29th Jul 2008 09:58
DWYKA RESOURCES LIMITED (ASX:DWY.AX; AIM:DWY.L)
A.C.N. 060 938 552
QUARTERLY REPORT 30 JUNE 2008
HIGHLIGHTS DURING THE QUARTER
PHILIPPINES COAL PROJECT
- Acquired option to acquire an interest in the Daguma Coal Project located on southern Mindanao in the Philippines. Since exercised in July 2008.
- Conclusion of services agreement with Tomori Enterprises Limited to provide ongoing liaison and facilitation services for the life of the Daguma Coal Project
- Successful capital raising of GBP10.3m (A$21.3m) to finance acquisition and exploration expenditure
- Review of historical data on the Daguma Coal Project completed
MUREMERA NICKEL PROJECT IN BURUNDI
- Phase One of Muremera exploration programme completed
- Phase Two, due to commence, concentrating on drilling geophysical anomalies derived from recently completed VTEM survey
- Muremera geological environment confirmed to be similar to that at nearby Kabanga which is currently has an inferred resource of 36Mt @ 2.8% Nickel
SWAZIGOLD PROJECT IN SWAZILAND
- Core drilling at Daisy Prospect returns gold values of 3.39 g/t over 10m
- High grade intersection of 16.56 g/t over 1m
- Trenching at Kobolondo Prospect returns several significant gold intersections
- Option to increase interest in the SwaziGold Project, extended from 30 June 2008 until 30 September 2008.
KIMCOR DIAMONDS PLC
- Increase in overall diamond production to 5,173 carats in May 2008 (compared with previous average monthly production of 1,200 carats)
PHILIPPINES COAL PROJECT
On 7 May 2008, Dwyka announced that it had entered into an option giving it the ability to acquire an interest in the Daguma and Bonanza coal deposits located on the Philippines island of Mindanao (collectively, the 'Project'). A review of historic data in relation to the Project was subsequently completed by Dwyka and the results of that review were announced by the Company on 29 May 2008.
The Company also announced on 28 May 2008 that pursuant to the terms of a placing agreement, Ambrian Partners Limited as broker to the Company had conditionally placed 39,745,500 fully paid ordinary shares ('Shares') at a price of 26 pence per Share with selected institutional investors to raise gross proceeds of approximately £10.3 million (A$21.3 million) in order to finance the acquisition by the Company of an initial 30% interest in the Project and related exploration and development costs (the 'Placing').
An Extraordinary General Meeting of Dwyka shareholders ("EGM") held on 30 June 2008, approved the Placing, the exercise by the Company of an option to acquire an interest in the Project, the issue of Shares in connection with the exercise of that option and the issue of Shares as consideration pursuant to a services agreement in connection with the Project ("Services Agreement").
Subsequent to the end of the Quarter, Dwyka announced that a drilling agreement in relation to an initial 5000 metre core drilling programme for the Project (to result in approximately 25 large diameter drill holes) had been signed and that drilling was expected to commence shortly. In addition, the Company has announced that it had exercised its Project option, permitting it to acquire an indirect 30% interest in the Project by 18 January 2009, with the possibility of thereafter increasing that interest to a maximum of 100%. As a result of the exercise of that option, Dwyka also announced that it would pay US$1.25million to Tomori Enterprises Limited ("Tomori") and would issue to Tomori a total of 17,494,071 Shares at a deemed price of 26 pence per Share. These Shares were issued as partial consideration for the exercise of the Project option and as full consideration for the provision by Tomori to Dwyka, pursuant to the Services Agreement, of Project-related services over the life of the Project.
MUREMERA PROJECT
During the quarter, it was announced that BHP Billiton had successfully completed Phase One of the exploration programme at the Muremera Nickel Project, comprising a VTEM study and first phase drilling. Phase 2 of drilling is due to commence in the September Quarter.
The results of the VTEM studies and first phase drilling indicates that the geological environment at Muremera is similar to that at the nearby Kabanga deposit which currently has an inferred resource grading [email protected]% Nickel, and that the Muremera district remains positive for higher grade Kabanga North type Nickel mineralization.
The geological methods which aided the discovery of Kabanga are being used at Muremera and include early stage geophysical studies and orientation drilling. Orientation drilling has been undertaken to increase the likelihood of locating economic zones of nickel bearing sulphide in such a complex structure.
The second phase of the exploration programme will be focused on more precise and defined drilling of targets identified from the recently received VTEM results.
The Muremera Nickel Project is located within one of the world's principal nickel provinces, just 2 kilometres from, almost adjacent to and in the same geological sequence as, the giant Xstrata/Barrick Kabanga deposit in Tanzania which currently has an inferred resource of 36Mt @ 2.8% Nickel. The Kabanga deposit is thought to be the world's largest undeveloped nickel sulphide deposit and has similar geophysical anomalies to those at Muremera.
As a result of the completion of Phase 1, BHP Billiton has satisfied its requirements to earn an initial 10% interest in the Project. BHP Billiton has the ability to earn a total interest of up to 50% in the Project by carrying the Project through to completion of a concept study and sole funding at least US$5.2million worth of Project expenditure. It is anticipated that the amount to be spent by BHP Billiton to reach an overall interest of 50% in the Project is likely to be significantly greater than the minimum required amount of US$5.2million, as BHP Billiton has already spent approximately US$4.2 million in relation to Phase One (as against the minimum required amount for that phase of US$1.2million).
SWAZIGOLD PROJECT
Daisy Prospect
Drilling
During the Quarter, core drilling was conducted at the Daisy Prospect as part of a 2000 metre drilling diamond drilling programme underway in connection with the SwaziGold Project. The assay results for the first hole (SG03D) returned significant gold values located between 116 and 126m. The 10m intersection returned an average gold content of 3.39 g/t which includes a high grade intersection of 16.56 g/t over 1m. Drilling of SG04 D was completed on the 26th of April at a depth of 234.73m. The southernmost extent of the ore body was intersected from 173 to 176m with an average grade of 0.31 g/t over 3 metres. The mineralization corresponds to similar patterns of mineralization in previous drilling programmes, and evidence suggests that a major east-west trend fault truncates the ore body to the south.
Drilling of SG05 D was completed on the 18th of June at a depth 190.49m. The complete host rock stratigraphy and alteration zone were Intersected in BH SG 05D (similar to SG 03D). The hole has a high silicic content, probably as a result of late stage post mineralization faulting and associated fluid infiltration. It therefore intersected no significant gold mineralisation. The inferred relict ore zone is located at 142.38 -153.49 metres. Figure 1 and Figure 2 indicates the borehole positions of the current and proposed boreholes and the proposed daisy oreshoot.
To view Figures 1 and 2 please click on the following web link:
http://www.rns-pdf.londonstockexchange.com/rns/0916A_-2008-7-29.pdf
Soil Geochemistry
Infill soil geochemistry on a 100 metre x 50 metre grid was completed in the south-western portion of the Daisy Prospect during the quarter (209 new samples). These results, together with previous results as reported on 3 December 2007 have defined a 1250 metre x 500 metre >100ppb gold in soil anomaly (peak 1560ppb) to the south-west of the Daisy mine. The North-Eastern part of this anomaly corresponds with the old Gordon Mine. The sampling program corresponds with the old Gordon workings, plant area and some of the historical pits and trenches. The soil geochemistry also identified additional reverse circulation ("RC") drilling targets located to the north of the known Daisy Prospect.
Kobolondo Prospect
Trenching
To date, a total of eight trenches have been excavated on the Main Shear Zone (the main gold bearing structure) in the 450 metre strike length. Trench spacing ranges from 30 - 70 metre. Mineralisation in the Main Shear Zone has been closed-off to the south-west but remains open to the north-east. The following table summarises the intersections >1g/t Au:
Trench 1: 2.59g/t Au over 11m (including 6.30g/t Au over 4m)
Trench 2: 1.09g/t Au over 3m
Trench 3: No intersections >1g/t Au
Trench 4: 1.38g/t Au over 2m
Trench 5: 6.59g/t Au over 4m;
1.56g/t Au over 2m;
2.72g/t Au over 2m
Trench 6: 1.12g/t Au over 1m;
1.06g/t Au over 2m;
1.64g/t Au over 1m
Trench 7: 2.60g/t Au over 2m ;
4.84g/t Au over 1m
Trench 8: 5.08g/t Au over 3m ;
1.27g/t Au over 1m
Drilling
Ground conditions at the SwaziGold Project are typical of the Barberton style of geology. In particular, the ground conditions at Kobolondo are poor, suggesting that there has been plenty of geological activity. This activity, in the form of weathering and oxidation, implies significant potential for larger trap sites and zones prone to preferential mineralisation. After initial core drilling with Triple Tube Core Barrels at Kobolondo, it has been decided to move to RC drilling to obtain better results, as Kobolondo remains an important target. This RC drill programme is expected to commence as soon as a rig is available.
Equity Earn-in
Under the terms of a Shareholders and Earn-in Agreement, Dwyka is able to progressively increase its interest in Swazi Gold Ventures (Pty) Limited ("SGV") (up to a maximum of 100%) by funding Project exploration and making certain periodic share and cash-based payments. As a result of a three-month extension to the deadline for completion of the current phase under that agreement, Dwyka has until 30 September 2008 to spend a total of US$750,000 in order to increase its equity in SGV from 50% to 70%. As at 30 June 2008, Dwyka had incurred total project expenditure of US$667,137.
The extension will enable the completion of the 3D modeling and associated resource estimations of the main prospects in relation to the SwaziGold Project.
KIMCOR DIAMONDS PLC
During the Quarter, Kimcor Diamonds Plc ("KimCor") reported diamond production of 5,173 carats for May 2008, as compared with previous average monthly production of 1,200 carats. In addition, KimCor also announced the following information:
SMI4
During May, diamond recovery from the SMI4 tailings project averaged 12.23cpht against a budget of 6cpht.
New equipment required to take SMI4 processing rates up to 150,000 tonnes per month ("tpm") was intended to be installed and commissioned during the September 2008 quarter.
Newlands
Newlands mine achieved the budgeted recoverable grades for both kimberlite and tailings during May 2008. A new crusher circuit was installed during late May and KimCor expected the operation to process 7,000tpm of kimberlite and 23,000tpm of tailings during June 2008.
Blaauwbosch
The hoisting from underground and processing of kimberlite at Blaauwbosch mine was expected to increase from 100 to 400 tonnes per shift in June following the completion of a new ore pass that had previously been a bottleneck to production. This new ore pass was scheduled for completion by 16 June 2008.
Nooitegdacht
The terms of a new strategic alliance were under negotiation with a South African based diamond mining company with particular expertise in large-scale alluvial mining. Initially the proposal would see the existing KimCor processing plant operate at capacity of 45,000tpm with the introduction of a new fleet of haul trucks and excavators for mining. The medium-term objective would be to invest in mobile pan processing plants to replace the existing plant.
MELISSA STURGESS
Chief Executive Officer
The technical exploration and mining information contained in the above announcement has been reviewed and
approved by Ed Nealon, who has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is qualified as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. Nealon is a Dwyka Resources Limited Director and meets the criteria of a qualified person under the AIM guidance note for mining, oil and gas companies.
Ed Nealon consents to the inclusion in this announcement of such information in the form and context in which it appears.
Enquiries:
Melissa Sturgess
Dwyka Resources Limited
(+618) 9324 2955 or [email protected]
In the United Kingdom
Richard Brown
Ambrian Partners Limited
+44 (0)20 7634 4700
Press enquiries
Charlie Geller/Leesa Peters
Conduit PR
(+44) 20 7429 6604 or (+44) 7970 067 320
or visit http://www.dwyresources.com
Related Shares:
Nyota Minerals