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TAWANA RESOURCES NL - Tawana aims to be a low cost producer preliminary assessment Mofe Creek Iron Ore Project, Liberia

Release Date: 02/07/2013 09:10:00      Code(s): TAW       PDF(s):  
Tawana aims to be a low cost producer preliminary assessment Mofe Creek Iron Ore Project, Liberia

Tawana Resources NL
(Incorporated in Australia)
(Registration number ACN 085 166 721)
Share code on the JSE Limited: TAW
ISIN: AU000000TAW7
Share code on the Australian Stock Exchange Limited: TAW
ISIN: AU000000TAW7
(“Tawana” or “the Company”)




    The trading Halt has been lifted on the JSE and ASX.

-   Preliminary desktop assessment demonstrates potential for the Mofe Creek Iron Ore
-   Friable itabirite at both Gofolo and Koehnko prospects collectively hosting an
    exploration target of 95Mt1 (within the Global Exploration Target of 500Mt2)
-   Excellent weight recoveries of 44-57% from recently announced metallurgical test
    work, confirm a high quality 60%+ Fe concentrate can be produced1
-   Tawana is aiming to develop an open cut mining operation with a production period of
    at least 10 years
-   Preliminary Assessment outcomes indicate potential total FOB (Free On Board)
    operating costs could range between US$30-35/t
-   Based on the recent favorable metallurgical test results it is expected that a simple
    gravity processing plant would be required and the Company is aiming for a low
    capital intensity project
-   Strategic review process progressing well. Tawana anticipates the process to be
    finalised shortly

Tawana Resources Managing Director, Len Kolff said “We are very pleased with the
outcomes from the preliminary desktop assessment of our 100% owned Mofe Creek Iron
Ore Project. The Company is aspiring for low operating and capital cost estimates
reflected by the very favourable characteristics of the project including soft, friable
itabirite mineralization from surface, simple crushing and gravity separation and an ideal
location only 20km from the coast.”
The Preliminary Assessment follows the Company’s recent metallurgical announcement
which indicated that the soft itabirite mineralization has excellent weight recoveries of
between 44%-57% and concentrates into a high quality, 60%+ Fe product from simple
processing, clearly highlighting the potential for the Mofe Creek Iron Ore Project to be a
high grade, low cost, iron ore producer.
1 95Mt is the midpoint of a 62-126Mt range and refer to ASX Announcement 25th June 2013
2 Refer to ASX Announcement 18th March 2013

Mofe Creek Iron Ore Project Preliminary Assessment

Tawana Resources NL (ASX: TAW) is pleased to announce progress in its goal to become a
West African iron ore producer, with the results of a Preliminary Desktop Assessment
(“Preliminary Assessment”) on the Company’s 100% owned Mofe Creek Iron Ore Project in

Tawana Resources Managing Director, Len Kolff said “The aim of the Preliminary
Assessment was to evaluate our aspirations for the project to be a 60%+ Fe high-grade
iron ore low cost producer based on a simple open cut contract mining operation, low
cost gravity separation, product hauled a short 20 kilometres to the coast and trans-
shipped via barge to deep water vessels.”

Mr Kolff also noted “with ArcelorMittal reported to recently have approved a US$1.5
billion expansion of its existing operations in Liberia, Mofe Creek represents an exciting
new iron ore discovery in Liberia and it is certainly the place to be for West African iron
ore producers”

Key parameters of the Preliminary Assessment

The Preliminary Assessment was completed using the following parameters, which are
aspirational in nature:

Aimed Life of Mine                  +10 years
Weight Recovery                     44% - 57%
Product Grade                       60% Fe grade concentrate
Average Operating Cost             US$30-35 per tonne FOB (US$50-55 per tonne cfr)
Table 1: Key Preliminary Assessment parameters

The Company has based its Preliminary Assessment on a review of comparable iron ore
peers, including West Africa, and typical mining operations for the style of mineralisation
identified (refer to ASX announcement released on 25th June 2013), with the results of the
Preliminary Assessment being aspirational and conceptual in nature. The Preliminary
Assessment is not a "scoping study" (as that term is used in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore

Investors are advised that the Mofe Creek Iron Ore Project is not sufficiently advanced to
be currently supported by Mineral Resources, and accordingly results of the Preliminary
Assessment undertaken by the Company cannot and do not provide any assurance of
economic development or economic viability of the project, nor that the aspirations
contemplated by the Preliminary Assessment will be realised. Investors should note that
for the Company to establish the economic viability of the Mofe Creek Iron Ore Project,
the Company will need to establish sufficient Mineral Resources and sufficiently consider
other factors including but not limited to mining, processing, metallurgical, infrastructure,
marketing, environmental, social and Government matters before the Company's
aspirations for the Mofe Creek Iron Project can be realised. Given the early stage of the
project and the nature of the assumptions and targets contemplated in the Preliminary
Assessment, investors are cautioned not to place undue reliance on the results of the
Preliminary Assessment.

Details of the Preliminary Assessment

The Preliminary Assessment focused on the proposed mining and processing method,
transport and infrastructure and the initial metallurgical test results. The Preliminary
Assessment was prepared internally by the Company, with the assistance of external
consultants and estimates are to a (+/-50%) level of confidence. In preparing the
Preliminary Assessment comparable peer companies with similar types of operations aimed
for by the Company were taken into consideration.

The Preliminary Assessment is based on an open cut contract mining operation producing a
high grade +60% Fe grade concentrate through simple crushing and gravity separation.
The product is anticipated to be hauled approximately 20kms to the coast where it will be
trans-shipped via barge to deeper water.

The mining concept in the Preliminary Assessment is based on shallow (<50m depth) open
cut pits using conventional ripper, excavator, haul truck and front end loaders, on a
contract mining basis.

Metallurgical Test-Work & Processing
As part of the Preliminary Assessment, the Company applied the results from the recent
metallurgical test work to the proposed open pit mining schedule. The test work was
based on the first phase reconnaissance programme on soft, friable weathered surface
mineralisation and hard, fresh below base of weathering mineralisation at the Gofolo and
Koehnko prospects (refer to ASX announcement dated 25 June 2013).

Metallurgical results of the test work are highly encouraging and demonstrate:
-   mineralisation amenable to simple gravity separation
-   a high-grade 60%+ Fe product from the soft friable itabirite
-   excellent weight recoveries of 57% (based on >3.3SG excluding -45 µm)
-   very low sulphur, alumina and phosphorous impurities
The test work results successfully demonstrated that the mineralisation at Mofe Creek
exhibits simple metallurgical characteristics and is amenable to simple gravity separation
only to produce a high-grade concentrate product.

Transport, Infrastructure & Access
The Mofe Creek Iron Ore Project is exceptionally well located being approximately 20kms
from the coast and only 85km by sealed road to the deep water port of Monrovia.

The Preliminary Assessment is based on product being transported by haul road or
conveyor 20kms to the coast and then transhipment via barge to deep water for loading on
to Mini Cape-size or Panamax vessels for export.

Alternative options for transport include:
-   trucked approximately 85kms by sealed road to the deep water Port of Monrovia,
    where it will be loaded on to Cape-size or Panamax vessels for export; or
-   the use of nearby (<20km) 65km decommissioned standard-gauge iron ore rail corridor
    from the decommissioned Bomi Hills mine to the Port of Monrovia.

These options have not been considered as part of this Preliminary Assessment as
insufficient data gathering, research or Government of Liberia liaison has been completed
by the Company at this stage.

Operating Costs
The Preliminary Assessment assumes the average cash operating cost to be in the vicinity
of US$30-35/t FOB (US$50-55/t cfr), based on the Company’s internal evaluation and
comparable operations including West Africa. This cost estimate contemplates a contract
mining and processing operation, including producing, transporting and shipping the high
grade Fe concentrate over the assumed life-of-mine.

Operating cost item                  Assumed value
Contract Mining                      US$8-10 per ROM tonne
Processing                           US$8-10 per ROM tonne
Road Haulage                         US$2-3 per processed tonne
Trans-shipping                       US$12 per processed tonne
Total Cash Operating Cost - FOB      US$30-35 per tonne
Shipping Transport                   US$20 per processed tonne
Total Cash Operating Cost – cfr      US$50 -55 per tonne

Table 2: Summary of operating costs (excludes Government royalties and taxes)

The range of potential operating costs contemplated in the Preliminary Assessment are
aspirational in nature, and not necessarily supported by analysis specific to the Mofe Creek
Iron Ore Project, and should in no circumstances be treated as demonstrating the
economic viability of the Mofe Creek Iron Ore Project nor as an assurance that (if the
project were to be developed) these operating costs are achievable.

Mofe Creek Global Exploration Target >500Mt

A global exploration target size potential of between 360Mt to 670Mt of friable
mineralisation has been estimated for the Mofe Creek project area. This estimate includes
both friable itabirite and friable intermixed itabirite/amphibolite mineralisation. The
estimate does not include hard itabirite, potential blind DSO or additional mineralisation
associated with the target footprints highlighted in yellow in Appendix 2, which have not
had sufficient field work to date to justify inclusion.

The 95Mt (62-126Mt range) exploration target includes friable itabirite from the Gofolo
and Koehnko Prospects (including Koehnko South) and forms part of the total 90Mt -
230Mt friable itabirite exploration target, within the >500Mt Global Exploration
Target. The 62-126Mt range is defined by a lower 33% and upper 66% conversion rate
of friable itabirite to friable mixed itabirite/amphibolite, where 95Mt represents the
midpoint at a 50:50 conversion rate and consistent with previous exploration target
size potential announcements.

Refer to ASX Announcement 18 March 2013 for further details.

About Mofe Creek Iron Ore Project

The Mofe Creek Iron Ore Project is located within one of Liberia’s historic premier iron ore
mining districts. The project is 10km along strike from the abandoned Bomi Hills mine
(>50Mt DSO @ 65% Fe), 80km along strike from the historic Bong Mine (>275Mt @ 38% Fe),
45km from Mano River mine (100Mt @ 52% Fe) and 20km from Bea Mountain resource
(>100Mt @ 45% Fe).

The Project is exceptionally well located being approximately 20km from the coast for
potential haul-road trucking or conveyor of product to the coast and transhipment via
barge to deeper water for on-shipment. Other possible infrastructure solutions exist; road
or rail to the deep water port of Monrovia via a 85km sealed road from the central licence
area or a 65km decommissioned standard-gauge iron ore railway alignment from the Bomi
Hills mine to the port of Monrovia; 17km east from the easternmost magnetic anomaly.

Detailed information on all aspects of Tawana’s projects can be found on the Company’s
website www.tawana.com.au. For further information please contact:

Lennard Kolff van Oosterwijk, Managing Director
Tel: +61 7 35102115, Mob: +61 424942589

Competent Persons Statement
The information in this report that relates to 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.

Forward Looking Statement
Statements regarding plans with respect to the Company’s mineral properties, including statements, assumptions and targets
relating to the Preliminary Assessment are forward looking statements. There can be no assurance that the Company’s plans for
development of its mineral properties will proceed as currently expected, nor in accordance with the Preliminary Assessment. There
can also be no assurance that the Company will be able to confirm the presence of a mineral deposit, that any mineralisation will
prove to be economic or that a mine will successfully be developed on any of the Company’s mineral properties, either in
accordance with the Preliminary Assessment or otherwise.

2 July 2013

PricewaterhouseCoopers Corporate Finance (Pty) Ltd

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