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

To: VAUGHN who wrote (2408)	2/3/1999 4:12:00 PM
From: Goalie	Respond to of 7235

Right on, Vaughn! Thanks. Goalie.

To: VAUGHN who wrote (2408)	2/3/1999 5:00:00 PM
From: Confluence	Read Replies (2) \| Respond to of 7235

Hello Vaughn, Goalie et al, I'd have to say that my opinion is closer to that of Bozkurt than Vaughn, but both make some very important points. Firstly, Vaughn points out that perception is all that matters. In the short term, most definitely. In the longer term, reality and perception get together, allowing markets to prove that they are efficient. But dislocations in the short term allow for imperfections in the market. Look at internet stocks, Bre-X and SUF. Obviously, long term owners of SUF feel that the present price does not accurately affect the long term potential, or they would cease to own a stock where the short term perception is/has been poor since about a year ago. Secondly, SUF's property at Marsfontein was wrongly taken from the company and shareholders, IMHO. However, that is past. Could it happen again? Yes. Could any government in the world throw up roadblocks to development like that at Voisey's Bay? Yes. Could a major SUF find at Munn Lake be skewered by problems with claims/environment/lawsuits/regulatory approval, etc.? Yes. So any new developments imply risk. And the perception of risk for development in RSA has gone up appreciably over the past year, principally because of Marsfontein. But what if the murky powers that be in RSA are actually aware of the perceptions of dealing there? Perhaps they may wish to demonstrate publicly that in RSA, government, the people (black business), big corporations and foreign companies can all work together successfully. Wouldn't Newco, with future ventures involving SUF, be an excellent way to demonstrate that foreign exploration companies can be treated fairly? I believe that the perception of RSA as bad place for foreign mining companies will be matched with reality over the next little while. If the reality is that SUF does not participate in future exploration ventures jointly with De Beers and Newco, then we shareholders were completely shafted by the RSA establishment and few foreign exploration companies will consider investment. On the other hand, if RSA is really open for business and wants development of the great natural resources as stated by the White Paper, then the injustice that was done to SUF will be corrected over time by inclusion with De Beers and Newco in various exploration and development situations. I have no idea which way this wind will blow, but I believe that SUF shareholders will be tipped off as to the future value of dealing in RSA by the treatment SUF receives over the next few weeks and months. Imagine the potential upside to being the exploration partner to the government's friends, black business and De Beers (the guys who couldn't find M1). Who else could compete? I believe that Bozkurt is correct in his view that the De Beers decision was really made last June, and also Goalie's thoughts that we can now understand just how the Marsfontein debacle came about. Just follow the money. We will soon find out if SUF's RSA cup is half empty, or half full. Of course, a find in the NWT would be of huge benefit to SUF shareholders, as would further positive developments at Camafuca, and other spots around the globe, including Klipspringer. The lesson I've learned is not to worry when things start to go awry, but rather well before. The market is wrong in its short term valuation of SUF, as well as the long term expectations for share price. Just check the massive volumes of shares purchased over the past couple of months by First Marathon. Somebody, who realizes the present market perception is negative, has been suckering large blocks onto the bid side of the market, and doing a fine job of it. Is it Franco Nevada? Teck? De Beers? Noranda? Falconbridge? RTZ? A smart fund manager? Americans? Peter Munk? Watch for the analyst to issue increasingly glowing reports over the next while, after the clients have established their positions. If anybody wants to sell their stock, go ahead. Maybe the naysayers were right. I believe otherwise. Regards, Confluence

To: VAUGHN who wrote (2408)	2/4/1999 3:25:00 PM
From: BozkurtD	Read Replies (2) \| Respond to of 7235

Hello Vaughn, Thank you for your response. Like I said before I am not denying that Canadian operations are important. I strongly believe that hypothetically, if what they have in RSA was in Canada, their stock prices would have been much higher than where it is right now. But that still does not change the fact that they need "cash flow". Let us assume that they find something major in NWT. It will take money to start and finish the project. Look at Diavik. Cost is $1 Billion. Also it will take 4 to 6 years to start mining(that is if they are lucky and don't come across any obstacles) after the project starts. Number one, SUF does not have the cash to finance a project of that magnitude {they will need partner(s), i.e. too many cooks in the kitchen}, Number two, if they tie up all their resources to a project like that they can not wait for 4-6 years to have a cash flow again because M1 will be exhausted well before that. We have to remember something. SUF is not a small company, they employ around 250 people. They need the cash flow. Also my understanding is that SUF recognizes the importance of a Canadian find and therefore as you know, they are active in NWT. I agree with you that market perception is important. But I believe the reality is important as well. Actually that is where SUF is now. In their own words they have become a "show me" company. If you look at the P/E ratios, while ABZ and DMM are flying well over 500's, SUF is barely around 7. The only real cash generator is SUF. (DMM will not see a profit for the next four years until they payoff what they owe th BHP). Even though it is a factor, I don't think that SUF's problems are originating solely from where their mining operations are(RSA, Angola etc.). First of all they are not the only company operating in RSA. As far as I know, not all of those companies are hit in the same way. I agree with Confluence, What happens in RSA can and will happen at other places in different forms or shapes. That is the risk factor. When a company is into exploration and mining, there is no way of predicting what will happen next until the production starts. That is true anywhere in the world. I think that last year's M1 incident with the "heirs" did not only hurt SUF financially but hurt SUF's management's image as well. Both CJ and LB claimed on National TV that SUF would get the mining rights and CJ even predicted a starting date for the mining operations. That was a big and costly mistake. But as far as I am concerned that does not show incompetence, on the contrary I think that the SUF's management is a good team and they are doing a good job. The only criticism I have is their lack of effort when it comes to PR. They have a lot of good things going for them. But not too many people or groups know about them. What we need is some outside players coming into the picture. The 3 Musketeers (First Marathon, RBC and TD) are playing with this stock like a yo-yo and manipulating it in any way they want. Just out of curiosity, couple of weeks ago, I called Solomon Smith Barney and Merryl Lynch in NewYork to talk to their Mining/Precious Metals analysts. (H. Herschaft and J. Corkrane respectively). They both asked the same thing. (Who is SouthernEra? Where are they?) Basically they had no idea that SUF existed. A week before that I was talking to a Portfolio Manager in Boston, and when I mentioned SUF, I received the same response. No clue what so ever. My point is SUF needs more, much more exposure. I believe in shaking the tree to get the apple, SUF is waiting for the apple to fall by itself. Like I said before, SUF has a lot of good things to offer and not too many people know about those things. We both know that SUF is a good investment. I hope that what we post here don't fall on to deaf ears. Something positive and constructive comes out of these. Regards Bozkurt P.S. I was told that the reason behind today's big drop is an article in the National Post. Can anybody post (at least a summary or contents of) it. Thanks in advance.