Tawana Resources to divest diamond projects

THE BOURSE WHISPERER: Tawana Resources (ASX: TAW) has announced it is to dispose of its interests in the Kareevlei diamond project in South Africa and the Flinders Island diamond project in Australia.

The company explained the move is part of its ongoing strategy to reduce overheads, divest non- core assets and fast-track the development of the Mofe Creek iron ore project in Liberia.

 

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“The ongoing divestment of non-core legacy assets will enable Tawana to affect considerable cost and administrative savings and help fast-track its flagship Mofe Creek iron ore project in Liberia,” Tawana Resources managing director Len Kolff said in the company’s announcement to the Australian Securities Exchange.

“This represents a positive outcome, providing the company approximately $430,000 in working capital in two tranches in the near future.

“With the disposal of these assets, the company will streamline its portfolio of assets whilst reducing overheads and providing additional working capital.”

Tawana Resources’ 100 per cent-owned South African Subsidiary company, Diamond Resources Pty Ltd entered into an Option Agreement with BlueRock Diamonds in April 2013 and a Supplementary Agreement in August 2013.

Under the terms of the agreement, BlueRock Diamonds has the option to purchase outright the Kareevlei diamond project Mining Right and associated equipment for a total of R4 million (approximately AU$430,000).

Subsequent to the announcement of the termination of the Flinders Island Agreement between Flinders Mines (ASX: FMS) and Tawana Resources and Orogenic Exploration in July 2013, Tawana has entered into an Asset Sale Agreement with Kalyan Resources Pty Ltd and terminated the Flinders Island Agreement with Orogenic Exploration Pty Ltd.

Concurrent with the termination of the Flinders Island Agreement, Tawana announced the sale of its 80 per cent holding in the Flinders Island diamond project to Kalyan Resources Pty Ltd for AU$1 (one dollar) plus a 2.5 per cent Gross Revenue Royalty on Kalyan’s 80 per cent holding in the event of discovery and commercial production.

The company indicated its principle focus will be the development of the Mofe Creek iron ore project in Liberia.

The Mofe Creek project hosts a 95 million tonne high-grade plus-45 per cent iron friable itabirite exploration target within a global exploration target of greater than 500 million tonnes of friable itabirite and intermixed itabirite/amphibolite.

Tawana has completed metallurgical test-work on representative samples from a maiden 2,500 metre reverse circulation drill program, which the company says have confirmed the potential to beneficiate through crushing to 3.35mm, a plus-60 per cent iron product with low contaminants and 44 to 57 per cent mass recovery within the itrabirite.

The project is situated in close proximity to the coast, which the company considers to combine well with the positive metallurgical test-work results to suggest the potential for a low capital intensity project at low operating costs.