If the following extract is true, then IMHO, CJ has deliberately underplayed the importance of the Marsfontein farm ( M1 ). If the M1 mineral rights are not acquired by SUF, and the proposed envisaged cash flow not generated to meet the Angolan scheduled payments, SUF will then forfeit their stake in Camafuca.
All hinges around the M1.
If SUF loses the Camafuca operations as well as the M1, then the future for SUF will indeed be bleak.
Quote from Business Day: 'One of the terms, as set out in SouthernEra's latest annual report, is that if "the company does not acquire the mineral rights to the farm Marsfontein and fails to make the payment, the company's interest in the (joint venture) shall be assigned to SAA and Comica". In other words, without Marsfontein, SouthernEra stands to get nothing for its first C$7m instalment plus the C$2m it has spent on developing Camafuca.'
SUF will need all it's negotiating skills to avert disaster, as the balance of the Klipspringer Project, outside of the M1, is more of a long term project that will take some time before the realisation of any substantial profits. |
