30th Jan 2009 10:58
DWYKA RESOURCES LIMITED (ASX:DWY.AX; AIM:DWY.L)
QUARTERLY REPORT 31 DECEMBER 2008
A.C.N. 060 938 55
Highlights during the Quarter
Revised Exploration and Development Strategy
Muremera Nickel Project in Burundi
Drilling complete on the first 6 holes of the Phase Two programme
Two massive sulphide intersections of 4.27 metres and 6.99 metres made in one borehole returning an average weighted composite grade of approximately 1 per cent. nickel equivalent
SwaziGold Project in Swaziland
Extension of timetable for current work programme
Kimcor Diamonds Plc
Sale of diamond and industrial assets to Belmont Mining Limited
Corporate
Decision to preserve cash and subsequent cessation of exploration activities at the Daguma/Bonanza Coal Project in the Philippines
Cash balances at 31 December 2008 GBP7.3 million (AUD$15.5 million)
REVISED EXPLORATION AND DEVELOPMENT STRATEGY
As previously announced, in light of the economic turmoil affecting world stock markets and the financial sector generally the Board has adopted a revised exploration and development strategy.
The Board's new general strategy is to preserve capital during the current economic downturn, both in the interests of protecting shareholder value and in order to maximize cash available to the Company for potential future strategic acquisitions. In line with this strategy, during the Quarter the Board conducted a review of the Company's portfolio of projects and the expenditure commitments associated with those projects. As a result of this review, the decision was made to cease exploration activities at the Daguma/Bonanza coal project in the Philippines, on the basis that continuing involvement in that project would have depleted Dwyka's cash reserves to approximately GBP2.4m by the end of January 2009 with the requirement for a further acquisition payment to be made at that stage. Movements in the AUD:USD exchange rates in the months leading up to the decision to cease had additionally meant that the cost of making such acquisition payments had increased by over 25% since funds were raised for the project in May 2008.
Consistent with the above strategy, the Company also announced during the Quarter that it had renegotiated the timetable for its earn-in under the Swazigold Project, with the current work programme extended until 28 February 2009.
As a final component of the revised strategy, the Company will on an ongoing basis search for and evaluate suitable acquisition opportunities that would add substantial value for Dwyka shareholders when economic conditions stabilize and improve.
MUREMERA PROJECT
During the Quarter a total of 6 holes were drilled as part of Phase Two of BHP Billiton's earn-in programme in relation to the Muremera Project in Burundi ("Project"). Phase Two of BHP Billiton's earn-in predominantly relates to the testing of various targets identified during the initial Phase of exploration completed earlier in 2008. The Phase Two drilling to date has resulted in one target, producing two intersections of massive sulphide of 4.27m and 6.99m at depths between 132.61m to 136.88m and 144.8m to 151.79m, respectively, returning an average weighted composite grade of approximately 1 per cent Nickel equivalent.
Detailed results of those intersections are set out in the table below.
|
Drill Hole |
Depth |
Depth |
Intersection |
Ni |
Cu |
Co |
|
(No) |
From (m) |
To (m) |
(m) |
(% wt avg) |
(% wt avg) |
(% wt avg) |
|
RUJA D001 |
132.61 |
136.88 |
4.27 |
0.68 |
0.3 |
0.11 |
|
RUJA D001 |
144.8 |
151.79 |
6.99 |
0.73 |
0.33 |
0.11 |
|
RUJA D001 |
132.61 |
153.8 |
21.19 |
0.49 |
0.21 |
0.08 |
The geological environment at Muremera is similar to that at the nearby Kabanga deposit, which is currently estimated to contain a resource of 48.1 Mt @ 2.72% Ni, 0.38% Cu, 0.51 g/t PGM (3.05% Ni eq.).
BHP Billiton has the option to spend a minimum of US$5.2 million on the Project, to earn up to a 50% interest in Danyland Limited, the Dwyka subsidiary which holds the exploration rights for the nickel and associated minerals within the Project area. BHP Billiton spent a total of approximately US$4.2 million in relation to the Project during Phase One.
SWAZIGOLD PROJECT
On 29 October 2008, Dwyka announced that it had successfully renegotiated the timetable for the work programme (and the corresponding project earn-in schedule) in relation to the SwaziGold project ("SG Project"), so as to extend the current project phase to 28 February 2009. Approximately US$22,000 further in exploration expenditure in relation to the SG Project is required in order to be able to increase its interest in Swazi Gold Ventures (Pty) Ltd (the holder of a 90% interest in the SG Project company) from 50% to 70%.
KIMCOR DIAMONDS PLC
During the Quarter, Kimcor Diamonds Plc ("KimCor"), in which Dwyka has a shareholding of 48%, announced that it had signed a Sale of Shares Agreement with Belmont Mining Limited ("Belmont") pursuant to which KimCor would effectively dispose of its diamond and industrial businesses via the sale to Belmont of all of the shares in the KimCor subsidiaries acting as holding companies for those businesses, in return for Belmont assuming liabilities in relation to those businesses and paying £500,000 in cash to KimCor. The signing of this agreement came in response to a dramatic downturn in the market for rough and unpolished diamonds as a consequence of the global financial crisis and resultant concerns about the future profitability for KimCor of its Southern African-based diamond assets. The agreement, which was subject to the approval of KimCor shareholders in general meeting, became unconditional when such approval was obtained at the KimCor EGM held on 8 January 2009. At that EGM, KimCor shareholders also voted to change the name of the company to Carlton Resources Plc.
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 m[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
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Nyota Minerals