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

To: dara who wrote (7117)	11/26/2003 7:30:17 PM
From: Letmebe Frank	Respond to of 7235

Third Quarter Results: southernera.com LMBF

To: dara who wrote (7117)	11/26/2003 7:33:51 PM
From: Letmebe Frank	Read Replies (2) \| Respond to of 7235

Hello Dara - since your link doesn't seem to work, I thought I would find the post and repeat it here: I talked to Dr. Sally Eyre yesterday. She was very nice to talk to. The following is as I interpreted her comments, if I made any errors I apologize in advance. The reason for the financing is............The debt for Messina has a high interest rate, 14.5% I believe, the company would like to have the option for them to pay it down (or remove it - I'm not quite sure if they have enought to remove it in full, I'd guess yes, but I didn't ask that). It also depends on the suspected movement in currencies, they wouldn't want to pay it off if they think the currency is going to move in their favour. She mentioned that there is a clause in the contract for the loan that states that the forward selling contracts (for Platinum/Palladium) could be negated if they pay off the loan. She said they can't really put this information into a news releases as it would alarm their north american automobile manufacturer who is buying the product. She further said that if they were to want to pay down their loan, they would enter into discussions with there end customer to hopefully come up with a mutually agreeable compromise for the floor/ceilings of the respective commodities, before issuing a news release about that. She said at the current Rand exchange rates the margins are still robust................and said some gold mines are not under a 7 Rand, and they will probably not be operating for long at a loss. Ultimately, she said suf will be a 1 Million/oz/year producer...............which will be the 5th largest in the world. Quite a lofty goal!!!! She said their still on track to be in full production Phase 1 by the middle of next year. She said once phase 3 is drilled out, they will probably enter into an agreement where the j/v partner will get an interest in the whole Messina project, based on %'s of pgm's attributed to each company. This is probably more simplistic then it really would be, I'd guess, as the time value of money would have to be factored in to some degree. As for the timing of the financing, she said that we're in a bull market right now, the Rand is strong..........which hurts, but they don't know what the situation will be in 6 months, so they thought it best to raise money now. This gives them flexibility to do what they think is required going forward. It looks like the players that have been unloading stock might be finished for now. I noticed Sprott bought at least another 25,000 shares today. I bought 2,000 more. In total right now I've got about 32,000 shares, and there's another 6,000 in an account that I look after for my brother. I think, overall, the company has done a very impressive job raising money, they've raised money at the peaks of trading over the last 2 years, with warrants only applied to the last financing at prices more then 50% above the trading level. Compared to any other company, I think it's quite amazing. If I've made any errors in the above, my intrepretation might be a bit off, but for the most part it should be correct. Have a good weekend! dcj