SouthernEra Resources Limited -
SouthernEra fifth most active conference
SouthernEra Resources Limited
SUF
Shares issued 26,881,395
1999-07-02 close $4.8
Monday Jul 5 1999
Week ended July 2nd
by Stockwatch business reporter
This is the first review of SouthernEra in Forum Watch,
claiming fifth position among Canada Stockwatch's most
active conferences. SouthernEra has interests in a number of
diamond properties, including properties in the Northwest
Territories, South Africa, Angola, and Brazil. On April 15,
SouthernEra announced that it had entered into an agreement
with Messina Holdings Limited to acquire, at an estimated
cost of $10.5-million (U.S.), its 54.17 per cent controlling
interest in Messina Ltd., a South African platinum mine. On
March 29, the company released highlights from its annual
report, showing mining income of $39.6-million on revenue of
$52.4-million in its first year of mining operations. The
company had no debt as of Dec. 31, 1998, and working capital
was reported as $10.9-million. Canada Stockwatch articles of
June 10, and June 30, provide an excellent overview of
SouthernEra and will be appended to this issue of Forum
Watch.
The SouthernEra discussion picked up following the June 30
Stockwatch article, with Midas contributing lengthy post
offering some additional comments to the article. WillP
responded, addressing each of the points raised by Midas. The
nature of these two posts is such that they should be read in
their entirety, something that is well worth doing. In a
subsequent post, WillP offered an opinion on the stock price
in response to comments from Gapper and Midas:
"SouthernEra is pretty far flung, and is probably perceived as
a boring, low-leveraged stock...as opposed to Island Arc,
Kalahari, or Winspear...who are perceived to have all their
eggs in one basket. But the 'low-leveraged' bit is wrong. Dead
wrong. Also...once a property moves into production, it seems
to follow that share prices lag. The exploration bugs drift off
to the latest craze. The conservative types have not arrived
yet." Yachtie joined the discussion, raising a question
regarding the company's interest in the Messina property: "I
note that Merrill Lynch have an 'accumulate' rating on SUF
partially due to their opinion on Messina over the 'uncertainty
that the acquisition will be completed' by the closing target of
late Aug 99...I was of the opinion that this was a 'done deal'
already and that there were no roadblocks to its completion."
WillP responded that "the tone of the Merrill Lynch quote is a
bit ominous." In a subsequent post, he added: "One line I
wonder about...'The transaction is also subject to several other
conditions precedent, which will be satisfied before the
completion of the bankable feasibility study.' I assumed that
this means that the feasibility study would naturally satisfy
these conditions. An alternate interpretation is, the feasibility
study will only be completed if the additional conditions are
satisfied. In any case...no indication as to what those
conditions are, or whether they have been satisfied to date."
As the week drew to a close, Suffering aired some of his
thoughts: "I am really getting frustrated with the share price
and volume of this stock. I do not understand the company's
lack of concern when it comes to the stock price." He offered
some additional comments in another post: "After the annual
meeting, I felt confident but the action since then has been
unnerving. They seemed to be upbeat and confident in the
meeting, yet they allow the stock to get hammered in this
matter on small volumes. In my opinion if they felt that the
stock was of value, they would be buying back shares."
SouthernEra closed out the week at $4.80.
(c) Copyright 1999 Canjex Publishing Ltd.
canada-stockwatch.com
old url (better for printing)
|
