2006 Annual Report
Address by the Chairman
It is my pleasure to present to you the Annual Report for the year to 30 June 2006.
Exploration funding during the year was applied mainly to the Company’s adjoining projects in Namibia and Botswana, where the Company is exploring for diamonds and base metals respectively.
During the year significant numbers of very fresh kimberlitic garnets were recovered from a number of drill holes, drilled in the western area of the Company’s exploration licences at Tsumkwe in Namibia. The fact that these garnets, which were recovered from the base of the Kalahari sand cover, show signs of little wear, indicates the probability that they have shed from a local kimberlite source. Accordingly the Company plans to conduct a ground gravity survey in this area in an effort to locate any kimberlites.
In neighbouring Botswana, the Company has concentrated on drilling the large 2.4 kilometre long zone of zinc, lead and silver mineralisation at Kihabe. Since September last year, the zinc price has risen significantly from around US$ 1,350 per tonne to over US$ 3,800 per tonne in May this year and is currently trading at around US$ 3,400 per tonne.
With the indication of these metal price rises, the Company commissioned ProMet Engineers in September 2005 to conduct a scoping study on the Kihabe project. This study was completed in November 2005 and concluded that the Kihabe project had the potential to generate significant cash flows for the Company at prevailing metal prices. Consequently the Company commenced an infill drilling programme at Kihabe in late March this year, in order to upgrade this zone of mineralisation to a JORC compliant resource. Whilst the Company has experienced some delays in its initial schedule, it is endeavouring to maintain the objective of producing a pre-feasibility study on the project by the end of 2006 or early 2007. If this pre-feasibility study proves to be positive, the Company will proceed to a bankable feasibility to hopefully be completed in the second half of 2007.
At Telfer, in Australia, Barrick Gold of Australia Pty Ltd, completed the deep diamond core drilling programme at East Thompson’s Dome and Tim’s Dome, toward the end of last year and have now withdrawn from the joint venture. A number of other parties have expressed interest in forming a joint venture on this project.
I should like to thank all Members of our Staff and fellow Board Members for the significant support that they have all given to the Company during the year. The Company’s operations in Africa require employees to be away from their families for significant periods of time, and because of the time difference, those in Australia are frequently called upon to work extended hours. For this, I am extremely grateful.
Nigel Forester
Chairman & Managing Director
