Hello Peter & RJ
Peter, I almost missed the Canada Newswire announcement as well. It didn't use SouthernEra in its title but rather Camafuca. It was early in the day.
RJ, as you will see in the rest of this post, the company is focused mostly on its South African/Angolan diamond prospects, so I suspect any work on gold properties is probably proceeding at a modest pace ($430 an oz.). Peter was at the show, perhaps he can say. I am stuck up here in the tundra so I couldn't say.
As a follow-up to my post yesterday I did a little sleuthing and secured two very interesting documents.
One was on the Net, relevant aspects of which I have duplicated below.
What I find particularly interesting about this NR is that it is effectively Kalahari1s much more promotional spin on what was essentially a very conservative and understated Southernera March 20th NR, albeit with a presumed 15 days of additional progress incorporated.
Kalahari Resources Inc. - News Release
Mackay Lake/Back Lake exploration developments
Kalahari Resources Inc. KLA
Shares issued 22,157,802 1997-04-04 close $0.8
Monday, Apr 7, 1997 News Release
Mr. Albert Applegath reports. A total of 5,000 till samples has been collected and processed since 1994 (2,070 in 1996) on the company's Mackay Lake/Back Lake projects.
Six distinct mineral trains with lengths varying from one to seven miles have now been defined.
The key indicator minerals processed are superb in both quality and quantity.
Circular magnetic targets have been located (both from airborne and ground geophysical plotting) in two lakes. The indicator mineral trains end at the western shores of these two lakes opposite the geophysical targets. There are no indicator minerals on the eastern shores of these two lakes.
The source should be in the lakes.
The composition and quantity of the indicator minerals indicate diamondiferous sources.
There are at least 12 key lake targets to drill with the right geochemistry and geophysics. Drilling of 12-20 holes to test these targets through the ice will start within the next seven days. Land targets are also being refined.
Another 1,000 surface till samples will be collected as weather permits.
There is over 30 miles of adjoining border to the recent Snap Lake diamond discoveries of Winspear-Aber.
Kalahari's joint venture partner (SouthernEra Resources) has budgeted $1 million for this project in 1997. Over $7 million has been spent on this diamond project since 1993.
The company's president and his partner are going into the current drill program and the continuing geophysical and sampling with a great deal of professional confidence and enthusiasm.
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I am not sure of your take, but I find the NR much more promotional, and for that matter, informative.
For those surfing through who do not know, Southernera is the operator on this property and has an option to earn 70% of the Back Lake/McKay Lake block from Kalahari, in return for certain minimum expenditures, which they have now exceeded by almost double.
Those interested in a speculative play may note that Kalahari has 23,800,000 shares issued, very modest working capital, traded for as low as $.68 last Friday and opened at $1.07 this A.M. with volume in the last two days of 165,000 +/- up from 20-30,000 per day a week ago. They are down a bit now but then this is a Friday, and many buyers may not want to own margined stock on the weekend. Some shorters are also slipping into the picture.
Kalahari appear to be riding the coat tails of what will probably be a significant Southernera discovery(s) starting most probably with announcements next week and through September.
The President of Kalahari has historically proven very adept at stock promotion and will probably do more for Southernera1s share price in the process than will the companies1 promotional efforts.
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The other document I referred to is not, to my knowledge, on the Net, but was sent to me by a "source".
It is a Southernera stock analysis dated April 3, 1997, prepared by SMK Securities of the Johannesburg Stock Exchange, and distributed by RBC Dominion Securities.
It is 20 pages of the most in-depth, insightful and informative company analysis I have ever had the good fortune to read. Every analysis I have ever read in the past pales in comparison to the professionalism and detail of this document.
To any investors who may be considering Southernera, I can not recommend more strongly, that you try to secure a copy.
There is an incredible amount of information on the Klipspringer and Angolan initiatives and some very interesting contractual information on the companies1 current obligations and arrangements with Kennecott and other property participants in Canada and abroad.
The document is VERY conservative in its choice of data, analysis and conclusions, and repeatedly states this. In fact, non of its financial conclusions consider any issues involving potential or unproved or unestablished resources.
For example, only the 2.1 km of proven Leopard fissure strike, 250m depth, $100/carat, 65 carats per 100 tonnes grade and only 1,500 tpd are considered in valuing the resource and its revenue potential.
The reality is that the Leopard fissure has been traced for 40 km, drilled to 500m, stones average as high as $126/carat, 85 carats per 100 tonne grade and planned production of 3,000 tpd.
Speculative share value associated with unproved potential in Angola, Canada, Ukraine, Uruguay, Zambia, etc. is completely discounted.
At the end of the day, the analysis arrives at the same conclusions I suggested in previous posts 3Substantial Growth Potentialý - 3Strong Buyý - 3Southernera is one of the smallest pure exploration companies with the greatest potential for growthý
SMK/Dominion Securities (conservatively remember), suggest that the company will have 1997 EPS of $.11 increasing to $1.25 by 2000, NPV of $16.83 per share (1997) and a (Klipspringer only) internal rate of return of 136% (@ 1,500tpd).
They ("conservatively") suggest a 3 year target price of $25/share.
Time and space do not allow me to quote the amount of new information in this document. Suffice it to say that the Klipspringer and Angolan properties have far more potential than has been previously published.
Peter,..... you will be happy to know that, as a result of the Bulk Sampling program, the Leopard fissure is expected to be in 750 tpd production by approximately mid-year generating immediate cash flow. The Sugarbird fissure blow is expected to be mined (open pit) first with the rest of the fissures coming on stream over the next three years as shafts, adits, cross cuts and test stoping are completed. I was also far to pessimistic about the amount (projected in my post yesterday), that may be needed to put Klipspringer into full production. It would appear that cash-flow may be sufficient assuming incremental development.
Finally, and I had to laugh when I read this, the only 3Negativeý that was quoted was that 3the company may have to raise additional capital if the current projects prove to be more successful than shown in our projectionsý.
Hope this was of interest?
Regards |
