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TAWANA RESOURCES NL - Financial Report for the half-year ended 30 June 2013

Release Date: 11/09/2013 10:00:00      Code(s): TAW       PDF(s):  
Financial Report for the half-year ended 30 June 2013

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”)

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 30 JUNE 2013

This information should be read in conjunction with the 31 December 2012 Annual Report

Contents

Corporate Directory                                   3

Directors’ Report                                     4

Auditor’s Independence Declaration                    6

Statement of Comprehensive Income                     7

Statement of Financial Position                       8

Statement of Changes in Equity                        9

Statement of Cash Flows                              10

Notes to the Financial Statements                    11

Directors’ Declaration                               14

Independent Auditor’s Review Report to the Members   15


Corporate Directory

Directors
                                           Solicitors to the Company
Mr Wayne Richards Executive Chairman
Mr Lennard Kolff  Managing Director        Steinepreis Paganin
Mr Matthew Bowles Non-Executive Director   Level 4, The Read Buildings
                                           16 Milligan Street
Joint Company Secretaries                  Perth WA 6000

Mr Winton Willesee                         Price Sierakowski
Mr Aaron Finlay                            Level 24, St Martin’s Tower
                                           44 St George’s Terrace
Principal Place of Business                Perth WA 6000
and Registered Office
                                           Share Registry
Suite 25
145 Stirling Highway                       Computershare Investor Services Pty Ltd
Nedlands WA 6009                           GPO Box 2975
                                           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
                                           Level 20
                                           181 William Street
                                           Melbourne VIC 3000

                                           Stock Exchange

                                           Australian Securities Exchange
                                           ASX Code: TAW

                                           JSE Limited
                                           JSE Code: TAW
Directors’ Report

Your Directors present their report on the Company and its controlled entities (“consolidated entity”)
for the half-year ended 30 June 2013.

Directors

The names of the Directors in office at any time during or since the end of the half-year are as follows.
All Directors have been in office for this entire period unless otherwise stated.

Mr Warwick Grigor – Non-Executive Chairman (resigned 29 January 2013)
Mr David Frances – Executive Chairman (appointed 29 January 2013, resigned 6 May 2013)
Mr Wayne Richards – Executive Chairman (appointed 15 August 2013)
Mr Len Kolff – Managing Director
Mr Julian Babarczy – Non-Executive Director (resigned 15 August 2013)
Mr Matthew Bowles – Non-Executive Director

Operating results

The loss of the consolidated entity for the half-year ended 30 June 2013 after providing for income tax
amounted to $1,132,567 (30 June 2012: $1,062,797).

No dividends were declared or paid during the half-year ended 30 June 2013.

Review of operations

Background

Tawana was incorporated as a public company on 16 November 1998 in Australia. Operating
through its various subsidiaries, the Company is involved in the exploration for iron ore in West Africa.
The Company’s objective is to establish viable ore reserves and turn such projects into profitable
operations.

The company also continues to expand its interests in evaluating other mineral resources.

Tawana listed on ASX (as a primary listing) in April 2001 and JSE (as a secondary listing) in
November 2005. The Company’s head office is located in Perth, Australia.

Corporate Activities

On 11 January 2013, the Company announced that it planned to commence RC drilling at the Mofe
Creek Iron Ore Project during January 2013 after it was granted the Mofe Creek mineral exploration
license by the Liberian Ministry of Lands Mines and Energy in December 2012.

On 29 January 2013, the Company announced that it has commenced RC drilling at the Mofe Creek
project during January 2013. Approximately 1,600m of RC drilling of a planned 2,500m programme
had been completed on the Koehnko target. Drilling had intersected significant widths of friable iron
formation from surface to an average down-dole depth of 36.5m and maximum of 51m. On 12 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.

On 18 March, the Company announced a global exploration target size potential of >500Mt of which
90-230Mt was friable itabirite and 270-440Mt was friable mixed itabirite/amphibolite

Results for the maiden metallurgical test-work programme were announced on 25 June 2013,
confirming the potential to produce a +60% Fe product with low impurities at 44-57% weight recovery
from friable, weathered itabirite.

During the period Mr David Frances resigned as Executive Chairman of the Company.

Events occurring after the reporting period

On 2 July 2013, the Company announced the results of the preliminary desktop assessment
demonstrating the potential for the Mofe Creek Iron Ore Project.

On 15 July 2013, the Company announced the discovery of additional high-grade outcropping coarse
grained itabirite mineralization and DSO float at the new Zaway Prospect.

On 22 July 2013, the Company announced that Canaccord Genuity had initiated research coverage in
relation to the Company.

On 13 August 2013, the Company announced that 50,000,000 options over ordinary fully paid shares
had been exercised at an exercise price of $0.01, raising $500,000.

On 15 August 2013, the Company announced the appointment of Mr Wayne Richards as the
Company’s Executive Chairman. Mr Richards has a career spanning almost 30 years in the design,
development and commissioning/expansion of several major iron ore and nickel projects (greenfield
and brownfield). Mr Richards has an extensive mining background at a senior executive and
management level, with in-depth experience in mineral processing and project management.

Concurrently, on 15 August 2013, the Company announced the resignation of Mr Julian Babarczy as
a Non-Executive Director of the Company.

On 26 August 2013, the Company announced the disposal of its interests in the Kareevlei Diamond
Project in South Africa and the Flinders Island Diamond Project as part of the its ongoing strategy to
reduce overheads, divest non-core assets and fast track the development of the Moke Creek iron Ore
Project in Liberia.

On 5 September 2013, the Company announced, the receipt of its Environmental Permit from EPA for
the exploration phase of its 100% owned Mofe Creek Iron Ore Project in Liberia.

Auditor’s independence declaration

The lead auditor’s independence declaration for the half-year ended 30 June 2013 has been received
and is attached to this Directors’ Report.

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




Mr Len Kolff
Managing Director
Dated this 11th day of September 2013




Auditor’s Independence Declaration

[Declaration removed for SENS purposes. Please find the declaration on the Tawana
website.]





Consolidated Statement of Comprehensive Income
For the half-year ended 30 June 2013

                                                          30 June 2013         30 June 2012
                                                               $                    $
Continuing operations
Revenue                                                           11,159               62,665

Corporate costs                                                  (458,451)           (354,465)
Depreciation                                                       (4,356)             (2,322)
Employee benefits expense                                        (273,134)           (213,260)
Exploration expenses written off                   3             (295,981)                  -
Share based payments expense                                            -            (496,660)
Other expenses                                                    (49,001)            (82,951)
Loss before income tax expense                                 (1,069,764)         (1,086,993)
Income tax expense                                                      -                   -
Net loss for the period from continuing
operations                                                     (1,069,764)         (1,086,993)
Profit/(Loss) from discontinued operations after
tax                                                               (62,803)             24,196
Net loss for the period attributable to
Tawana Resources NL                                            (1,132,567)         (1,062,797)

Other comprehensive income/(loss)
Items that may be reclassified to profit or loss
Gain/(loss) on translation of foreign operations                 224,670              (34,536)
Total comprehensive loss for the period
attributable to Tawana Resources NL                             (907,897)          (1,097,333)


Basic and diluted earnings per share from
continuing and discontinued operations (cents)                    (0.126)              (0.124)

Basic and diluted earnings per share from
continuing operations (cents)                                     (0.119)              (0.126)

Basic and diluted earnings per share from
discontinued operations (cents)                                   (0.007)               0.002

Weighted average number of shares used to
calculate basic and diluted earnings per share               898,135,892          856,629,043




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


Consolidated Statement of Financial Position As at 30 June 2013


                                                  Note          30 June            31 December
                                                                 2013                  2012
                                                                   $                     $

Current assets
Cash and cash equivalents                                           702,582             1,678,614
Trade and other receivables                                          79,695                85,513
Total current assets                                                782,277             1,764,127

Non-current assets
Trade and other receivables                                          49,782                51,047
Property, plant and equipment                                        53,531                52,024
Exploration expenditure                                           2,092,052             1,413,186
Total non-current assets                                          2,195,365             1,516,257

Total assets                                                      2,977,642             3,280,384

Current liabilities
Trade and other payables                                            189,702               121,374
Provisions                                                           59,383                22,556
Total current liabilities                                           249,085               143,930

Non-current liabilities
Provisions                                                           39,264                39,264
Total non-current liabilities                                        39,264                39,265

Total liabilities                                                   288,349               183,194

Net assets                                                        2,689,293             3,097,190

Equity
Contributed equity                                5(a)           46,131,150            45,631,150
Reserves                                                          2,311,377             2,369,859
Accumulated losses                                              (45,753,234)          (44,903819)
Total equity                                                      2,689,293             3,097,190



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


Consolidated Statement of Changes in Equity For the half-year ended 30 June 2013

                                           Issued        Reserves       Accumulated       Total
                                           capital                         losses
                                              $              $                $             $

Balance at 1 January 2013                45,631,150      2,369,859       (44,903,819)   3,097,190

Loss for the period                                  -              -     (1,132,567)   (1,132,567)
Other comprehensive income for the
period                                               -     224,670                 -      224,670
Total comprehensive income/(loss) for
the period                                           -     224,670        (1,132,567)    (907,897)
Transactions with owners in their
capacity as owners
Options exercised or lapsed                 500,000       (283,152)          283,152      500,000
Balance at 30 June 2013                  46,131,150      2,311,377       (45,753,234)   2,689,293

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

Loss for the period                                  -              -     (1,062,797)   (1,062,797)
Other comprehensive loss for the
period                                               -     (34,536)                 -     (34,536)
Total comprehensive loss for the
period                                               -     (34,536)       (1,062,797)   (1,097,333)
Transactions with owners in their
capacity as owners
Options issued                                     -        496,660                 -      496,660
Balance at 30 June 2012                   45,431,150      3,346,267      (40,459,285)    8,318,132



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



Consolidated Statement of Cash Flows For the half-year ended 30 June 2013


                                                    Note       30 June 2013           30 June 2012
                                                                    $                      $

Cash flows from operating activities
Receipts from customers                                                      -                 14,276
Payments to suppliers and employees                                   (724,171)              (747,966)
Interest received                                                       11,159                 62,665
Net cash flows used in operating activities                           (713,012)              (671,025)

Cash flows from investing activities
Payments for plant and equipment                                          (892)              (149,756)
Proceeds from sale of plant and equipment                                1,287                258,532
Payments for exploration                                              (770,346)              (468,640)
Net cash flows used in investing activities                           (769,951)              (359,864)

Cash flows from financing activities
Proceeds from issue of shares                                          500,000                       -
Net cash from financing activities                                     500,000                       -

Net increase in cash and cash equivalents                             (982,963)            (1,030,889)
Cash and cash equivalents at beginning of
period                                                               1,678,614              3,722,991
Effects of exchange rates on cash holdings in
foreign currencies                                                       6,931                 19,020
Cash and cash equivalents at end of period                             702,582              2,711,122



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

Notes to the Financial Statements For the half-year ended 30 June 2013

1.     Basis of preparation

     The half-year consolidated financial statements are general purpose financial statements
     prepared in accordance with the requirements of the Corporations Act 2001, Australian
     Accounting Standard AASB 134: Interim Financial Reporting, Australian Accounting
     Interpretations and other authoritative pronouncements of the Australian Accounting Standards
     Board (“AASB”).

     It is recommended that these financial statements be read in conjunction with the annual
     financial report for the year ended 31 December 2012 and any public announcements made by
     Tawana Resources NL and its controlled entities during the half-year in accordance with
     continuous disclosure requirements arising under the Corporations Act 2001.

     The half-year financial statements do not include full disclosures of the type normally included in
     annual financial statements.

     The same accounting policies and methods of computation have been followed in these interim
     financial statements as were applied in the most recent annual financial statements. The Group
     adopted a number of new accounting standards with effect from 1 January 2013, however they
     had no effect on the financial position or performance of the Group. The Group has not early

      adopted any of the standards issued but not yet effective and does not expect the adoption of
      these standards will have an impact in the period of initial application.

      Reporting Basis and Conventions

      The half-year financial statements have been prepared on an accruals basis and are based on
      historical costs modified by the revaluation of selected non-current assets, financial assets and
      financial liabilities for which the fair value basis of accounting has been applied.

2.    Going Concern

      These financial statements have been prepared on a going concern basis.

      For the half-year ended 30 June 2013 the net loss was $1,132,567 (to 30 June 2012:
      $1,062,797). Cash outflows from operations were $713,012 (to 30 June 2012 outflows of
      $671,025). As at 30 June 2013 the Group had a net working capital position of $533,192 (as at
      31 December 2012: net working capital of $1,620,197). Subsequent to 30 June 2013 the
      Company has announced that 50,000,000 options over ordinary fully paid shares had been
      exercised at an exercise price of $0.01, raising an additional $500,000.

      The Directors believe that the Group is a going concern on the basis that it will continue its track
      record of successfully issuing share capital to new and existing shareholders, whilst prudently
      managing its cash outflows and contractual commitments relating to its exploration program. As
      at the date of this report the Group had no material non-cancellable contracts, including its
      planned expenditure under its Liberian tenements, which are cancellable at the discretion of the
      Group. In the event that the aforesaid future capital raising initiatives are unsuccessful, the
      Group has the ability to scale back its cash outflows from operating activities, including its
      exploration program.

      These financial statements do not include any adjustments to the recoverability or classification
      of recorded asset amounts, or to the amounts or classification of liabilities, which might be
      necessary should the Group not be able to continue as a going concern.

3.    Exploration expenses written off

      During the period the Company terminated the Option Agreement to acquire the Sinoe Gold
      Project outright due to a lack of significant results being reported. The Company wrote off the
      previously capitalised exploration expenditure in relation to this project of $295,981 during the
      period.

4.    Dividends

      No dividend has been declared or paid during the half-year or the previous corresponding
      period.

      The Company does not have any franking credits available for current or future years as it is not
      in a tax paying position.

5.    Contributed equity

(a)   Movements in share capital

                                                                    30 June             31 December
                                                                     2013                   2012
                                                                       $                      $
      Ordinary shares, fully paid                                    46,131,150             45,631,150
      Movement in ordinary shares on issue
                                                                      Number                   $
      Balance at 1 January 2013                                     876,629,043             45,631,150
      Shares issued                                                  50,000,000                500,000
      Share issue costs                                                       -                      -
      Balance at 30 June 2013                                       926,629,043             46,131,150

(b)   Share options

                         Exer-    Expiry date   Balance at     Issued           Exercised      Expired or      Balance at
                         cise                   beginning     during the        during the      forfeited        end of
                         price                   of period     period            period        during the       period
                                                                                                 period
                                                 Number        Number            Number          Number         Number

      Unlisted options   $0.10    17 Jan 14       6,750,000                -               -              -      6,750,000
      Unlisted options   $0.10    17 Jan 13       6,000,000                -               -    (6,000,000)      6,000,000
      Unlisted options   $0.07    17 Jan 13       6,750,000                -               -    (6,750,000)      6,750,000
      Unlisted options   $0.01    23 Feb 13      50,000,000                -    (50,000,000)              -     50,000,000
      Unlisted options   $0.01     30 Jul 13     50,000,000                -               -              -     50,000,000
      Unlisted options   $0.05     9 Sep 14       5,000,000                -               -              -      5,000,000
      Unlisted options   $0.01     8 Mar 14      25,000,000                -               -              -     25,000,000
      Unlisted options   $0.03    10 Nov 13       1,250,000                -               -              -      1,250,000
      Unlisted options   $0.05    10 Nov 15       1,250,000                -               -              -      1,250,000
      Unlisted options   $0.036   30 April 15    28,500,000                -               -              -     28,500,000

                                                180,500,000                -    (50,000,000)   (12,750,000)    117,750,000

6.    Segment information

      The Company operates wholly in one business segment, being mineral exploration and in one
      geographical segment, being Africa. As a consequence, the Company has not identified and
      therefore, not disclosed, any segment information on the basis of the internal reports being
      provided to the chief decision maker, which is the board as a whole.

7.    Contingent assets and liabilities and commitments

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

8.    Subsequent events

On 2 July 2013, the Company announced the results of the preliminary desktop assessment
demonstrating the potential for the Mofe Creek Iron Ore Project.

On 15 July 2013, the Company announced the discovery of additional high-grade outcropping coarse
grained itabirite mineralization and DSO float at the new Zaway Prospect.

On 22 July 2013, the Company announced that Canaccord Genuity had initiated research coverage in
relation to the Company.

On 13 August 2013, the Company announced that 50,000,000 options over ordinary fully paid shares
had been exercised at an exercise price of $0.01, raising $500,000.

On 15 August 2013, the Company announced the appointment of Mr Wayne Richards as the
Company’s Executive Chairman. Mr Richards has a career spanning almost 30 years in the design,
development and commissioning/expansion of several major iron ore and nickel projects (greenfield
and brownfield). Mr Richards has an extensive mining background at a senior executive and
management level, with in-depth experience in mineral processing and project management.
Concurrently, on 15 August 2013, the Company announced the resignation of Mr Julian Babarczy as
a Non-Executive Director of the Company.

On 26 August 2013, the Company announced the disposal of its interests in the Kareevlei Diamond
Project in South Africa and the Flinders Island Diamond Project as part of the its ongoing strategy to
reduce overheads, divest non-core assets and fast track the development of the Moke Creek iron Ore
Project in Liberia.

On 5 September 2013, the Company announced, the receipt of its Environmental Permit from EPA for
the exploration phase of its 100% owned Mofe Creek Iron Ore Project in Liberia.



Directors’ Declaration

In accordance with a resolution of the Board of Directors, I state that:

In the opinion of the Directors:

1.    The financial statements and notes are in accordance with the Corporations Act 2001 and:

      (a)    Comply with Accounting Standard AASB 134 Interim Financial Reporting and the
             Corporations Regulations 2001; and

      (b)    Give a true and fair view of the financial position of the consolidated entity as at 30 June
             2013 and of its performance for the half-year ended on that date.

2.    There are reasonable grounds to believe that the Company will be able to pay its debts as and
      when they become due and payable.

On behalf of the Board.




Mr Len Kolff
Managing Director
Dated this, 11th September 2013


Independent Auditor’s Report

[Auditor’s Report removed for SENS purposes. Please find report on the Tawana
website.]




11 September 2013



Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd

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