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Gold/Mining/Energy : SOUTHERNERA (t.SUF)
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To: Gord Bolton who wrote (2705)4/2/1999 3:57:00 PM
From: gemsearcher  Read Replies (1) of 7235
 
Hello Gord. Eight months ago the market punished the share price because the potential loss of M1 meant that the cash cow that would fund Klipspringer development was in jeapordy and that the only alternative was to go back to the market (with consequent dilution); a double whammy , if you you will. The company did a great job in securing 40% ofwhat has turned out to be an even richer M1 (thereby ensuring Klipspringer development without near - term dilution), only to be told by the market that its share price did not warrant a better than 5X CFPS multiple because Klipspringer would not generate the same cash as M1 after M1 was mined out!! I'm sure the company is frustrated by this " are they a producer or are they an exploration company " line of thinking - I certainly am. I am VERY bullish on SUF - they only need another mine that would be slated to come into production around the time M1 approaches depletion that, when added to forecasted Klipspringer(i.e.Leopard) production, will approximate current M1 cash flow. Then the market should afford a more reasonable(8 - 10X) multiple, as well as give recognition to the tremendous blue sky. The next 2-3 months are going to be very interesting - there will be a convergence of NWT , Marsfontein / Klipspringer, Camafuca and other news and results. Keep the faith all; the glory days are just around the corner. Regards. gemsearcher.
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