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Gold/Mining/Energy : SOUTHERNERA (t.SUF) -- Ignore unavailable to you. Want to Upgrade?

To: maxed who wrote (4250)	7/31/1999 6:35:00 PM
From: Goalie	Respond to of 7235

Hi eddy. Likewise, I listened to the confc call - and I agree with you that SUF people have too much class to get into knifing Nesbitt...! I was disappointed in a couple of other things: (a) the timing of the 2Q NR and confc call was very poor coming at a time when the markets were nose diving; they should have waited until after the long weekend (in Canada); (b) only 2-3 questions came from brokerage houses; of course we don't know how many houses were listening in on the call and chose not to ask questions. I hope there were many house logged on -- if not, SUF must do a better job on getting them to listen to the SUF story! And if a lot of houses were on the call but failed to ask questions, its a reflection on them because it seems to me they were on the line just to satisfy their own curiosity perhaps, or because their bosses told them to be on. We'll see if they call some clients who don't know about SUF and recommend buying the stock at such a discount! One interesting note; a friend who has done his DD on SUF, recently called a reputable brokerage house and asked about SUF. To his amazement my friend knew more details about SUF than the broker!!! To say that the market (created by the brokers) "knows" about a stock is highly suspect! They "know" a stock if given a bunch of free shares to move the price and thus reap profits! However, I must add that some brokers make sure they do know about the stock they recommend to their clients! Others seem to follow the definition by Woody Allen: A stock broker is a guy who'll invest your money until you have none left! Regards. Goalie.

To: maxed who wrote (4250)	7/31/1999 6:56:00 PM
From: gemsearcher	Read Replies (1) \| Respond to of 7235

Hello Eddy , Goalie and All. A few thoughts on Q2 and going forward: 1. Clearly , the McKay write-off and the amortization of the Randgold payment had a dramatic affect on EPS ; unless Marsfontein proves out a longer life (it will - CJ told me he thought 10 years and we should know the drilling results in August - only question is "when" for accounting purposes) , this amortization charge will continue to depress EPS ; doubtful we'll see another significant exploration write-off this year - all the properties with accumulated costs in the AR are still "active". FWIW , I believe it's a little premature to measure SUF as a function of EPS .IMO , CFPS - i.e. does the co. have the cash to feed the engine without having to access the public markets is far more significant a measure at this stage. 2. CFPS for Q2 was lower than Q1. This really surprised me because a measurement of Q2 vs. Q1 looked like this: a) Q2 - 277K carats X $114/carat = 35 CFPS. b) Q1 - 200K carats X $121/carat = 37 CFPS. I spoke with the co. about this - apparently , SUF received payment for its last Q2 produced parcel on July 2 - i.e. it will be reflected in Q3. 3. The direction of the analysts' questions on the conference call , and echoed in FM's comment in today's FP story , was whether SUF can generate sufficient cash flow post M1 to fuel the exploration /development engine without having to go to the market/dilute. (Strangely Teevee, there does not appear to be any market concern whatsoever that SA is going to fall off the face of the earth/spiral into an abyss/implode - ;-)). I thought the co.'s response was bang-on - assuming no new Marsfontein pipes/blows , the co. feels that even under conservative projections , it will be more than able to bridge the CFPS drop post M1 until Klipspringer fissures are ramped up/ Camafuca and Messina kick into production. 4. I really respect these guys for the conservative approach they take - while given the share price I am sure there must be some temptation to hype/overstate , they resist it and focus on building the co. 5. The next 3 - 4 months are going to be exciting/telling - Marsfontein/Klipspringer exploration/reserves will become clearer , Camafuca bulk sample complete (hopefully in a climate that increasingly looks like it may be peaceful) , Messina done/financed and who knows - NWT/Brazil exploration advanced ?. Regards and a good weekend to All.