TAW 0.00% 31.0¢ tawana resources nl

discovery exciting - article

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    16 April 2003

    A diamond exploration company with Wellington roots, Tawana Resources, might have made a massive US$1 billion diamond discovery in the Kimberley region of South Africa - but confirmation is months away.

    "The Daniel Project alluvial channel is an exciting and potentially very large discovery. However, it has not yet been tested for diamonds," Tawana said yesterday.

    The Australian-listed Tawana shares rocketed from A48 cents to A65 cents yesterday, while share options went from A3 cents to A20 cents.

    Among the shareholders are about 400 based in Wellington.

    Tawana's Eastbourne-based director Philip Chisholm said yesterday the news was "seriously exciting", though it was early days and the downside was: "It's worth nothing". It was hard to put a potential value on the share price, but if the find lived up to expectations: "You are talking about a share price over A$10," Mr Chisholm said. "These sorts of discoveries are very rare."

    The only other alluvial discovery was the Bow River mine, also found by Tawana managing director Wolf Marx, which turned out to be worth about US$165 million.

    "This deposit looks to be about 10 times bigger - you are talking about a deposit potentially worth in excess of US$1 billion," Mr Chisholm said.

    The next step was to take a 500-tonne bulk sample to see if there are diamonds in the quantities they expected.

    "All will be known by November," he said. It would not take long to get into mine production and raising money to do that would be a "cakewalk", he said.

    The Daniel Project is a BHP Billiton and Tawana joint venture. Project operator Tawana may earn a 30 per cent interest in any discovery within the project area, but may be able to increase that by another 10 per cent.

    The project is in a big, ancient river bed in an area about two kilometres wide and 7km long.

    It is 6km from the De Beers-owned Finsch diamond mine, one of the biggest in the world.

    The closeness to the Finsch mine meant a high probability that the Daniel Project would produce diamonds, Tawana said.

    There were extremely large "potholes" underground - the base of ancient waterfalls where diamonds may have been caught during millions of years.

    The Finsch mine produced about two million carats a year, worth about US$100 million.

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