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

To: GULL who wrote (1198)	5/22/1998 6:49:00 AM
From: Confluence	Read Replies (1) \| Respond to of 7235

From today's Financial Post: Friday, May 22, 1998 SouthernEra and heirs settle their differences By PETER KUITENBROUWER The Financial Post SouthernEra Resources Ltd. of Toronto and its opponents, a group of heirs, dropped their lawsuits yesterday over a South African diamond cache. The adversaries don't have a deal yet. Still, the end of the five-month fight before a South African court opens the way for a possible settlement to the dispute and has left diamond giant De Beers Consolidated Mines Ltd. scrambling for its next move. "We're tired of having end runs run around us," SouthernEra president Chris Jennings said yesterday from Johannesburg. The settlement removes legal obstacles to an expropriation of the site by South African Mines Minister Penuell Maduna, he said. "The minister now has to decide whether we are the fair, legitimate owners of the Marsfontein mineral rights," Jennings said. Investors, however, responded by dumping SouthernEra shares (SUF/TSE), which dropped $1.25 to $7, 10› shy of its 52-week low. Patrick Evans, South African consul in Toronto, said Maduna has been in Europe and has not yet seen the latest SouthernEra request. "The government is intent on a change in the mineral rights regime in South Africa to ensure that individuals or corporations do not hold mineral rights in perpetuity," Evans said. In a letter last month to The Financial Post, Maduna said he would fight in court for the right to turn over the Marsfontein rights to the Canadian-led group. If South Africa expropriates the site, Jennings said SouthernEra will pay the heirs 75 million rand ($21.3 million) in compensation. That's the same amount offered by De Beers when it secured the heirs' disputed rights last month. For weeks SouthernEra and De Beers have been negotiating over the rights. Among other points, De Beers wants SouthernEra to sell the diamonds through its Central Selling Organization, which markets 70% of the world's diamonds. Those talks are now on hold. "This doesn't mean there was a settlement between ourselves and SouthernEra," De Beers spokesman Roger Van Eeghen said. "We are reviewing our position following today's events." Jennings said "the door is still open to talks with De Beers." Still, he said, "the heirs' aim is to take a big cheque and go away. They will get their money quicker from SouthernEra than De Beers, because De Beers will only pay them the money after there is a certain amount of [exploration] work done on the property." Toronto accountant Len Lombardi, who owns more than 30,000 SouthernEra shares, rejoiced at the news. "I'm happy, I really am," he said. "De Beers is going to be out, and we can market our own diamonds and make more money."