Wednesday August 29, 3:03 pm Eastern Time
Press Release
SOURCE: SouthernEra Resources Limited
SouthernEra Releases Second Quarter Results
TORONTO, Aug. 29 /CNW/ - Highlights announced during the second quarter of 2001 include:
- Approval of R345 million debt financing for Messina PGM project
- API plant produces first PGM concentrate at Messina
- US $2 million of debt converted to equity
- Subsequent to June 30, Rio Tinto completed a private placement in the
Company of 2.5 million common shares at $3.75 per share for proceeds
of $9.4 million
In June, Rand Merchant Bank ("RMB"), as Lead Arranger, approved its participation in a R345 million debt financing to complete construction and start-up of the Messina PGM project in South Africa. The Company also announced that its 70.4% subsidiary, Messina Limited, reached an agreement in principle with a major international automotive company to supply floor-price protection for both platinum and palladium production within the framework of an off-take contract. Finalization of the loan is subject to satisfying conditions of draw down including: (i) finalization of the floor-price agreement with the automotive company on terms acceptable to RMB and Impala Platinum; (ii) final approval of a completion guarantee; and (iii) funding of, or acceptable guarantees for R143 million of project equity.
During June, the Accelerated Production Initiative project at Messina produced its first PGM concentrate, approximately six full weeks ahead of schedule. Other significant API milestones achieved include the upgrading of the ventilation shaft and changeover to a bigger hoist and conveyances. The ventilation shaft is now licensed for men and material and will be capable of hoisting 30,000 tonnes per month. Stoping activities have recently commenced as planned and will be ramped up to 20,000 tonnes per month. Progress on the main shaft and larger mine continues on schedule for production start up as planned in the last quarter of 2002.
Subsequent to the quarter end, Rio Tinto, the Company's largest shareholder and one of the world's largest mining companies, purchased by way of a private placement, 2.5 million common shares at a price of $3.75 per share for proceeds of $9.4 million. This increased Rio Tinto's ownership in SouthernEra to 6,865,130 shares representing approximately 18.5% of the Company's issued and outstanding shares after closing or approximately 14.5% fully diluted. Rio Tinto's SouthernEra shares are held by its wholly owned subsidiaries.
The Company incurred a net loss before exploration cost write-offs for the three months to June 30th of $0.9 million on revenue of $1.4 million, compared to income before exploration write-offs of $1.1 million on revenue of $7.7 million in the second quarter of 2000. During the quarter the net loss was $3.5 million (12 cents per share) compared to net loss of $2.3 million (9 cents per share) for the second quarter of 2000. Cash flow (used in) provided by operations for the quarter was ($1.0 million) (3 cents per share), compared to $5.5 million or 20 cents per share in the second quarter of 2000.
For the six months ended June 30th, the net loss was $4.9 million (16 cents per share), including $2.7 million of exploration cost write-offs, compared to a net loss of $4.0 million (15 cents per share) for the comparable period in 2000. Cash flow (used in) provided by operations totalled ($1.3 million) (4 cents per share) compared to $12.7 million or 47 cents per share for the six months in 2000.
SouthernEra's portion of diamond production from the Klipspringer Mine (50% SUF) in the second quarter was 12,144 carats on throughput of 81,100 tonnes, for a grade of 15 carats per hundred tonnes. This compares to a yield of 130,185 carats from 149,500 tonnes in the second quarter of 2000, a yield of 87 carats per hundred tonnes. The material processed in the quarter differed greatly from the material in 2000 as reprocessed tailings and stockpiled diabase made up the bulk of the current quarter whereas ore from the M-1 pipe was being processed in the second quarter of 2000.
The Company reported that the major activity in the quarter was the development work and construction at Messina, totaling $13.1 million for the three months.
Exploration costs for the quarter, at $1.1 million reflected a seasonal level of activity.
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.
The full quarterly report is being mailed to shareholders and is available on the Company's website, www.southernera.com
PHIL |
