SouthernEra Releases Second Quarter Results (PROFIT of 2 cents/share!)
biz.yahoo.com
Monday August 18, 4:48 pm ET
Company Reports a Net Profit of $1.6M (2 cents per share)
Shares Issued and Outstanding: 61,674,459 TSX: SUF AIM: SRE
TORONTO, Aug. 18 /CNW/ - The Board of SouthernEra Resources Limited announced the following highlights from the second quarter of 2003:
- Messina Platinum achieved 40,000 tonnes per month production target
- Mark Rosslee appointed Senior Vice President and CFO
- Mining license issued for Messina's Phase 2 (Doornvlei Section)
- Prospecting permit issued for Messina's Phase 3 (Dwaalkop Section)
- Drilling commenced at Messina's Phase 4 (Zebediela Section) as part of
pre-feasibility study
Subsequent to June 30:
- Messina Platinum announced the terms of the rights issue
- Drilling commenced at Messina's Phase 3 as part of feasibility study
- Millennium Platinum resource upgraded by 250 percent to 3.7 million
ounces
- Klipspringer concluded a new wage agreement
- Stan Westcott retired from Messina Platinum Mines
The Company realized a net profit for the three months to June 30 of $1.6 million (2 cents per share) compared to a net loss of $2.2 million (5 cents per share) in the second quarter of 2002. In the current quarter, the Company incurred an operating loss of $1.3 million on revenue of $0.6 million versus an operating loss of $0.7 million on revenue of $0.7 million in the comparable quarter of 2002. The operating loss was negated by the recognition of a $3.8 million foreign exchange gain. Cash flow used in operations for the quarter was $8.9 million (15 cents per share), compared to a source of $0.4 million (0 cents per share) in the second quarter of 2002.
Operations Update
Progress continued at Messina Platinum's Phase 1 Mine (Voorspoed Section), which remains under development. During the second quarter, Messina's now fully commissioned Main Shaft hoisted 171,049 tonnes, of which 75,744 were development waste tonnes and 95,305 were reef tonnes from both production and development levels. Production during the quarter came principally from the 150 and 200-metre levels. During the quarter high levels of development continued on the 275 and 350-metre levels to support the production build up. Production from these levels has now commenced.
Although still under development, Messina produced 8,777 ounces of 3PGE's plus gold, 77.4 tonnes of nickel and 60.4 tonnes of copper during the quarter. Reflecting the high levels of development during the quarter, the average fully diluted head grade was 3.25 grams per tonne. The average head grade for the first six months of the year was 3.66 grams per tonne and is expected to continue improving as the mine builds up to steady state production. Costs at Messina continue to be capitalised during this development period.
Messina's excellent safety record continued through the second quarter with 500,000 fatality-free shifts being recorded in June.
Production at the Company's 50 percent-owned Klipspringer Diamond Mine was affected during the quarter by a labour strike. The strike was resolved on July 21 with the conclusion of a new wage agreement and a commitment by the National Union of Mineworkers to support continuous operations. In the second quarter, tonnage throughput was 38,900 tonnes. Average grade in the quarter was 35 carats per hundred tonnes, yielding 13,700 carats.
The Company's operations at Messina and Klipspringer continued to be impacted by the strength of the South African Rand. During the first six months of the year the Rand appreciated by approximately 27 percent relative to the US Dollar compared to the same period last year. With the bulk of the Company's capital and operating expenses in Rand, this has resulted in increased costs in US Dollar terms. The strength of the Rand may be attributed both to Dollar weakness and high real interest rates in South Africa. The South African Reserve Bank has reduced interest rates by 2.5 percent in recent months as inflation has continued to drop. Further rate cuts are expected during the second half of the year. This is expected to contribute to a softening of the Rand, which should bring costs close to budgeted projections for the second half of the year.
During the quarter, exploration activities continued at the Company's platinum and diamond exploration projects. Following conclusion of the second phase drilling program at the Millennium Platinum Project in South Africa the Company reported a 250 percent increase in the Millennium Platinum resource to 3.7 million ounces. Drilling also commenced at the Company's diamond projects in South Africa.
Drilling also continued at the Company's Canadian diamond exploration projects. Results from this program are expected in the months ahead. Following the conclusion of an airborne survey at the Company's diamond and precious metals projects in Gabon, a drilling program commenced during the quarter. Incorporation of the operating company for Project Camafuca continued to be impeded by delays in regulatory approval required from the Angolan government. |
