Here it is:
Attention Business/Assignment Editors:
SouthernEra announces major platinum acquisition
- SouthernEra to Purchase Messina Holdings' Controlling 54.17% Interest
in Messina Limited. Messina Limited owns 100% of Messina Platinum
Mines Limited.
- Measured Resource of + 51 Million Tonnes to 1,000 Metres.
- Mine Credits Include Platinum, Palladium and Other Platinum Group
Metals (PGM), as well as Gold, Nickel, Copper and Cobalt.
- Pre-Feasibility Study Indicates After Tax Net Earnings for the Project
to be Approximately C$23 million Per Annum.
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TORONTO, April 15 /CNW/ - SouthernEra Resources Limited (SUF - TSE), one
of the leading diamond exploration and mining companies in the world, today
announced its plans to expand into the noble precious metals group, most
notably platinum and palladium.
SouthernEra has entered into an agreement with Messina Holdings Limited,
a wholly owned subsidiary of Impala Platinum Holdings Limited (Implats), to
acquire, at an estimated cost of US$10.5 million, their 54.17% controlling
interest in Messina Limited, a South African company listed on the
Johannesburg Stock Exchange. Messina Limited's assets include its wholly owned
subsidiary, Messina Platinum Mines Limited and approximately R58 million
(US$9.4 million) in cash.
The agreement follows a long due diligence process and the production of
a detailed pre-feasibility study under the direction of SouthernEra and
independently reviewed by one of South Africa's leading engineering consulting
groups - Steffen, Robertson & Kirsten (SRK). The pre-feasibility study was
carried out at a cost of over C$1 million and requires little further work to
convert to a full feasibility study.
Terms of the agreement require SouthernEra to complete a bankable
feasibility study within approximately four months. The feasibility study is
expected to demonstrate that the Messina platinum mine will generate a rate of
return of at least 20%. The pre-feasibility showed a 24% rate of return. The
transaction is also subject to several other conditions precedent, which will
be satisfied before the completion of the bankable feasibility study. Assuming
completion of the acquisition, SouthernEra will make an offer on similar terms
to the remaining shareholders of Messina Limited.
''We are very excited about this acquisition which forms part of our
plans to expand the company and which, moreover will provide steady, very long
term income to fund further growth and enhance shareholder value,'' says Chris
Jennings, President, SouthernEra Resources Limited. ''We believe it will make
a very good fit with our diamond business. The fundamentals of the PGM
business are good. We also look forward to working closely with and
benefitting from the experience of Impala Platinum Holdings Limited.''
The Messina Platinum Mines property is located 16 kilometres southeast of
SouthernEra's Klipspringer Mine office in the Northern Province of South
Africa. Klipspringer is SouthernEra's primary diamond production project.
SouthernEra is confident that the close proximity will create synergies
between the two operations, which will result in cost savings.
In addition to an initial annual production of about 120,000 oz of
Platinum Group Metals and Gold, the pre-feasibility study indicates that the
mine is expected to produce approximately 1,406 tonnes of Nickel, 848 tonnes
of Copper and 27 tonnes of Cobalt annually.
SouthernEra plans to process the ore only to the concentrate stage. ''The
elimination of the need to build a smelter and refinery on site will
substantially reduce the capital costs and eliminate the need to acquire
specialised platinum marketing skills,'' adds Jennings.
MORE THAN 33 YEAR LIFE OF MINE.
SouthernEra plans to mine both reefs on the Voorspoed section
simultaneously at a rate of 60,000 tonnes per month. At this rate, the
Voorspoed section is projected to have a life of over 33 years. This is
expected to provide long term, steady cash flow for SouthernEra, which will
augment the cash flow from the projected long life of the Klipspringer
fissures.
A significant amount of work (at a cost of +- C$29 million) has been done
on the property in the past. There is some surface infrastructure and a
vertical shaft to 325 metres on the Voorspoed section. This will also result
in substantial capital savings.
LARGE RESOURCE.
The Messina Platinum Mines Mineral Leases cover both precious and base
metals over several farms, totaling 5,439 hectares in extent on which a strike
length of 16 kilometres of both the Merensky and the UG2 platinum reefs have
been delineated. These two important reefs, which dip at an average of 58
degrees are separated by 120 metres. The steep dip of the reefs will enable
the use of more productive and economical mining methods than those used at
the mines on these reefs elsewhere in the Bushveld Igneous Complex, which dip
at an average of 14 degrees.
The resources of the Voorspoed and Doornvlei sections have been
delineated by 155 drill holes, most with multiple intersections. These
resources are to a depth of 1,000 metres and for Voorspoed, where mining will
commence, have been calculated after applying a 25% geological loss factor.
The total resource for the above two sections to 1,000 metres, is 51
million tonnes at a grade of 6.4 g/t PGM + Au, containing 10.48 million oz of
PGM's +Au. There is further potential for substantially increasing resources
on the property both westwards along strike and down dip.
SouthernEra Resources Limited was taken over by present management in
1992 with the goal of becoming a leader in exploration, mining and production.
The company is currently one of the world's leading diamond producers.
SouthernEra holds exploration rights for properties in more than 7 countries,
most notably South Africa, Canada's Northwest Territories, Brazil and Angola.
The company employs more than 300 people and has a solid reputation for
technical excellence and the highest ethical standards. SouthernEra expects to
employ 920 people at its new platinum mine. This will provide much-needed jobs
in a very economically depressed area of Northern Province.
The company is committed to growth through geographical and geological
diversification and believes that this commodity diversification into the
promising and growing platinum and palladium business will provide consistent
long-term revenue.
Analysts, the Press and Fund Managers are invited to a briefing at
SouthernEra's Office at 4 p.m. to-day.
%SEDAR: 00004535E
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For further information: Christopher M.H. Jennings, President, A.Lee
Barker, Senior Vice President, Frank van de Water, Vice President, Finance,
Kim Freeman, Vice President, Operations, Nicholas Sayce, Investor Relations:
Phone: (416) 359-9282, Fax: (416) 359-9141, e-mail: inbox@southernera.com,
Web site: www.southernera.com
PHIL |
