functions of major project teams.

Over the past 3 years, Mr Kolff has held no other directorships with ASX-listed companies.

Mr Euan Luff  Non-Executive Director
Appointed 16 November 1998
Resigned 15 June 2012

Mr Luff is a Senior Partner of Wilmoth Field Warne, Solicitors. In his professional capacity he acts as
a legal adviser to a number of private and public companies.

Over the past 3 years, Mr Luff has held no other directorships with ASX-listed companies.

DIRECTORS' REPORT

Mr Julian Babarczy  Non-Executive Director
Appointed 9 December 2009

Mr Babarczy is currently a Portfolio Manager at Regal Funds Management, where he has primary
responsibility for investments within the mining and oil and gas sectors. Prior to this role, Mr Babarczy
worked in investment banking for Lazard, where he provided advice to both listed and unlisted
companies on capital raising and merger and acquisition transactions. Before joining Lazard, Mr
Babarczy held several roles in corporate finance, where he was instrumental in a range of successful
transactions including IPOs, secondary market capital raisings, listed company advisory mandates
and equities research across a broad range of industry sectors. Julian holds a Bachelor of Business
from Monash University in Melbourne, is a Chartered Financial Analyst charterholder, and has a
graduate diploma in Applied Finance and Investment from the Securities Institute of Australia.

Over the past 3 years, Mr Babarczy has held no other directorships with ASX-listed companies.

Mr Matthew Bowles  Non-Executive Director
Appointed 30 May 2011

Mr Bowles has extensive commercial and corporate finance experience within the resource sector,
formerly being an Executive Director, Mergers and Acquisitions with global advisory firm Ernst &
Young. Prior to joining Ernst & Young in 2004, Mr Bowles spent 8 years with Rio Tinto Limited in a
number of senior financial roles and 4 years in London in corporate finance and investment banking.

Mr Bowles is currently the Chief Development Officer for Gryphon Minerals Limited. He is a member
of the Australian Society of Certified Practising Accountants and the Financial Services Industry of
Australasia.

Over the past 3 years, Mr Bowles has held directorships with the following ASX-listed companies:

Company                                             Commenced           Ceased
Alicanto Minerals Limited                           19 Sept 2012        -

Interests in the shares and options of the Company

As at the date of this report, the interests of the directors in the shares and options of Tawana
Resources NL were:

Name                                Number of ordinary           Number of options
                                                shares        over ordinary shares
Mr D Frances(1)                                250,000                           -
Mr W Grigor(2)                              27,850,000                   5,000,000
Mr L Kolff                                           -                  15,000,000
Mr E Luff(2)                                21,589,740                   6,104,150
Mr J Babarczy                               26,173,288                   5,000,000
Mr M Bowles                                  6,000,000                   5,000,000
    (1)   Opening balance as at the date of appointment
    (2)   Closing balance as at the date of resignation

Joint Company Secretaries

Mr Winton Willesee

Mr Willesee is an experienced company director and company secretary. Mr Willesee brings a broad
range of skills and experience in strategy, company administration, corporate governance, company
public listings, merger and acquisition transactions, reconstructions and corporate finance.

DIRECTORS' REPORT

Mr Willesee holds a Master of Commerce, Post-Graduate Diploma in Business (Economics and
Finance), a Graduate Diploma in Applied Corporate Governance, a Graduate Diploma in Applied
Finance and Investment, a Graduate Diploma in Education and a Bachelor of Business. He is a
Fellow of the Financial Services Institute of Australasia, a Member of CPA Australia and a Chartered
Secretary.

Mr Willesee is a currently a director and/or chairman of a number of small and mid-cap listed
companies.

Mr Aaron Finlay

Mr Finlay is a Chartered Accountant and Chartered Company Secretary with over 20 years'
experience in the accounting and finance profession.

Mr Finlay is Finance Director and Company Secretary for ASX-listed Cleveland Mining Company
Limited. Prior to this he was Chief Financial Officer and Company Secretary for ASX listed Mayne
Pharma Group Limited and previously INVESCO Australia's Chief Financial Officer where he had
responsibility for the operations of finance, as well as the compliance, legal, and human resources
functions. Prior to that position, Mr Finlay was head of group tax and treasury for INVESCO's global
operations in London. Prior to joining INVESCO, Mr Finlay worked for PricewaterhouseCoopers (then
Price Waterhouse) in London and Perth for 7 years.

Operating results

The loss of the Consolidated Entity for the year ended 31 December 2012 after providing for income
tax amounted to $6,473,524 (2011: $7,368,084).

Financial position

The net assets of the Consolidated Entity are $3,097,190 as at 31 December 2012 (2011:
$8,918,805).

Principal activities and significant changes in affairs

Tawana Resources NL's principal activities consisted of mineral exploration, in particular diamond and
gold exploration. There were no significant changes in the nature of the activities of the consolidated
entity during the year that have not been covered in this Annual Report.

REVIEW OF OPERATIONS

Corporate

    -   Mofe Creek Mineral exploration license granted and strike extensions secured via option
        agreement
    -   Mr Euan Luff resigned as a Director
    -   Nimba and Lofa gold licenses relinquished

Mofe Creek Iron Ore Project

    -   Detailed aeromagnetics survey flown; 65km strike of prospective iron formation defined
    -   High priority drill targets defined at Koehnko and Gofolo targets
    -   25km from coast, 95km along sealed road or adjacent to decommissioned rail alignment
        65km to port of Monrovia
    -   10km along strike from historic Bomi Hills mine; >50Mt high-grade DSO magnetite produced

Sinoe Gold Project

    -   Significant trenching results; 12m at 2.3g/t incl. 4m at 6.25g/t Au
    -   Three broad 8km x1 00-400m +30ppb gold trends defined in broad spaced soil gridding
    -   Five high priority, high tenor +50ppb up to 1g/t Au anomalies defined within trends by infill soil
        sampling

Subsequent Events

    -   2500m RC drill programme completed at Mofe Creek
    -   Significant friable iron formation and DSO intersected; new discovery
    -   Warwick Grigor resigned as Non-Executive Chairman and David Frances appointed
        Executive Chairman

Corporate
The Company was granted the Mofe Creek mineral exploration license in December by the Ministry of
Lands Mines and Energy after successful transfer from a reconnaissance permit. The Company
secured strike extensions via Option Agreement to the Company's existing 100% owned Mofe Creek
Iron Ore Project on 8th May 2012. The Company signed an extension to the JV agreement entered
into with Konblo Bumi Inc to secure strike extensions (pending due diligence) to the Company's
existing 100% owned Mofe Creek Project.

The Company signed an extension to the JV agreement entered into with Global Mineral Investments
LLC ('GMI') to extend the Option period whilst transfer of the license is effectuated. The Company and
its joint venture partner received and paid for the license renewal notice for the Sinoe license from the
Ministry of Lands Mines and Energy during the fourth quarter.

The Company announced on 15th February 2012 that it had signed a Heads of Agreement ("HOA") to
acquire the gold rights to the Cape Mount Gold Project. Progression of the transaction required
negotiation and signing of a Definitive Agreement and was subject to, amongst other things,
satisfactory due diligence by Tawana. After conducting its due diligence investigations, Tawana
elected not to proceed with the transaction on 7th June 2012.

Legacy residential houses in South Africa were sold for ZAR2,000,000 to a local company during the
second quarter as the Company continues to rationalise legacy assets outside of its core focus.

Mr Euan Luff resigned as a director of the Company on 18th June 2012. The Company acknowledges
the valuable contribution of Mr Luff over his significant term as a director of the Company and wishes
him every success in his future endeavours.

The Nimba and Lofa gold exploration licenses in Liberia were relinquished during the year. Closure
was applied for over the Daniel Alluvial Project exploration license in RSA during the year.

Liberia
Hand auger drilling and mapping defined two high priority targets at the Mofe Creek iron ore project.
Detailed aeromagnetics and radiometrics was flown confirming the target areas, defining
approximately 65km strike length of prospective geology and several additional target areas. Drill
targets were defined and the reconnaissance license successfully transferred to an exploration
license (TAW 100%) during the year.

Wide spaced soil sampling with subsequent infill sampling within high priority areas generated over
4500 samples. Three broad 8km x100-400m +30ppb gold trends were defined with five high priority,
high tenor +50ppb up to 1g/t Au anomalies defined within the broader mineralised trends. 1600m of
trenching was completed with best results returning 12m at 2.3g/t including 4m at 6.25g/t Au during
the year.

Reconnaissance 400 x 50 m spaced soil sampling over high priority stream sediment BLEG
anomalies defined on the Nimba and Lofa projects was completed during the year. No significant
anomalies were identified and the Company submitted relinquishment reports for the Nimba and Lofa
licenses during the year.

Mofe Creek Iron Project 
Reconnaissance geological mapping and rock chip sampling was completed over the license and JV 
areas defining a preliminary estimate of 45km strike of prospective geology and confirming the 
presence of both friable iron formation and DSO mineralization within the license area. A total of 119 
itabirite rock chip samples have been assayed to date across the prospective iron formation. Average 
iron formation grades from the 119 samples are detailed in the table below.
  n = 119      Fe %   SiO(2) %  Al2O3 %        P%       S%     Mn %  LOI1000 %
  Avg         43.00      34.95     1.09      0.08     0.02     0.06       2.07
  Max         63.69      78.29    11.41      0.94     0.09     2.02      11.10
  Min         11.06       0.78     0.03      0.01     0.00     0.01       0.07
  Mode        47.69      38.24     0.28      0.01     0.01     0.02       1.58
Average grade of all rock chip sampling to date

A decision was made to fly detailed aeromagnetics to better define potential drill targets. The
Company announced results of the aeromagnetics survey on 6th August 2012. The survey was flown
by Aeroquest Airborne of Perth, WA, a member of the Aeroquest International group of companies.
The survey was by PAC-750XL fixed wing aircraft at 200m line spacing and 50m ground clearance.
Survey QC was managed by Southern Geoscience Consultants of Perth and after all checks of data
met quality control requirements specified within the agreement.

Over 65km strike length of iron formation was interpreted from the aeromagnetics Folding and
repetition of the itabirite within the highest priority targets appears to have caused thickening of the
iron formation enhancing prospectivity. Detailed aeromagnetics interpretation of the 200m line
spacing survey was completed by Southern Geoscience Consultants (SGC) over the license area.
Interpretation confirmed the geological mapping to date and the five key target areas defined;
Koehnko, Zaway, Gofolo, Gofolo West and Gofolo North-West in addition to other target areas in the 
south.

The Company successfully trialed hand auger drilling as an alternative to trenching and pitting during
the wet season. This allowed for safer, faster, less invasive and more cost effective access into areas
of no outcrop within target areas. Hand auger drilling effectively penetrates areas of friable iron
formation with hole depths averaging 3.8m and reaching up to 5.7m depth.

Over 50 hand auger holes were drilled on a 400 x 100m grid into the Koehnko target. All holes
terminated in mineralization with an average hole depth of 3m and up to 5.5m deep. The friable iron
formation intersected to date averages 42% Fe and up to 53% Fe with low contaminants over an
interpreted footprint of 5.2km strike and 100m to 400m width. Mineralisation remains open to the
south where hand auger drilling continues. Average end of hole grades from the 50 holes received
over the Koehnko target to date are detailed below.

          depth (m)     Fe %    SiO(2) %     Al2O3 %          P%          S%  LOI1000 %  CR2O3 %   TiO2 %     V2O5 %     MnO %
    Avg           3    41.75       27.46        7.12        0.03        0.05       3.29     0.06     0.22       0.01      0.02
    Max         5.5    52.97       53.54       17.09        0.07        0.13       9.94     0.30     1.09       0.07      0.05
    Min         0.3    24.06        4.75        1.51        0.01        0.00       0.00     0.00     0.03       0.00      0.01
Average grades of Koehnko target hand auger drilling to date

All samples were assayed by SGS Liberia and were sourced from in-situ outcropping material.
Samples were dried and crushed to a nominal 2 mm using a jaw crusher then the whole sample
pulverised in a LM2 to a nominal 85% passing 75 µm. A 200g sample was then scooped, with iron ore
analysis of majors and minors by borate fusion-XRF.

The Mofe Creek Project is located within one of Liberia's historic premier iron ore mining districts. The
project is 10 km along strike from the abandoned Bomi Hills iron ore mine. Historic production at Bomi
Hills is poorly documented; however estimated historic production by the Government of Liberia is 50
Mt of high-grade DSO lump magnetite in addition to high-grade beneficiated sinter feed concentrate.

Bomi Hills produced high-grade direct shipping ore (DSO) magnetite in addition to magnetite
concentrate beneficiated from itabirite (metamorphosed and re-crystalised banded iron formation).
DSO magnetite averaged 64.5% Fe, 4.5% SiO2, 1.5% Al2O3 and 0.13% P, of which 53% formed lump
material (average 11-37mm) and 47% formed fines (<11mm). The beneficiated itabirite concentrate
averaged 64% Fe, 6% SiO2 and 0.04-0.05% P and was used to produce sinter feed (Gruss, 1973).

The Project is well positioned for possible future infrastructure scenarios; road or rail to the deep
water port of Monrovia or road to coast and transhipment via barge to deeper water for onward
shipment. A well-maintained 100km long sealed road exists from the central licence area to the city of
Monrovia. In addition to this a decommissioned iron ore railway alignment* exists from the Bomi Hills
mine to the port of Monrovia; 20km east from the easternmost magnetic anomaly. Rail distance from
Mofe Creek to the port of Monrovia is 65km. Alternatively the Project area is approximately 25km from
the coast for possible stand-alone haul road construction, trucking and transhipment via barge to
deeper water for on shipment.

Sinoe Gold Project
Tawana previously secured binding exclusivity and exclusive rights to purchase outright the Sinoe
license pending results of the first year field exploration programme. The Company funded exploration
during the first year and intends to exercise its right to purchase the licence outright and an extension
to the Option period has been signed whilst transfer of the license is effectuated. The mineral
exploration license covers 400km2 of Birimian aged rocks along arguably one of the most prospective
gold mineralised structures being explored in Liberia today; the Dugbe Shear.

The project area is 25km along strike from Hummingbird's (AIM: HUM) 3.8Moz Dugbe discovery and
40km along strike from Equator Resources (ASX: EQU) Bukon Jedeh Project. Both projects are
hosted along secondary and tertiary structures adjacent to the main Dugbe Shear. Similar structural
settings exist over the Sinoe Project area.

Infill soil sampling defined five high priority +50ppb soil anomalies with individual soils of up to 1g/t Au
and consecutive lines of results over 100ppb. Highest priority anomalies range from 1km up to 1.8km
in length and between 200m to 500m widths. All anomalies occur within large footprint, lower tenor
+30ppb envelopes or 'Gold Trends' defined over the 800x100m grid announced in March 2012.

Trench results were received for initial trenching over the southern +30ppb gold trend defined during
phase one soil sampling. Trenching was designed to test for broad mineralised zones coincident with
a large +30ppb anomaly defined by 800x100m soil sampling. Mineralised trench intervals returned
were:

     -   12m at 2.3g/t including 4m at 6.25g/t Au in Trench 1
     -   22.1m at 0.24g/t including 2.1m at 0.49g/t Au in Trench 1
     -   24m at 0.4g/t including 8m at 0.87g/t Au in Trench 2B
     -   16m at 0.24g/t Au in Trench 2B

Trench ID    UTM_E        UTM_N   From (m) To (m) Interval (m)  Sample ID   Au ppm   Intersection
PNTR001     524661     562671.3     257.7  261.7             4  STS1081       0.51   12m @ 2.3g/t incl. 4m @ 6.25g/t
PNTR001     524661     562667.3     261.7  265.7             4  STS1082       6.25   Au (0.1g/t Au cut-off)
PNTR001     524661     562663.3     265.7  269.7             4  STS1083       0.15

PNTR001     524661    562257.25     673.2  674.3           1.1  STS1234       0.37
PNTR001     524661    562255.45     674.3  676.8           2.5  STS1235       0.34
PNTR001     524661    562253.65     676.8  677.9           1.1  STS1236       0.04
PNTR001     524661     562252.6     677.9  678.9             1  STS1237       0.51   22.1m @ 0.24g/t Au incl. 2.1m @
PNTR001     524661    562251.55     678.9    680           1.1  STS1238       0.51   0.49g/t Au (0.1g/t cut-off)
PNTR001     524661       562249       680    684             4  STS1093       0.14
PNTR001     524661       562245       684    688             4  STS1094       0.21
PNTR001     524661       562241       688    692             4  STS1095       0.16
PNTR001     524661    562237.35       692  695.3           3.3  STS1096       0.25

PNTR002B    528860       565838         0      4             4  STS1322      0.785
PNTR002B    528860       565834         4      8             4  STS1323       0.95
PNTR002B    528860       565830         8     12             4  STS1324       0.13   24m @ 0.4g/t incl. 8m @ 0.87g/t
PNTR002B    528860       565826        12     16             4  STS1325       0.35   Au (0.1 g/t cut-off)
PNTR002B    528860       565822        16     20             4  STS1326        0.1
PNTR002B    528860       565818        20     24             4  STS1327       0.13

PNTR002B    528860       565658       180    184             4  STS1369       0.26
PNTR002B    528860       565654       184    188             4  STS1370      0.345   16m @ 0.24g/t Au (0.1g/t cut-off)
PNTR002B    528860       565650       188    192             4  STS1371       0.13
PNTR002B    528860       565646       192    196             4  STS1372       0.22
Mineralised trench intersections

Soil samples were collected on a nominal 400x50m and 200x50m grid. Lines were cut and surveyed
using hand held GPS. Approximately 1.5kg of B horizon soil was collected below the surface
vegetation and humus layer; generally around the 30cm depth profile. Sample sites that occurred
within close proximity to transported stream sediments were moved to the nearest available site to
avoid sampling stream sediment and target in-situ weathered soil horizons. Alternating field duplicates
and certified standards at various analytical levels were inserted every 25th sample for QA/QC
purposes. Trench samples were collected by channel sampling to geological intervals and maximum
interval length of 4m. Lithology, alteration, weathering, veining, structure and mineralisation were
logged to geological intervals.

All samples were submitted to SGS Laboratory in Monrovia for sample preparation and gold analysis.
All samples were crushed to a nominal 2mm by jaw crusher then pulverised to a nominal 85% passing
75µm and a 200g scoop sub-sample taken for analysis. Laboratory preparation equipment was
flushed using barren material between each sample run. Soil sample gold analysis was by Aqua
Regia digest and Solvent Extraction AAS finish (DL 0.002 ppm). Trench sample gold analysis was by
Fire Assay of a 50g sample and AAS finish (DL 0.01ppm). Results received to date have passed
internal QA/QC procedures and are within reporting error limits (+/-95% CL) of certified standards and
duplicates inserted by the Company providing confidence in the reported results.

The geology of the Sinoe area is characterised by a package of gently dipping biotite and garnet-
biotite schists, intruded by cm to >10m scale pegmatite dykes and sills, mafics and late granitic
intrusives. The strong north-easterly striking gold anomalous zones are interpreted to be associated
with north-east splays off the major Dugbe shear. A similar structural trend is noted at the Dugbe
(1.8Moz) and Tuzon (2.05Moz) projects 25km to the east. The splays appear bound to the north by a
sub parallel structure to the Dugbe shear, and both structures appear to wrap around a large, 35km
by 14km circular feature underlying the known resources and Sinoe project areas. The circular feature
has a coincident magnetics low and radiometrics high geophysical anomaly which in conjunction with
the widespread presence of pegmatites is interpreted to represent an underlying intrusive body of
likely granitic affinity. The geological setting and field observations is interpreted to suggest an
intrusion related gold (IRG) genetic model which alludes to significant tonnage and in some instances
grade potential.

Nimba and Lofa
The Company completed 400x50m spaced soil programmes over the Nimba and Lofa licenses. Soil
sampling at Lofa was designed to target a discrete 6x3km area of hills in the north-west of the Lofa
license where peak BLEG anomalies reported at 8.6ppb; 8.5 times higher than background gold
levels and clustering of BLEG anomalies was observed. Soil sampling at Nimba was designed to test
a >10 km strike length ridge and two smaller sub-parallel ridges where peak BLEG anomalies were
recorded at 16 ppb; 16 times higher than background gold levels of around 1ppb.

No significant soil anomalies were defined at Nimba or Lofa and the Company submitted
relinquishment documents for both licenses during the year.

Subsequent Events & Work Plan Going Forward

A maiden 2,500m RC drilling programme was completed over the Gofolo and Koehnko targets at
Mofe Creek. Significant mineralised intersections were returned including 40m at 49.9% Fe with low
contaminants from surface (including 14m at 57.5% Fe from 12m down hole) and Gofolo and 34m at
42.8% Fe with low contaminants from surface (including 8m at 53.5% Fe from 12m down hole) at
Koehnko. Planning is underway for a 10,000m resource drilling programme and 5,000m exploration
drilling programme with the aim to define a JORC compliant resource by end 2013. Meanwhile hand
auger drilling has resumed helping define and prioritise key target areas in Mofe Creek prior to drilling
commencing.

Hand auger drilling along strike from reported trench intersections and high priority soil anomalies
commenced during Q1 2013 at the Sinoe gold project. Pending results of the auger programme
expected during Q2 2013, follow-up diamond drilling of significant anomalies is planned.

About Liberia
Liberia is a democratic country run by Her Excellency President Ellen Johnson Sirleaf; Africa's first
elected female head of state in 2005 and recently re-elected in November 2011 for her second term.
The country is hugely prospective and hosts several world class iron ore deposits but yet is
completely underexplored for gold and non-ferrous metals. Liberia has a modern and transparent
mining code and the government is supportive of foreign investment especially in the exploration and
mining industry to help unlock the value of its potential mineral wealth.

Liberia is located in West Africa dominantly within the Archean aged Kenema Man Domain and lesser
Birimian sediments to the east. There are a large number of world class mineral deposits located in
the Archean and Birimian rock types throughout West Africa including Simandou (2.2Bt Fe), Obuasi
(40Moz+ Au) and Tasiast (18Moz+ Au). West Africa is one of the fastest growing mineral provinces in
the world and Liberia currently hosts several world class iron ore deposits and is underexplored for
gold.

South Africa
Rakana Consolidated Mining Pty Ltd (TAW 26%)
The Company holds a 26% equity stake in Rakana Consolidated Mining Pty Ltd ("Rakana") the joint
venture partner of Aquila Resources Ltd ("Aquila") in the Thabazimbi Joint Venture ('TJV'). The
Avontuur Manganese project which includes the Gravenhage manganese resource and the Meletse
iron ore resource are incorporated under the TJV.

Thabazimbi Iron Ore Project (TAW indirect interest 6.7%)
The Thabazimbi Iron ore Project includes the Meletse Iron Ore project and is located in the Limpopo
Province of South Africa. Aquila announced a resource increase on the Thabazimbi Iron Ore Project
during the year. For further technical detail please refer to Aquila's December 2012 Quarterly report.

Avontuur Manganese Project (TAW indirect interest 6.7%)
Aquila announced a resource increase on the Avontuur Manganese Project during the year. For
further technical detail please refer to Aquila's announcement of 29th March 2012.

Aquila announced on 3rd April 2012 the termination of sale process for Avontuur Manganese Project
in light of cash flow anticipated from other transactions and the flat manganese market conditions.

Daniel Alluvial Project, Kimberley Region (TAW 100%)
The Daniel Alluvial Project is a large buried palaeo alluvial diamond project 2 km south of the Finsch
kimberlite diamond mine. It was discovered in 2003 following a FALCOMTM survey by BHPB targeting
satellite kimberlite pipes around Finsch. The project consists of three diamondiferous palaeo gravel
channels; Feeder Channel, Main Channel and Eastern Gravels. The Daniel diamonds are interpreted
to be derived from eroded diamondiferous Finsch kimberlite material.

A Confidentiality Agreement was signed with a listed South African company during the year to review
Daniel data. No corporate activity resulted and the Company has applied for closure over the Daniel
license.

Legacy residential houses in South Africa were sold for ZAR2,000,000 to a local company during the
second quarter as the Company continues to rationalise legacy assets outside of its core focus.

For further information, please contact Lennard Kolff van Oosterwijk, Managing Director.

Competent Persons Statements

The information in this report in so far that it relates to Liberian Project Exploration Results, Mineral Resources or Ore Reserves
is based on information compiled by Lennard Kolff van Oosterwijk, who is a Member of the Australian Institute of Geoscientists
included in a list promulgated by the ASX from time to time. Lennard Kolff van Oosterwijk is a full-time employee of the
Company and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration
and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Lennard Kolff van Oosterwijk consents to the
inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report, insofar as it relates to the Meletse Iron Ore Resource and the Gravenhage Manganese Resource
was prepared under the supervision of Mr Brent E Green who is a member of the Australian Institute of Geoscientists and Mr
Bernhard Siebrits who is a member of the Australasian Institute of Mining and Metallurgy. Mr Green is full-time employee of
Aquila Resources Ltd and Mr Siebrits is a full-time employee of Golder Associates Africa Ltd. Mr Green and Mr Siebrits have
sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity
which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the 'Australasian Code of
Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Both Mr Green and Mr Siebrits consent to the
inclusion in the announcement of the above matters based on the information in the form and context in which it appears.

Subsequent events

On 11 January 2013, the Company announced that it plans to commence RC drilling at the Mofe
Creek project during January 2013 after it was granted the Mofe Creek mineral exploration license by
the Ministry of Lands Mines and energy late last year.

On 29 January 2013, the Company announced that it has commenced RC drilling at the Mofe Creek
project during January 2013 after it was granted the Mofe Creek mineral exploration license by the
Ministry of Lands Mines and energy late last year. Approximately 1,600m of RC drilling of a planned
2,500m programme has been completed on the Koehnko target. Drilling has intersected significant
widths of friable iron formation from surface to an average down-dole depth of 36.5m and maximum of
51m.

On 29 January 2013, the Company announced the appointment of Mr David Frances as Executive
Chairman. Concurrent to the appointment of Mr Frances to the Board is the resignation of Non-
Executive Chairman, Mr Warwick Grigor.

On 26 February 2013, the Company announced that 50,000,000 options expiring 23 February 2013
had been exercised at a price of $0.01 per option raising $500,000 for the Company.

On 18 March 2013, the Company announced the results of its maiden 2,500m reverse circulation drill
programme which was completed at the Company's 100% owned Mofe Creek project in Liberia, West
Africa.

Dividends paid or recommended

The Directors do not recommend the payment of a dividend and no amount has been paid or
declared by way of a dividend to the date of this report.

Future developments, prospects and business strategies

The consolidated entity will continue to concentrate on mineral exploration particularly iron ore
exploration with emphasis on the development of its existing projects.

Environmental issues

The Company is aware of its environmental obligations with regards to its exploration activities and
ensures that it complies with all regulations at all times.

REMUNERATION REPORT (Audited)

This report details the nature and amount of remuneration for each Director of Tawana Resources NL,
and for key management personnel. For the year ended 31 December 2012, there are considered to
be no key management personnel who are not Directors of the Company.

Remuneration policy

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 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 $300,000 in total,
for each 12 month period commencing 1 January each year, until varied by ordinary resolution of
shareholders.

Executive Remuneration

Executive remuneration is paid according to experience and market conditions. Executive
remuneration is reviewed annually by 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.

Details of remuneration for year ended 31 December 2012

Details of the remuneration of the Directors of Tawana Resources NL and its controlled entities, are
set out in the following tables:

                           Short-term benefits                 Post     Share-     Total     Perform-
                                                         employment      based                   ance
                                                                      payments             Related(2)
                   Salary and  Cash bonus      Non-cash      Super-                           
                      fees                     benefits   annuation
2012                     $              $             $           $          $         $          %
Directors
Mr W Grigor           40,000            -            -       3,600      84,500   128,100       66.0
Mr L Kolff           231,711            -            -      20,854     169,000   421,565       53.9
Mr E Luff (1)         16,667            -            -           -           -    16,667          -
Mr J Babarczy         40,000            -            -           -      84,500   124,500       66.0
Mr M Bowles           40,000            -            -       3,600      84,500   128,100       66.0
                     368,378            -            -      28,054     422,500   818,932
(1)    Resigned 15 June 2012
(2)    Share based payments from all of performance-related remuneration

                           Short-term benefits                Post      Share-     Total     Perform-
                                                        employment       based                 ance
                   Salary and Cash bonus      Non-cash      Super-    payments              related
                      fees                    benefits   annuation
2011                    $           $                $           $           $         $          %
Directors
Mr W Grigor           40,000            -            -       3,600           -    43,600          -
Mr L Kolff (1)        54,167            -            -       4,875           -    59,042          -
Mr E Luff             40,000            -            -           -           -    40,000          -
Mr J Babarczy         40,000            -            -           -           -    40,000          -
Mr H Hill (3)         16,667            -            -           -           -    16,667          -
Mr M Bowles (4)       23,333            -            -       2,100           -    25,433          -
Key Management
Personnel
Mr L Kolff (2)      142,500       25,000             -      13,650      75,619   256,769        39.2
                    356,667       25,000             -      24,225      75,619   481,511
(1)    Remuneration from appointment as a Director on 27 October 2011
(2)    Remuneration while Chief Executive Officer to 26 October 2011. Share-based payments during
       this period relates to options issued in the prior year that vested during this period.
(3)    Resigned 27 May 2011
(4)    Appointed 30 May 2011

Options granted as remuneration

All options issued to Directors and Key Management Personnel are issued for nil consideration.

All options issued have been 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.

During the year ended 31 December 2012, 25,000,000 options were issued to Directors or Key
Management Personnel as remuneration.

Shares issued on exercise of compensation options

During the years ended 31 December 2012 and 2011, no share options were exercised by Directors
or Key Management Personnel.

Employment contracts of directors and senior executives

There are no contracts between the Company and the Directors other than Messrs Frances and Kolff.
The Company has entered into a standard appointment agreement with Mr Len Kolff which provides
for an appointment term of three and one half years from 14 June 2012 and a notice period of three
months, $230,000 annual salary and performance bonuses together with an issue of options over fully
paid ordinary shares in the Company as noted above.

The Company has entered into a standard appointment agreement with Mr David Frances which
provides for an appointment term of one year from 28 January 2013 and a notice period of one
month, $260,000 annual salary and an issue of incentive options subject to shareholder approval.

Meetings of directors

During the financial year, 10 meetings of Directors were held. Attendances by each Director during
the year were as follows:

                     Board meetings
                  Number        Number
                attended   eligible to
                                attend
Mr W Grigor           10            10
Mr L Kolff            10            10
Mr E Luff              6             5
Mr J Babarczy         10            10
Mr M Bowles           10            10

Options

At the date of this report, the unissued ordinary shares of Tawana Resources NL under option are as
follows:

Grant date          Date of expiry      Exercise price      Number under
                                                                  option
17 Jan 2009           17 Jan 2014            $0.10             6,750,000
9 Sep 2010            30 Jul 2013            $0.01            50,000,000
9 Sep 2010             9 Sep 2014            $0.05             5,000,000
8 Mar 2011             8 Mar 2014            $0.01            25,000,000
10 Nov 2011           10 Nov 2013            $0.03             1,250,000
10 Nov 2011           10 Nov 2015            $0.05             1,250,000
28 May 2012           30 April 2015          $0.036           27,000,000
27 June 2012          30 April 2015          $0.036            1,500,000
                                                             117,750,000

During the year ended 31 December 2012, 20,000,000 options were exercised at a price of $0.01 per
option. During the year ended 31 December 2011, 30,000,000 options were exercised at a price of
$0.01 per option. Subsequent to 31 December 2012 a further 50,000,000 options expiring 23
February 2013 were exercised at a price of $0.01 per option.

No person entitled to exercise an option had or has any right by virtue of the option to participate in
any share issue of any other body corporate.

Indemnifying officers or auditor

In accordance with the constitution, except as may be prohibited by the Corporations Act 2001 every
officer of the Company shall be indemnified out of the property of the Company against any liability
incurred by him in his capacity as officer or agent of the Company or any related corporation in
respect of any act or omission whatsoever and howsoever occurring or in defending any proceedings,
whether civil or criminal. The terms of the policy prevent disclosure of the amount of the premium
payable and the level of indemnification under the insurance contract.

Proceedings on behalf of the Company

No person has applied for leave of Court to bring proceedings on behalf of the Company or 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 any part of these proceedings.

The Company was not a party to any such proceedings during the year.

Non-audit services

The Company did not engage its external auditor to provide any non-audit services during or since the
end of the financial year.

Auditor's independence declaration

The lead auditor's independence declaration for the year ended 31 December 2012 has been
received and is attached to this Directors' Report.

Signed in accordance with a resolution of the Board of Directors.

Mr Lennard Kolff
Managing Director

Dated at Sydney this 27th day of March 2013

CORPORATE GOVERNANCE STATEMENT

The Board members of Tawana Resources NL 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 second edition of the principles, which was
subject to further amendments in 2010. 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 as set out
in the consolidated entity's Delegated Authority Policy.

A description of the Company's main corporate governance practices is set out below. All of 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 fulfill 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 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 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.

Throughout the whole of the financial year the Board was chaired by a Non-executive (Independent)
Chairman, and was comprised of a majority of independent non-executive Directors.

The Board considers that Mr Bowles meets the criteria in Principle 2. He has no material business or
contractual relationship with the Company, other than as a director and no conflicts of interest which
could interfere with the exercise of independent judgement, notwithstanding he is a nominee of
Gryphon Minerals Limited (as at the date of this report Gryphon Minerals Limited holds approximately
12.8% of the Company's issued share capital). The Board considers Mr Bowles to be independent on
the basis Gryphon Minerals Limited is not in a position to exercise control over the Company.

The following were Directors during the 2012 year:

Director       Capacity                    Position          Held office   Held office to
                                                             from
W Grigor       Non-Executive Chairman      Independent       20 Apr 2010   28 January
                                                                           2013
L Kolff        Managing Director           Non-Independent   27 Oct 2011   Current
E Luff         Non-Executive Director      Non-Independent   20 Apr 2010   15 June 2012
               Executive Chairman          Non-Independent   31 Jul 2009   20 Apr 2010
               Non-Executive Director      Non-Independent   16 Nov 1998   31 Jul 2009
J Babarczy     Non-Executive Director      Independent       9 Dec 2009    Current
M Bowles       Non-Executive Director      Independent       30 May 2011   Current

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 (excluding the Managing
Director) must retire from office as follows:

(a)   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.
(b)   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 strategy implementation and financial performance;
-     liaising with the 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, to assess the performance of each of the Directors. Due to the changes to the Board,
the Board did not conduct performance reviews during the 2012 year.

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

In view of the Company's current stage and the small size of the Board, the roles that would otherwise
be performed by an audit committee, remuneration committee and nomination committee are
performed by the full Board.

External auditors

Company 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. William Buck Audit (Vic) Pty Ltd was appointed as the
external auditor in 2009. The Corporations Act requires William Buck Audit (Vic) Pty Ltd 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 Board.

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 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 Company's business objectives.

Considerable importance is placed on maintaining a strong control environment. There is an
organisational 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 Board.

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.

Diversity policy

The Company has established a Workplace Diversity Policy which outlines the Board's commitment to
promoting a corporate culture that is supportive of diversity. This policy outlines the Company's
strategies for achieving diversity within the Company.

Given the Company's size and stage of development, the Company has not adopted targets for the
proportion of female employees within the organisation as proportional targets are difficult to achieve
with such low employee numbers. However Company policy for vacancies at the Board and Senior
Management level is to ensure that a diverse candidate pool is sought.

As at 31 December 2012 there were not any female Directors or employees within the Company.

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.

When analysts are briefed on aspects of the Company's operations, the material used in the
presentation is released to the ASX. 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 Board undertakes a review of the remuneration packages of all Directors and executive officers
on an annual basis. Remuneration packages are reviewed with due regard to performance and other
relevant factors.

In order to retain and attract executives of sufficient experience to facilitate the efficient and effective
management of the Company's operations, the Board 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.

All policies referred to in this section are available by contacting the Company.

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2012

                                                     Note                  Consolidated
                                                                     2012                 2011
                                                                        $                    $
Continuing operations
Revenue                                               4            98,526              173,413

Corporate costs                                                  (887,063)            (534,557)
Depreciation                                                       (4,683)              (4,230)
Employee benefits expense                             5          (891,589)            (502,333)
Exploration expenses written off                               (4,701,592)                   -
Other expenses                                                    (74,324)            (109,052)
Loss before income tax expense                                 (6,460,725)            (976,759)
Income tax expense                                    6                 -                    -
Net loss for the period after tax from
continuing operations                                          (6,460,725)            (976,759)
Loss from discontinued operations after tax          13           (12,799)          (9,125,733)
Net loss for the period attributable to
Tawana Resources NL                                            (6,473,524)         (10,102,492)

Other comprehensive income / (loss)
Gain / (loss) on translation of foreign operations                (44,751)           2,734,408
Other comprehensive income / (loss) for the
period, net of tax                                                (44,751)           2,734,408
Total comprehensive income / (loss) for the
period attributable to Tawana Resources NL                     (6,518,275)          (7,368,084)

Earnings per share from continuing and
discontinuing operations
 Basic and diluted loss (cents)                      19             (0.75)               (1.26)

Earnings per share from continuing operations
 Basic and diluted loss (cents)                      19             (0.74)               (0.12)

Earnings per share from discontinued
operations
 Basic and diluted loss (cents)                      19             (0.01)               (1.14)

The above Statement of Comprehensive Income should be read in conjunction with the
accompanying notes.

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2012

                                                  Note                       Consolidated
                                                                       2012                 2011
                                                                          $                    $
Current assets
Cash and cash equivalents                         17(a)           1,678,614            3,722,991
Trade and other receivables                         7                85,513               42,326
Assets held for sale                                8                     -              133,478
Total current assets                                              1,764,127            3,898,795

Non-current assets
Trade and other receivables                         7                51,047               39,787
Property, plant and equipment                                        52,024                7,534
Exploration expenditure                             9             1,413,186            5,081,927
Total non-current assets                                          1,516,257            5,129,248

Total assets                                                      3,280,384            9,028,043

Current liabilities
Trade and other payables                           10               121,374               83,223
Provisions                                                           22,556               26,015
Total current liabilities                                           143,930              109,238

Non-current liabilities
Provisions                                                           39,264                    -
Total non-current liabilities                                        39,264                    -

Total liabilities                                                   183,194              109,238

Net assets                                                        3,097,190            8,918,805

Equity
Contributed equity                                 11            45,631,150           45,431,150
Reserves                                           12             2,369,859            2,884,143
Accumulated losses                                              (44,903,819)         (39,396,488)
Total equity                                                      3,097,190            8,918,805

The above Statement of Financial Position should be read in conjunction with the accompanying
notes.

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2012
                                                             Consolidated
                                            Issued       Reserves    Accumulated          Total
                                           capital                        losses
                                                 $              $              $              $
Balance at 1 January 2011               36,482,279       (281,859)   (29,293,996)     6,906,424

Loss for the period                              -              -    (10,102,492)   (10,102,492)
Other comprehensive income for the
period                                           -      2,734,408              -      2,734,408
Total comprehensive loss for the
period                                           -      2,734,408    (10,102,492)    (7,368,084)
Transactions with owners in their
capacity as owners
Shares issued, net of costs              8,948,871       (398,290)             -      8,550,581
Share options issued and vested                  -        829,884              -        829,884
Balance at 31 December 2011             45,431,150      2,884,143    (39,396,488)     8,918,805

Balance at 1 January 2012               45,431,150      2,884,143    (39,396,488)     8,918,805

Loss for the period                              -              -     (6,473,524)    (6,473,524)
Other comprehensive income for the
period                                           -        (44,751)             -        (44,751)
Total comprehensive loss for the 
period                                           -        (44,751)    (6,473,524)    (6,518,275)
Transactions with owners in their
capacity as owners
Shares issued, net of costs                200,000              -              -        200,000
Share options exercised or expired                       (966,193)       966,193
Share options issued and vested                  -        496,660              -        496,660
Balance at 31 December 2012             45,631,150      2,369,859    (44,903,819)     3,097,190

The above Statement of Changes in Equity should be read in conjunction with the accompanying
notes.

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2012

                                                Note                  Consolidated
                                                                     2012                  2011
                                                                        $                     $
Cash flows from operating activities
Receipts from customers                                            13,746                31,388
Payments to suppliers and employees                            (1,478,832)           (1,549,471)
Interest received                                                  98,537               169,277
Interest paid                                                           -                     -
Net cash flows used in operating activities     17(b)          (1,366,549)           (1,348,806)

Cash flows from investing activities
Proceeds from sale of plant and equipment                               -                34,653
Purchase of plant and equipment                                   (49,173)              (11,764)
Proceeds from sale of discontinued operation                      248,947                13,906
Payments for exploration                                       (1,064,853)             (592,366)
Net cash flows used in investing activities                      (865,079)             (555,571)

Cash flows from financing activities
Proceeds from issue of shares                                     200,000             5,050,000
Capital raising costs                                                   -              (256,350)
Net cash from financing activities                                200,000             4,793,650

Net increase in cash and cash equivalents                      (2,031,628)            2,889,273
Cash and cash equivalents at beginning of
period                                                          3,722,991               835,470
Effects of exchange rates on cash holdings in
foreign currencies                                                (12,749)               (1,752)
Cash and cash equivalents at end of period      17(a)           1,678,614             3,722,991

The above Statement of Cash Flows should be read in conjunction with the accompanying notes.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012

1.    Summary of significant accounting policies

      The principal accounting policies adopted in the preparation of these financial statements are
      set out below. These policies have been consistently applied to all the years presented, unless
      otherwise stated. The financial statements include the consolidated entity consisting of Tawana
      Resources NL and its subsidiaries. For the purpose of preparing the consolidated financial
      statements, the Company is a for-profit entity.

(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
      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.

      These financial statements have been prepared under the historical cost convention.

      Compliance with International Financial Reporting Standards

      These financial statements comply with Australian Accounting Standards (AASBs).
      Compliance with AASBs ensures that these financial statements, comprising the financial
      statements and notes thereto, comply with International Financial Reporting Standards (IFRS).

      Critical accounting estimates

      The preparation of financial statements in conformity with AASBs 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

      Subsidiaries

      The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of
      Tawana Resources NL as at 31 December 2012 and the results of all subsidiaries for the year
      then ended. Tawana Resources NL and its subsidiaries together are referred to in these
      financial statements 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.

      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.

(c)   Foreign currency translation

      The presentation currency of Tawana Resources NL and its subsidiaries is Australian Dollars
      (A$). The functional currency of Tawana Resources NL is Australian Dollars and the functional
      currency of the overseas subsidiaries is South African Rand (Tawana Resources SA (Pty) Ltd
      and Diamond Resources (Pty) Ltd), Botswana Pula (Seolo Botswana Pty Ltd) and US Dollars
      (Kenema-Ma Holdings Liberia 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 end of
      the reporting period. Foreign exchange gains and losses resulting from the settlement of such
      transactions and from translation at financial year end exchange rates are recognised in the
      profit and loss.

      As at the end of the reporting period the assets and liabilities of overseas subsidiaries are
      translated into the presentation currency of Tawana Resources NL at the rate of exchange
      prevailing at the end of the reporting period and the Statement of Comprehensive Income is
      translated at the weighted average exchange rates for the period. All translation differences are
      recognised in the foreign currency translation reserve.

      On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to
      that particular foreign entity is recognised in the Statement of Comprehensive Income.

(d)   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.

      Interest

      Interest is recognised as it accrues using the effective interest method.

(e)   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 realise 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.

(f)   Impairment of assets

      Assets, except for exploration and evaluation (refer to Note 1(g)) 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 subsequent reporting date.

(g)   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 the profit
      and loss 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.

(h)   Property, plant and equipment

      Plant and equipment and buildings are stated at cost less accumulated depreciation and any
      impairment losses. Land is stated at cost less any impairment losses. 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 all assets are reviewed for impairment when events or changes in
      circumstances indicate the carrying value may not be recoverable in accordance with Note 1(f).

      The residual value, useful lives and depreciation methods are reviewed and adjusted if
      appropriate, at the end of each reporting period.

      Gains and losses on disposals are determined by comparing proceeds with the carrying
      amount. These are included in the Statement of Comprehensive Income.

(i)   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.

(j)   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 realisation,
      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 Statement of Comprehensive Income
      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
      Statement of Comprehensive Income.

(k)   Cash and cash equivalents

      Cash and short-term deposits in the Statement of Financial Position 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 statement of cash flows, cash
      and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding
      bank overdrafts.

(l)   Employee entitlements

      Wages and Salaries and Annual 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.

      Share-based payments
      Share-based compensation benefits are provided to employees in accordance with the Tawana
      Resources Employee Option Plan, an employee share scheme.

      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.

      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.

(m)   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.

(n)   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 Statement of Comprehensive Income on
      a straight-line basis over the period of the lease.

(o)   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
      Statement of Comprehensive Income 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).

(p)   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.

(q)   Other taxes

      Revenues, expenses and assets are recognised net of the amount of GST or VAT except:

      -     where the GST / VAT incurred on a purchase of goods and services is not recoverable
            from the taxation authority, in which case the GST / VAT 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 / VAT included.

      The net amount of GST recoverable from, or payable to, the taxation authority is included as
      part of receivables or payables in the Statement of Financial Position.

      Cash flows are included in the Statement of Cash Flows on a gross basis and the GST / VAT
      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 / VAT recoverable
      from, or payable to, the taxation authority.

(r)   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.

(s)   Earnings per share

      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.

      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.

(t)   Preparation of financial statements in relation to the consolidated entity

      From 28 June 2010, the Corporations Act 2001 no longer requires the preparation of parent
      entity accounts, for the purpose of streamlining parent entity reporting. Where the entity is
      required to prepare financial statements in relation to the consolidated entity, the Corporations
      Regulations 2001 (the Principal Regulations) specify supplementary information about the
      parent entity that is to be included in a note to the consolidated financial statements. This
      information is disclosed in Note 23.

(u)   New accounting standards and interpretations

      The AASB has issued new and amended accounting standards and interpretations that have
      mandatory applications for the current and reporting periods. With the exception of those
      standards not available for early adoption for these financial statements, the consolidated entity
      has decided to adopt all of these accounting standards and interpretations. There was no
      significant change to these financial statements arising from the adoption of those standards
      and interpretations.

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 derivative
      financial instruments. Funds are invested for various short term periods to match forecast cash
      flow requirements.

(a)   Market risk

      Foreign currency risk
      The consolidated entity has foreign operations with functional currencies in the South African
      Rand, the Botswana Pula and the United States Dollar. Both the parent company and each
      subsidiary transacts predominantly in its own functional currency with little or no foreign
      currency risk. Cash invested into each foreign operation through intercompany loan accounts,
      with no fixed date of maturity on those loans, from the parent to its foreign operations is
      considered to form part of the parent company's net investment in its foreign operations and
      therefore is considered by the parent company to not represent a foreign currency risk.

      Cash flow and fair value interest rate risk
      As the consolidated entity has no significant interest-bearing assets or liabilities, the
      consolidated entity's income and operating cash flows are not materially exposed to changes in
      market interest rates.

(b)   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 2012.

      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.

(c)   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 2012, the consolidated entity's strategy, which was unchanged from 2011, 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.

       Liquidity risk arises from the financial liabilities of the Group and the Group's subsequent ability
       to meet their obligations to repay their financial liabilities as and when they fall due.

       The Group's objective is to maintain a balance between continuity of funding and flexibility
       through the use of equity funding and cash and short-term deposits sufficient to meet the
       Group's current cash requirements.

(d)    Fair value estimation

       The carrying amount of financial assets and financial liabilities recorded in the financial
       statements approximate their respective fair values determined in accordance with the
       accounting policies disclosed in Note 1.

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.

(i)    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(g).

(ii)   Share based payment valuations

       Details relating to the shares based payment valuations are detailed in Note 20.

4.     Revenue and other income

                                              Consolidated             
                                             2012      2011   
                                                $         $   
Revenue from continuing operations                            
Interest received                          98,526   169,253   
Other revenue                                   -     4,160   
                                           98,526   173,413

5.   Expenses

     Expenses from continuing operations
     includes:
     Auditors' remuneration                 45,000    67,032
     Compliance and regulatory fees        174,795   101,203
     Consultancy and legal fees            199,537   143,879
     Travel expenses                       135,532   106,554
                                           554,864   418,668

     Employee benefits expense includes:
     Salaries and wages                    228,253   240,806
     Superannuation                         28,054    24,225
     Directors' fees                       136,667   160,000
     Share-based payments                  496,660    75,619
     Other employee expenses                 1,955     1,683
                                           891,589   502,333

6.   Income tax

     Tax losses

     The Group has unused tax losses for which no benefit has been recognised, however the
     Directors are of the opinion that, given uncertainty around the amount of such losses, it would
     be misleading to quantify these losses.

     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.

     Income tax recognised in profit or loss
                                                                         2012                  2011
                                                                            $                     $
     Current tax
     Current tax expense in respect of the current
     year                                                                   -                     -
     Adjustments recognised in the current year in
     relation to the current tax of prior years                             -                     -
                                                                            -                     -
     Deferred tax
     Deferred tax expense recognised in the current
     year                                                                   -                     -
                                                                            -                     -
     Total income tax expense recognised in the
     current year relating to continuing operations                         -                     -

     The income tax expense for the year can be reconciled to the accounting profit as follows:

     Loss before tax from continuing operations                    (6,460,725)             (976,759)

     Income tax benefit calculated at 30% (2011: 
     30%)                                                          (1,938,217)             (293,028)
     Foreign taxes paid                                                     -                     -
     Effect of unused tax losses and tax offsets not
     recognised as deferred tax assets                              1,938,217               293,028
                                                                            -                     -
     Adjustments recognised in the current year in
     relation to the current tax of prior years                             -                     -
     Total income tax expense recognised in the
     current year relating to continuing operations                         -                     -

     The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by
     Australian corporate entities on taxable profits under Australian tax law. There has been no
     change in the corporate tax rate when compared with the previous reporting period

7.   Trade and other receivables

                                                                         Consolidated
                                                                        2012                  2011
                                                                           $                     $
     Current
     Trade debtors                                                    29,065                10,686
     GST and VAT receivable                                            6,867                 7,226
     Prepayments                                                      49,581                24,414
                                                                      85,513                42,326

     Non-current
     Other deposits                                                   51,047                39,787

8.    Assets held for sale

      Property, plant and equipment                                           -              126,689
      Other assets                                                            -                6,789
                                                                              -              133,478

9.    Exploration expenditure

      The exploration and evaluation expenditure relates to the consolidated entity's projects in South
      Africa and Botswana.

      Movement in carrying values
                                                                               Consolidated
                                                                          2012                  2011
                                                                             $                     $
      Balance at beginning of year                                   5,081,927             2,923,147
      Expenditure during the year                                    1,064,853             5,081,927
      Expenditure written off during the year                       (4,701,592)           (2,923,147)
      Foreign currency translation                                     (32,002)                    -
      Balance at end of year                                         1,413,186             5,081,927

10.   Trade and other payables

      Current
      Trade creditors                                                    45,186               19,757
      Other creditors and accruals                                       76,188               63,466
                                                                        121,374               83,223

11.   Contributed equity

(a)   Issued capital

      Ordinary shares, fully paid                                    45,631,150           45,431,150

(b)   Movements in share capital

                                                 2012            2011            2012            2011
                                               Number          Number               $               $

      Balance at beginning of year        856,629,043     601,455,755      45,431,150      36,482,279
      Shares issued during year            20,000,000     255,173,288         200,000       9,955,221
      Transaction costs relating to
      share issues                                  -               -               -      (1,006,350)
      Balance at end of year              876,629,043     856,629,043      45,631,150      45,431,150

(c)   Terms and conditions of contributed equity

      Holders of ordinary shares are entitled to receive dividends as declared from time to time and
      are entitled to one vote per share at shareholders' meetings in a poll or one vote per
      shareholder on a show of hands.

      In the event of winding up of the Company, ordinary shareholders rank after all other
      shareholders and creditors and are fully entitled to any proceeds of liquidation.

12.   Reserves

                                     Note             Consolidated
                                                  2012               2011
                                                     $                  $
      Foreign currency translation   (a)       (45,306)              (555)
      Options                        (b)     2,392,281          2,861,814
      Asset revaluation              (c)        22,884             22,884
                                             2,369,859          2,884,143

(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(c).

(b)   Options reserve

      The options reserve records the fair value of options issued but not exercised.

      Balance at beginning of year                                 2,861,814            2,430,220
      Options expense for year                      20               496,660              829,884
      Options exercised and expired during
      year                                                          (966,193)            (398,290)
      Balance at end of year                                       2,392,281            2,861,814

(c)   Asset revaluation reserve

      The asset revaluation reserve records revaluations of non-current assets. This is a historical
      reserve and there have been no movements in the years ended 31 December 2012 and 2011.

      Balance at end of year                                          22,884              22,884

13.   Discontinued operations

      On 9 March 2011 the Group announced that it had commenced an ongoing rationalisation
      program in respect of its existing interests in South Africa and Botswana. The Group had
      originally announced a decision to sell its interest in the Kareevlei project on 18 August 2010,
      which had been classified as a discontinued operation in the prior financial year. As at
      December 2011 the Group commenced a program to market and sell its remaining interests in
      South Africa and Botswana. As such, the assets that formed part of the disposal group were
      reclassified as Assets Held for Sale in the statement of financial position and all revenues and
      expenditures relating to the disposal group were reclassified as a discontinued operation in the
      statement of comprehensive income for the year ended 31 December 2011. The assets held
      for sale have been valued by the directors at cost, which in their estimation, is below their net
      fair value less distribution costs. In the process of reviewing those recoverable values, amounts
      previously capitalised as exploration expenditure under tenements, which the Group still holds
      title to, have been written down by $2,923,147 to $nil.

      In addition to the above, the Group considered the likelihood of recouping an amount receivable
      from Rolatseng Mining CC ("Rolatseng"), which at 31 December 2010 was stated at a value of
      $2,960,354. The receivable is secured by the underlying title against the Kareevlei interest.
      Due to the delay in receipting further payments from Rolatseng or to progress the Kareevlei
      interest to trial mining phase which represents a key payment milestone for the interest, the
      Group has decided to write down the receivable to $nil. This write-down forms part of the
      discontinued operation concerning the Kareevlei interest.

      The financial performance of the discontinued operations, which is included in the Statement of
      Comprehensive Income as loss from discontinued operations, and adjusted to the previous
      year's comparatives, is as follows:

                                                           Consolidated
                                                    2012                  2011
                                                       $                     $
Sale of Kareevlei interest                             -                     -
Other revenues                                   141,965                51,617

Corporate costs                                 (154,764)              (527,005)
Employee benefits expense                              -                (31,881)
Foreign currency translation losses realised           -             (2,734,963)
Impairment of capitalised area of interest             -             (2,923,147)
Impairment of receivable from Rolatseng
Mining CC                                              -             (2,960,354)
                                                 (12,799)            (9,125,733)

14.   Key management personnel disclosures

(a)   Directors and other key management personnel

      The following persons were directors of Tawana Resources NL during the financial year:

      Warwick Grigor (resigned 28 January 2013)
      Lennard Kolff
      Euan Luff (resigned 15 June 2012)
      Julian Babarczy
      Matthew Bowles

      There were no key management personnel of the group for the year outside the Directors

(b)   Compensation of key management personnel

      Short-term employee benefits                                351,711              381,667
      Post-employment benefits                                     28,054               24,225
      Share-based payments                                        422,500               75,619
                                                                  802,265              481,511

(c)   Equity instrument disclosures relating to key management personnel

(i)   Option holdings

      The number of options over ordinary shares in the Company held during the financial year by
      each director of Tawana Resources NL and other key management personnel of the Company,
      including their personally related parties, are set out below.

       2012

       Name                     Balance at       Granted       Exercised       Options    Balance at          Options
                                  start of   during year     during year        lapsed   end of year       vested and
                                      year     as remun-                   during year                 exercisable at
                                                 eration                                                  end of year
                                    Number        Number          Number        Number        Number           Number
       Directors
       Mr W Grigor                       -     5,000,000               -             -     5,000,000        5,000,000
       Mr L Kolff               10,000,000    10,000,000               -   (5,000,000)    15,000,000       15,000,000
       Mr E Luff *               6,104,150             -               -             -             -                -
       Mr J Babarczy                     -     5,000,000               -             -     5,000,000        5,000,000
       Mr M Bowles              15,000,000     5,000,000               -             -    20,000,000       20,000,000


                                31,104,150    25,000,000               -   (5,000,000)    45,000,000       45,000,000
           * Closing Balance at date of resignation

       2011

       Name                     Balance at       Granted       Exercised        Other    Balance at          Options
                                  start of   during year     during year      changes   end of year       vested and
                                      year     as remun-                  during year                 exercisable at
                                                 eration                                                 end of year
                                    Number        Number         Number        Number        Number           Number
       Directors
       Mr W Grigor                       -             -              -             -             -                -
       Mr L Kolff               10,000,000             -              -             -    10,000,000       10,000,000
       Mr E Luff                 6,104,150             -              -             -     6,104,150        6,104,150
       Mr J Babarczy                     -             -              -             -             -                -
       Mr M Bowles *            15,000,000             -              -             -    15,000,000       15,000,000
       Mr H Hill                         -             -              -             -             -                -
                                31,104,150                            -             -    31,104,150       31,104,150
       * Opening balance at date of appointment

(ii)   Shareholdings

       The number of shares in the Company held during the financial year by each director of
       Tawana Resources NL and other key management personnel, including their personally related
       parties, is set out below. There were no shares granted during the reporting year as
       remuneration (2011: Nil).

       2012
       Name                     Balance at      Balance at      Received         Other    Balance at    Balance at
                              start of the         date of    during the   acquisition       date of    end of the
                                      year        appoint-       year on     of shares   resignation          year
                                                      ment   exercise of    during the
                                                                 options          year
                                    Number          Number        Number        Number        Number        Number

       Directors
       Mr W Grigor              27,850,000               -             -             -             -    27,850,000
       Mr L Kolff                        -               -             -             -             -             -
       Mr E Luff *              21,589,740               -             -             -    21,589,740             -
       Mr J Babarczy            25,173,288               -             -             -             -    25,173,288
       Mr M Bowles                       -               -             -             -             -             -


                                74,613,028               -             -             -    21,589,740    53,023,288

       * Closing balance at date of resignation

       2011

       Name                     Balance at      Balance at      Received         Other    Balance at    Balance at
                              start of the         date of    during the   acquisition       date of    end of the
                                      year        appoint-       year on     of shares   resignation          year
                                                      ment   exercise of    during the  
                                                                 options          year
                                    Number          Number        Number        Number        Number        Number

       Directors
       Mr W Grigor              27,850,000               -             -             -             -    27,850,000
       Mr L Kolff                        -               -             -             -             -             -
       Mr E Luff                20,689,740               -             -       900,000             -    21,589,740
       Mr J Babarczy            25,000,000               -             -       173,288             -    25,173,288
       Mr M Bowles                       -               -             -             -             -             -
       Mr H Hill                         -               -             -             -             -             -
       Key management
       personnel 
       Mr L Kolff                        -               -             -             -             -             -
                                73,539,740               -             -     1,073,288             -    74,613,028

(d)    Loans to key management personnel

       There were no loans to key management personnel of the consolidated entity, including their
       personally related parties, as at 31 December 2012 or 31 December 2011.

(e)    Other transactions with key management personnel

       Mr E Luff, a director of the Company, is a senior partner of the legal firm Wilmoth Field Warne,
       which received $Nil (2011: $50,003) in fees for the provision of legal services. Payments were
       based on commercial terms and conditions.

15.   Details of controlled entities

      Name                                     Country of    Interest held by the
                                            incorporation    consolidated entity
                                                             2012            2011
                                                                %               %
      Parent
      Tawana Resources NL                       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
      Kenema-Man Holdings Liberia Pty Ltd       Australia      100            100
      Tawana Liberia Inc                          Liberia      100            100

16.   Segment information

      The consolidated entity operates wholly in one business segment. AASB 8 requires operating
      segments to be identified on the basis of internal reports about components of the Group that
      are regularly reviewed by the chief operating decision maker in order to allocate resources to
      the segments and to assess their performance.

      Information reported to the Group's chief operating decision maker for the purposes of resource
      allocation and assessment of segment performance is focused on the geographical region of
      operations. The Group's reportable segments under AASB 8 are therefore within one
      geographical segment, being Africa.

17.   Notes to the Statement of Cash Flows

(a)   Reconciliation of cash and cash equivalents

      For the purposes of the 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
      Statement of Financial Position as:

                                     Consolidated
                                 2012               2011
                                    $                  $
Cash on hand and at bank    1,658,614          3,702,991
Cash on deposit                20,000             20,000
                            1,678,614          3,722,991

(b)   Reconciliation of net loss after tax to net cash flows from operations

                                                                                    Consolidated
                                                                            2012                   2011
                                                                               $                      $
      Net loss                                                        (6,473,524)           (10,102,492)

      Adjustments for:
      Depreciation                                                         4,683                  4,230
      Impairment and write off of non-current
      assets                                                           4,701,592                  9,998
      Profit on sale of property, plant and
      equipment                                                         (115,469)                (6,300)
      Discontinued operation                                                   -              8,696,090
      Share-based payments                                               496,660                 79,884
      Interest paid through share issues                                       -                      -
      Unrealised foreign currency gain / loss on
      translation                                                              -                      -

      Changes in assets and liabilities
      (Increase) / decrease in:
         Trade and other receivables                                     (54,447)               (64,472)
         Inventories                                                           -                 17,171

      Increase / (decrease) in:
        Trade and other payables                                          38,157                (26,163)
        Interest-bearing liabilities                                           -                  2,665
        Provisions                                                        35,805                 40,583
      Net cash from operating expenses                                (1,366,549)            (1,348,806)

18.   Auditors' remuneration

      William Buck
      Audit services                                                      45,000                 61,500
      Non-audit services                                                       -                      -
                                                                          45,000                 61,500

      Auditor of subsidiaries
      Pricewaterhouse Coopers
      Audit services                                                       4,478                  5,532
      Non-audit services                                                       -                      -
                                                                           4,478                  5,532
19.   Loss per share

      Classification of securities as ordinary shares

      The Company has only one category of ordinary shares included in basic loss per share.

      Classification of securities as potential ordinary shares

      There are currently no securities to be classified as dilutive potential ordinary shares on issue.

                                                                             2012              2011
                                                                           Number            Number

      Weighted average number of ordinary shares used in the
      calculation of basic loss per share                             865,231,783       801,529,216

                                                                                $                 $

      Net loss from continuing and discontinuing operations            (6,473,524)      (10,102,492)

      Net loss from continuing operations                              (6,460,725)         (976,759)

      The loss per share calculation as disclosed on the Statement of Comprehensive Income does
      not include instruments that could potentially dilute basic earnings per share in the future as
      these instruments were anti-dilutive in the periods presented. A summary of such instruments
      is as follows:
 
      Equity securities                                               Number of          Number of
                                                                     securities          potential
                                                                                          ordinary
                                                                                            shares

      Options over ordinary shares                                  180,500,000        180,500,000

      No options have been issued subsequent to year end but prior to the date of issue of these
      financial statements.

20.   Share-based payments

      Summary of options on issue

      Issue date            Quantity    Grant date     Expiry date        Exercise price

      17 Jan 2009          6,000,000    18 Dec 2008    17 Jan 2013        $0.10
      17 Jan 2009          6,750,000    18 Dec 2008    17 Jan 2013        $0.07
      17 Jan 2009          6,750,000    18 Dec 2008    17 Jan 2014        $0.10
      23 Feb 2010         50,000,000    23 Feb 2010    23 Feb 2013        $0.01
      9 Sep 2010          50,000,000    9 Sep 2010     30 Jul 2013        $0.01
      9 Sep 2010           5,000,000    9 Sep 2010     9 Sep 2014         $0.05
      8 Mar 2011          25,000,000    8 Mar 2011     8 Mar 2014         $0.01
      10 Nov 2011          1,250,000    10 Nov 2011    10 Nov 2013        $0.03
      10 Nov 2011          1,250,000    10 Nov 2011    10 Nov 2015        $0.05
      28 May 2012         27,000,000    28 May 2012    30 April 2013      $0.036
      27 June 2012         1,500,000    27 June 2012   30 April 2015      $0.036
                         180,500,000
      All share options are exercisable at year end.

      During the year ended 31 December 2012, the following options were exercised:

      9 Sep 2010          20,000,000    9 Sep 2010     31 Jul 2012        $0.01

      Fair value of options granted during the year

      The assessed fair value at grant date of options granted to individuals is allocated equally over
      the period from grant date to vesting date. Fair values at grant date are independently
      determined using a Black Scholes option pricing model that takes into account the exercise
      price, term of the option, 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 following options were issued during the year ended 31 December 2012:

Issue date   Quantity     Grant date   Expiry date   Exercise        Fair    Total fair
                                                        price       value         value
                                                                      per
                                                                   option
28 May 12    27,000,000    28 May 12   30 April 15     $0.036     $0.0169      $456,300
27 June 12    1,500,000   27 June 12   30 April 15     $0.036     $0.0169       $25,350
             28,500,000                                                        $481,650

The model inputs for the options granted during the year were as follows:

                                         A             B
Quantity                        27,000,000     1,500,000
Grant date                       28 May 12    27 June 12
Expiry date                    30 April 15   30 April 15
Grant date share price               $0.03         $0.03
Exercise price                      $0.036        $0.036
Expected volatility                   100%          100%
Option life (years)                    2.5           2.5
Expected dividend yield                 0%            0%
Risk free rate at grant date         3.26%         3.26%

      The cost of the issue of options was recorded in the financial statements as follows:

      -     options issued during the financial year for consulting work, with a cost of $25,755 (2011:
            $4,265) were charged to the profit or loss;
      -     options issued during 2012, and not yet vested at the commencement of the financial
            year for employee remuneration, with a cost of $ Nil (2011: $75,619) were charged to the
            profit or loss; and
      -     options issued in satisfaction of capital raising costs, with a value of $Nil (2011: $750,000)
            were charged directly to equity.

21.   Commitments and contingent assets and liabilities

      Leasing commitments

      The Group has entered into operating leases on office space for terms of up to 5 years. Future
      minimum rentals payable under this operating lease are as follows:

                                              2012        2011
                                                 $           $
Within one year                             56,002      16,800
After one but not more than five years     224,008      67,200
                                           280,010      84,000

      Annual license fees on exploration licenses held by the Company are $43,394 with a minimum
      exploration commitment of $96,424 per annum.

      The Group does not have any material contingent assets or liabilities other than as disclosed in
      this report.

22.   Subsequent events

      On 11 January 2013, the Company announced that it plans to commence RC drilling at the
      Mofe Creek project during January 2013 after it was granted the Mofe Creek mineral
      exploration license by the Ministry of Lands Mines and energy late last year.

      On 29 January 2013, the Company announced that it has commenced RC drilling at the Mofe
      Creek project during January 2013 after it was granted the Mofe Creek mineral exploration
      license by the Ministry of Lands Mines and energy late last year. Approximately 1,600m of RC
      drilling of a planned 2,500m programme has been completed on the Koehnko target. Drilling
      has intersected significant widths of friable iron formation from surface to an average down-dole
      depth of 36.5m and maximum of 51m.

      On 29 January 2013, the Company announced the appointment of Mr David Frances as
      Executive Chairman. Concurrent to the appointment of Mr Frances to the Board is the
      resignation of Non-Executive Chairman, Mr Warwick Grigor.

      On 26 February 2013, the Company announced that 50,000,000 options expiring 23 February
      2013 had been exercised at a price of $0.01 per option raising $500,000 for the Company.

      On 18 March 2013, the Company announced the results of its maiden 2,500m reverse
      circulation drill programme which was completed at the Company's 100% owned Mofe Creek
      project in Liberia, West Africa.

23.   Supplementary information about the parent entity

                                                                                     Parent
                                                                         2012                  2011
                                                                            $                     $
      Assets
      Current assets                                                1,569,956             3,724,429
      Total assets                                                  3,280,384             9,028,043

      Liabilities
      Current liabilities                                              55,760                77,549
      Total liabilities                                                55,760                77,549

      Net assets                                                    3,097,190             8,918,805

      Equity
      Issued capital                                               45,631,150            45,032,860
      Reserves                                                      2,369,859             3,282,988
      Total equity                                                  3,097,190             8,918,805

      Profit and loss
      Profit / (loss)                                              (6,090,764)           (7,468,570)

      Comprehensive income
      Total comprehensive income                                   (6,090,764)           (7,468,570)

      There were no contingent liabilities, guarantees or capital commitments of the parent entity not
      otherwise disclosed in these financial statements.

DIRECTORS' DECLARATION

In accordance with a resolution of the directors of Tawana Resources NL, I state that:

1.    In the opinion of the directors:

      (a)   the financial statements and notes as set out on pages 30 to 53 of the Company and of
            the consolidated entity are in accordance with the Corporations Act 2001, including:

            (i)    giving a true and fair view of the Company's and the consolidated entity's financial
                   position as at 31 December 2012 and of their performance for the year ended on
                   that date; and

            (ii)   complying with Accounting Standards and Corporations Regulations 2001; and

      (b)   there are reasonable grounds to believe that the Company will be able to pay its debts as
            and when they become due and payable.

2.    The attached financial statements and notes thereto comply with International Financial
      Reporting Standards as issued by the International Accounting Standards Board as described
      in Note 1 to the financial statements.

3.    This declaration has been made after receiving the declarations required to be made to the
      directors in accordance with section 295A of the Corporations Act 2001 for the financial year
      ended 31 December 2012.

On behalf of the Board

Mr Lennard Kolff
Managing Director

Sydney, 27 March 2013

SCHEDULE OF MINING TENEMENTS

Mining & Exploration tenements currently held by the consolidated entity are as follows:

Location            Title held by                             % held by         Title
                                                            Tawana group

Kareevlei Wes       Diamond Resources Pty Ltd                    100%           NC 30/5/1/2/2/081 MR
South Africa

Flinders Island     Orogenic Exploration Pty Ltd / Tawana         80%           EL 4183 & 4290
SA, Australia       Resources NL

Flinders Island     Orogenic Exploration Pty Ltd / Tawana         80%           ELA 06/648
SA, Australia       Resources NL

Orapa               Seolo Botswana (Pty) Ltd                     100%           PL 61/2007
Botswana


Sinoe               Global Mineral Investments LLC          Subject to option   MEL 11009
                                                             agreement to
                                                            purchase 100%

Mofe Creek          Tawana Liberia Inc                           100%           MEL 12029

ASX ADDITIONAL INFORMATION
AS AT 15 MARCH 2013

Additional information included in accordance with the Listing Rules of the Australian Securities
Exchange Limited. The information is current as at 15 March 2012.

1.    Substantial shareholders

      On 30 July 2012 the Company received an initial substantial shareholder form from Gryphon
      Minerals Limited stating that Gryphon Minerals Limited had a relevant interest in 114,250,000
      ordinary shares representing 13.03% of the voting shareholding of the Company.

      On 15 September 2011 the Company received an initial substantial shareholder form from
      Chalmsbury Nominees Pty Ltd stating that Chalmsbury Nominees Pty Ltd had a relevant
      interest in 67,844,432 ordinary shares representing 7.9% of the voting shareholding of the
      Company.

      On 7 January 2011 the Company received an initial substantial shareholder form from Merriwee
      Pty Ltd stating that Merriwee Pty Ltd had a relevant interest in 50,000,000 ordinary shares
      representing 8.3% of the voting shareholding of the Company.

2.    Statement of issued capital

(a)   Distribution of fully paid ordinary shareholders

Size of holding    Number of    Shares held
                     holders
1  1,000                180        108,615
1,001  5,000            376      1,158,714
5,001  10,000           267      2,132,569
10,001  100,000         682     27,179,778
100,001 and over         459    862,216,027
                       1,964    892,795,703

(b)   All ordinary shares (whether fully paid or not) carry one vote per share without restriction.

(c)   At the date of this report there were 1,197 shareholders who held less than a marketable parcel
      of shares.

3.    Options

                  Exercise    Expiry date      Number of  Number of
                     price                       options   holders
Unlisted options     $0.10    17 Jan 2014      6,750,000         6
Unlisted options     $0.01    30 Jul 2013     50,000,000         1
Unlisted options     $0.05    9 Sep 2014       5,000,000         1
Unlisted options     $0.01    8 Mar 2014      25,000,000         1
Unlisted options     $0.03    10 Nov 2013      1,250,000         1
Unlisted options     $0.05    10 Nov 2015      1,250,000         1
Unlisted options    $0.036    30 April 2015   27,000,000         6
Unlisted options    $0.036    30 April 2015    1,500,000         1

4.   Quotation

     Listed securities in Tawana Resources NL are quoted on the Australian Securities Exchange
     and the Johannesburg Stock Exchange.

5.   Twenty largest shareholders

     The twenty largest shareholders hold 55.46% of the issued capital of the Company as at 
     15 March 2013.

     No    Shareholder                                             Number of     Percentage
                                                                     shares              of
                                                                                     issued
                                                                                    capital

     1     Gryphon Minerals Limited                              100,000,000         11.20%
     2     Merriwee Pty Ltd <Merriwee Super Fund A/C>             55,400,000          6.21%
     3     Black Peak Holdings Pty Ltd                            44,900,000          5.03%
     4     BT Portfolio Services Limited <Warrell Holdings S/F    
           A/C>                                                   38,000,000          4.26%
     5     Spring Plains Past Co (Vic) PL <Spring Plains A/C>     37,625,398          4.21%
     6     HSBC Custody Nominees (Australia) Limited              30,739,782          3.44%
     7     Mr Julian Babarczy                                     25,173,288          2.82%
     8     Gregorach Pty Ltd <Grigor Superfund A/C>               19,850,000          2.22%
     9     Trayburn Pty Ltd                                       18,912,926          2.12%
     10    Gryphon Minerals Limited                               14,250,000          1.60%
     11    ABN AMRO Clearing Sydney Nominees Pty Ltd              14,242,746          1.60%
     12    McTavish Industries Pty Ltd <McTavish Super Fund       
           A/C>                                                   13,100,000          1.47%
     13    I E Properties Pty Ltd                                 13,000,000          1.46%
     14    Symorgh Investments Pty Ltd                            12,800,000          1.43%
     15    Bainpro Nominees Pty Ltd                               11,171,000          1.25%
     16    Quality Life Pty Ltd <The Viking Fund A/c>             10,500,000          1.18%
     17    Cambus Equities Pty Ltd                                 9,720,000          1.09%
     18    Seventy Three Pty Ltd <King S/F No 3 A/c>               8,950,000          1.00%
     19    Mr Neville James Miles                                  8,501,101          0.95%
     20    Lufgan Nominess Pty Ltd                                 8,222,572          0.92%
                                                                 495,058,813         55.46%
Date: 28/03/2013 10:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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