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

To: nempela who wrote (1374)	6/3/1998 2:39:00 PM
From: Rocky510	Read Replies (1) \| Respond to of 7235

Nempela, Thanks! (eom)

To: nempela who wrote (1374)	6/3/1998 5:47:00 PM
From: VAUGHN	Respond to of 7235

Hello Nempela Thanks for the update, I missed the call as well. I read through the AR over lunch and noted a few references that might help answer a few questions raised by another poster. Prior to the discovery of the M-1 mid 97, SUF had planned to put the dykes and blow into initial production and had started to develop a mining plan to that effect. Upon finding and establishing the grade and value of the M-1, a new mining plan was started to put it into higher production, the previous one shelved, and a larger capacity plant ordered. With the protracted delay due to the dispute, the M-1 plan had to be shelved and the original plan resurrected only recently. This delay of the original plan resulted in the fact that the "fissure system has not been developed for mining to the extent that it can continuously feed the mill at capacity levels". Remember this is a larger mill than was originally planned for dyke production. Also with regard to the suggestion of initial production shortfalls it is also worth noting that the initial material treated consisted of 127 tonnes of tailings from the original 10 foot pan plant and 14,357 tonnes from the Sugarbird Blow. Note that while the Sugar Bird Blow grades @ 0.86 carats per tonne its content is only valued at $86 per carrat. The original plant mill feed was going to be from the Leopard fissure which averages 0.73 carrats per tonne but its stones are selling much higher at $120 per carrat. So taking into account that old tailings and lower value ore were being initially processed, the plant was being commissioned and the dyke adits, raises, drifts and cross cut systems are under-developed, I think SUF has done quite well achieving the production they did. The projected 1998 production figure of 100,000 carrats from 150,000 tonnes suggests they will be running somewhere near their originally proposed production target of 500 tonnes per day which seems very reasonable under the circumstances. I also find it interesting that the Leopard fissure stones are selling for an average of $120 per carrat which suggests prices have risen substantially (approximately 40%) from when these stones were originally valued back in 1995. Two other observations. Now that SUF has a built in surplus plant capacity they can accept additional feed whenever it becomes available with out delay for additional capacity. There were a number of other dykes and pipes discovered and under evaluation any one of which might easily contribute addition feed in the near future. The plant is a "state of the art commercial unit incorporating proven recovery technology, primary and secondary crushing circuits, 2 stage scrubbing, and a dense medium cyclone section with a sophisticated water and ferrosilicon recovery systems. Final diamond recovery uses secure x-ray technology and hands off diamond sorting through glass enclosed boxes". (Doesn't sound too much like an old pan plant to me, but hey, if it recovers diamonds I guess that s all thats important right?) Finally, it is worth noting that SUF and DB are 50/50 joint venture partners on the Doornrivier farm where one of these kimberlites was discovered in 1997 and a joint exploration program is in negotiations. Who knows, maybe a horse trade might be a possibility? Regards