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Press Release
SOURCE: SouthernEra Resources Limited
SouthernEra Announces Conversion of US $1 Million Debt to Common Shares
TORONTO, Jan. 22 /CNW/ - SouthernEra announced today that a further US $1 million in Exchangeable Capital Units issued on March 1, 2000 has been converted by RMB International (Dublin) Limited into 730,483 common shares at the strike price of Cdn. $2.07 per share, bringing the total number of issued and outstanding shares to 29,666,865. This exercise reduces the total outstanding Units to US $3.0 million.
The original US $5.0 million in Units was used to acquire a portion of SouthernEra's 70.4% interest in Messina Limited, which holds a 100% interest in the Messina platinum group metals ("PGM") project in South Africa. As announced in December, Rand Merchant Bank was appointed by Messina Limited to arrange and structure a non-recourse loan for the completion of construction and start-up of the Messina project.
The Messina bankable feasibility study completed in February, 2000, projected a 36% IRR, a net present value of US $122 million at a 10% discount rate, and total net cash flow of US $359 million, all assuming a platinum price of US $448 per ounce and a palladium price of US $498 per ounce. The feasibility study predicts an average annual production rate of 159,000 ounces of 5PGM's + gold with an average operating cost of US $150 per ounce of payable metal (net of nickel and copper by-product credits) and a mine life of 17 years.
Platinum is currently trading at over US $600 per ounce while palladium is over US $1,000 per ounce. At these prices the economics of the project improve to a 59% IRR, a net present value of US $209 million at a 10% discount rate, and total net cash flow of US $536 million.
SouthernEra Resources Limited is a diamond mining and exploration company and an emerging platinum group metals producer. The common shares of SouthernEra are traded under the symbol SUF on the Toronto Stock Exchange.
For further information
SouthernEra Resources Limited, Rudi P. Fronk, Director, Telephone: (416) 359-9282, Fax: (416) 359-9141, e-mail: inbox@southernera.com
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