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Half Year Accounts

16th Mar 2007 11:07

Dwyka Diamonds Limited16 March 2007 DWYKA RESOURCES LIMITED(formerly Dwyka Diamonds Limited)A.C.N. 060 938 552 HALF-YEAR REPORT 31ST DECEMBER 2006 DIRECTORS' REPORT The Directors present their report for the half-year ended 31 December 2006. DIRECTORS The names of the Directors of the Company in office during the half-year anduntil the date of this report are: Melissa Sturgess, Adrian Griffin, Michael Langoulant, Ed Nealon and Evan Kirby. Mr Cedric Bredenkamp was a director at the start of the financial year until hisresignation on 9 January 2007. REVIEW AND RESULTS OF OPERATIONS African operations Black Economic Empowerment (BEE) Compliance The BEE restructure of Dwyka's South African operations was completed in October2006. All of Dwyka's South African operations are now controlled by SuperkolongHoldings (Pty) Ltd in which Dwyka has a 70% interest. The remaining 30% interestis held by Dwyka's BEE partner, Kolong Investments (Pty) Ltd. The restructure is significant for Dwyka as it sees the Group move to 70%ownership of the De Beers Tailings Re-treatment Project ("DBTR") while securingthe same equity proportions in all of its South African operations. In addition,Dwyka's other projects and operations - comprising the Kimberley-basedIndustrial Products businesses, the prospective Bosele diamond fissureexploration project and Blaauwbosch, Newlands and New Elands undergroundkimberlite mines - are now fully BEE-compliant, with the result that Dwyka: - can proceed to conversion of all "old order" mining rights to "new order" rights as contemplated under applicable South African legislation; - can maximise development of its existing projects and operations; - is now placed in a strong position to secure further opportunities in South Africa; and - will, as regards its Industrial Products division, be viewed as a "preferred" supplier to South African mining companies and in relation to tendering and procurement with government. This re-structure bringing all of Dwyka's South African operations within theBEE compliance provides future certainty for all Dwyka's South Africanoperations and will provide the Board with the confidence to pursue longer termcommitment of capital to generate the maximum return from both existing assetsand potential acquisitions. Exploration and mining division De Beers Diamond Tailings Re-treatment Project - RSA The De Beers tailings operation is held, and managed, by Dwyka's 70% BEEsubsidiary, Superkolong (Pty) Ltd. Commercial recovery of diamonds commenced in the September 2006 quarter.Throughput increased progressively throughout the period and first revenuepayments were received from De Beers. A total of 70,501 tonnes was processed in the December 2006 quarter and 3,698carats of diamonds were recovered. Feed grades improved towards the end of thequarter as plant availability improved and increased throughputs were achieved. Under the terms of Superkolong's current agreement with De Beers, Superkolong ispaid a fixed amount to treat the material on a contract basis. Thus, Dwyka'sexposure to operating costs at designed throughput is minimal. After deductingoperating costs Superkolong shares the diamond revenue with De Beers. Blaauwbosch Kimberlite Mine - RSA Development continued at Blaauwbosch in preparation for production stoping. Thefirst of the stoping blocks were blasted and ore from those blocks were hauledto the surface in January 2007. It is anticipated full production rates fromunderground (10,000 tonnes per month) will be achieved by April 2007. Somekimberlite from development headings has been processed. Despite being heavilycontaminated with wall rocks the material achieved reasonable grade (about 15carats per hundred tonnes (cpht)) and produced some large stones. During the half year 10,076 tonnes of development were treated to recover 1,412carats at an average grade of 14.01 cpht. A number of large stones wererecovered. 24,866 tonnes of tailings were treated to recover 1,152 carats at anaverage grade of 4.63 cpht. Newlands Kimberlite Mine - RSA During the half year, 16,492 tonnes of kimberlite were treated to recover 1,960carats at an average grade of 11.88 cpht. A number of large stones wererecovered. Furthermore, 7,793 tonnes of tailings were treated to recover 673carats at an average grade of 8.63 cpht. Grades from the underground operation were below expectation however changes tomanagement and mining practice subsequent to the end of the period have improvedgrades and tonnes produced. Mahene and Itanana Kimberlites - Tanzania (JV with De Beers) Dwyka's second joint venture with De Beers involves assessment of thediamondiferous Mahene and Itanana kimberlite pipes in the Nzega District ofTanzania. Under the terms of its agreement with De Beers, Dwyka will bulk-sample thepipes, at a cost of about US$1.5 million. Dwyka's Tanzanian partner, ThorntreeMinerals Limited ('Thorntree'), is assisting with logistical, managerial andgovernment liaison support within Tanzania. Thorntree has the right toparticipate in 20% of Dwyka's equity interest in these projects once thedecision to progress to feasibility study is made, but will have to fund itsshare of costs to maintain its equity position. De Beers has the option to acquire a 51 per cent shareholding in Dwyka TanzaniaLimited, the Dwyka subsidiary holding the project, by reimbursing Dwyka threetimes the costs incurred by Dwyka to evaluate the projects. Alternatively, DeBeers can elect to remain a 5 per cent shareholder in Dwyka Tanzania Limited orconvert its shareholding into a 1.5 per cent gross royalty payable on diamondrevenues. As part of this agreement, Dwyka Tanzania will sell all diamondsrecovered in the licence areas to De Beers. No field activity was undertaken during the half year. Bosele Exploration - RSA Previous drilling by Dwyka revealed that the volcanoclastic sediments fillingthe crater exceed a vertical thickness of 200 metres; however, none of the holesdrilled penetrated the base of the sedimentary sequence. Bulk sampling of thesandy sediments in the upper part of the sequence showed them to bediamondiferous. Further ground based geological investigations were undertaken during the halfyear. New Elands Kimberlite Mine - RSA Contract tailings re-treatment was implemented at New Elands, with Dwykareceiving R2.50 per tonne treated with a minimum fee equivalent to 15,000 tonnesper month being payable. Nooitgedacht Alluvial Diamond Mine - RSA During the half year, 68,913 tonnes of gravel were treated to recover 490.11carats at an average grade of 0.71 cpht. Subsequent to the end of the period,the mine was placed on care and maintenance during the installation of a newcrushing plant. The plant will crush oversized material generated during thediamond recovery process. The crushed material will be utilised in bricks andconcrete produced by Superkolong Bricks (Pty) Ltd and Superkolong Cement (Pty)Ltd respectively. Industrial Division - RSA Dwyka's Industrial Division is operated by Superkolong Industrial (Pty) Ltd.This division achieved combined concrete and brick sales of R12.3 million forthe half year. Rising demand for bricks has resulted in the implementation oftwo shift operations of the brick plant subsequent to the end of the period. Subsequent to the end of the period Superkolong was awarded supply of concretefor a new Kimberly based prison facility. The term of the supply will lastapproximately 18 months. This supply is augmented by a number of othersignificant contracts which reflect rising demand for construction productswithin the region. Indian diamond exploration programme Laboratory testing of all outstanding samples collected during the 2006 Indianfield campaign was completed during the half year. This programme completed theformal obligations under the terms of the BHP Billiton Framework Agreement andhas resulted in two areas which will be assessed for further exploration. Lessprospective ground will be relinquished. Operating results The Group's performance during the half year has been disappointing. Theconsolidated loss for the period was $6,281,000 mainly due to challenges inbringing the DBTR plant on-line, delays in finalising underground development atBlaauwbosch and a drop off in grade at the Newlands mine. During the half year the majority of the Group's cash resources were allocatedto commissioning the DBTR plant. Slower than anticipated ramp-up together withissues affecting plant availability and throughput rates resulted in adisappointing performance by this unit. Since period end plant availability andthroughput rates have continued to improve and the performance of this unit isexpected to significantly improve in the coming half year. The time taken to complete the planned underground development work at theBlaauwbosch mine was longer than expected. As a result no underground productionwas achieved during the half year. Since period end production stoping hascommenced and a stronger performance is expected from this mine in the cominghalf year. At the Newlands mine high grade ore access was restricted resulting in lowerthan expected grades during the half year. Operational changes made towards theend of the period have resulted in initial grade improvements which will beclosely monitored during the coming half year. Future developments The Board of Dwyka recognises the opportunities presented by the current strongdemand for commodities and in particular metals. To improve the potential toreturn growth and profits to its shareholders, the Dwyka board has implemented aprogram of diversification. This program has initially resulted in agreementsentered into after the period end to acquire controlling interests in twocompanies; one of which has a nickel project in Burundi as its major asset, andthe other, a gold project in the Barberton Greenstone Belt, Swaziland. MATTERS SUBSEQUENT TO THE END OF THE HALF-YEAR a) On 30 January 2007 Dwyka Resources Limited acquired all of the issued sharesin Dannyland Pty Ltd, for the share consideration being 6,475,343 ordinaryshares issued on 2 February 2007 and 3,237,671 ordinary shares issued on 7 March2007. The issue of a further 6,475,343 ordinary shares as part consideration isdependant upon future exploration success. Dannyland Pty Ltd owns 100% of the rights to the Muremera nickel project inBurundi. The fair value of the net identifiable assets of the company at thedate of acquisition was $US5,000,000. The financial effects of the abovetransaction have not been brought to account at 31 December 2006. The operating results and assets and liabilities of the company will be broughtto account from 1 January 2007. b) On 7 March 2007 the company entered into a Memorandum of Understanding toacquire a 50% shareholding in Swaziland Gold Ventures Pty Ltd, the owner ofprospective gold mining tenements in Swaziland for the cash payment of$US200,000 and the issue of $US1,500,000 ordinary Dwyka Resources Limitedshares. Subject to further exploration activity Dwyka has the potential toincrease its holding in Swaziland Gold Ventures Pty Ltd to 100%. The financial effects of the above transaction have not been brought to accountat 31 December 2006. The operating results and assets and liabilities of thecompany will be brought to account upon completion of the transaction. c) On 12 March 2007 the company resolved to change its name to Dwyka ResourcesLimited. d) Since year end the Company has implemented an underwritten Share PurchasePlan offering all shareholders $A5,000 worth of ordinary shares at an issueprice of $0.31. As the Share Purchase Plan is underwritten the Share PurchasePlan will result in the issue of 8,870,950 ordinary shares. At the same time theCompany announced it had entered into an underwritten placement agreement toissue a further 7,258,065 ordinary shares at $A0.31 to clients of MontagueStockbrokers Pty Ltd. The underwritten Share Purchase Plan and placement willraise $A5,000,000 in working capital before issue costs. ROUNDING OF AMOUNTS The amounts contained in this Report have been rounded to the nearest $1,000(where rounding is applicable) under the option available to the Company underASIC Class order 98/0100. The Company is an entity to which the class orderapplies. AUDITOR'S INDEPENDENCE DECLARATION Section 307C of the Corporations Act 2001 requires our auditors,PricewaterhouseCoopers, to provide the Directors of the Company with anIndependence Declaration in relation to the review of the half-year financialreport. This Independence Declaration is set out on the following page. Dated at Perth this 16th day of March 2007. Signed in accordance with a resolution of the Directors. M SturgessExecutive Chairman AUDITOR'S INDEPENDENCE DECLARATION As lead auditor for the review of Dwyka Resources Limited for the half yearended 31 December 2006, I declare that to the best of my knowledge and belief,there have been: (a) no contraventions of the auditor independence requirements of theCorporations Act 2001 in relation to the review; and (b) no contraventions of any applicable code of professional conduct in relationto the review. This declaration is in respect of Dwyka Resources Limited and the entities itcontrolled during the period. Pierre Dreyer PerthPartner 16 March 2007PricewaterhouseCoopers CONSOLIDATED INCOME STATEMENTFOR THE HALF-YEAR ENDED 31 DECEMBER 2006 Half-year Half-year Ended Ended 31 Dec 2006 31 Dec 2005 $'000s $'000s Revenue from operations 3,406 3,866Cost of sales (4,152) (2,783) Gross profit (746) 1,083 Other income 237 269 Other expenses from ordinary activitiesAdministration (2,897) (2,376)Exploration written off (288) (699)Impairment of assets (1,077) -Impairment of goodwill (920) -Finance costs (293) -Other (297) - Loss before income tax (6,281) (1,723) Income tax expense - - Loss for half year (6,281) (1,723) Loss attributable to minority interest - -Loss attributable to members of Dwyka Resources Limited (6,281) (1,723) Basic loss per share (cents) (7.33) (2.15) Diluted loss per share (cents) (7.33) (2.15) The above Consolidated Income Statement should be read in conjunction with theaccompanying notes. CONSOLIDATED BALANCE SHEETAS AT 31 DECEMBER 2006 31 Dec 2006 30 June 2006 Note $'000s $'000s CURRENT ASSETSCash and cash equivalents 2,285 6,286Trade and other receivables 978 977Inventories 324 484 Total Current Assets 3,587 7,747 NON-CURRENT ASSETSReceivables 57 4,536Other financial assets 192 103Property, plant & equipment 8,894 3,597Exploration, evaluation and miningproperties 8,907 8,709Other 311 308 Total Non-Current Assets 18,361 17,253 TOTAL ASSETS 21,948 25,000 CURRENT LIABILITIESTrade and other payables 1,662 1,649Borrowings 205 76Provisions 247 249 Total Current Liabilities 2,114 1,974 NON-CURRENT LIABILITIESBorrowings 6,615 2,611Deferred tax liability 1,633 1,601Provisions 306 305 Total Non-Current Liabilities 8,554 4,517 TOTAL LIABILITES 10,668 6,491 NET ASSETS 11,280 18,509 EQUITY Contributed equity 3 56,912 56,912Reserves 1,320 2,217Accumulated losses (46,952) (40,669) Total parent entity interest 11,280 18,460Minority interest - 49 TOTAL EQUITY 11,280 18,509 The above Consolidated Balance Sheet should be read in conjunction with theaccompanying notes. CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR HALF YEAR ENDED 31 DECEMBER 2006 Half-year Half-year Ended Ended 31 Dec 2006 31 Dec 2005 $'000s $'000s Total equity at beginning of the half year 18,509 14,530 Adjustment on adoption of AASB 132 and AASB 139, net of tax Reserves - (82) Accumulated losses - 82Changes in fair value of available for sale financial assets, 73 99net of taxExchange differences on translation of foreign corporations (715) 557Net income recognised directly in equity (642) 656Loss for the half year (6,281) (1,723)Adjustment for prior years losses recouped on minority (49) -interest Total recognised income and expense for the half year (6,972) (1,067) Transactions with equity holders in their capacity as equityholders Contributions of equity, net of transaction costs - 5,901(note 3) Share based compensation reserve 318 139 Cost of increased equity in subsidiary (575) - Deferred share consideration on purchase of - 629subsidiaries (257) 6,669 Total equity at end of the half year 11,280 20,132 Total recognised income and expense for the half year isattributable to: Members of Dwyka Resources Limited (6,972) (1,067)Minority interest - - (6,972) (1,067) The above Consolidated Statement of Changes in Equity should be read inconjunction with the accompanying notes. CONSOLIDATED STATEMENT OF CASH FLOWSFOR HALF-YEAR ENDED 31 DECEMBER 2006 Half-year Half-year Ended Ended 31 Dec 2006 31 Dec 2005 $'000s $'000s CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers (inclusive of GST) 3,477 3,852Payments to suppliers and employees (inclusive of GST) (6,146) (5,396)Interest received 98 188Other income 104 29Interest paid (163) - Net cash outflow from operating activities (2,630) (1,327) CASH FLOW FROM INVESTING ACTIVITES Payments for plant & equipment (956) (277)Proceeds from sale of plant and equipment 2 1Payments for other financial assets - (250)Rehabilitation bonds - (8)Payment for acquisition for business unit, net of cash - (1,021)acquiredCash acquired on acquisition of business unit 124 -Payment for acquisition of increased subsidiary interest (575) -Proceeds from sale of other financial assets 17 2Payment for exploration/mine development (633) (2,107) Net cash outflow from investing activities (2,021) (3,660) CASH FLOWS FROM FINANCING ACTIVITIES Loans to other parties - (69)Loan to associates (614) (2,429)Proceeds from borrowings 979 -Repayment of borrowings (137) -Proceeds from issue of shares - 3,187Payment for equity issue costs - (107) Net cash inflows from financing activities 228 582 Net decrease in cash held (4,423) (4,405) Cash and cash equivalents at the beginning of the reporting 6,286 9,582periodEffect of exchange rate changes on cash 422 342 Cash and cash equivalents at the end of the reporting period 2,285 5,519 The above Consolidated Statement of Cash Flows should be read in conjunctionwith the accompanying notes. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2006 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This general purpose financial report for the interim half-year reporting periodended 31 December 2006 has been prepared in accordance with Accounting StandardAASB 134 Interim Financial Reporting and the Corporations Act 2001. This interim financial report does not include all the notes of the typenormally included in an annual financial report. Accordingly, this report is tobe read in conjunction with the annual report for the year ended 30 June 2006and any public announcements made by Dwyka Resources Limited during the interimreporting period in accordance with the continuous disclosure requirements ofthe Corporations Act 2001. The accounting policies adopted are consistent with those of the previousfinancial year and corresponding interim reporting period. SEGMENT INFORMATION Primary reporting format - Geographical segments Africa Australia India Unallocated ConsolidatedHalf-year 2006 $'000s $'000s $'000s $'000s $'000s Total segment revenue 3,545 - - 98 3,643 Segment result (4,986) (2,004) (296) 1,005 (6,281) Unallocated Africa Australia India $'000s ConsolidatedHalf-year 2005 $'000s $'000s $'000s $'000s Total segment revenue 3,896 1 - 188 4,085 Segment result (682) (1,272) (8) 239 (1,723) 3. EQUITY SECURITIES ISSUED Movements in equity securities during the half-year period were: Date Details Issue price Number of shares $'000s Half Year 2006 Fully paid ordinary shares 1/7/2006 Opening balance 85,737,134 56,693 31/12/2006 Balance 85,737,134 56,693 Employee Share plan shares issued with limited recourse employee loans 1/7/2006 Opening balance 7,000,001 - 21/12/2006 Employee share plan $1.00 1,000,000 - issue 31/12/2006 Balance 8,000,001 - Total ordinary shares 31/12/2006 on issue 93,737,135 56,693 Other equity securities Value of conversion rights - convertible notes, net of tax 1/7/2006 Opening balance 219 31/12/2006 Balance 219 31/12/2006 Total contributed equity 56,912 Half Year 2005 Fully paid ordinary shares 1/7/2005 Opening balance 77,706,862 50,726 30/8/2005 Mine purchase GBP0.35 2,747,802 2,308 consideration (A$0.84) 4/11/2005 Placement GBP0.30 4,500,000 3,187 ($A0.72) 22/12/2005 Placement in lieu of A$0.685 749,137 513 services rendered Total issue costs (107,) 31/12/2005 Balance 85,703,801 56,627 Employee Share plan shares issued with limited recourse employee loans 1/7/2005 Opening balance 2,733,334 - 21/12/2005 Employee share plan $0.87 750,000 - issue 21/12/2005 Employee share plan $1.00 3,350,000 - issue 31/12/2005 Balance 6,833,334 - Total ordinary shares on31/12/2005 issue 92,537,135 56,627 Other equity securities 1/7/2005 Opening balance - 31/12/2005 Balance - 31/12/2005 Total contributed equity 56,627 4 BUSINESS COMBINATION Half Year 2006 Effective from 1 October 2006 the Group completed a Black Economic Empowerment(BEE) transaction with its BEE partner - Kolong Investments Limited. Thistransaction was entered into to ensure all South African operations wereclassified as BEE compliant under South African law. The transaction resulted inDwyka - increasing its holding in Superkolong Pty Ltd, the owner and operator of thede Beers Tailings treatment plant from 40% to 70%; and equipment; and - reducing its interest in the Dwyka Resources industrial business and itsvarious mining assets from 100% to 70%. The initial 40% ownership interest in Superkolong Pty Ltd was acquired onincorporation of the company for nominal value. The results of Superkolong Pty Ltd are incorporated into the results of theGroup as from 1 October 2006. This company contributed $334,318 in revenues anda net loss of $874,731. If the acquisition had occurred on 1 July 2006, theconsolidated revenue and consolidated loss for the half year would have been$518,148 and $6,281,000 respectively. Details of the fair value of the assets and liabilities acquired and goodwillare as follows: AUD $'000sPurchase consideration:Cash paid 347Deferred cash consideration 205Share of subsidiaries net liabilities disposed -Allocated to Biz Africa net assets position (347)Total purchase consideration on acquisition ofSuperkolong 205Fair value of net identifiable liabilities acquired (refer below) (715) Goodwill 920 In the event that the Group does not pay Kolong Investments Limited a ZAR500,000 dividend for each of the 30 June 2008, 30 June 2009, and 30 June 2010periods, the Group shall make a contingent cash payment to Kolong InvestmentsLimited for the difference between the actual dividend paid and ZAR 500,000. Atthe date of this report, the payment of dividends is not probable and futurecash payments have been recognised as deferred cash payments. This goodwill represents future income streams to flow from the DBTR plant,however based on current performance of the DBTR plant this goodwill has beenfully written off in this half year period. The fair value of assets and liabilities acquired are based on discounted cash flow models. No acquisition provisions were created. The assets and liabilities arising from the acquisition are as follows : Carrying amount Fair value $'000s $'000s Cash and cash equivalents 124 124Trade and other receivables 569 569Plant and equipment 6,428 6,428Trade and other payables (75) (75)Non-current payables - unsecured (4,776) (4,776)Non-current payables -secured (2,985) (2,985) Net identifiable liabilities acquired (715) (715) Half Year 2005 On 1 September 2006 the parent entity effected the acquisition of 100% of theissued share capital of Kophia Diamonds Pty Ltd and Bellsbank Mining Number OnePty Ltd. These entities were acquired as a single business acquisitiontransaction. Together these companies own 3 underground mines in South Africa. Theconsideration for this purchase is the issue of 2,747,802 shares and the paymentof ZAR5 million to the vendors of the companies. This acquisition incorporatesthe provision of future services to the Group by the vendors and includesoperational targets for the mines acquired. The acquired business contributed revenues of $299,094 and a net loss of $41,614to the Group for the period from 1 October 2006 to 31 December 2006. If theacquisition had occurred on 1 July 2006, the acquired business would havecontributed revenues of $299,094 and a net loss of $112,978 to the Group. Details of the fair value of the assets and liabilities acquired and goodwill are as follows: AUD $'000sPurchase consideration:Cash paid (ZAR5 million) 1,021Parent company shares (valued at the market price ofthose shares as at the date of acquisition) 2,308Deferred issue of Parent company shares (valued at themarket price of those shares as at the date ofacquisition) 629 Total purchase consideration 3,958Fair value of net identifiable assets acquired 3,958 Goodwill - At the date of acquisition it was considered probable that at least a further749,400 parent company shares will be issued as additional consideration for theacquisition. This deferred share issue has been valued at the market price ofthose shares as at the date of acquisition. Further in the event that certainpre-determined mine performance hurdles are achieved by the subsidiary,additional consideration in the form of shares and options may be payable. It isnot possible to determine if additional shares and/or options will be issued.The fair value of assets and liabilities acquired are based on discounted cashflow models. No acquisition provisions were created. The assets and liabilities arising from the acquisition are as follows : Carrying amount Fair value $'000s $'000s Receivables 211 211Inventories 345 345Plant and equipment 818 818Exploration - 4,630Mine property/development 170 2,370Deferred tax asset 149 -Trade payables (45) (45)Deferred tax liability - (1,984)Rehabilitation provision - (216)Non-current payables (776) (776)Non-current loans from vendors (1,395) (1,395) Net identifiable assets acquired (523) 3,958 5 CONTINGENCIES There has been no change in contingent liabilities since the last annual report. 6 SUBSEQUENT EVENTS a) On 30 January 2007 Dwyka Resources Limited acquired all of the issued sharesin Dannyland Pty Ltd, for the share consideration being 6,475,343 ordinaryshares issued on 2 February 2007 and 3,237,671 ordinary shares issued on 7 March2007. The issue of a further 6,475,343 ordinary shares as part consideration isdependant upon future exploration success. Dannyland Pty Ltd owns 100% of the rights to the Muremera nickel project inBurundi. The fair value of the net identifiable assets of the company at thedate of acquisition was $US5,000,000. The financial effects of the abovetransaction have not been brought to account at 31 December 2006. The operating results and assets and liabilities of the company will be broughtto account from 1 January 2007. b) On 7 March 2007 the company entered into a Memorandum of Understanding toacquire a 50% shareholding in Swaziland Gold Ventures Pty Ltd, the owner ofprospective gold mining tenements in Swaziland for the cash payment of$US200,000 and the issue of $US1,500,000 ordinary Dwyka Resources Limitedshares. Subject to further exploration activity Dwyka has the potential toincrease its holding in Swaziland Gold Ventures Pty Ltd to 100%. The financial effects of the above transaction have not been brought to accountat 31 December 2006. The operating results and assets and liabilities of thecompany will be brought to account upon completion of the transaction. c) On 12 March 2007 the company resolved to change its name to Dwyka ResourcesLimited. d) Since year end the Company has implemented an underwritten Share PurchasePlan offering all shareholders $5,000 worth of ordinary shares at an issue priceof $0.31. As the Share Purchase Plan is underwritten the Share Purchase Planwill result in the issue of 8,870,950 ordinary shares. At the same time theCompany announced it had entered into an underwritten placement agreement toissue a further 7,258,065 ordinary shares at $0.31 to clients of MontagueStockbrokers Pty Ltd. The underwritten Share Purchase Plan and placement willraise $5,000,000 in working capital before issue costs. DWYKA RESOURCES LIMITED DIRECTORS' DECLARATION In the directors' opinion: (a) the financial statements and notes set out on pages 7 to 17 are inaccordance with the Corporations Act 2001, including: (i) complying with Accounting Standards, the Corporations Regulations 2001 andother mandatory professional reporting requirements; and (ii) giving a true and fair view of the consolidated entity's financial positionas at 31 December 2006 and of its performance, for the half-year ended on thatdate; and (b) there are reasonable grounds to believe that Dwyka Resources Limited will beable to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Directors. M Sturgess Executive Chairman Dated at Perth, this 16th day of March 2007. PRICEWATERHOUSECOOPERSABN 52 780 433 757 QV1250 St Georges TerracePERTH WA 6000GPO Box D198PERTH WA 6840DX 77 PerthAustraliawww.pwc.com/auTelephone +61 8 9238 3000Facsimile +61 8 9238 3999 INDEPENDENT REVIEW REPORT TO THE MEMBERS OF DWYKA RESOURCES LIMITED Report on the Half-Year Financial Report We have reviewed the accompanying half-year financial report of Dwyka ResourcesLimited, which comprises the balance sheet as at 31 December 2006, and theincome statement, statement of changes in equity and cash flow statement for thehalf-year ended on that date, other selected explanatory notes and thedirectors' declaration for the Dwyka Resources Limited Group (the consolidatedentity). The consolidated entity comprises both Dwyka Resources Limited (thecompany) and the entities it controlled during that half-year. Directors' Responsibility for the Half-Year Financial Report The directors of the company are responsible for the preparation and fairpresentation of the half-year financial report in accordance with AustralianAccounting Standards (including the Australian Accounting Interpretations) andthe Corporations Act 2001. This responsibility includes designing, implementingand maintaining internal control relevant to the preparation and fairpresentation of the half-year financial report that is free from materialmisstatement, whether due to fraud or error; selecting and applying appropriateaccounting policies; and making accounting estimates that are reasonable in thecircumstances. Auditor's Responsibility Our responsibility is to express a conclusion on the half-year financial reportbased on our review. We conducted our review in accordance with AuditingStandard on Review Engagements ASRE 2410 Review of an Interim Financial ReportPerformed by the Independent Auditor of the Entity, in order to state whether,on the basis of the procedures described, we have become aware of any matterthat makes us believe that the financial report is not in accordance with theCorporations Act 2001 including: giving a true and fair view of the consolidatedentity's financial position as at 31 December 2006 and its performance for thehalf-year ended on that date; and complying with Accounting Standard AASB 134Interim Financial Reporting and the Corporations Regulations 2001. As theauditor of Dwyka Diamonds Limited, ASRE 2410 requires that we comply with theethical requirements relevant to the audit of the annual financial report. A review of a half-year financial report consists of making enquiries, primarilyof persons responsible for financial and accounting matters, and applyinganalytical and other review procedures. It also includes reading the otherinformation included with the financial report to determine whether it containsany material inconsistencies with the financial report. A review issubstantially less in scope than an audit conducted in accordance withAustralian Auditing Standards and consequently does not enable us to obtainassurance that we would become aware of all significant matters that might beidentified in an audit. Accordingly, we do not express an audit opinion. Theseprocedures do not provide all the evidence that would be required in an audit,thus the level of assurance provided is less than that given in an audit. Wehave not performed an audit, and accordingly, we do not express an auditopinion. For further explanation of a review, visit our websitehttp:/www.pwc.com/au/financialstatementaudit While we considered the effectiveness of management's internal controls overfinancial reporting when determining the nature and extent of our procedures,our review was not designed to provide assurance on internal controls. Our review did not involve an analysis of the prudence of business decisionsmade by directors or management. Independence In conducting our review, we have complied with the independence requirements ofthe Corporations Act 2001. Conclusion Based on our review, which is not an audit, we have not become aware of anymatter that makes us believe that the half-year financial report of DwykaResources Limited is not in accordance with the Corporations Act 2001 including: (a) giving a true and fair view of the consolidated entity's financial positionas at 31 December 2006 and of its performance for the half-year ended on thatdate; and (b) complying with Accounting Standard AASB 134 Interim Financial Reporting andCorporations Regulations 2001. PricewaterhouseCoopersPierre Dreyer PerthPartner 16 March 2007 DWYKA RESOURCES LIMITEDAND ITS CONTROLLED ENTITIES CORPORATE DIRECTORY DIRECTORSM.J. Sturgess, A Griffin, E.F.G Nealon, E. Kirby, M.J. Langoulant COMPANY SECRETARY:M.J. Langoulant REGISTERED OFFICE:98 Colin Street WEST PERTH WA 6005Telephone: (+61 8) 9324 2955Facsimile: (+61 8) 9324 2977 ADVISER AND BROKERAmbrian Partners Limited8 Angel Court, London EC2R 7HPUnited Kingdom AUDITORSPricewaterhouseCoopersQV1, 250 St. Georges TcePERTH WA 6000 AUSTRALIA LAWYERS TO THE COMPANYAustralia:Clayton UtzQV1, 250 St Georges TcePERTH WA 6000 South Africa:Werksmans Attorneys155 - 5th StreetSandown, Sandton 2196SOUTH AFRICA SHARE REGISTRYAustralia:Computershare Investor Services Pty LtdReserve Bank Building, Level 245 St George's TerracePERTH WA 6000 United Kingdom:Computershare Investor Services Pty LtdPo Box 859The Pavillions, Bridgewater RoadBristol BS99 1XZUNITED KINGDOM ASX CODEShares: DWY AIM CODEShares: DWY This information is provided by RNS The company news service from the London Stock Exchange

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Nyota Minerals
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Value8,972.64
Change0.00