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

To: gemsearcher who wrote (6180)	8/25/2000 2:20:17 PM
From: PHILLIP FLOTOW	Read Replies (1) \| Respond to of 7235

Friday August 25, 12:21 pm Eastern Time Press Release SOURCE: SouthernEra Resources Limited SouthernEra Resources Limited second quarter results to June 30, 2000 TORONTO, Aug. 25 /CNW/ - Highlights of the Second Quarter Report for SouthernEra are as follows: - Cash flow from operations totaled $5.5 million for the quarter (20 cents per share) and $12.7 million (47 cents per share) for the six months to June 30, 2000, compared to $9.2 million (35 cents per share) for the second quarter of 1999 and $18.8 million (72 cents per share) for the comparable six month period in 1999. - Mining permit received for Messina platinum/palladium project. Underground development started. An additional 16.4% of the shares of Messina were acquired, increasing the Company's interest to 70.4%. - Positive Feasibility for Klipspringer underground mine. Corporate Direction ------------------- Significant changes have been made by the newly appointed Board of Directors in corporate governance. Four board committees have been appointed which are taking an active role in shaping a new set of corporate strategies and policies. Included in this corporate strategy will be innovative financing options which should enable the Company to realize shareholder value without significant equity dilution. On August 14th the Company announced new compensation policies for directors and senior officers designed to align their interests more closely with those of shareholders. The appointment of a new CEO to lead the Company forward is expected shortly. Operations ---------- The net loss for the quarter was $2.3 million (9 cents per share) after amortization charges and exploration project write downs totaling $7.6 million, compared to net income in the second quarter of $1.9 million (7 cents per share) after amortization charges and write downs totaling $6.9 million. Revenue for the quarter was $7.7 million compared to $16.5 million for the same quarter in 1999. For the six months to June 30th, the net loss was $4.0 million (15 cents per share) after amortization charges and write downs totaling $12.1 million compared to net income of $6.9 million (26 cents per share) after amortization charges and write downs of $8.7 million. Revenue for the six months was $16.5 million compared to $25.5 million for the six months in 1999. At the Marsfontein Joint Venture (40% SUF) production throughput for the quarter was 149,478 tonnes (first quarter 114,520), yielding 130,185 carats, for an average grade of 87 carats per hundred tonnes. This compares with a yield of 156,918 carats with an average grade of 137 carats per hundred tonnes in the first quarter. Although the grade continues to drop as M-1 is mined out, the stone size and quality is holding up. The average price per carat reflected in revenue in the second quarter was US $123 compared to US $117 in the first quarter of this year. Mining of the M-1 pipe will end during the 3rd quarter. The previously mined stockpiled material will supply feed to the 100 tonnes per hour plant for the balance of the year and through most of 2001. A recent bulk sampling program of the stockpiled gravels determined that this material should generate significant cash flows to the Company. During the quarter the Company increased its holding in Messina Limited to 70.4%. At the Messina Project, in May the company received the mining license and commenced de-watering the Voorspoed shaft and the recommissioning of the headgear and major items of equipment such as winders and compressors. Underground development work on the 150m and 200m levels to access the two platinum/palladium reefs and to take a bulk sample for further metallurgical testing, will take place in the third and fourth quarters. The Company continues to evaluate other safe and cost-effective methods for mining development. The Board is currently evaluating three different financing methodologies for Messina, none of which would require a significant new equity contribution from SouthernEra. Assuming that project financing is in place by early 2001, production is expected to begin in early 2003. A positive feasibility study on SouthernEra's 100% owned Klipspringer Project located immediately adjacent to Marsfontein has been delivered by Badger Mining & Consulting (Pty) Ltd., a recognized independent South African mining consulting firm. Based on the positive economics forecast for the project (see news release dated August 24), the Board of Directors of SouthernEra has approved development of a mine subject to securing suitable project financing. The internal rate of return for the project is 42.9%, and payback of initial capital is achieved approximately 1.5 years after full production begins. The feasibility study for mining the Camafuca kimberlite pipe on the Chicapa River in Angola was submitted to the Angolan partners in July and is currently being evaluated. Exploration ----------- During the next six months, the Company will evaluate two promising new sources of diamond-bearing gravels which are thought to have eroded from the M-1 pipe and Leopard fissure. Both areas are located on ground held by the Company. If these areas prove to be economic, commercial exploitation could begin during 2001 using the existing processing facilities at Marsfontein. The Company's MacKay Lake project could host the northeast extension of Winspear Resources Ltd.'s Snap Lake diamond deposit. Winspear recently drilled a successful step-out hole on the Snap Lake deposit within 1 kilometre of the MacKay Lake boundary. The Company's geologists believe that it is likely that the shallow-dipping Winspear kimberlite sill extends onto MacKay Lake at a depth of 900-1200 metres. Because of its high grade and high value, an extension of the Snap Lake deposit onto SouthernEra ground could be economic at these depths. A second sill, partly drilled by Winspear, may also dip onto the Company's property. The Company is currently evaluating a prospective drill program and expects to make an announcement shortly. For the complete report for the six months ended June 30, 2000, please visit the company's website at www.southernera.com. SouthernEra Resources Limited is a diamond mining and exploration company and an emerging platinum group metals producer. The common shares of SouthernEra are traded under the symbol SUF on the Toronto Stock Exchange. For further information SouthernEra Resources Ltd.: Christopher M.H. Jennings, Chairman, Rudi P. Fronk, Director, Telephone: (416) 359-9282, Fax: (416) 359-9141, e-mail: inbox@southernera.com PHIL