28th Oct 2005 07:00
Dwyka Diamonds Limited28 October 2005 Dwyka Diamonds Limited 1st Quarter Results to 30 September 2005 HIGHLIGHTS • De Beers Tailings Retreatment Project in construction and on track for commissioning to commence in December 2005 • Diamond processing recommenced at Newlands, with first sale of diamonds planned by the end of October 2005 • Nooitgedacht Alluvial Mine produced an average grade of 1.2 carats per hundred tonnes • Sale of 18.11 carat stone for US$130,000 (US$7,100 per carat) from the Nooitgedacht Alluvial Mine • Rough diamond stock on hand at period end totalled 523.28 carats which will be sold during October 2005 • Industrial Division revenue for quarter R9,600,000 compared with June quarter of R5,791,920 • 2005 Indian Exploration field season commenced on 2nd August 2005 with stream sediment sampling in the state of Orissa and Andhra Pradesh SOUTH AFRICAN OPERATIONS De Beers Diamond Tailings Retreatment Project Dwyka Diamonds Limited ("Dwyka or "the Company") and its black empowerment partner Kolong Investments Holdings ("Kolong"), have an agreement with De BeersConsolidated Mines ("De Beers") to retreat diamond tailings from its Kimberley mines in South Africa. Under the agreement De Beers will supply agreed monthly tonnages for processing at contracted diamond feed grades and pre-agreed marketdiamond prices. Once the plant is commissioned, 50,000 tonnes per month of tailings will be processed. The construction of the plant is on track to commence commissioning in December2005. The Tailings Retreatment Project is owned by Superkolong (Pty) Ltd with Dwykaholding 40 per cent of the equity through its wholly owned subsidiary company,Supermix (Pty) Ltd. The capital cost of the project is approximately R21 millionand project development is currently being funded by Dwyka. Once operations havecommenced funding is expected to be switched to a South African Rands bank loan. Nooitgedacht Alluvial Mine During the quarter 24,824 tonnes of gravel were treated recovering 305 carats atan average grade of 1.2 cpht. A number of large stones were recovered includingstones of the following sizes: 3.61, 4.10, 4.25, 4.32, 10.96 carats. In July 2005 the Company sold an 18.11 carat for US$7,100 per carat. Diamonds recovered during the quarter will be sold in late October 2005.Diamonds on hand at period end totalled 523.28 carats. Purchase of New Mines On the 30th August 2005 the Company announced that it had finalised the purchaseof the three hard rock diamond mines, Blaauwbosch, New Elands and Newlandslocated near Kimberley in South Africa. Newlands Treatment of ore recommenced at the Newlands Diamond Mine on the 21st September2005. Whilst the plant was off-line, a total of 7,000 tonnes of underground orewas stockpiled which the plant will treat during the ramp up of miningoperations. Underground mining is scheduled to re-commence during October 2005 and by June2006 total production from both underground mining and tailings re-processing istargeted to produce an estimated 1,800 carats per month. Blaauwbosch Significant progress was made at the Blaauwbosch mine during the quarter todeepen the shaft from the 145 metre level. The shaft has now been extended andfully equipped to a depth of 190 metres. The new mine plan requires this shaftto be extended to 220 metres before underground mining is scheduled tore-commence. The Blaauwbosch plant recommenced operations early in October 2005 on a feed ofdiamond tailings material. Underground ore will be treated from January 2006, with a production target ofapproximately 3,500 carats per month with a value of approximately US$3m perannum. Further production potential Both Blaauwbosch and Newlands have excellent potential to increase productionfrom other unmined resources located on these properties. Dwyka will undertake adetailed investigation of this extra production potential in the coming months. New Elands The New Elands mine will be brought into production once the first two mines areoperating at target levels. Funding All development work at Blaauwbosch and Newlands is being funded from Dwyka'scurrent cash reserves. Purchase Consideration The three mines are owned by Bellsbank Number One (Pty) Ltd and Kophia Diamonds(Pty) Ltd. As part of the purchase consideration the Company has issued and allotted2,747,802 fully paid ordinary shares to the vendors of these mines. These sharesare subject to an agreed 12 month escrow period. Industrial Division The Industrial division continues to perform to expectations with combinedconcrete and brick sales for the September 2005 quarter being R9,600,020compared to June 2005 quarter being R5,791,920. Bosele Eight kimberlitic ilmenites and one kimberlitic garnet was identified andanalysed from a heavy mineral concentrate from a percussion drill hole. Aneclogitic garnet was previously recovered from the same drill hole and a G10garnet was found in a superficial sample. These are strong indications that theBosele volcanoclastic body is diamondiferous. In a report by one of the Company's consulting geologists, the Bosele project isdescribed as prospective and recommends that further work be done. A number of targets with similar superficial expressions to the Boselevolcanoclastic body have been identified in the surrounding areas using aerialphotography and satellite imagery. Prospecting right applications have now beenlaunched over the identified target areas. As the next step the Bosele Project requires either an extensive core drillingand micro diamond analysis programme or a mini-bulk sampling programme. Theseoptions are currently being examined by the Company. INDIAN DIAMOND EXPLORATION PROGRAMME The 2005 field season commenced on the 2nd August 2005. Additional tenements have been applied for during the quarter with a total ofthree blocks for 6,070 km2 in Chhattisgargh and 2 blocks for a total of 2,105km2 in Madhya Pradesh. Both of these areas are highly prospective for diamondexploration and the areas are within a 40 km radius to the Tokapal KimberliteField and 65 km radius to the Majhgawan diamond mine respectively. The second field sortie commenced during the final weeks of the quarter with ourGeologist, Nigel Chapman, flying to India on the 17th September. This visit isenvisaged to last approximately four weeks. A reconnaissance team was mobilised from Annatapur, Andhra Pradesh to Bolangir,Orissa to reconnoitre the area with respect to road access, security issues andcamp establishment. All reports were positive with water levels dropping in mostof the drainages allowing for stream sediment sampling to commence. Stream sediment sampling is planned for the tenements in the state of Orissa.113 samples are planned to be taken in the area surrounding Bolangir which willthen be sent to Diatech Laboratory in Perth, Australia for analysis. Here theywill be processed and passed through the mini DMS plant and the concentrateobserved for diamond and kimberlitic indicator minerals (KIM's). Representativefractions of KIM's will then be micro-probed to determine their mineralchemistry. MELISSA STURGESSExecutive Chairman The technical exploration and mining information contained in this report wascompiled by Mr Ed Nealon, a Dwyka Diamonds Ltd director. Mr Nealon providesconsulting services via his company Athlone International Pty Ltd. Mr Nealon isa member of the Australasian Institute of Mining and Metallurgy and isconsidered to be a Competent Person in his respective area of expertise pursuantto the Australasian Code for Reporting of Mineral Resources and Ore Reserves. MrNealon consents to the inclusion in the report of the matters based on hisinformation in the form and context in which it appears. Further information please contact: In Australia: In United Kingdom:Mike Langoulant, Melissa Sturgess Laurence Read/ Leesa PetersDwyka Diamonds Limited Conduit PR(+618) 9324 2955 +44 (0)20 7618 8707 / +44 (0)7979 955 923 Rule 5.3 Appendix 5B Mining exploration entity quarterly report Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98. Name of entityDWYKA DIAMONDS LIMITED ACN or ARBN Quarter ended ("current quarter")098 060 938 552 30 September 2005 Consolidated statement of cash flows Cash flows related to operating Current quarter Year to dateactivities $A'000 3 months) $A'000 1.1 Receipts from product sales and 2,202 2,202 related debtors 1.2 Payments for (a) exploration and (389) (389) evaluation (b) development (952) (1,066) (c) production (2,492) (2,378) (d) administration (716) (716) 1.3 Dividends received 1.4 Interest and other items of a 112 112 similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other FOREX variance (47) (47) ------------ ------------ Net Operating Cash Flows (2,282) (2,282) ------------ ------------ Cash flows related to investing activities1.8 Payment for purchases of: (a) prospects (1,015) (1,015) (b) equity investments (c) other fixed assets (54) (54) 1.9 Proceeds from sale of: (a) prospects (b) equity investments 2 2 (c) other fixed assets 1.10 Loans to other entities (869) (869) 1.11 Loans repaid by other entities 24 24 1.12 Other (provide details if material) ------------ ------------ Net investing cash flows (1,912) (1,912) ------------ ------------ 1.13 Total operating and investing cash (4,194) (4,194) flows (carried forward) ------------ ------------ Cash flows related to financing activities1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings (9) (9) 1.18 Dividends paid 1.19 Other - capital raising costs ------------ ------------ Net financing cash flows (9) (9) ------------ ------------ Net increase (decrease) in cash held (4,203) (4,203) 1.20 Cash at beginning of quarter/year to date 9,582 9,582 1.21 Exchange rate adjustments to item 1.20 88 88 ------------ ------------1.22 Cash at end of quarter 5,467 5,467 ------------ ------------ Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the relatedentities Current quarter $A'000 ------------- 1.23 Aggregate amount of payments to the parties included in 182 item 1.2 ------------- 1.24 Aggregate amount of loans to the parties included in - item 1.10 ------------- 1.25 Explanation necessary for an understanding of the transactions - Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows - 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest - Financing facilities available Add notes as necessary for an understanding of the position. Amount available Amount used $A'000 $A'000 ------------- -------------3.1 Loan facilities Nil Nil 3.2 Credit standby arrangements Nil Nil Estimated cash outflows for next quarter $A'000 ------------------ 4.1 Exploration and evaluation 200 4.2 Development 300 ------------------ Total 500 ------------------ Reconciliation of cash Reconciliation of cash at the end of the Current quarter Previous quarterquarter (as shown in the consolidated $A'000 $A'000statement of cash flows) to the relateditems in the accounts is as follows. 5.1 Cash on hand and at bank 337 1,662 5.2 Deposits at call 5,130 7,920 5.3 Bank overdraft 5.4 Other (provide details) ------------ ------------- Total: cash at end of quarter (item 5,467 9,582 1.22) ------------ ------------- Changes in interests in mining tenements Tenement Nature of Interest at Interest reference interest beginning of at end of (note (2)) quarter quarter --------- ---------- ------------ ---------6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining Blaauwbosch Full ownership Under option 100% tenements acquired or Mine and operational increased Newlands control Mine finalised New Elands during quarter Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rightstogether with prices and dates. Total Number Issue price per Amount paid up number quoted security (see per security note 3) (see note 3) ------ ------ ------------ -------------- 7.1 Preference - - +securities ------ ------ ------------ -------------- (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions ---------- ---------- ------------ -------------7.3 +Ordinary 83,187,998 80,454,664 N/A N/A securities ---------- ---------- ------------ ------------- 7.4 Changes during quarter (a) Increases through issues 2,747,802 2,747,802 GBP0.35 GBP0.35 (AUDO.84) (AUDO.84) (b) Decreases through returns of capital, buy-backs ---------- ---------- ------------ -------------7.5 +Convertible - - debt securities ---------- ---------- ------------ ------------- (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through ---------- ---------- ------------ -------------- securities matured, converted ---------- ---------- ------------ -------------7.7 Options Exercise price Expiry date (description 2,000,000 - $1.47 30/6/2006 and conversion 1,100,000 - $0.52 30/6/2007 factor) ---------- ---------- ------------ -------------7.8 Issued during quarter ---------- ---------- ------------ ------------- 7.9 Exercised during quarter ---------- ---------- ------------ ------------- 7.10 Expired cancelled) during quarter ---------- ---------- ------------ ------------- 7.11 Debentures - - (totals only) ---------- ---------- 7.12 Unsecured notes - - (totals only) ---------- ---------- Notes 1 This quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report. 2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2. 3 Issued and quoted securities. The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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