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

To: Peter Bourgeois who wrote (890)	4/20/1998 2:05:00 PM
From: VAUGHN	Read Replies (1) \| Respond to of 7235

Hello Peter I will try to reach David over lunch Peter. Thank you for the address. Man o man, this thread has suddenly become popular. Spent half an hour this A.M. going through all the posts. Some really good stuff. Everyone deserves congratulations. A truly informative series of posts and not a shot taken at anyone. What a pleasure to read. One of Joe's question's was not answered however and I will briefly try, however inadequately. Yes, generally dyke deposits are very narrow such as the ones at River Ranch or Koidu but that is what the market has liked about Klipspringer's. They have averaged well over two meters and have ballooned to over ten from time to time. Secondly, they have proven to contain average carat sizes and values/tonne that are well above average for diamond mines (see chart posted last week). Thirdly, and this is often overlooked, most dykes are found in relatively flat eroded geology, however, the Leopard, Sugarbird, and I believe the others, cut across a series of eroded mountains, (see annual report photos) thus allowing multiple adits to be driven economically for ore extraction from several locations and multiple drifts simultaneously. Finally, while most dykes have not been found to be more than 2 to 6km in length, the Leopard has been traced for over 60km and I believe the Sugarbird has up to 20km of proven strike. None of the dykes have as yet had their entire strike established. When Goalie talks about 50 years, he is quoting SUF's usual conservatism. I don't believe it takes too many minuets with a calculator to figure out that even at 5,000 or 10,000 tonnes/day, that these deposits will be producing well beyond that time frame. The following is from Cannacord's Morning Coffee: * SouthernEra Resources (SUF : TSE : $8.00 : Issued 30.4M) Much of last week's diamond mining news focused on developments in SouthernEra's ongoing litigation over the M1 diamond-bearing pipe at the Klipspringer Project in South Africa. While this is a focal facet of the SouthernEra story, the Company did provide brief updates Friday on the Luo (alluvial) and Camafuca projects in Angola, and a progress report on other activities at Klipspringer. Production from the Chicapa River and floodplain alluvial deposits on the Luo Concession in Angola for six weeks during February and March was about 5,120 carats and sold for a total of US$1.1M; a 100.78-carat stone sold separately for over $400,000: SouthernEra's share of the proceeds amounted to US$775,000. Samples from the drill program on the Camafuca Pipe in Angola should be analyzed by mid-May, and further selective drilling and bulk sampling is planned. SouthernEra has renegotiated the payment terms on Camafuca. The US$7M payment due April 10/98 was satisfied by the issue of 173,770 shares valued at $1.5M, with another market-related share plus cash payment equivalent to US$6.5M due in about one year. Of the 22,000 carats of Klipspringer stones being readied for sale, some 19,000 were produced from the Sugarbird Blow (balance from the Leopard Fissure). The Company did not provide tonnage figures, so a grade rationalization is not possible. Throughput has varied in the plant from 1,000 to 2,000 tonnes per day (2,000 tpd rating) since its start-up on March 2. The mine life of the Sugarbird Blow is only several months (4-5 months at plant capacity), but it will be interesting to see the diamond price realizations at the early May sale as a significant increase in the average stone size had been observed in early processing over what had been recovered from the pilot plant: the broken stone phenomena? For those readers of The Financial Post, this analyst has never used the term "all bets are off." To state a buy or sell opinion at this time on SouthernEra still bears on taking a stance on the M1 litigation and this is well beyond our scope: we continue to monitor the situation as closely as possible (please see Daily Letter comments of April 16 and 17). David James (204) 988-9602 Its sunny and cloudless here in YK for the sixth day in a row (12+ Centigrade today). Snow is a day or two away from being all gone from most yards with sun exposure, and the ice roads closed Friday. The lakes remain frozen and will not seriously candle until we have had several days of rain usually in first to second week of May but then this is not a normal year. Ice over deeper lakes should be sound enough for drilling if they had ice drill platforms frozen in last month, until at least third week of May to first week of June depending on the rain and any major storms that blow in. Minor speculative accumulation late Friday and this morning in IAR. Keep your eyes on it and KLA for any inkling of field success at Munn and Margaret. *OFF TOPIC* One last thought Joe. If you have a bunch of KRY, you may want to read todays electronic article from Stockwatch. The M1 shinanigans pale in comparison. KRY does not come off looking like the world best investment. Regards