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

To: S. E. Baker who wrote (1818)	7/24/1998 9:26:00 PM
From: DavidA	Read Replies (1) \| Respond to of 7235

Hi Steve, My understanding is that SUF are considering a purchase of a portable plant, that may be used at various locations on the Klipspringer, for sample testing. The estimated cost would comprise of approximately 2mil. Regards,

To: S. E. Baker who wrote (1818)	7/27/1998 11:10:00 AM
From: BozkurtD	Read Replies (2) \| Respond to of 7235

Hi Steve.. SUF is planning to purchase a mobile processing plant with 30 tons/hour capacity within the first couple of months of next year. According to their plans they will reach to 50000 tons/month capacity by December of this year which will be utilizing the existing plant to its full capacity. The mobile plant will be strictly for the Klipspringer operations. Here are some figures: Klipspringer (Current production) 18000 c/month US 115 $/c (Average Sugarbird Diamonds) US 2070000 $/month - 200000 Labor Cost 1870000 - 196350 %10.5 CSO's cut (Sorting, Marketing etc.) 1673650 Before Taxes - 669460 %40 RSATaxes US 1004190 Net Sales/month These figures are from K. Freeman. I also was told that, currently there are two shifts working and another shift is being trained. As I have mentioned before they will be reaching the 50000 tons/month capacity at M1 by December 1998. Here are some more figures. M1 (December 1998 production) 50000 tons/month 2.25c/ton US 150$/c US 16875000 $/month - 900000 Labor Cost 15975000 -1677375 %10.5 CSO's cut (Sorting, Marketing etc.) 14297625 -571905 %4 Advertising Surcharge (Apllies to M1 production only) 13725720 -5490288 %40 RSA Taxes 8235432 Net M1 Sales US 3294173 %40 SUF's Share of Net Sales/month That is approximately US 3.3M /month. I believe that these are conservative figures. M1 alone will bring in around CDN $2/share annually. I.M.H.O. The Klipspringer and the other operations should bring in at least $3/year per share within the next 12 months. (Because regardless of the economical situation, CSO has to buy the M1 and the Klipspringer productions according to the agreement). I would like to point out that, production figures came from SUF but forecasting is my opinion only. If they hit $3/share cash flow within 12 months,under normal conditions, we should see the stock at anywhere from $21 to $27. That would be a minimum of %200 return on $7 current value investment. If anyone knows about a better investment please let me know. P.S. I have used %40 as SUF's share in M1 calculations. They will be buying Rangold out by the end of October for 61.25 M Rands. (the pay-out will be in RSA currency). SUF does not see any problems with coming up with that money by that time. Regards Bozkurt