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

To: Letmebe Frank who wrote (6932)	8/3/2002 4:00:25 PM
From: gg cox	Read Replies (1) \| Respond to of 7235

Repeat Date:April 25 2002 Haywood Securities Pushes SouthernEra On Its Way To AIM The results for 2001 from SouthernEra Resources do not, at first glance, reflect the great changes that have taken place in the company since the new management team under the chairmanship of Dr Chris Jennings took over in the summer of 2000. Diamond sales generated revenues of only US $3.8 million in 2001 compared to US$17.3 million in 2000, but this was due to the cessation of mining at the high yield MI open pit diamond pipe at Marsfontein. With no contribution from this the company had to rely on sales of diamonds from the treatment of low grade stockpile and tailing materials and limited underground fissure material from the Klipspringer Joint venture. Klipspringer, however, is the key to the future and diamond production commenced last year from the newly commissioned No 4 level approximately six months ahead of schedule. SouthernEra now anticipates that production from it should reach 186,000 carats/year - nearly 20 per cent above feasibility estimates - when full capacity of 33,000 tonnes month is achieved. This is one of the reason why leading Canadian stockbrokers Haywood Securities are recommending SouthernEra so vigorously, and the other is the potential from its 70.4 per cent owned Messina mine which is also in South Africa. Until recently it was thought that SouthernEra would be a significant producer of diamonds and platinum group metals by the end of this year and getting the full benefit of carrying operating costs in rands and selling its products for dollars. However, as Haywood points out, the recent decision to accelerate Phase 1 in the Voorspoed section at Messina by deepening the shaft now rather than late in 2003 as per the original feasibility, will postpone production from the platinum group metal project until the third quarter of 2003. The brokers, however, see this as a positive move. For a start the shaft deepening will be easier, safer and quicker to carry out before production commences. Second, it will boost throughput from 80,000tonnes a month to 120,000 tonnes a month, Third, even though it will defer cash flow of US$20 million by a whole year, it will boost cash flow thereafter by a similar amount year on year. As a result production of PGMs is expected to rise from 110,000 to 167,000 ozs/annum, and all at a cost of only US$22 million. The original plan was based on the need to conserve cash, but by deepening the shaft now Haywood reckons that the only bottle neck will now be the mill as the number of working levels will be increased from four to seven. It will also, according to the company, boost the net present value of Phase 1 by 20 per cent by reducing capital and operating costs; ensuring that the mill is used to full capacity; and reducing the mine life from 17 to 12 years. In the meantime the Phase 11 feasibility in the Doornvlei section is also expected this summer. SouthernEra has plenty of other strings to its bow with exploration activities in Canada, South Africa, Gabon and Australia all producing positive results. Much interest is now focussing on the potential of the huge Camufuca kimberlite pipe in Angola now that peace seems to be returning to that country. But the other thing about SouthernEra which Haywood forgot to mention is that the company has made a policy decision to seek a dual listing on AIM, according to insiders. SouthernEra would be quite a prize for AIM and hopefully the London market would help double the share price from its present level towards Haywood's revised target of C$10 per share ( 438p)