31st Jan 2005 07:00
Dwyka Diamonds Limited31 January 2005 Dwyka Diamonds Limited Second quarter results to 31 December 2004 HIGHLIGHTS • Detailed follow-up of positive new targets revealed by Indian Reconnaissance Permit sampling program. • Sampling at recently granted Orissa tenements, India, to commence during February 2005. • Dwyka extends option agreements to acquire kimberlite diamond mines in South Africa. • New X-Ray diamond processing machine yields immediate positive results. • Drill core from Bosele exploration programme (RSA) sent to Australia for analysis. • New mining methods at Nooitgedacht (RSA) returning positive results. • Group cash at the end of the quarter of approximately A$13.2 million. INDIAN DIAMOND EXPLORATION PROGRAMME Positive results have been achieved from Dwyka's alliance permits in threeIndian states. Assessment of several early completed samples returnedsignificant quantities of kimberlitic indicator minerals. In the space of thequarter the ongoing sampling program has already collected 65 samples andnarrowed potential indicator source areas to two prospects. Detailed groundgeophysics and geochemical sampling of these prospects will be pursued duringthe first quarter of 2005. Final laboratory results from the batch of samplesalready taken are expected during February of this year. Initial sampling of newly awarded permits in Orissa is also due to commenceduring February. This program of sampling new permits in close spatial andgeological proximity to recently discovered diamondiferous kimberlites isamongst the first to be carried out by modern explorers in this state. SOUTH AFRICAN OPERATIONS Dwyka's continued focus during the quarter has been to analyse the production,performance and potential of four hard rock diamond assets in South Africa overwhich it has an option agreement. The four projects are Blaauwbosch, New Elands,Newlands and West End. All of the mines have historical production but wereclosed at varying times due to flooding, inappropriately applied capital, andinappropriate mining methods being utilised. Of the four mines, Blaauwbosch and Newlands have been reopened by the currentowners, who are mining and treating both underground ore and tailings. Theperiod of exclusivity as set out in the option agreements has been extendeduntil 31 March 2005. Mining and processing at two of the mines, Blaauwbosch and Newlands, have beenmonitored since late October 2004. This monitoring has involved measuring thetonnes removed from underground and the grade of the underground production atthe plant. Tailings are being processed separately to ascertain the relativegrades and values of the underground and tailings ore. Actual on-mine costs arealso being measured. As part of the current due diligence, Dwyka is assessing various levels ofproduction against differing exchange rate assumptions, thereby allowing for,and reducing the impact of, continued rand strength. Bosele (Dwyka 70%) Bosele Fissure The Bosele project is located near Barkly West in the Northern Cape Province ofSouth Africa, approximately 110 km north-west of Kimberley. The Bosele project covers an area of 1135Ha contiguous with the Dancarl DiamondMine owned by a De Beers subsidiary company. The Dancarl Diamond mine has minedthe Bobbejaan Fissure right up to the boundary of Dwyka's Bosele tenements. Dwyka's drilling programme showed that the Bobbejaan fissure extends onto itsproperty below the surface. A decision on the economic value of the fissureextension will be made in the coming months. Bosele South On the southern part of the Bosele property a drilling programme on new targetshas been undertaken. Core from this program was air freighted to Australia fortesting during the quarter. This test work commenced after the end of the periodand results are expected shortly. Nooitgedacht Alluvial Mine During the quarter, Dwyka maintained its focus on mining areas containing largeboulder trap sites. 111.46 carats were recovered from 10,579 tonnes of graveltreated at an average grade of 1.05 cpht. From November, the mobile scalping plant was positioned adjacent to the pit toeliminate double handling and transport of oversize rock. The total cost of thenew plant was just under Rand 2 million. Dwyka anticipates recovering thiscapital cost within a short period through improved diamond recoveries fromfresh gravel feed, and from re-treatment of tailings products. During the plantcommissioning on historical grease room tailings, five diamonds totalling overthree carats in weight were recovered from the five tonnes of materialre-treated. As anticipated activities at Nooitgedacht were limited during the quarter asstaff focussed on the due diligence being undertaken on the four hard rockproperties under option. Staffing at Nooitgedacht has again returned to normalnow that the assessment systems are in place on the properties under option. Processing Plant Developments In September 2004, Dwyka decommissioned the grease room at De Hoop and placedorders for a new wet X-ray diamond sorting system. All of the equipment has nowbeen delivered to site and successfully commissioned. The total cost of the new plant was just under Rand 2 million. Dwyka anticipatesrecovering this capital cost within a short period through improved diamondrecoveries from fresh gravel feed, and from re-treatment of tailings products.During the plant commissioning on historical grease room tailings, five diamondstotalling over three carats in weight were recovered from the five tonnes ofmaterial re-treated. The installation consists of a feed preparation section followed by two"Flowsort" X-Ray sorters. The Flowsorts with their associated control andsecurity systems are all mounted in a standard 20 foot sea container. They aredesigned for complete "hands-off" operation with diamonds being recovered intotamper-proof stainless steel boxes. The security system incorporates links tothe computerised control systems plus digital surveillance for 24 hour remotemonitoring or operations. The new plant has been used to recover diamonds from concentrates produced bythe Nooitgedacht gravel treatment plant during the final quarter of 2004. Overthe next six months it will also re-treat the grease room tailings from previousoperations at the Nooitgedacht and De Hoop mines. When Dwyka establishes newmines in the Kimberley area, the new plant will form the basis of a centralisedconcentrate treatment facility. Industrial Division The Industrial division has experienced strong demand during the quarter. As ususual demand decreased as the holiday season approached at the end of thequarter. The brick plant returned to its usual one shift per day duringDecember. Dwyka remains confident that demand will strengthen again from March2005 when new funding for government housing projects is released. MELISSA STURGESSChief Executive Officer The technical exploration and mining information contained in this report wascompiled by Ed Nealon, a Dwyka Diamonds Ltd director, and Mrs Catherine Telfer,a director and employee of Venmyn Rand (Pty) Ltd. Mr Nealon provides consultingservices via his company Athlone International Pty Ltd while Venmyn Rand (Pty)Ltd are consultants to Dwyka Diamonds in South Africa. Both Mr Nealon and MrsTelfer are members of the Australasian Institute of Mining and Metallurgy andare each considered to be a Competent Person in their respective areas ofexpertise pursuant to the Australasian Code for Reporting of Mineral Resourcesand Ore Reserves. Further information please contact: In Australia: In United Kingdom:--------------------- ------------------------Mike Langoulant, Melissa Sturgess Joe Nally--------------------- ------------------------Dwyka Diamonds Limited Williams de Broe Plc--------------------- ------------------------(+618) 9324 2955 +44 (0)20 7588 7511--------------------- ------------------------ --------------------- ------------------------ Laurence Read/ Leesa Peters --------------------- ------------------------ Conduit PR --------------------- ------------------------ +44 (0)20 7936 9095 / +44 (0)7979 955 923 --------------------- ------------------------ Website: www.dwykadiamonds.com 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 31 December 2004------------------- ------------------ Consolidated statement of cash flows ------------ ------------Cash flows related to operating Current quarter Year to dateactivities $A'000 (6 months) $A'000 ------------ ------------ ------------ 1.1 Receipts from product sales and 1,126 2,671 related debtors 1.2 Payments for (a) exploration and (1,051) (1,781) evaluation (b) development (1,402) (2,927) (c) production (410) (1,097) (d) administration 1.3 Dividends received 1.4 Interest and other items of a 163 269 similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other FOREX variance 10 10 ------------ ------------ Net Operating Cash Flows (1,564) (2,855) ----- ----------------------- ------------ ------------ Cash flows related to investing activities 1.8 Payment for purchases of: (a) (182) (707) prospects (b)equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) 27 27 prospects (b)equity investments (c)other fixed assets1.10 Loans to other entities (250) (250)1.11 Loans repaid by other entities1.12 Other (provide details if material) ------------ ------------ Net investing cash flows (405) (930) ------------ ------------1.13 Total operating and investing cash (1,969) (3,785) ----- flows (carried forward) ------------ ------------ ----------------------- 1.13 Total operating and investing cash flows (1,969) (3,785) ----- (brought forward) ------------ ------------ ----------------------- Cash flows related to financing activities1.14 Proceeds from issues of shares, options, etc. 10,8561.15 Proceeds from sale of forfeited shares1.16 Proceeds from borrowings1.17 Repayment of borrowings1.18 Dividends paid1.19 Other - capital raising costs (543) ------------ ------------ Net financing cash flows 10,313 ----- ----------------------- ------------ ------------ Net increase (decrease) in cash held (1,969) 6,5281.20 Cash at beginning of quarter/year to date 15,130 6,6321.21 Exchange rate adjustments to item 1.20 26 27 ------------ ------------1.22 Cash at end of quarter 13,187 13,187 ----- ----------------------- ------------ ------------ 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 180 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 4004.2 Development ------ ----------------------------- ------------------ Total 400----- ----------------------------- ------------------ Reconciliation of cash------------------------- ------------ -------------Reconciliation of cash at the end of the Current quarter Previous quarterquarter (as shown in the consolidatedstatement of cash flows) to the relateditems in the accounts is as follows. $A'000 $A'000 ------------------------- ------------ ------------- -------------5.1 Cash on hand and at bank 2,829 3,9505.2 Deposits at call 10,358 11,1805.3 Bank overdraft5.4 Other (provide details)----- ---------------------- ------------ ------------- Total: cash at end of quarter (item 13,187 15,130----- 1.22) ------------ ------------- ---------------------- Changes in interests in mining tenements ----------- --------------- -------- -------- Tenement Nature of Interest at Interest reference interest beginning of at end of quarter quarter (note (2)) ----------- --------------- -------- --------6.1 Interests in mining tenements ----------- --------------- -------- -------- relinquished, reduced or lapsed6.2 Interests in mining tenements acquired or ----------- --------------- -------- -------- increased 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 -------------- number quoted security (see up per ---------- ---------- note 3) security (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 80,440,196 77,590,196 N/A N/A securities ---------- ---------- ---------- ------------ 7.4 Changes during quarter (a) Increases through issues (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 2,000,000 - Exercise price Expiry date (description and conversion factor) 1,100,000 - $1.47 30/6/2006 $0.52 30/6/2007 ---------- ---------- ---------- ------------ 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) ---------- ---------- Compliance statement 1 This statement has been prepared under accounting policies which comply withaccounting standards as defined in the Corporations Law or other standardsacceptable to ASX (see note 4). 2 This statement does give a true and fair view of the matters disclosed. Notes 1 This quarterly report provides a basis for informing themarket how the entity's activities have been financed for the past quarter andthe effect on its cash position. An entity wanting to disclose additionalinformation 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 optionsin respect of interests in mining tenements acquired, exercised or lapsed duringthe reporting period. If the entity is involved in a joint venture agreement andthere are conditions precedent which will change its percentage interest in amining tenement, it should disclose the change of percentage interest andconditions precedent in the list required for items 6.1 and 6.2. 3 Issued and quoted securities The issue price and amount paidup is not required in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 1022: Accountingfor Extractive Industries and AASB 1026: Statement of Cash Flows apply to thisreport. 5 Accounting Standards ASX will accept, for example, the use ofInternational Accounting Standards for foreign entities. If the standards useddo not address a topic, the Australian standard on that topic (if any) must becomplied with. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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