SOUTHERNERA (t.SUF) Message Board

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Gold/Mining/Energy : SOUTHERNERA (t.SUF)

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To: marcos who wrote (3041)	4/22/1999 8:51:00 AM
From: gemsearcher	Read Replies (1) of 7235

Hello Marcos. Thanks. I have quickly scanned the ML report. ML's base case gave rise to a conservative valuation of just under $4 per SUF share. This was further discounted by the following conservative assumptions: - SUF issuing 4 million shares at $5/share to fund capital requirements {note no indication SUF would do this; SUF exploring several financing alternatives , including rights offering in Messina , sale of royalty interest , sale of minority interest to black empowerment for cash etc.) - platinum prices averaging 10% less than ML's long-term forecast of US$420/oz -palladium prices averaging 20% less than ML's long-term forecast of US 285/oz - capital/operating costs higher by 20%(base model already employed higher #'s than those forecasted by SUF) - a 1X price/NAV multiple (i.e. no gold like premium) -base model assumed 20 year mine life -IOW , pretty conservative Regards gemsearcher P.S> all the above assumes a 54% interest; the price paid by SUF for the 54% represented an 84% premium over current share price and SUF intends to make same offer to minority.

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