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

To: VAUGHN who wrote (1631)	6/16/1998 8:48:00 PM
From: Andrew	Read Replies (1) \| Respond to of 7235

Does anyone here know what kind of a cash flow multiple a diamond producer might trade at? Perhaps Vaughn, Confluence or George could respond as you guys seem the most knowledgeable in this area. Thanks in advance, Andy

To: VAUGHN who wrote (1631)	6/17/1998 8:10:00 AM
From: DavidA	Respond to of 7235

17 June 1998 SouthernEra and De Beers sign deal Simon Barber WASHINGTON - De Beers is to take control of the disputed M1 diamond pipe on Marsfontein farm in Northern Province, ending a bitter fight with Toronto-listed mining junior SouthernEra Resources. SouthernEra had been about to start mining at the site when 29 heirs emerged unexpectedly last December, registered their rights and optioned them to De Beers. Under an agreement announced on Monday, Minerals and Energy Minister Penuell Maduna will be spared having to rule on SouthernEra's application that the heirs and De Beers be expropriated under section 24 of the minerals act in the public interest. De Beers is to get a 60% interest in M1 and will manage the project. SouthernEra will take the remaining 40% after buying out partner Randgold Exploration. De Beers will pay the heirs' company, NGS Resources, about R75m as previously agreed. SouthernEra is to retain control of its larger Klipspringer project nearby, and Marsfontein ore will be processed at the company's recently completed treatment plant at Modderfontein. De Beers' Central Selling Organisation will buy M1 and Klipspringer output. Previously, SouthernEra president Chris Jennings insisted he would not sell through De Beers, saying it would mean taking a 25% discount on prices SouthernEra could obtain elsewhere. A joint statement by all four companies involved said the agreement would "enhance and strengthen the stability of the world market for diamonds, as well as provide SouthernEra with the benefits of an assured and reliable market". SouthernEra had been counting on the M1 pipe, which is small but contains a very high grade of easily mined ore, to finance operations at Klipspringer and the expansion of its holdings at Camafuca, a potentially massive pipe in Lunda Norte province, Angola. In a teleconference with investors and analysts on Monday, Jennings said the deal with De Beers "should give us funds to do additional work in Angola and get at more of the Camafuca pipe which we believe is going to be a real winner". P.S. The discount value that SUF will obtain in sale of diamonds through De Beers is in the mid one digit numbers. The specific number cannot be disclosed do to the specifications within the contract with De Beers. This information was discussed in CJ's conference call with the analyst. I am surprised FP did not cover this issue in there latest article, Peter was present and had asked a lot of questions regarding this item.

To: VAUGHN who wrote (1631)	6/17/1998 8:43:00 AM
From: DavidA	Respond to of 7235

SouthernEra and De Beers sign deal Simon Barber Washington - De Beers is to take control of the disputed pipe on Marsfontein farm in Northern Province, ending a bitter fight with Toronto - SouthernEra Resources. SouthernEra had been about to start mining at the site when 29 heirs emerged unexpectedly last December, registered their rights and optioned them to De Beers, Under an agreement announced on Monday, Minerals and Energy Mininster Penuell Maduna will be spared having to rule on SouthernEra's application that the heirs and De Beers be expropriated under section 24 of the minerals act in the public interest. De Beers is to get a 60% interest in M1 and will manage the project. SouthernEra will take the remaining 40% after buying out partner Randgold Exploration. De Beers will pay the heirs NGS Resources, about R75m. SouthernEra is to retain control of its larger Klipspringer project nearby and Marsfontein ore will be processed at the company's recently completed treatment plant in Modderfontein. De Beers CSO will buy M1 and Klipspringer output. Previously, SouthernEra president Chris Jennings insisted he would not sell through De Beers, saying it would mean taking a 25% discount on prices SUF could obtain elsewhere. A joint statement by all four companies involved said the agreement would enhance and strengthen the stability of the world market for diamonds, as well as provide SouthernEra with the benefits of an assured and reliable market. SouthernEra had been counting on the M1 pipe, which is small but contains a very high grade of easily mined ore, to finance operations at Klipspringer and the expansion of its holdings at Camafuca, a potentially massive pipe in Lunda Norte province of Angola. In a teleconference with investors and analysts on Monday, Jennings sad the deal with De Beers should give us funds to do additional work in Angola and get at more of the Camafuca pipe which we believe is going to be a real winner.