SouthernEra Resources Ltd -
SouthernEra still hopes for an Angolan payday
SouthernEra Resources Ltd
SUF
Shares issued 29,666,865
Dec 3 2001 close $2.950
Monday Dec 3 2001
by Will Purcell
SouthernEra is now better known as a platinum miner, thanks to the company's shrewd deal
to acquire a 70-per-cent stake in Messina Limited just prior to a significant increase in the
price of platinum and palladium. Unfortunately, SouthernEra has not had similar success with
some of its diamond deals, which have sucked up most of the profits from its Marsfontein
mine without providing much of a return so far.
The biggest drains on SouthernEra's treasury were a number of adventures in scary Angola,
which have siphoned over $50-million out of the company over the past five years. Only one
of those projects is still active, but the Camafuca pipe still has a decent shot at redemption,
should the three key players manage to come to a final agreement on the development of a
mine.
SouthernEra's first foray into Angola began late in 1996, when the company struck a deal
with Sphere Trading, a South African company that owned the rights to mine and sell
diamonds from concessions in the Luo area. Under the terms of the deal, SouthernEra was to
provide the cash to explore and develop the concession areas, in exchange for 10 per cent of
the net profits from the sale of diamonds taken from the riverbeds. As well, SouthernEra
would receive 35 per cent of the profits from the Cassanguidi concessions, but the company
was responsible for all of the operating costs and a portion of the capital cost of the project.
Also as part of the agreement, SouthernEra agreed
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