To all:
The following is an update on SUF dated Jan. 16/98 from Hilton Ashton, of SMK Securities in Johannesburg, phone: 833-8110. Although this document is several days old, it provides a clear insight into this case from a leading diamond expert and a person who knows South Africa's mining laws, and works for a top securities company, SMK.
QUOTE:
"SOUTHERNERA - SHARES SUSPENDED FOLLOWING DISPUTE OVER OWNERSHIP OF MARSFONTEIN (SUF - C$13.75)
Stock Rank (Recommendation): BUY
EVENT
The company's shares were suspended on Wednesday, 14 January to avoid unnecessary price volitality due to market speculation. The suspension was instigated by a dispute over the Marsfontein mineral rights which has landed up in the South African courts. Application has been made by a number of heirs of the original owners of the mineral rights to prohibit the Minister of Mineral and Energy Affairs from issuing a certificate authorizing the transfer of the mineral rights to Randgold, SouthernEra's joint venture partner.
IMPLICATION
The mineral rights over portions 16, 20, 21, 22, 23, 24 and remaining extent portion 2 of the farm Marsfontein 91 are currently registered in the name of four individuals all of whom died during the 1960-s. A few years ago Randgold undertook a complete search of the will, liquidation and distribution accounts in the estates, and deeds of cession. The searches enabled them to construct family trees of the four holders and it was discovered that the mineral rights were not passed on to the descendants. On the strength of the research Randgold applied for, and was granted, a prospecting permit over the property. Further, South African law provides for the cession of mineral rights to an applicant in such a case where the mineral rights are registered in the names of deceased people if the latter provides the following:
1. Proof that the applicant has made reasonable effort to locate all descendants of the original mineral rights owners, and failing this, has,
2. Deposited cash equivalent to the value of the mineral rights with the Department of Mineral Development. In this instance Randgold deposited just less than R1-million. This cash then becomes available to any person who may prove that he/she is the rightful owner after the minerals have been ceded.
Also, the mineral rights can only be granted (to Randgold in this case) if the persons (in this case the people disputing the allocation) entitled to the rights have failed to obtain cession within two years of becoming so entitled. This they did not do therefore, in our opinion, have no claim to the mineral rights.
It is clear that the heirs want to jump onto the bandwagon when it was realised (in fact it was pointed out to them) that a mine was being established to mine the fairly rich pipe. And this was on land that they could remotely stake a claim.
The case is being heard in the Supreme Court and judgement is due on February 10th (ed - now we have learned, been changed to the 24th).
CONCLUSION
In our view the South African law has provided for this kind of event and SouthernEra and Randgold have followed the correct steps to secure the rights. It is unlikely that the claimants will have a case and we believe the Klipspringer project will go ahead as originally planned. Mining is due to commence towards the end of February. SouthernEra remains a BUY and the share price weakness following the resumption of trading yesterday is an ideal buying opportunity. There is no change to our one- and three-year target prices of $20 and $43 per share respectively.
(signed) Hilton Ashton, (SMK Securities, Johannesburg)
833 8110 January 15, 1998"
UNQUOTE_________________________
This SMK update comes directly from South Africa from a man who lives there, is a leading diamond expert, who is familiar with the laws of the land....Hilton Ashton, a name well known in the diamond mining industry in S.A.
BTW -- R1million + approx $350,000 Canadian IMO.
Thought you all might be interested in this update report from very close to the source of the event...
Cheers. Laz.
Cheers to all. |
