UPATE OF SOUTH AFRICAN DIAMOND PROJECTS

Transcription

1 TAWANA RESOURCES NL A.C.N Suite 124, Level 1, 530 Little Collins St., Melbourne, VIC 3000 Telephone: (03) Facsimile: (03) or UPATE OF SOUTH AFRICAN DIAMOND PROJECTS This release from the Directors of Tawana Resources NL ( the Company ) is to provide shareholders with an update of work programs and initiatives for operations in the Kimberley Region, South Africa. SUMMARY Acquisition of mobile processing plant and X-Ray Diamond Recovery Unit - Completed Daniel Alluvial - drilling underway, four holes completed tonne bulk sample to commence in mid October. Daniel Project awaiting access to three Application Areas. Kareevlei Diamond Project - KV2 bulk sample results received - KV3 drilling complete, bulk sampling underway Perdevlei Diamond Project 500 tonne bulk sample planned Agreement to form South African Black Economic Empowerment Company Completed ACQUISITION OF PROCESSING PLANT AND DIAMOND RECOVERY UNIT In order to accelerate work programs on all South African projects the Company has recently purchased a 20 tonne per hour mobile Dense Media Separation ( DMS ) plant and X-Ray Diamond Recovery Unit at a total cost of A$750,000. The DMS plant can be used for both kimberlites and alluvial gravels, to separate heavy minerals from the lighter fractions. In the X-Ray Diamond Recovery Unit the heavy mineral concentrate is scanned for diamonds, which are then automatically separated from the concentrate. The unit exploits diamond s characteristic fluorescence under X-rays. The DMS plant is currently being commissioned for use at the Daniel Alluvial Project. The X-Ray Diamond Recovery Unit will be commissioned in a central secure location to the Company s Kimberley projects.

2 PROJECT LOCATIONS DANIEL ALLUVIAL DISCOVERY (BHP Billiton/Tawana Joint Venture; Tawana earning 40%) A 70 hole drill program to recover 500 tonnes of alluvial material for bulk sampling has commenced. Four holes have been completed to date. Some delays have been experienced due to difficult drilling conditions, which has led to the collapse of some sections of the holes. Remedial measures are being implemented and the drilling rate is expected to increase as a result. The gravels intersected in three of the completed holes extended to a deeper level than anticipated. Gravel thicknesses in excess of 100m have been intersected. It is expected that during September/October a total of seventy 10 inch percussion drill holes will be completed, in ten selected locations (refer diagram), for the recovery of 500 tonnes of ancient alluvial gravel. During October and November the gravels will be processed through the DMS plant on site. The separated heavy mineral concentrate will be transported a short distance to the Company s X-Ray Diamond Recovery Unit. Completion of all processing is expected by late November.

3 Shareholders will be advised of meaningful results as and when they become available. Diagram Gravity image showing locations of drill sites Numbered 1-10 Summary The discovery of the Daniel Alluvial Project ( DAP ), by FALCON technology, in April, 2003 is considered highly significant for shareholders. Because of the large size of the DAP, gravity and magnetic surveys (from the close spaced helimag survey) have been used together, to determine the best targets for this drilling phase. The following points are considered important for an understanding of the DAP discovery; The potential for a strikingly large gravel resource based on interpretation of the FALCON gravity anomaly, drill results and recently completed helimag survey of the paleochannel. The proximity (6kms) of DAP to the Finsch Diamond Mine, hence a high probability that it carries diamonds. Its setting in a potholed, irregular dolomite environment similar to the Lichtenburg diamond field where the potholes within the dolomite formed

4 ideal trap sites for the diamond bearing gravels. The recovery of kimberlitic garnets from small gravel samples taken from within DAP. Visual inspection of the gravels recovered in the first drilling program gives confidence in the classification of the DAP gravels as ancient and in their having been deposited after the emplacement of the Finsch kimberlite. The type of gravels identified demonstrating that a once vibrant river system existed, ideal for the transportation and accumulation of diamonds. Experience with an Australian alluvial project has greatly helped in the interpretation of the DAP. The substantial Bow River Diamond Mine, Western Australia, which operated from 1983 to 1996, is in a similar setting to that of the DAP. It is a palaeochannel situated 26km from the Argyle Diamond Mine and carrying diamonds shed from that mine. Wolf Marx, the Managing Director of Tawana, was principally responsible for the discovery and early development of the Bow River Diamond Mine. Interest in Project The DAP discovery is located within the Daniel Project area, a BHP Billiton World Exploration Inc ("BHP Billiton") and Tawana Resources joint venture. The Company is earning a 30% interest in the DAP discovery; however upon completion of this 500 tonne bulk sample the Company will earn a further 10% interest. The Company is currently the operator of the joint venture. DANIEL PROJECT (BHP Billiton/Tawana Joint Venture; Tawana earning 30%) Tawana has drilled targets within 2 of the 5 application areas. Further drilling of selected targets, predominately FALCON kimberlite targets, will begin within three application areas when access has been secured. Interest in Project Tawana may earn a 30% interest in any discovery within the Project Area. However upon completion of specified bulk samples (500 tonne bulk samples for alluvial discoveries) Tawana may earn a further 10% interest. Tawana is currently the operator of the joint venture. KAREEVLEI WES DIAMOND PROJECT (Tawana 100%) KV2 kimberlite bulk sample results Twenty five 10 inch percussion air flush holes were drilled on a 20 x 20 metre grid across the one hectare KV2 kimberlite. The 175 tonnes of kimberlite recovered from the drill holes were delivered to a processing plant owned and operated by De Beers in Kimberley, South Africa.

5 This plant is a conventional Dense Media Separation Plant using X-Ray diamond recovery technology. Individual drill hole grades varied widely across the kimberlite, ranging from 0 carats per hundred tonnes ( cpht ) to an impressive 36.63cpht. The average stone size of the diamonds recovered was a large carats ( ct ). The largest diamond recovered was a 1.57 ct stone. A bottom cut-off of 1.5mm was used to exclude all non-commercial sized diamonds. The diamonds have been described as predominantly clear white stones. A preliminary valuation will be sought. Management is encouraged by these results and considers the following points important for the understanding of the Kareevlei Wes Project; 12 of the 20 holes which intersected the kimberlite recovered diamonds. As a result of the large average stone size recovered to date, the average value per carat is expected to be higher than originally anticipated. KV2 is open at depth below 100m Any development could be in conjunction with the other nearby kimberlites within the Kareevlei Wes cluster as well as with the Perdevlei, and the Daniel Alluvial, projects. In the light of the small sample size and the variable drill hole recoveries a larger bulk sample will be required to provide an accurate estimate of diamond grade. KV3 kimberlite bulk sample 250 tonnes of kimberlite has been delivered to the De Beers, Kimberley, processing plant. Results are expected by early November. Application for Mining Permit. The Company is currently preparing an application for a mining permit over the Kareevlei Wes Diamond Project. PERDEVLEI DIAMOND PROJECT (Tawana 100%) The Company intends to process 500 tonnes of kimberlite in order to define a measured diamond grade for the K1 kimberlite, the larger (1.7 ha) of two kimberlites present at Perdevlei. The recently acquired 20 tonne per hour DMS plant and X-Ray Diamond Recovery Unit will be used for this process. This measured grade will provide management with the necessary level of

6 confidence to embark on a mining and processing study that will also take into account the results of bulk samples from the Kareevlei Wes KV2 and KV3 kimberlites, located 25 km north of Perdevlei. Initial analysis of bulk sampling from Perdevlei K1, conducted during 2002, gives an indicated grade of between cpht. Full processing can be completed when the Company s X-Ray Diamond Recovery Unit becomes available. Application for Mining Permit. An application for a Mining Permit has been submitted to the Department of Minerals and Energy. AGREEMENT TO FORM SOUTH AFRICAN EMPOWERMENT COMPANY The Company has entered into an agreement with Seven Falls Trading (Pty) Ltd ( Seven Falls ) to form a new South African Black Economic Empowerment Company to explore, evaluate and develop diamond deposits in Southern African. The joint venture company will be 74% owned by Seven Falls, a company owned by Historically Disadvantaged South Africans and 26% owned by Tawana. The Board of the joint venture company will consist of; Mr. Thabo MAKWEYA, formerly the Provincial Minister of Tourism and Economic Affairs for the Northern Cape Province, South Africa Mr. Mlungisi MABIJA, a Senior Official in the Provincial Department of Transport and Public Works Northern Cape Province, South Africa Mr. Wolf Marx Chairman and Managing Director of Tawana Resources. The objective of the joint venture company is to actively pursue access to mineral resources and exploration, prospecting and mining opportunities in Southern Africa and to become a regional stakeholder in mining and exploration. The Board carries extensive skills in diamond exploration, evaluation, managerial expertise and public communications skills The joint venture company will be Tawana s preferred black empowerment partner and will be offered an option to purchase a 26% equity interest in any South African projects held by Tawana. The exercise price of the option will be at fair market value. Fair value is as agreed to by the parties or as determined by valuation to be undertaken in accordance with the internationally recognised VALMIN Code and on the basis that the joint venture company is a willing buyer and Tawana is a willing seller. The option will be exercisable in accordance with time frames to be agreed at the time of option issue.

7 Mr. Thabo Makweya Mr. Thami Mabija Prepared by: Wolf Marx Managing Director For further information: Philip Chisholm Director Telephone: Fax: Mobile: orange@actrix.gen.nz Web Site: