27th Apr 2006 08:56
Dwyka Diamonds Limited27 April 2006 Diamonds Limited ('Dwyka' or 'the Company') 3rd Quarter Results to 30 March 2006 Highlights •New diamondiferous body discovered at Bosele Project, RSA •Debt funding secured and received for De Beers Diamond Tailings Retreatment JV •Diamond Tailings Retreatment plant near completion at end of quarter •USD295,000 sale of diamonds from three mines •Positive results from recent stream sediment sampling programmes in Uttar Pradesh, India •Rough diamond stock on hand at quarter end - 1,365 carats Commenting today Adrian Griffin, CEO, said: "This quarter has seen first diamondsales from the Blaauwbosh mine in addition to revenues generated from our otherproducing mines. With another strong performance from our industrial divisionDwyka now has four revenue producing assets and we expect to commission our DeBeers tailings JV in Kimberly by the end of April 2006. In addition to overseeing the development of our production assets we have beenpushing forward our exploration portfolio with significant results seen fromBosele in South Africa and Uttar Pradesh in India. During 2006 Dwyka will work towards strengthening its production portfolio andbuilding on exploration success in Africa and India. Through the development ofwholly owned projects and with JV partners such as De Beers and BHP we shallcontinue to build value for Dwyka shareholders." For further information please contact: In Australia: In United Kingdom:Adrian Griffin, Melissa Sturgess Laurence Read/ Leesa PetersDwyka Diamonds Limited Conduit PR+61 (0) 8 9324 2955 +44 (0) 20 7429 6605/ +44 (0) 7979 955 923 African Operations Exploration and Development De Beers Diamond Tailings Retreatment Project - RSA The tailings project is a joint venture between Dwyka's wholly owned subsidiarySupermix Mining (Pty) Ltd ("Supermix"), and Black Economic Empowerment ("BEE")entity Kolong Investment Holdings (Pty) Ltd ("Kolong"). Dwyka has an effective40% interest in the joint venture vehicle, Superkolong (Pty) Limited. Theproject will be supplied with tailings from De Beers Consolidated MinesLimited's Kimberley mines. The Company announced on 23 January 2006 that debt finance of ZAR17.2 million(approximately GBP1.7m) had been secured and received for the project from theIndustrial Development Corporation of South Africa ("IDC") and the EuropeanInvestment Bank ("EIB"). Commissioning is expected to commence during April 2006. The plant has beendesigned for feed rates of over 80,000 tonnes per month and further increases incapacity should be possible at relatively low cost. De Beers have indicated thatadditional feed, above the agreed 50,000 tonnes per month, will be availablesubject to satisfactory plant performance. Such increased throughput couldsubstantially boost project economics. Mahene and Itanana Kimberlites - Tanzania (JV with De Beers) The Company's second joint venture with De Beers includes the diamondiferous Mahene and Itanana kimberlite pipes in the Nzega District of Tanzania. Under the terms of the transaction Dwyka will bulk sample the pipes at a cost ofabout USD1.5m. Dwyka's Tanzanian partner, Thorntree Minerals Limited("Thorntree") is assisting with logistical, managerial and government liaisonsupport within Tanzania. Thorntree has the right to participate in 20 per cent.of Dwyka's equity interest in the projects once the decision to progress tofeasibility study is taken. Thorntree will be required to fund their share ofcosts to maintain their equity position. De Beers has the option to acquire a 51 per cent. shareholding in Dwyka TanzaniaLimited, the Dwyka subsidiary holding the project, by re-imbursing Dwyka threetimes the costs incurred by the Company to evaluate the projects. Alternatively,De Beers may elect to remain as a five per cent. shareholder in Dwyka TanzaniaLimited or convert its shareholding into a 1.5 per cent. gross royalty payableon diamond revenues. As part of the agreement Dwyka Tanzania will sell alldiamonds recovered in the licence areas to De Beers. Bosele Exploration - RSA On 6 February 2006 the Company announced that a new diamondiferous body had beenidentified at its 70 per cent. owned Bosele project, located 90 km north west ofKimberley in South Africa and in close proximity to the Bellsbank kimberlitefield, a long-term producer of diamonds from both the pipes and fissures. Macrodiamonds have been recovered from bulk samples of volcanoclastic sedimentsinterpreted as being crater-fill sediments overlying a kimberlitic pipe. Thevolcanoclastic body has a surface expression with a length of approximately 3kmand breadth of 1.5km. Two bulk samples were taken with both of them recovering diamonds. The first,taken by Dwyka personnel, recovered 40 diamonds from approximately 150 tonnes ofmaterial. The second sample was taken by an independent consulting geologist andwas processed at De Beers' Evaluation Sampling Department in Kimberley andyielded eight diamonds. Dwyka has now drilled the body in three areas (each drill hole was separated byover one kilometre) resulting in a whole suite of kimberlitic indicator mineralsidentified. The Company made a further announcement during the quarter that independentdiamond consultant Mr Ray Ferraris has drawn similarities between the eightdiamonds recovered from a bulk sample taken at Bosele and diamonds from WesternAustralia's Argyle Mine. Mr Ferraris has 29 years' experience in the diamondindustry, including working for both De Beers and Rio Tinto. Although furtherdrilling is required, early indications are that the Bosele volcanoclasticsintruded a water-rich environment (a similar environment has been postulated forArgyle, and the Bosele resedimented volcanoclastics resemble Argyle's 'sandy'tuffs). New Elands Kimberlite Mine - RSA The New Elands mine development has been scheduled to follow stable productionfrom the Newlands and Blaauwbosch mines currently in production. Production Assets Nooitgedacht Alluvial Diamond Mine - RSA In early March the Company sold a parcel of 364 carats of diamonds for USD69,141which was an average value of USD189 per carat. Nooitgedacht is the most advanced of the Dwyka mines currently underdevelopment. Optimisation of the processing plant has seen a significant rise inthroughput. Selective mining has also resulted in improved product quality andlarger stone sizes being recovered. During the quarter 32,952 tonnes of gravel were treated recovering 255 carats atan average grade of 0.77 cpht. A number of large stones were recovered includingstones of the following sizes: 3.3, 3.3, 4.6 and 6.7 carats. Diamonds recovered during the quarter are expected be sold in late April 2006.Diamonds on hand from Nooitgedacht at period end totalled 126 carats. Newlands Kimberlite Mine - RSA In early March the Company sold a parcel of 1,712 carats of diamonds forUSD164,734 which was an average value of USD96 per carat. During the quarter 7,455 tonnes of kimberlite were treated recovering 1,424carats at an average grade of 19.10 cpht. A number of large stones wererecovered including stones of the following sizes: 3.2, 3.4, 3.5, 3.7, 4.0, 4.3,4.4, 6.0, 6.8, 7.4 and 11.4 carats. Diamonds recovered during the quarter are expected be sold in late April 2006.Diamonds on hand from Newlands at period end totalled 913 carats. The Newlands mine recommenced production in September 2005 and sold its firstparcel of diamonds in October 2005. Blaauwbosch Kimberlite Mine - RSA In early March the Company sold a parcel of 1,206 carats of diamonds forUSD61,343 which was an average value of USD51 per carat. During the quarter 8,233 tonnes of tailings were treated recovering 796 caratsat an average grade of 9.66 cpht. A number of large stones were recoveredincluding stones of the following sizes: 3.0, 3.1 and 4.7. Diamonds recovered during the quarter are expected be sold in late April 2006.Diamonds on hand from Blaauwbosch at period end totalled 327 carats. The first underground production at Blaauwbosch is scheduled to come on streamin the June 2006 quarter to complement existing tailings production. Industrial Division - RSA The Industrial division continues to perform to expectations with combinedconcrete and brick sales for the March 2006 quarter being R9.8 million. Operational Infrastructure Geological offices and purchase of plant and equipment During the quarter the Company reached an agreement with De Beers ConsolidatedMines Limited to take over five offices, on a 10 year, care and maintenancebasis and acquire, for a sum of ZAR4.0m (subject to final audit), a specialisedplant and engineering workshop in Kimberley, South Africa. The offices that the Company has taken over have become available due to therecent restructuring of De Beers' exploration operations in Kimberley. Included in the ZAR4.0m, Dwyka has purchased a specialised sampling plant,various pieces of processing equipment and a fully equipped engineeringworkshop. Some of the process plant is being utilised immediately in the DeBeers Tailings Retreatment Joint Venture. It is anticipated that the samplingplant for the forthcoming bulk sampling operation in Tanzania will beconstructed using much of the plant that forms part of the purchase agreement. The engineering workshop will be utilized extensively to build plant andinfrastructure that will be required on the underground mines Blaauwbosch andNewlands and on future Dwyka projects. It is anticipated that this acquisitionwill significantly decrease Dwyka's projected capital costs going forward. As a direct result of the agreement with De Beers Dwyka has employed 30 ex-DeBeers employees who were recently retrenched. This demonstrates the mutuallybeneficial way in which Dwyka and De Beers are working together to provide jobsfor local Kimberley people. It will also secure the future of a range ofbuildings which have historic significance to Kimberley and the history ofdiamond mining in South Africa. These new employees are part of the requiredstaffing complement for the tailings joint venture project. Indian Diamond Exploration Programme On 13 March 2006 the Company announced that it had received positive resultsfrom its recent stream sediment sampling programmes in Uttar Pradesh, India. Analysis of two samples from the Uttar Pradesh programme suggest the indicatorminerals were derived from a diamondiferous source rock. In material derived from the one of the samples, chrome spinel and pyropegarnets exhibit compositions typical of the diamond inclusion field. The samplesite is located approximately 100km north-west of the Bunder Kimberlite fielddiscovery recently announced by Rio Tinto. Analysis of the recent samples strongly suggests the source rock isdiamondiferous. The importance of this discovery is underpinned by the fact thatRio Tinto has recently located diamondiferous bodies intruding the same basementrocks. Additionally the surface textures of the indicator minerals found byDwyka, and the distances from the Rio Tinto discoveries, would suggest that bothsamples contain indicator minerals sourced from as yet undiscovered kimberlitebodies. The results were first reported from grain observation by Diatech Laboratoriesin Perth, Western Australia. Follow up sampling programmes have been planned and will commence within theJune 2006 quarter for the Uttar Pradesh region as will the design of geophysicalsurveys in vicinity of positive results. This will be to locate and drill testthe source of the kimberlitic indicator minerals. Diatech continues to process samples collected from the Uttar Pradesh regionaland Orissa follow up programmes. The observers in the Diatech Laboratorymaintain a high standard of quality and positive observed grains are very oftenconfirmed by probe results giving Dwyka confidence to commence follow up sampleprogrammes based on positive observed results alone. Corporate Change of Registered Address During the quarter the Company changed its registered address and principleplace of business to 98 Colin Street, West Perth, WA 6005, Australia. All othercontact details remain the same. Adrian GriffinChief Executive Officer Mining exploration entity quarterly report Name of entityDWYKA DIAMONDS LIMITED ACN or ARBN098 060 938 552 Quarter ended ("current quarter")31 March 2006 Consolidated statement of cash flows ---------- ---------Cash flows related to operating activities Current quarter Year to date $A'000 (9 months) $A'000 ---------- --------- --------- 1.1 Receipts from product sales and related 1,796 5,954 debtors 1.2 Payments for (a) exploration and (493) (1,199) evaluation (b) development (159) (1,779) (c) production (2,417) (6,488) (d) administration (823) (2,031) 1.3 Dividends received 1.4 Interest and other items of a similar 120 308 nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other FOREX variance 29 (31) ---------- --------- Net Operating Cash Flows (1,947) (5,266) ------------------------ ---------- --------- Cash flows related to investing activities 1.8 Payment for purchases of: (5) (1,185) (a) prospects (16) (255) (b) equity investments (80) (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects 26 28 (b) equity investments (c) other fixed assets 1.10 Loans to other entities (2,121) (4,588) 1.11 Loans repaid by other entities 4,492 4,516 1.12 Other ---------- --------- Net investing cash flows 2,376 (1,564) ------------------------ ---------- --------- 1.13 Total operating and investing cash flows 429 (6,830) (carried forward) ---------- --------- Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, 17 3,204 etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings (12) 1.18 Dividends paid 1.19 Other - capital raising costs (107) ---------- --------- Net financing cash flows 17 3,085 ------------------------- ---------- --------- Net increase (decrease) in cash held 446 (3,745) 1.20 Cash at beginning of quarter/year to date 5,485 9,582 1.21 Exchange rate adjustments to item 1.20 5 99 ---------- --------- 1.22 Cash at end of quarter 5,936 5,936 ------------------------- ---------- --------- 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 145 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 300 4.2 Development 100 ------------------ 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 related itemsin the accounts is as follows. $A'000 $A'000 ------------ ------------- 5.1 Cash on hand and at bank 1,062 232 5.2 Deposits at call 4,874 5,253 5.3 Bank overdraft 5.4 Other (provide details) ------------ ------------- Total: cash at end of quarter (item 5,936 5,485 1.22) ------------ ------------- Changes in interests in mining tenements --------- ---------- ----------- --------- Tenement Nature of Interest at Interest reference interest beginning at end of (note (2)) of quarter quarter --------- ---------- ----------- --------- 6.1 Interests in mining tenements --------- ---------- ----------- --------- relinquished, reduced or lapsed 6.2 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 Number Issue price Amount paid quoted per security up per (see 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 92,537,135 92,537,135 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 Exercise price Expiry date (description and 2,000,000 - $1.47 30/6/2006 conversion factor) 1,100,000 - $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. 24 April 2006Company SecretaryMichael Langoulant Notes 1 This quarterly report provides a basis for informing the market how theentity's activities have been financed for the past quarter and the effect onits cash position. An entity wanting to disclose additional information isencouraged 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 ofinterests in mining tenements acquired, exercised or lapsed during the reportingperiod. If the entity is involved in a joint venture agreement and there areconditions precedent which will change its percentage interest in a miningtenement, it should disclose the change of percentage interest and conditionsprecedent in the list required for items 6.1 and 6.2. 3 Issued and quoted securities. The issue price and amount paid up is notrequired in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 1022: Accounting for ExtractiveIndustries and AASB 1026: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of InternationalAccounting Standards for foreign entities. If the standards used do not addressa 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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