Hello russett, Q3 EARNINGS just reported, along with update:
SouthernEra Resources Limited - Highlights of third quarter
report to shareholders
- (Nine Months to September 30, 1999) -
TORONTO, Oct. 29 /CNW/ - SouthernEra Resources Limited (SUF-TSE)
SouthernEra Resources Limited (SUF-TSE) today announced that net income
for the three months to September 30, 1999 was $3.1 million on revenue of
$13.7 million, compared to $11.9 million on revenue of $20.6 million for the
same three months of 1998. On a per share basis, the earnings were 12 cents
for the quarter, compared to 46 cents in 1998.
Cash flow from operations was $13.6 million or 50 cents per share,
compared to $21.2 million, or 82 cents per share, for the same quarter in
1998.
The third quarter of 1998 was the start of operations at Marsfontein. The
overburden processed at that time yielded a very high grade of diamonds per
tonne, with realized prices approaching US $200 per carat, compared to US $111
per carat in the third quarter of 1999.
For the nine months to September 30th, revenue was $39.3 million and net
income was $10 million or 38 cents per share. For the comparable period in
1998, revenue was $28.8 million, and net income was $13.9 million,
representing 54 cents per share.
Cash flow from operations for the nine months was $32.3 million or $1.22
per share compared to $25.5 million or 98 cents per share for the period to
September 30, 1998.
The full text of the quarterly report is appended to this press release
and will be available on the Company's website.
THERE WILL BE A CONFERENCE CALL FOR INVESTORS FOR AN UPDATE ON
SOUTHERNERA'S ACTIVITIES ON WEDNESDAY, NOVEMBER 3, 1999 AT 10:00 A.M.
TORONTO TIME. INVESTORS SHOULD CALL 416-695-9753. THE REPLAY NUMBER IS
416-695-9772 AND THE CODE FOR THE PLAYBACK IS 3777. THERE IS ALSO A LIVE
AND ARCHIVED BROADCAST OF THE CONFERENCE CALL AT www.q1234.com.
Press releases issued during the quarter ended September 30 were:
July 15 Exploration commences in Brazil
July 20 Drilling to resume in August at Munn Lake
July 21 Exploration continues at Yamba Lake
July 28 Bankable feasibility commences on Messina Platinum
July 29 Highlights of results to June 30
August 18 Company fundamentals solid
August 23 Intention to make Normal Course Issuer Bid
September 8 TSE accepts notice to make Normal Course Issuer Bid
September 9 Leopard Fissure Mine progress
September 21 Marsfontein exploration indicates new resources
September 30 Munn Lake drilling results
SOUTHERNERA RESOURCES LIMITED
THIRD QUARTER REPORT 1999
For the nine months
ended September 30, 1999
To the Shareholders:
HIGHLIGHTS
----------
- Marsfontein produced 231,157 carats in the third quarter. The Company's
40% share totaled 92,463 carats.
- Klipspringer produced 7,637 carats predominantly from development ore.
- Net income for the quarter was $3.1 million, or 12 cents per share.
- Cash flow from operations for the quarter was $13.6 million, or 50
cents per share.
OPERATING RESULTS
-----------------
Net income for the three months ended September 30 was $3.1 million on
revenue of $13.7 million, compared to $11.9 million on revenue of $20.6
million for the same three months in 1998.
Cash flow from operations was $13.6 million, or 50 cents per share,
compared to $21.2 million, or 82 cents per share in the same quarter in 1998.
For the nine months to September 30, revenue was $39.3 million and net
income was $10 million, or 38 cents per share, compared to $13.9 million and
54 cents per share on revenue of $28.8 million in the comparable period in
1998.
Cash flow from operations for the nine months was $32.3 million, or $1.22
per share, compared to $25.5 million and 98 cents per share for the nine
months in 1998.
SOUTH AFRICA
------------
Marsfontein Joint Venture (40% SUF)
-----------------------------------
Production throughput for the quarter was 114,500 tonnes, compared with
an average throughput of 103,300 in the first two quarters of the year. The
recovered grade dropped to 202 cpht from 228 cpht in the second quarter.
The average price per carat reflected in revenue for the quarter was US
$111 compared to US $114 in the second quarter. The average stone size has
been decreasing as the M-1 pipe is mined to deeper levels, but currently seems
to be stabilizing at over 0.20 carats per stone.
As announced by De Beers in their second quarter report, producers
selling through the Central Selling Organization are no longer on quota: De
Beers is purchasing all diamonds produced and the reported results for
Marsfontein reflect this decision.
Production for the quarter was hampered by the creation of a higher
volume of concentrates, due to diabase occurring in the M-1 pit. A second
recovery circuit is being installed in the fourth quarter to handle the
increased concentrate content.
Six thousand metres of drilling were completed on eleven anomalies
representing extensions of the M-3 and M-8 fissure structures, resulting in a
1.9km strike length of new fissure drilled on M-8, westwards from the M-1
pipe. On the M-3 trend, a 1m to 2m wide fissure was intersected over a strike
of 1km. Recent drilling along the strike extension on the M-8 fissure has
increased the total length to 3.9km westwards from the M-1 pipe.
Klipspringer Project (100% SUF)
-------------------------------
Development work progressed well on the Leopard fissure, exceeding plan
in September. In September, 9,000 tonnes was sent to the plant, which actually
processed more than 12,200 tonnes during the month. The plan is to increase
the tonnage to 20,000 tonnes per month by March, 2000 and then to double this
treatment rate when plant capacity becomes available.
Material being processed includes development ore, which contains
significant amounts of waste. Over 7,600 carats were recovered in the quarter
and sent for valuation and sale in October. Although not yet formally valued,
on examination, the rough diamonds appear to be of a higher value than those
currently being mined from the M-1 pipe. A parcel of 8,200 carats is currently
in Kimberley for valuation.
The current resource base for Klipspringer on the Leopard fissure system
has been reported at 4.3 million tonnes to a maximum depth of 630m below
surface, along a 3.45km strike length. The in situ grade is estimated at 70
cpht.
Recent drilling has extended the strike an additional 400m to the west.
ANGOLA
------
Camafuca Project (51% SUF)
--------------------------
Bulk sample processing continued during the quarter, with approximately
35% of the 21,000 tonnes processed. Five hundred and thirty carats at an
average stone size of 0.41 carats have been recovered and will be valued in
the near future.
Concentrate tailings will be processed through a DMS plant near the site
for recovery and final determination of grade.
Calonda Sul (50% SUF)
---------------------
Gravel pumping equipment has been mobilized to the Chicapa River, down
from the Camuanzanza kimberlite pipe. The river will be tested for gravel
accumulations from the starting point down stream to the concession boundary.
CANADA - NORTHWEST TERRITORIES
------------------------------
Back Lake (70% SUF)
-------------------
In a press release dated September 30, the Company reported that diamond
drilling and ground geophysical programmes completed in the Munn Lake area,
traced the kimberlite sill for a further 950m, to 1.3km, with thicknesses
ranging between 12m and 0.06m. No further testing of this sill is planned.
Exploration at Back Lake will continue next spring.
Yamba Lake Project (51% SUF)
----------------------------
Processing and picking of till samples continued and will be completed in
the fourth quarter.
High priority targets have been selected from airborne data
interpretation and will form the basis of a drill programme in the spring.
BRAZIL (SUF earn-in 50%-70%)
----------------------------
During the quarter, two experienced geologists joined the diamond
exploration team and work commenced on the investigation and evaluation of
river basins for alluvial gravels and terraces.
As part of the primary kimberlite exploration programme, a number of rock
units producing high interest kimberlitic garnets have been identified, mapped
and sampled. Evaluation of aeromagnetic targets is well advanced.
The recommissioning of the sample processing and mineral sorting
laboratory is close to complete and two mineral sorters have been trained.
MESSINA PLATINUM
----------------
The bankable feasibility study to support the acquisition of 54% of the
shares of Messina Limited is on schedule for completion in November. The study
contemplates development of half of the property for a mine life of 20 years.
The partially developed property has a known resource of 51 million
tonnes at a grade of 6.4g/t platinum group metals plus gold, down to 950m.
There is considerable potential along strike and down dip.
Discussions concerning the financing of the 80,000 tonne per month
operation to produce 160,000 oz. of platinum group metals plus gold per year
are currently in progress.
The Year 2000 Issue
-------------------
As explained in the Company's last annual report, the Company feels that
the Year 2000 issue, relating to the potential problems resulting from
computerized systems that use two digits rather than four to identify a year,
will not affect the Company's operations.
The Company has only been operational since 1998, and therefore both
computers and systems in use are relatively new. All systems have been
reviewed, in most cases by third parties, and no problems remain.
There is a scheduled operations and processing plant shut down at
Marsfontein and Klipspringer over Christmas and New Year.
Normal Course Issuer Bid
------------------------
Under the Normal Course Issuer Bid approved by The Toronto Stock Exchange
on September 8, 1999, the Company purchased 50,000 of its shares between
September 17 and September 30, at prices ranging from $3.00 per share to $2.69
per share.
Purchases made pursuant to the bid will not exceed 1,344,294 common
shares, 5% of the currently issued and outstanding shares, over a 12-month
period commencing on September 10, 1999 and ending on September 9, 2000.
Common shares purchased by SouthernEra pursuant to the bid will be cancelled.
A copy of the Notice of the Issuer Bid to the Toronto Stock Exchange may
be obtained, without charge, by contacting the Company.
SUMMARY
-------
The Company is producing operating profits while it continues the
development work on the fissure system and actively explores for new sources
of diamonds. On completion of the acquisition and financing of the Messina
Platinum Project, the Company will be immediately going into development of
the mine, with first production in 2002.
(signed)
Christopher M.H. Jennings
President
Toronto, Ontario
October 29, 1999
<<
SOUTHERNERA RESOURCES LIMITED
CONSOLIDATED STATEMENTS OF INCOME AND DEFICIT
NINE MONTHS ENDED SEPTEMBER 30
(In thousands of Canadian dollars, except income per share)
(Unaudited)
Three months ended Nine months ended
September 30 September 30
1999 1998 1999 1998
Income
Diamond revenue net of
marketing and royalties $ 13,744 $ 20,652 $ 39,252 $ 28,789
Direct costs
Mining operations 2,097 1,405 5,789 4,472
Depreciation and amortization 4,839 1,195 10,517 1,580
-------- -------- -------- --------
Income from mining operations 6,808 18,052 22,946 22,737
Other operating expenses
General and administration 563 456 1,660 1,370
-------- -------- -------- --------
Income before the undernoted 6,245 17,596 21,286 21,367
Interest and investment income (108) (155) (407) (359)
Exploration costs written off - 35 3,028 324
Discontinued Operations - (1,243) - (321)
Other 51 (202) 118 502
-------- -------- -------- --------
Income before taxes 6,302 19,161 18,547 21,221
Income taxes
Current 5,450 - 11,146 -
Deferred (2,255) 7,300 (2,560) 7,300
-------- -------- -------- --------
Net income for the period 3,107 11,861 9,961 13,921
Deficit, beginning of period (6,020) (24,817) (12,874) (26,877)
-------- -------- -------- --------
Deficit, end of period $(2,913) $(12,956) $ (2,913) $(12,956)
-------- --------- --------- ---------
-------- --------- --------- ---------
Income per common share $ 0.12 $ 0.46 $ 0.38 $ 0.54
-------- --------- --------- ---------
-------- --------- --------- ---------
Weighted average number of shares outstanding to September 30, 1999 and
1998 was 26,524,998 and 25,870,104 shares, respectively.
SOUTHERNERA RESOURCES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOW
NINE MONTHS ENDED SEPTEMBER 30
(In thousands of Canadian dollars)
(Unaudited)
Three months ended Nine months ended
September 30 September 30
1999 1998 1999 1998
Results of operations
Net income for the period $ 3,107 $ 11,861 $ 9,961 $ 13,921
Adjustments for non-cash items
Exploration costs written off - 35 3,028 324
Depreciation and amortization 4,854 1,209 10,563 1,625
Deferred income taxes (2,255) 7,300 (2,560) 7,300
Discontinued operations - 600 - 2,098
-------- -------- ------- --------
5,706 21,005 20,992 25,268
Cash in non-cash working capital
balances 7,872 191 11,349 198
-------- -------- ------- --------
Cash from operations 13,578 21,196 32,341 25,466
-------- -------- ------- --------
Financing activities
Issue of capital stock for cash - 81 39 217
-------- -------- ------- --------
Cash provided by financing
activities 0 81 39 217
-------- -------- ------- --------
Investing activities
Acquisition of interest in joint
venture - (15,906) - (15,906)
Exploration expenditures (3,215) (2,120) (16,317) (7,285)
Property, plant and equipment (2,542) (2,554) (12,114) (12,933)
Share Repurchase Plan (144) - (144) -
Investment transactions 4 - 59 (49)
-------- -------- ------- --------
Cash used in investing activities (5,897) (20,580) (28,516) (36,173)
-------- -------- ------- --------
Increase (decrease) in cash 7,681 697 3,864 (10,490)
Cash and cash equivalents -
beginning of period 2,659 6,167 6,476 17,354
-------- -------- ------- --------
Cash and cash equivalents -
end of period $ 10,340 $ 6,864 $ 10,340 $ 6,864
-------- -------- ------- --------
-------- -------- ------- --------
Cash and cash equivalents comprise
Cash $ 6,011 $ 5,618
Short-term investments 4,329 1,246
-------- --------
$ 10,340 $ 6,864
-------- --------
-------- --------
SOUTHERNERA RESOURCES LIMITED
CONSOLIDATED BALANCE SHEETS - SEPTEMBER 30
(In thousands of Canadian dollars)
(Unaudited)
ASSETS 1999 1998
Current assets
Cash and short-term investments $ 10,340 $ 6,864
Accounts receivable 11,672 24,004
Diamond inventory 1,212 -
--------- ---------
23,224 30,868
--------- ---------
Property, plant & equipment 54,214 51,654
--------- ---------
Exploration properties 50,095 33,239
--------- ---------
$ 127,533 $ 115,761
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Payable for acquisition of interest in $ - $ 15,906
joint venture
Accounts payable and accrued liabilities 4,630 6,684
Income taxes payable 11,116 -
Current portion of deferred income taxes 2,269 -
--------- ---------
18,015 22,590
--------- ---------
Deferred income taxes 14,381 7,300
--------- ---------
Shareholders' equity
Common shares 103,518 98,827
Contributed surplus 48 -
Deficit (2,913) (12,956)
Cumulative foreign exchange adjustment (5,516) -
--------- ---------
95,137 85,871
--------- ---------
$ 127,533 $ 115,761
--------- ---------
--------- ---------
>>
/For further information: please contact: Christopher M. H. Jennings,
President, Frank van de Water, Vice-President, Finance, Nicholas Sayce,
Investor Relations, Phone: (416) 359-9282, Fax: (416) 359-9141, e-mail:
inbox(at)southernera.com, www.southernera.com/
(SUF.) |
