Wednesday, May 20, 1998
SouthernEra diamond dispute put on hold
By PETER KUITENBROUWER
The Financial Post
ÿAn overburdened court in South Africa has postponed until Friday at the earliest its hearing into a dispute over a diamond play in the Northern Province. "The court had 16 things to hear ahead of us," Jenny Jennings, wife and assistant of SouthernEra Resources Ltd. president Christopher Jennings, said yesterday from Johannesburg.
ÿ"I wouldn't be wildly surprised if they postponed it again."
ÿMeanwhile, she said talks were continuing between Toronto-based
SouthernEra and De Beers Consolidated Mines Ltd. in an attempt to
resolve the dispute. The talks in Johannesburg have dragged on for more than three weeks. ÿ"Remember that we are standing like small David in front of Goliath," Jennings said. "We are standing firm and it is not easy." ÿSouthernEra lawyer Lyle Hepburn flew from Toronto to South Africa last week to join the talks.
The dispute dates back five months, when a group of heirs claimed
ownership of mineral rights at a farm known as Marsfontein, where
SouthernEra says it found the most lucrative diamonds of its sprawling
Klipspringer project. ÿOn April 3, SouthernEra applied for an injunction from the High Court of South Africa (Transvaal provincial division) to block the sale of the rights. Six days later, before the court could hear the injunction, the heirs sold an option on the property to De Beers.
Yesterday in London, De Beers spokesman Roger Van Eeghen said, "We are still talking, and whilst one talks there's still hope." ÿHe did not clarify what is on the table. ÿVan Eeghen said De Beers will not take possession of the mineral rights until after the court case is settled.
ÿMeanwhile, through sealed bids at the South African Diamond Board,
SouthernEra is selling 20,000 karats of diamonds from other parts of the Klipspringer project. It had the diamonds independently appraised in Antwerp, Jennings said.
ÿDiplomatic sources have suggested De Beers has no interest in who mines Marsfontein, but wants to pressure SouthernEra to ensure any diamonds are marketed through its London-based Central Selling Organization, which sells 70% of the world's diamonds.
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SouthernEra shares (SUF/TSE) closed down 25› at $8.65 yesterday.
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