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

To: Goalie who wrote (1681)	6/26/1998 1:11:00 AM
From: RBMac	Respond to of 7235

Friday, June 26, 1998 SouthernEra woos shareholders Assures disgruntled investors they'll love deal ending 'war' with De Beers By PETER KUITENBROUWER The Financial Post SouthernEra Resources Ltd. president Chris Jennings promised a packed room of shareholders yesterday they will love the peace deal that ends his company's "war" in South Africa with giant De Beers Consolidated Mines Ltd. "The end of the war allows SouthernEra to do what SouthernEra does best," said a tired Jennings. "Find and mine diamonds." But a third of shareholders showed their dissatisfaction by voting against a resolution that will increase the number of common shares to be issued under the executive stock option plan to 4.6 million from 3.4 million. "Investors are a bit miffed because when Jennings is overseas who is the investment community going to talk to?" said Leo Bastyovanszky, who described himself as a longtime SouthernEra investor. "The board should be beefed up" and another senior executive should be hired to help Jennings. After the Toronto meeting, Jennings said the five-member board may look at adding new members and the company is also considering a shuffle at head office. He said during SouthernEra's five-month battle he talked continuously to Canadian investors on his cellular phone from his Johannesburg base from 5 a.m. until 11 p.m. "I used to sit at meals eating my food and talking on the phone." But he said the vote on options isn't an important show of unhappiness. "At other companies, the shareholders are throwing out the options and the shareholders' rights agreements," he noted. Shareholders also voted 88.9% for a poison pill to ward off a takeover, while 74% supported a motion to allow one or more private placements. A motivational film, a slide show and 90 minutes of speeches, plus beer and snacks, added up to an impassioned display by the firm to convince investors that despite troubles SouthernEra is a good place for their money. "We were uplifted and borne up by your support," said a tired, coughing Jennings. "We could not have sustained our fight without you. "We have at the back 300 or 400 karats of diamonds as an example of our production," Jennings added. "Gifts?" asked one hopeful investor, to the laughter of the crowd, composed largely of small investors. Stockholders have seen their shares plunge from $20 last October to a low of $4.75 June 12. On June 15, De Beers and SouthernEra signed a deal granting De Beers 60% of the disputed Marsfontein gold find and SouthernEra a stake that could grow to 40%. De Beers also gets marketing rights for all other diamonds from SouthernEra's sprawling Klipspringer mining project in the region. Since then the shares (SUF/TSE) have rebounded, closing at $6.75 yesterday, up 5›. "The move upwards came very quickly after the deal with De Beers," said John Hainey, a mining analyst at Yorkton Securities Inc. "Having the Marsfontein development go-ahead will give them the cash they need to mine the rest of Klipspringer." SouthernEra's fortunes, and shares, soared last year after it declared that in exploring a farm called Marsfontein in South Africa's Northern Province it had found "what could be among the top three active diamond mines and projects in the world." But the firm suffered a crippling blow in January, when 29 heirs came forward, claiming ownership of the mineral rights under Marsfontein. The heirs eventually sold the rights to De Beers for a reported $20 million.