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

To: Gemini who wrote (6400)	1/10/2001 10:04:11 AM
From: Rocky510	Read Replies (1) \| Respond to of 7235

SouthernEra's Camafuca feasibility study accepted SouthernEra Resources Ltd SUF Shares issued 27,766,645 Jan 9 close $2.13 Wed 10 Jan 2001 News Release Dr. Chris Jennings reports Following an independent technical review, SouthernEra's joint venture partners in the Camafuca diamond project in Angola have accepted SouthernEra's phase I feasibility study. With this acceptance, formal application has now been made for the mining permits required to begin construction of the mine. A total of 20 per cent of the project will be held by Empresa Nacional de Diamantes de Angola (Endiama), the Angolan state diamond mining company. An affiliate of Endiama, Sociedade Mineira do Lucapa Limitada (SML), will hold 15 per cent. Another 33 per cent (formerly 32 per cent) will be held by Welox Limited, a member of the Leviev Group of Companies. Mr. Leviev is an internationally recognized businessman who is a member of a syndicate which has been granted the concession to market Angolan diamonds. Welox has committed to provide up to $18-million (U.S.) in new financing for Camafuca which should be more than sufficient to meet the requirements specified in the feasibility study. SouthernEra, through its subsidiary company, SouthernEra Angola LDA, will be the project operator and retain a 32-per-cent carried interest. Total resources at Camafuca to a depth of 145 metres are estimated at 209.5 million cubic metres containing 23.24 million carats of diamonds valued at $109 (U.S.) per carat, resulting in an in-situ value of approximately $2.5-billion (U.S.). The phase I feasibility study proposes the application of a marine-type cutting head dredge rated at 550 cubic metres per hour for mining operations. During the 60-month phase I period, mining operations will concentrate on the southeast corner of Camafuca where 6.13 million cubic metres of material will be dredged with an average grade of 0.18 of a carat per cubic metre and a value of $117 (U.S.) per carat. The kimberlite material will be slurry transported from the dredge by pipeline to a land-based traditional dense media separation plant. Overall operating costs during phase I are estimated at $9.76 (U.S.) per cubic metre, or approximately $55 (U.S.) per carat. Phase I capital costs are projected to be $16-million (U.S.). Construction of the dredge and processing plant will take approximately nine months after final permits have been granted. Phase I net cash flow before interest expense is estimated at $40-million (U.S.), generating an internal rate of return of 185 per cent. Payback of the initial $16-million (U.S.) of capital costs is expected to occur during the first 12 months of full production. "We and our partners used the best available technical consultants to develop and evaluate the Camafuca feasibility study. Nonetheless, technical assumptions have been made which need to be confirmed by actual operating experience, particularly with regard to the mining method. We have therefore decided to scale-up production beginning with a phase I period designed to confirm project design and operating parameters. If successful, we will move to an expanded operation employing additional dredges well before the completion of phase I," said SouthernEra's chairman, Dr. Chris Jennings. (c) Copyright 2001 Canjex Publishing Ltd. stockwatch.com