Poised to be platinum’s No 5
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Five companies have expressed interest in partnering SouthernEra in its development of the Messina Platinum mine.
None is a platinum mining company and most are gold producers, SouthernEra president and CEO Patrick Evans tells Mining Weekly.
Additional investments in order to accelerate output from the Messina project from the initial 160 000 oz to 500 000 oz, is favoured by Evans as being of benefit to shareholders.
Such a level of output would make by 2006 the Toronto-listed company South Africa’s fifth largest platinum producer after Anglo Platinum, Impala Platinum, LonPlat and Northam.
SouthernEra, which is known as a diamond exploration and producing company, is evolving into an emerging PGM producer through its 70,4% acquisition of Messina Platinum last year from Impala, which in turn will continue to smelt, refine and market the first 160 000 oz for the life of the mine.
Once the 200 000 oz benchmark is reached, SouthernEra will have the option to expand its deal with Impala, consider toll refining on tender or build its own smelter.
However, at the moment, SouthernEra’s main focus is to bring Messina into early production, by August this year.
An initial output of 20 000 t/m is expected to rise to 300 000 t/m in 2003 and then to 450 000 t/m.
The feasibility study on phase two of the project will begin in September.
Phase two could, however, come into production sooner than expected, as an incline shaft to 145 m, which intercepts both the Upper Group Two and the Merensky reefs, is already in place.
SouthernEra’s principle listing is on the Toronto Stock Exchange, with RTZ, through Kennecott Corporation, as its single largest shareholder.
On a fully diluted basis, SouthernEra has 45-million shares, but at the moment 30-million outstanding shares are on issue.
Evans reports that with the growing understanding in Canada of the PGM market, shareholders are responding positively to the company’s platinum embrace.
SouthernEra is now interested in broadening participation in its stock and is currently looking to expand beyond the Toronto listing towards a New York listing.
SouthernEra is expecting its cashflow - currently a trickle - to increase in the next 12 to 18 months, when its three projects, Messina and diamond projects Camafuca and Klipspringer, come into production.
Already an established diamond-exploration company, SouthernEra is looking to expand its PGM exploration programme.
Greenfields PGM opportunities, outside of Messina, have been identified, and the exploration programme in West Africa, particularly Gabon, has also produced results beyond the diamond sector.
Though SouthernEra is not involved in the marketing of PGMs, Evans says the company would like to advance its understanding of the market, going forward.
Evans reports that the company is considering entering into a relationship with a major diamond manufacturer and marketer in which SouthernEra will go downstream with the yet unnamed company, that will in turn come upstream with SouthernEra.
Evans explains that the purpose of this relationship is to have a fully integrated participation from the diamond production, all the way through to retail.
Evans feels that SouthernEra has turned the corner in terms of leadership credibility in both diamond and PGM exploration.
SouthernEra was the second-largest producer of diamonds in South Africa after De Beers during the short-lived, but lucrative exploitation of the controversial Marsfontein diamond mine and he believes that the company could, within the next five years, become one of the major players in both sectors.
Mining, plant management and exploration will remain core activities in both the diamond and PGM field, while shaft-sinking, plant design-and-construction will be outsourced to contractors.
Vice-president Stanley Westcott is leading the development at Messina and geologists, metallurgists and engineers are being hired before productions commences in August.
SouthernEra staff complement of 400 is expected to increase four-fold as the new operational phases unfold.
Evans had been a long-standing non-executive director of SouthernEra, prior to being appointed president and CEO.
He was formerly employed by gold major Placer Dome, owner of 50% of South Deep in Gauteng, which has now also decided to embrace PGM opportunities
Evans resides in North America, but as a South African by birth and former South African Consul General to Canada, his heart is “still very much in Africa”, he confides.
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Zonika Botha, Special Features Reporter
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