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

To: eyewatch who wrote (6684)	9/19/2001 9:36:10 AM
From: PHILLIP FLOTOW	Read Replies (1) \| Respond to of 7235

Wednesday September 19, 9:30 am Eastern Time Press Release SOURCE: Messina Limited; SouthernEra Resources Limited SouthernEra Subsidiary Concludes Debt Financing For Platinum Group Metals Project TORONTO, Sept. 19 /CNW/ - Messina Limited ("Messina"), a 70.4% owned subsidiary of SouthernEra Resources Limited, announced today that it has executed all the definitive documentation and satisfied all conditions precedent to drawdown against its R345 million (US$40 million) debt financing to complete construction and start-up of its 100% owned Messina Platinum Group Metals ("PGM") project in South Africa. This project financing completes the full funding requirement for construction and start-up of the Messina Platinum mine at an estimated annual production rate of 160,000 ounces of PGMs at a projected cash operating cost of under US$150 per ounce. Rand Merchant Bank ("RMB") is the Lead Arranger of the financing provided by a consortium of South African banks that also includes BOE Merchant Bank and the Industrial Development Corporation of South Africa. First drawdown against the loan facility occurred yesterday. Drawdown of the full facility of R345 million is expected to take place by September 2002 when construction of the project will be completed. SouthernEra's President and CEO, Patrick Evans, said "the successful conclusion of this project financing represents a milestone in our efforts to build SouthernEra into a leading, independent producer of platinum group metals. Since the second quarter of last year, when SouthernEra acquired its interest in Messina, we have continued development of the Messina project at full-speed thanks to the support of our shareholders who have provided two equity financings. As announced recently, the Accelerated Production Initiative (API) commenced mining on schedule during August and is now shipping concentrate. The larger project is also on schedule and on budget for a production start-up in the last quarter of 2002." The loan facility consists of two tranches. Tranche A for R270 million (US$31.3 million) has a 7-year term from initial draw down to final repayment. Tranche B for R75 million (US$8.7 million) has a 7-1/2 year term from initial draw down to final repayment. The providers of Tranche B have also supplied a R75 million (US$8.7 million) project completion guarantee. As a condition precedent to draw down, RMB required a R121 million (US$14.0 million) underwriting of the forecasted profits of the API. SouthernEra is pleased to advise that its largest shareholder, Rio Tinto, has provided R58 million (US$6.7 million) of this underwriting with RMB providing underwriting of the balance of R63 million (US$7.3 million). One of the requirements of this loan facility is floor price protection on platinum and palladium production. To satisfy this condition, an agreement has been entered into with a major international automotive company. This five-year agreement provides for a guaranteed minimum weighted average floor price of US$400 per ounce for platinum and US$370 per ounce for palladium. The agreement also provides for a weighted average ceiling price of US$600 per ounce for 80% of platinum production and US$658 per ounce for 100% of palladium production. The contract covers up to a maximum of 232,000 ounces of platinum production and 178,000 ounces of palladium production over the five-year life, which represents approximately 3% of the current known PGM resource. At the option of either Messina or the automotive company, the contract may be terminated should the loan facility be repaid in full within the five-year contract period. PHIL