I have been speaking of the SUF story to a number of investor friends. I put together a patchwork of stuff for them to look over. Its shown below. I expect them to become buyers very soon. If anyone has a more organized report, I would love to see it. Its a great day today!
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February 15, 2001
Information on Southernera
Symbol SUF on TSE
Chart Web site
askresearch.com
Article - Russian Bureaucracy Won't Stall Platinum Prices
stockhouse.ca
feluce (ID#: 82616) [RESPECTED TECHNICAL ANALYST - F]
Just took a look at the charts and it looks very encouraging...... On both the daily a weekly charts (change to 3yrs.) the price has penetrated the upper "Bollinger Band".....This is a sign of strengh in the move.... .this is of great significance, as on the weekly chart as it indicates the longer term trend. The only negative I see is that the daily "stochastic" is at 80, this could indicate a some what overbought position,but it could of remain overbought forsome time. Ofcourse if we do not get the close above $3.00, all bets are off...
idris price action 2/14/01 17:45
Seems like maybe the 16 million ounce resource number is starting to have an impact. One PGM analyst told me that these numbers are worth a 10 dollar share price right now.The problem is that SUF is still perceived as a diamond exploration play when it should be valued as a PGM production play.The new management are precious metals guys so they should be able to turn this around once they are actually on the job. Also, what we need are a few more Messina announcements to focus the market on the real value here.
[RECENT NEWS RELEASE]
Author: GeoffB -- Date:2001-02-08 07:34:19
Subject: News Release - Upgraded reserve/resource at Messina
Looks like great news to me! 60% increase in global resource (16M oz) and 8.2M oz upgraded to "measured and indicated".
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SouthernEra Resources Ltd SUF
Shares issued 29,666,865 2001-02-07 close $2.4
Thursday Feb 8 2001 News Release
Mr. Christopher Jennings reports
Following an independent audit, SouthernEra today released an updated platinum group metals resource of 15.9 million ounces at its 70.4-per-cent owned Messina project in South Africa, representing a 60-per-cent increase from previous estimates. Of this updated resource, approximately 8.2 million ounces are in the measured and indicated category contained in 41.6 million tonnes at an average grade of 6.1 grams per tonne.
Messina currently consists of four separate project areas (Voorspoed, Doornvlei, Zebediela and Kafferskraal East) all located within the famous Bushveld complex. Each project area hosts the Merensky and UG2 chromitite reefs which are the most prolific PGM producing reefs in the world. Previous resource estimates at the Messina project were based on the Voorspoed and Doornvlei areas only. Resource calculations include the five PGMs (platinum, palladium, rhodium, iridium and ruthenium) plus gold, but excludes byproduct nickel and copper. The five PGMs account for well over 95 per cent of the contained precious metal content of the resource.
This resource was independently verified by professor Danie Krige, who is best known for developing the Kriging system of grade estimation which bears his name. Professor Krige has over 50 years of experience in mine evaluation.
The resource is based on drilling by Impala Platinum Ltd. of South Africa and takes into account underground mining dilution associated with mining widths ranging from 1.0 to 1.5 metres which are typical of the Bushveld complex. The resource is calculated down to 1,000 metres below surface. The deepest intersection to date is at 1,550, which yielded 1.72 metres grading 4.9 grams per tonne. The Merensky and UG2 reefs, if projected at the current dips, would remain within each of the four project areas to well below 2,000 metres, still within practised mining depths elsewhere on the Bushveld complex.
In early 2000, SouthernEra completed a bankable feasibility study on Messina's Voorspoed project which was chosen for its extensive infrastructure and the significant underground development work that had already been completed. The feasibility study was based on the Voorspoed resource to a depth of only 575 metres, resulting in a planned production rate of 159,000 ounces of five PGMs plus gold with an estimated average operating cost of $150 (U.S.) per ounce of payable metal (net of nickel and copper by-product credits) and a mine life of 17 years. The mine is currently under construction with a planned commercial start-up in early 2003.
Continuing work at the mine has verified much of the data in the feasibility study and has increased confidence in the estimation methods used in the resource calculation. Both the UG2 and Merensky reefs have recently been exposed on two levels at the main Voorspoed shaft. The reefs dip at 60 degrees with the result that relatively little waste development is required for access to the orebodies.
[Note that Geoff, Jspec, teevee are all knowleagable, levelheaded and respected people with no hidden agenda. Following from Stockwatch thread stockwatch.com - F]
Author: jspec -- Date:2001-02-09 22:35:06
Subject: Geoff
I.m with you on this NR. What is so fantastic is that the bankability feasibility study for production in 2003 only goes down to 575 meters on Voorspoed.
Can you see the expansion of production scope from cash flow from Voorspoed.
There are no sure things as a very big rule. This comes to me as about as close as they come.
But you know of my looking for intervening events .Can you or anyone really come up with a serious possibility that would circumvent a successful mining operation?
Teevee had some great comments on the subject,but I think that they would be surmountabe hindrances,and not ruination of the project.
Author: teevee -- Date:2001-02-10 11:37:11
Subject: jspec
The latest news release has raised my confidence considerably in the outcome of the final feasibility study. The NR clearly stated development is underway. I infer from that information that SUF officers and directors must be aware of the outcome and it must also be positive.
I am also confident that SUF will soon close an up take agreement with an end user of PGE's. For an insight into this, I suggest you look at the profiles of directors such as Dr. Fathi and Mr. Fox among others on the SUF web site. Dr. Fathi's key role in the IPO of Stillwater and connections in the investment banking sector worldwide along with Mr. Foxes international brokerage and PGE marketing background leads me to believe that SUF will soon obtain an uptake agreement.
Assuming that annual PGE consumption will continue to grow, and that Russian stockpiles are depleated, I expect the PGE market will evolve as follows:
There will be room for new entrants like SUF(assuming they are not bought out in a hostile takeover-a 16 million ounce resource under development has to be attractive to large gold producers who might want to add PGE's to their precious metal production) and large producers will act as swing producers to keep supply in balance with demand, much as Inco does with Nickel.
Author: GeoffB -- Date:2001-02-10 12:52:27
Subject: jspec/teevee
jspec:
Suffice it to say that I agree with what teevee has stated.
As you are well-aware, risks are inherent in any mining operation (mining conditions/milling operations). My confidence in the mining conditions grows, as more bulk-sampling and drilling work continues. Also, SUF has hired a COO with 25+ years of experience in mining in S. Africa, the last 5 years with Northam. He was the manager of this PGM mine, which had always been a "problem" mine before his hiring. He is credited with turning the operations of this mine around. Hiring him at this time, IMO, will ensure a smooth path to production for Messina.
The only other risk to consider is political, but we've had many good posts by Confluence and Goalie01 on Stockhouse that have stated that S. Africa is mining, and any assault on that by political entities would be like shooting oneself in the foot.
The recent "use it or lose it" policy instituted in S. Africa may actually play into the hands of a growing junior PGM players in S. Africa, like Southernera. Senior mining companies may want to JV their land holdings with a company like Southernera, instead of losing the land claims outright. Some of the profit of the large companies is generated by smelters, and having concentrate feed from junior miners like Southernera is one way to keep the profits rolling in. In fact, this may have been part of Impala's thinking when selling their stake in Messina to Southernera?
It is also my understanding, from Confluence/Goalie01 that Dr. Jennings has good rapport with the local communities in the area of Messina/Marsfontein.
The last consideration for a mining operation is the sale price of the commodities. As teevee said, with top-notch directors negotiating forward contracts, I believe Southernera will be "in the money" on these commodities for a LONG time to come. IMO, the contracts will provide a floor sale price for the PGMs that is right around the highly profitable scenario of the feasibility study released a year ago. But, these PGM forward contracts also have ceiling prices, which will enable Southernera to profit enormously if PGMs continue to trade in the stratosphere. With a forward contract in place, the floor on the sale of metals protects Southernera from any protracted recession.
Author: jspec -- Date:2001-02-10 20:37:02
Subject: Teevee and Geoff
Good posts. I think that SUF with its exec and professional staff can meet any problem except political ones which seem remote at present,
What impresses me most is the relatively shallow depth in the feasibility report on one zone only. This is shaping up as a really major operation in the years ahead, Can anyone suggest a better opportunity in the mining sector?
Author: teevee -- Date:2001-02-11 00:23:34 Subject: open to suggestions
jspec, Can anyone suggest a better opportunity in the mining sector? In a word, no. If you can, let me know.
Author: GeoffB -- Date:2001-02-12 09:51:34 Subject: jspec:
I agree with your commentary Better investments? Not me Investments in this class that I'm watching? Aber you know of, North American Palladium (PDL.T) below $12, as long as the price of Palladium holds up. |
