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

To: Goalie who wrote (847)	4/16/1998 1:04:00 PM
From: VAUGHN	Respond to of 7235

Hello Goalie Thanks for the info. Some opinion from Cannacord in their Morning Coffee post conference call I believe. * SouthernEra Resources (SUF : TSE : $9.00 : Issued 30.4M) One year ago, SouthernEra was trading at about $9.00, the Company had 22.6M in the treasury (an $18.1M financing was completed in Q1/97), and the acquisition of a 51% interest in the Camafuca/Camazambo kimberlite pipe in Angola was just being finalized. At Klipspringer, some 6,500 tonnes of bulk sample from the Leopard (Main) fissure was processed, with the recovery of over 5,200 carats of which 4,823 carats were valued at an average of US$107/carat (up nicely from earlier valuations). Exploration was ongoing on the Sugarbird Fissure and small scale bulk sampling had been done on the blow with encouraging results. We were modelling Klipspringer at production rates of 500, 1,000 and 1,500 tonnes per day which would (and could) produce pretax profits in the US$6-20M range. We were looking at Klipspringer as a good cash flow support project for the Angolan ventures. The revised joint-venture agreement for the Farm Marsfontein with Randgold was announced on June 19/97, by which time reverse circulation drilling on four of seven geochemical anomalies had identified two pipes (M1 and M3) and at least two kimberlite dikes. Subsequent bulk sampling and drilling on M1 outlined a resource of 512,400 tonnes grading 3.083 carats/tonne with an average carat value of $142. The prospect of reaping a one year(() bonanza of $100M+ from M1, prompted the ordering and construction of the new 2,000 tpd plant which is located on the nearby Farm Rusfontein. M1 promised to provide the cash required for the development of the fissure mine(s) at Klipspringer, cover off Angolan requirements and then some. The Company's focus was changed during the summer of 1997. The litigation over the mineral rights on the part of the Farm Marsfontein containing M1 was first announced on January 15, and background is provided in our March 16 Daily Letter (copies on request). At the time of that comment, the heirs of the original owners of the mineral rights (circa 1920) were transferring their claims into a corporate entity which we now know as NGS Minerals (Pty) Limited ("NGS"). SouthernEra and Randgold were to seek expropriation of the mineral rights at a hearing in Pretoria on April 14, however immediately before the hearing, counsel for NGS informed SouthernEra's lawyer that they had concluded a prospecting contract for Marsfontein on April 9, 1998 with De Beers Consolidated Mines. The hearing was postponed until April 16 (today) with a final hearing set for May 18. We do not have details on the terms of the prospecting contract NGS has signed with De Beers but suspect that, subject to the court's decision, De Beers would be given a period of time to redrill and bulk sample M1 (etc.); possibly a buyout agreement has already been formulated. De Beers has become quite active in joint-ventures/financings with junior exploration companies (Mountain Province in the NWT, Troymin in Alberta's Buffalo Hills, TNK Resources in Botswana), and it is unlikely that the prospecting contract transaction should be viewed as having any ulterior motive beyond a potentially sound business decision. Once again we will not offer any opinion on the litigation as this area is well beyond our scope. The M1 litigation is a critical component in SouthernEra's future: to develop the Leopard and Sugarbird Fissures to the point that they could fully support the 2,000 tpd processing plant might take 18 months, and capital of US$20M. Cash on hand is believed to be in the C$5-10M range and C$7-14M might be generated from the current mining of the Sugarbird Blow. The stock dropped sharply yesterday, to an interday low of $8.50 previous close $12.90) on volume of 469,697 shares, and we could see further downside short-term. (SouthernEra tends to be a very volatile trader-look for buy points on down-spikes.) The Company is hosting a conference call at 10 a.m. EDST today (Thursday) and this might provide some support: any further thoughts will be in Friday's Daily Letter. David James (204) 988-9602 Regards

To: Goalie who wrote (847)	4/16/1998 1:46:00 PM
From: Tomato	Read Replies (1) \| Respond to of 7235

Does anyone know the racial composition of the heirs? I had assumed that they were white, since I figured with the property have a Boer sounding name and blacks probably not being able to own property (or could they?) under apartheid, that we were talking about white owners and heirs. Anyone know for sure? I wonder why the black lawyers are supposedlyon the heirs' side and the presumably white lawyers on SUF's side? Is that the case? Maybe they allow contingent fees there and some young lawyers see some money to be made? If anyone has any facts on the situation, please chime in.