RLD.L Regulatory News (RLD)

19 Mar 2007 07:00

Tanzanite One Limited19 March 2007 19 March 2007 TANZANITE ONE LIMITED ('TANZANITEONE', 'THE GROUP' OR 'THE COMPANY') INCORPORATED AND REGISTERED IN BERMUDA EXEMPT COMPANY NUMBER EC33385 RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006 Tanzanite One Ltd (AIM:TNZ), the premier miner of the gemstone tanzanite, ispleased to announce its results for the full year ended 31 December 2006. Pleasenote that throughout the document, $ refers to US$. HIGHLIGHTS * Net profit after tax of $1.8 million after non cash write downs of $3.2 million (net of tax) * Net profit before tax and write-downs of $7.2 million * Gross margin of 44% * Income tax paid of $2.4 million * Basic earnings per common share of 2.47 cents * Net cash generated from operations of $7.5 million * Full year dividend increases by 33% to 8 cents per share * Drilling results indicate mineralisation at greater depths * Early stoping trials produce promising results +-------------------------------------+-----------+-----------+----------+|Key statistics: | FY 2006| FY 2005| Movement|+-------------------------------------+-----------+-----------+----------+|Net profit | $1.8| $9.8| (82%)|| | million| million| |+-------------------------------------+-----------+-----------+----------+|After tax effect of closure of | $3.2| -| 100%||jewellery business and intangible | million| | ||assets written off | | | |+-------------------------------------+-----------+-----------+----------+|Revenue | $36.0| $41.1| (12%)|| | million| million| |+-------------------------------------+-----------+-----------+----------+|Gross margin | 44%| 61%| (28%)|+-------------------------------------+-----------+-----------+----------+|Tonnes processed | 15,896| 20,931| (24%)|| | | | |+-------------------------------------+-----------+-----------+----------+|Carats recovered |1.2 million|1.4 million| (14%)|| | cts| cts| |+-------------------------------------+-----------+-----------+----------+|Carats per tonne |77 ct/tonne|55 ct/tonne| 40%|+-------------------------------------+-----------+-----------+----------+|On mine cash cost per carat | $2.54| $1.25| 103%|+-------------------------------------+-----------+-----------+----------+|Average price per carat (rough | $12| $11| 9%||tanzanite) | | | |+-------------------------------------+-----------+-----------+----------+ PERFORMANCE TanzaniteOne announces consolidated earnings for the year ended 31 December 2006of $1.8 million equal to 2.35 cents per share (2005: $9.8 million; 13 cents pershare). Net profit of $1.8 million is stated after the $2.8 million (before tax) writedown in cut, polished and jewellery inventory following the decision to divestof the wholesale jewellery business and an additional $1.8 million (before tax)write-down for the reported book value of the intangible assets, notably theTanzanite Blue brands. While ownership of these brands is still withTanzaniteOne, the decision to write down their value was linked to the decisionto increase the Group's focus on mining tanzanite. The Directors have declared a final dividend of 6 cents (2005: 5 cents) pershare payable on 23rd April 2007 to shareholders registered on 2nd April 2007.This brings the total dividend payable for the year ended 31 December 2006 to 8cents, an increase of 33% over the previous year. Net profit and production comparison by half year: FY 2006+-----------------------------+--------------+--------------+--------------+| | 1H 2006 | 2H 2006 | FY 2006 |+-----------------------------+--------------+--------------+--------------+|Net profit after tax and |($0.1 million)| $1.9 million| $1.8 million||minorities | | | |+-----------------------------+--------------+--------------+--------------+|Tanzanite production (carats)| 570,405| 660,100| 1,230,505|+-----------------------------+--------------+--------------+--------------+ Reflecting on the results for the year ended 31 December 2006, Ian Harebottle,Tanzanite One Limited's Chief Executive Officer said: "Net profit after tax isdown to $1.8 million predominantly due to the once off non-cash write-downs wehave made during the year. We now have a clean balance sheet and a company thatis focused on mining. I am encouraged by the strong cash earnings achieved forthe year of $6.27 million despite the challenges of lower quality production andreduced production volumes. We are satisfied with the progress made in improvingmining efficiencies. We will continue to review and improve our marketingpolicies and to reduce overhead costs which, together with improved levels ofproduction, point to a more profitable 2007." Group results analysed +--------------------+--------+----------------------------+--------+--------+| | |Non-cash write-offs | FY2006 | FY2005 |+--------------------+--------+---------------+------------+--------+--------+| |Trading | Closure of | Intangible | | || | | wholesale | assets | | || | | jewellery |written off | | || | | business | | | |+--------------------+--------+---------------+------------+--------+--------+|Tanzanite production| 1.2 | | | 1.2 | 1.4 ||(carats) |million | | |million |million |+--------------------+--------+---------------+------------+--------+--------+|US$'000 | | | | | || | | | | | |+--------------------+--------+---------------+------------+--------+--------+|Revenue | 35,958 | | | 35,958 | 41,090 ||Cost of sales |(17,292)| (2,810) | |(20,102)|(16,206)|+--------------------+--------+---------------+------------+--------+--------+|Gross profit | 18,666 | | | 15,856 | 24,884 ||Admin, royalties and|(9,818) | | (1,824) |(11,642)|(10,504)||other costs | | | | | |+--------------------+--------+---------------+------------+--------+--------+|Profit before D&A | 8,848 | | | 4,214 | 14,380 ||Depreciation & |(1,692) | | |(1,692) |(1,456) ||amortisation | | | | | |+--------------------+--------+---------------+------------+--------+--------+|Profit/(loss) before| 7,156 | | | 2,522 | 12,924 ||tax | | | | | ||Tax expense |(2,081) | 815 | 529 | (737) |(3,077) |+--------------------+--------+---------------+------------+--------+--------+|Profit/(loss) after | 5,075 | (1,995) | (1,295) | 1,785 | 9,847 ||tax | | | | | ||Minority interest | (2) | | | (2) | (73) |+--------------------+--------+---------------+------------+--------+--------+|Profit/(loss) after | 5,073 | (1,995) | (1,295) | 1,783 | 9,774 ||minority | | | | | ||interests | | | | | |+--------------------+--------+---------------+------------+--------+--------+ Revenues from ordinary activities for the period were 12% down to $36.0 millionfrom $41.1 million in FY 2005. This decrease was primarily due to a combinationof factors in the first half of the year, including lower production volumes asa result of extensive national power outages and a lower percentage of 'A'quality tanzanite recovered. Revenue of $20.4 million in the second half of theyear was 25% higher compared to the first half, resulting in total revenue of$36.0 million for the year. The higher average export price of 9% achieved forrough tanzanite in the second half reflects the overall improvement in thequality of the material produced. Production for the year was 1,230,505 million carats of tanzanite from 15,896tonnes at an average of 77 carats per tonne. During the first half of the yearthe mine recovered 570,405 carats of tanzanite from 7,605 tonnes processed.Production increased sharply by 15% during the second half recovering 660,100carats from 8,291 tonnes. An improvement in mining capabilities continues topush grades attained higher, which at 77 carats per tonne represents a 40%improvement over the 2005 year. Gross margin achieved for the year was 44% inclusive of a $2.8 million inventorywrite-down. Excluding inventory write-downs, the gross profit margin was 52%reflecting the higher proportion of 'A' quality material produced during thesecond half. Historic records indicate that 'A' quality material represents an average of1.5% of total production. In the first six months, 'A' quality materialrepresented 0.4% of the produced material, a 73% decrease. In the second half ofthe year the percentage of 'A' quality material increased to 1.96%, for anaverage of 1.2% over the full year. While the full year figure remains somewhatoff the historic average, it validates management's belief that these factors dotend to average out in the longer term. On mine costs per carat for the full year were $2.54/carat (2005:$1.25/carat).Increased costs were mainly due to a 32% reduction in tonnes processed, higherdiesel costs for power generation stemming from the extensive national powercuts in Tanzania throughout the year and additional development work inpreparation for stoping. As the mine increases its current production levels andimproves its mining methods, economies of scale are expected to reduce the unitcost per carat. Administration costs for the year of $10.6 million include a $1.8 millionimpairment of intangible assets. Administrative costs are expected to reducefollowing the relocation of the Johannesburg office to Tanzania and theassociated closing of the retail polished stone and jewellery business. Thewrite-down of intangible assets of $1.8 million, non-recurring salaries of $0.7million and the saving of $2.6 million in administrative costs due to theclosure of the retail business will significantly reduce administrative costsfor 2007. Inventory levels have decreased to $9.9 million at year-end from $14.3 millionin FY 2005. This was mainly due to the decision to close the wholesale jewellerybusiness and concentrate on pure tanzanite mining. Capital expenditure for the year of $2.7 million comprised an upgrade ofelectrical infrastructure at the mine, the purchase of a mobile x-ray machine toenhance security on site, construction of additional on site staff accommodationand the acquisition of new vehicles. The effective tax rate increased from 24% to 29%. This was due largely to thewrite back of the deferred tax asset of $0.5 million on the net loss of $1.8million realised in The Tanzanite Company (UK) limited ("TTC UK"). THE TANZANITE INDUSTRY Retail tanzanite sales were buoyant in December 2006 with strong demand reportedat the early trade shows held thus far in 2007. The encouraging retail marketboosted the demand for rough tanzanite. TanzaniteOne continues to produce anincreasing percentage of the world's known tanzanite supply. Growth in market share can be attributed to various factors, including animproved geological understanding supported by enhanced management and reportingsystems, improved mining efficiencies and the implementation of improved sortingsystems. In addition, production from neighbouring mines has diminished as aresult of their operational constraints at greater depths. The Group's corporate objective is to achieve an annual production rate of fivemillion carats of tanzanite in five years. Initiatives that have been put inplace to achieve this goal include improved security, the introduction ofrevised mining methods by creating surge capacity, the introduction of selectivestoping and trackless mining. Tanzanite One Limited Condensed Consolidated Income Statement For the year ended 31 December 2006 $'000 Notes Unaudited Audited 2006 2005 ____________________________________ Revenue 35,958 41,090Cost of sales (i) (20,102) (16,206) _________________________Gross profit 15,856 24,884 Administration and other operating (ii) (10,562) (9,108)costsRoyalties (1,238) (1,435)Depreciation and amortisation (1,692) (1,456)Net financing income 158 39 _________________________Profit before tax 2,522 12,924 Income tax expense (737) (3,077) _________________________Profit after tax 1,785 9,847 _________________________Profit attributable to equity 1,783 9,774holders of parentMinority interest 2 73 _________________________Net profit 1,785 9,847 _________________________EPS (basic - cents) 2.47 13.89EPS (diluted - cents) 2.35 13.00 Notes on 31 December 2006 Condensed Consolidated Income Statement (i) Includes $2.8 million write-down of jewellery and polished stone inventory(ii) Includes $1.8 million write-down of intangible assets Tanzanite One Limited Condensed Consolidated Balance Sheet As at 31 December 2006 $'000 Notes Unaudited Audited 2006 2005 _______________________________ Non-current assets Property, plant and equipment (i) 20,824 19,910 Intangible assets - 1,824 Inventory (ii) 613 205 Long-term loans receivable - 2 Deferred tax assets (iii) 2,515 1,226 _________________________ Total non-current assets 23,952 23,167 _________________________ Current assets Inventory (iv) 9,872 14,266 Income tax receivable (v) 2,125 278 Trade and other receivables (vi) 11,497 10,861 Cash and cash equivalents 7,005 8,298 _________________________ Total current assets 30,499 33,703 _________________________ Total assets 54,451 56,870 _________________________ Equity Issued share capital 22 22 Share premium 37,671 36,883 Share options outstanding 739 504 Foreign currency translation reserve (27) 648 Retained earnings 7,858 11,247 _________________________ Total equity attributable to equity 46,263 49,304 holders of the parent Minority interest (vii) 151 182 _________________________ Total equity 46,414 49,486 Non-current liabilities Interest-bearing borrowings (xiii) 1,166 670 Provisions (ix) 82 82 Deferred tax (x) 3,809 4,145 _________________________ Total non-current liabilities 5,057 4,897 _________________________ Current liabilities Interest-bearing borrowings (viii) 10 107 Income tax payable (xi) 1,980 167 Trade and other payables (xii) 990 2,213 _________________________ Total current liabilities 2,980 2,487 _________________________ Total liabilities 8,037 7,384 _________________________ Total equity and liabilities 54,451 56,870 _________________________ Number of shares in issue 72.7 71.6 million million Net asset value per share 63.87 69.13 cents cents Notes on the 31 December 2006 Condensed Consolidated Balance Sheet (i) Represents fixed assets within the group. The movement from prior year is due to depreciation ($1.7 million) and current year capital expenditure ($2.7 million). Current year expenditure reflects purchase of security equipment, construction of staff quarters and development expenditure in Tanzania. (ii) Reflects display jewellery in Tanzanite Foundation Ltd ($0.16 million) and Tanzanite One (SA) Ltd ($0.45 million). (iii) Reflects deferred tax on assessed losses in Tanzanite One (SA) Ltd and The Tanzanite Company (Pty) Ltd. (iv) Inventory comprises of $7.5 million rough tanzanite, $1.5 million polished and jewellery inventory and $0.9 million of consumable stores. (v) Provisional tax paid by TanzaniteOne Mining Ltd in Tanzania. (vi) Includes trade debtors of $8.3 million, value added tax receivable of $2.3 million ($1.4 million in Mauritius and $0.9 million in Tanzania) and other debtors of $0.9 million. (vii) Reflects 25% minority interest in TanzaniteOne Trading Ltd in Tanzania. (viii) Reflects portion of finance lease loans from Stannic Bank in Tanzanite One (SA) Ltd. The finance lease is secured against specific fixed assets (motor vehicles and office equipment). (ix) Reflects provision for rehabilitation. (x) Deferred tax comprises largely deferred tax liability in fixed assets in Tanzanite One Mining Ltd in Tanzania. (xi) Reflects income tax payable in TanzaniteOne Mining Ltd in Tanzania ($2 million). (xii) Includes trade creditors $0.5 million, directors fees payable $0.1 million, value added tax $0.3 million and other creditors $0.1 million. (xiii) NBC Bank loan applied on acquisition of certain plant and equipment. Tanzanite One Limited Condensed Consolidated Cash Flow Statement For the year ended 31 December 2006 $'000 Unaudited Audited Notes 2006 2005 ____________________________ Cash flows from operating activitiesCash generated from operations (i) 7,533 6,172Interest income received (ii) 766 373Financing cost paid (iii) (608) (334)Taxation paid (iv) (2,425) (1,904)Dividends paid (v) (5,205) (1,531) _________________________Net cash from operating activities 61 2,776 Cash flows from investing activitiesAcquisitions of property, plant and equipment (vi) (2,668) (2,671)Proceeds on disposal of property, plant and 129 1,809equipment _________________________Net cash from investing activities (2,539) (862) Cash flows from financing activitiesNet proceeds from issue of share capital (vii) 788 1,208(Repayment)/receipt of long-term loans receivable (2) 162Increase/(repayment) in interest-bearing (viii) 399 (1,831)borrowings - current _________________________Net cash from financing activities 1,185 (461) Net (decrease)/increase in cash and cash (1,293) 1,453equivalentsTranslation difference in opening cash and cash 0 (64)equivalentsCash and cash equivalents at beginning of the year 8,298 6,909 _________________________Cash and cash equivalents at end of the year 7,005 8,298 _________________________ Notes on the 31 December 2006 Condensed Consolidated Cash Flow Statement (i) Cash generated from operations reflects net cash from the sale of tanzanite, payments to suppliers and movement in working capital. (ii) Reflects interest received on surplus cash balances and call accounts. (iii) Interest paid on the NBC bank finance lease obligation applied on acquisition of certain plant and equipment. (iv) Includes $2.1 million income tax paid in TanzaniteOne Mining Ltd. (v) Comprised of 2005 final dividend of 5 cents per common share declared on 6 April 2006 and the interim dividend of 2 cents paid on 10th November 2006. (vi) Includes purchase of security and power generating equipment, construction of staff quarters and development expenditure on site in Tanzania. (vii) Reflects net proceeds from the exercise of options into shares. (viii) Reflects a movement in the NBC Bank finance lease obligation as mentioned above. MINING The first half of the year under review delivered disappointing results.Budgeted tonnage was lower than anticipated because of power shortages, strictersecurity measures impacting on the turnaround time at any given operating faceand development work in preparing for the stoping panels. +--------------------------+--------+--------+---------+| |1H 2006 |2H 2006 | FY 2006 |+--------------------------+--------+--------+---------+|Plant feed (tonnes) | 7,605| 8,291| 15,896|+--------------------------+--------+--------+---------+|Tanzanite production | 570,405| 660,100|1,230,505||(carats) | | | |+--------------------------+--------+--------+---------+ Tonnage in the second quarter of the year increased over the first quarterfollowing the introduction of three dedicated production crews. By mid-year thequality of production started to trend higher. The second half of the year saw asignificant improvement both in the quality and quantity of material processeddue to the intersection of more productive mining areas. All five working shafts, being Bravo, CT, Main, Askari and Delta are fullyoperational and producing. A second access point was established at Bravo and CTshafts resulting in increased safety and improved ventilation, effectivelyimproving productivity. Upgrades to existing shafts continued and include a 150 metre extension of Mainshaft to 450 metres on dip. Extending this shaft down-dip is part of the Group'slong-term growth plan to intersect fold stacks at greater depths. The currentsurface installation is able to support mining to approximately 800 metres ondip. A sub-shaft is planned at this level to allow mining to a further 350metres or a total down dip extent of 1,100 metres. Both CT and Askari shafts are currently being upgraded with the requisitesurface infrastructure to mine to 800 metres on dip, with a sub-shaft (similarto that being considered in Main shaft) in each of these two shafts. This willprovide access to reach lower levels at a later time. In summary, the mine plan is for CT, Main and Askari shafts to serve as theprimary haulage shafts at extended depths, with Bravo and Delta shafts servingas access ways for mining personnel and alternate airways. To date, there has been little up-dip exploration to determine if tanzanitemineralisation has been left unrecovered. Recognising that tanzanite is a finiteresource, a project to ensure the extraction of the available resource at aneconomically viable cost-per-tonne was initiated. A selective stoping processwas developed and tested in Bravo Shaft between 14 and 17 level; the area inwhich the 16,839 carat Mawenzi was found. The exercise indicated that throughselective stoping further tanzanite could be extracted economically. The Group is currently evaluating the impact of stoping in other key areas(coupled with trackless mining, using load-haul-dump units) to determine whetherincreased mechanisation will deliver improved efficiencies. This method willallow for the profitable mining of lower grade output, where fluctuations ingrade will be evened out by increasing the scale of mining. Results of the trial stope indicate that while the ratio of carats to tonnes maydrop significantly, there is also a drop in the cost-per-tonne mined and as aresult, stoping is viable and should be employed to ensure maximum utilisationof the resource. Alternative methods for extracting material will also betested. EXPLORATION During 2006, TanzaniteOne made significant strides towards delineating thetanzanite deposit. This was accomplished by increasing the level of geologicalknowledge and confidence through core drilling, geophysics, geochemical analysesand structural and geological mapping. The Group's key focus remains that of growth within its existing mining licensearea (9sq kilometres). During the year under review, the known down-dipextension of the tanzanite bearing zone on the mining license area was extendedthree times through the Deep Hole Drilling (DHD) project. The DHD programme consisted of two phases, with the first phase intersecting theLower Horizon, which hosts the economic mineralisation in the JW Zone at adown-dip extent of approximately 800 metres. The second phase of drillingre-confirmed the existence of the ore-zone at greater depths and alsosignificantly increased the known down-dip extent of the ore zone. The seconddrilling phase intersected the ore-zone at a down-dip extent of over 1,400metres. The overall drilling program shows that the Lower Horizon, which hosts theeconomic mineralisation extends three times further down-dip than previouslyestablished. The second drilling phase brought the combined metres drilledduring the DHD programme to 2,501 metres. All four drill holes of the DHDprogramme intersected the ore-zone where the ore bearing horizon intersected atdepth was shown to be geochemically similar to the tanzanite bearing zonecurrently being mined. The DHD project has also revealed that the ore-zoneappears to thicken at depth. The Group's knowledge of the deposit at deeper levels has also beensignificantly enhanced through a geophysical exploration programme. NaturalSource Audio Magnetotelluric (NSAMT) was employed to calculate the resistivityof the underlying rocks through variance in the electric and magnetic fields andtheir interaction with the ground. This enabled the modelling of the mineralisedzone at depth, which in turn enables the development of a long-term mine plan. An increase in exploration expenditure has been approved to continue theevaluation of neighbouring properties, surface drilling of exploration areas andthe training of core drillers. At present, TanzaniteOne's published resource remains as indicated at the timeof listing on AIM in 2004; at 63 - 83 million carats which at an average priceof $12/carat in the rough represents $756 million to $996 million in the ground.The outcome of the DHD programme, supported by the geophysics, has prompted theinitiation of a review of this resource statement. The results of the review areexpected to be finalised by the fourth quarter of 2007. POWER GENERATION During the first half of 2006, Tanzania and the surrounding East AfricanCountries were gripped by severe drought. This impacted on the available powersupply in Tanzania, which is largely reliant on Hydro-Electric power for itsnational power generation. This caused extensive power shedding measures to beput in place which impacted negatively on the mine's supply of power and thusits ability to operate efficiently. In view of the negative impact power outageswere having on production, the Group purchased two large generators whichjointly have the ability to deliver up to 2 megawatts of power. TanzaniteOnecurrently has a maximum power demand of 900 kilowatts. While the cost of selfgenerated power is higher than that supplied on the national grid, theinstallation of these generators has provided the mine with uninterruptedproduction and should cater for TanzaniteOne Mining's medium term growth plans. SECURITY Security remains a challenge. Throughout the year, TanzaniteOne has improved itsaccess / egress systems supported by closed circuit television and otherelectronic surveillance equipment. Once this system is fully deployed, themovement of all staff, both in terms of physically entering and exiting by wayof swipe cards, as well as through visual images will be monitored continuously.Two additional X-ray units have been ordered to support the current mobile unit. TRAINING & SAFETY A gemmologist has been contracted to train all sort house employees and toensure that they obtain national accreditation. Training of the mine workers isprogressing well, with all new employees hired in 2006 having completed theirtraining successfully. Existing employees continue receiving formal mine,technical and first aid training. It is expected that 70% of the totalunderground workforce will have completed their training by the end of thecurrent financial year. TANZANITEONE TRADING The first half of 2006 proved to be disappointing as the quality and volume ofrough tanzanite in the Arusha market was low. The availability of stones throughto late February was disappointing, being of poor colour and clarity. The Merelani region received heavy rainfalls in March which prevented mining bymany small scale miners in blocks B and D. Notwithstanding a slight improvementin the availability of rough material towards the end of the first half,larger-size, fine quality material was still in short supply resulting indiminished purchasing. The second half saw better quantities of rough tanzanite brought to market inArusha. Purchases from July to September were 74% higher than the purchases forthe whole of the first half of the year. The vast majority of the roughpurchased was in the 2.5 - 10 carat size range. Although total purchases for 2006 were down 26% from 2005, it was a good yearfor trading. This subsidiary has moved away from primarily trading smaller goodsof below 4 carats to building strong relationships with prominent brokers. Thematerial purchased by TanzaniteOne Trading in 2006 has all been sold and thequality, especially towards the end of the year, was well received by ourDistribution Partners (DPs). TANZANITEONE MARKETING Prices achieved on rough sales increased by approximately 10% over the year. Sales in the first half of the year were impacted by low volumes and a lack ofquality stones. The material being procured was predominantly of medium to lightcolour and the volumes were low. Two sales were held in the first half of theyear with the second sale being relatively small due to a lack of availablequality stones. In line with improved production and buying, two further saleswere held in the second half of the year. These sales reflected the improvedquality of tanzanite with the third sale generating a record $9.5 million inrevenue. The intention is to increase the number of sales per annum asproduction rises. TanzaniteOne Marketing is mandated to grow the number of DPs, but with depressedsupply the timing was not deemed appropriate. As supply and quality improve andremain consistent, the number and spread of DPs will be increased. TanzaniteOne Marketing is actively encouraging its DPs to expand into newmarkets such as the Far East, Middle East, Europe and Russia, all of which haverecently gained momentum. Permanent offices have been opened by some of the DPsin the United Kingdom, Germany and Dubai. SOCIAL RESPONSIBILITY TanzaniteOne is committed to investing in sustainable community upliftmentprojects. Such projects are developed in conjunction with the local peopleliving in close proximity to tanzanite's source and in collaboration with theTanzanite Foundation. A project team led by the office of the DistrictCommissioner is in the process of being established. The aim of the project teamwill be to ensure that all social projects are undertaken in the best interestsof and with the full support of the local people. The team will be staffed byelected representatives from TanzaniteOne, the Zonal Mines Office and thevillages of Nasinyai and Merelani. Projects completed to date include the Nasinyai Primary School which educates420 children, the ongoing expansion of a secondary school for boys and girlsaged between 12 and 18, and the construction of a medi-clinic and a much valuedcommunity centre that is used for social gatherings and church congregations. Northern Tanzania is an area affected by drought. The early part of 2005 wasparticularly dry. The fresh water supplied by TanzaniteOne to some 2,000villagers and 4,500 head of cattle provided some relief and has led the Group toprioritise the implementation of some additional water projects during 2007. TanzaniteOne committed extensive resources to rebuild the main access road thatconnects the people of Merelani and Nasinyai with the two nearby towns of Arushaand Moshi. The project to rebuild the main access road which was damaged bytorrential rains was completed in early 2007. OUTLOOK TanzaniteOne will continue to develop its relationship with stakeholders in thebest interests of developing the tanzanite industry. Special emphasis will beplaced on improving on the successes already achieved. This includes constantconsultation with the relevant government departments, our employees, ourneighbouring communities, the smaller scale miners and others. Our achievements in terms of improving our geological understanding and miningcompetence, coupled with extensive pro-active partnering and measured globalgrowth in demand provide a high level of confidence in terms of the futureprospects of the tanzanite industry and TanzaniteOne. We will continue toprioritise the possibility of a dual listing on to the Dar-es-Salaam StockExchange. It is the only vehicle which will ensure Tanzanians may have theopportunity of maximum participation in the success of the tanzanite industry. Tanzanite One LimitedIncorporated in BermudaExempt company number EC33385 Board of DirectorsMichael Adams Non-executive ChairmanAmi Mpungwe Non-executive Deputy ChairmanIan Harebottle Chief Executive OfficerMark Summers Chief Financial OfficerEdward Nealon Non-executive directorNicholas Sibley Non-executive directorGustav Stenbolt Non-executive directorBen de Bruyn Alternate director to Gustav Stenbolt Audit/Risk CommitteeNicholas Sibley (Chairman)Michael AdamsGustav StenboltBen de Bruyn Alternate director to Gustav Stenbolt Remuneration/Succession Planning CommitteeMichael Adams (Chairman)Ami MpungweEdward Nealon Mining and Geology CommitteeEdward Nealon (Chairman)Ian Harebottle Nominations CommitteeThe Nominations Committee comprises the full board Company SecretaryWilli Boehm ManagementIan Harebottle Chief Executive OfficerMark Summers Chief Financial OfficerZane Swanepoel TanzaniteOne Mining, General ManagerAdrian Banks TanzaniteOne Trading, Managing DirectorCandice Nunn TanzaniteOne Marketing, Managing Director Nominated Advisor & Broker (AIM)Evolution Securities Ltd100 Wood StreetLondon EC2V 7ANTelephone: +44 (0)20 7071 4330Facsimile: +44 (0)20 7071 4451 Joint Broker (AIM)Ambrian Partners LimitedHillgate House26 Old BaileyLondon EC4M 7HWTelephone: +44 (0)20 7776 6400Facsimile: +44 (0)20 7776 6420 For more information please contact: Tanzanite One Limited Conduit PRWilli Boehm Leesa Peters/ Jos Simson+61 40 996 9955 +44 (0) 20 7429 6600/ 0781 215 9885 Tanzanite One Limited Tanzanite One (SA) LimitedIan Harebottle Mark Summers+255 744 600 991 +27 83 253 5539 www.tanzaniteone.com This information is provided by RNS The company news service from the London Stock Exchange