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

To: Andrew who wrote (2528)	3/3/1999 8:47:00 AM
From: PHILLIP FLOTOW	Respond to of 7235

From this morning's news: Wednesday March 3, 8:11 am Eastern Time Angolan war seen boosting diamond giant De Beers By Steven Swindells JOHANNESBURG, March 3 (Reuters) - Renewed war in Angola has improved South African diamond giant De Beers' bottom line as supplies from the southern African state are disrupted and prices pushed higher, diamond analysts said on Wednesday. De Beers, which controls 70 percent of the world's diamond market by regulating sales through its Central Selling Organisation (CSO), has earned $800 million in two sales so far this year, a 33 percent increase over 1998 levels. Analysts forecast the CSO was on course to earn $3.7 billion from diamond sales this year -- up 10 percent up from 1997 -- allowing De Beers to recover from a poor performance in 1998 when Asia's economic downturn bit heavily into profits. Analysts said the diamond price was being pushed higher because of reduced supplies from Angola where fresh fighting erupted on December 5 between the government and UNITA rebels, shattering a 1994 peace accord. Prospects for a negotiated peace are slim and the United Nations Security Council has ordered its remaining 1,000 peacekeepers to leave the country by March 20. ''De Beers has been fortuitous because of the conflict in Angola. There's been a radical decline in sales out of Angola,'' said analyst James Allan at Barnard, Jacobs, Mellet and Co. De Beers shares were up 2.8 rand or 2.64 percent at 109 rand at 1250 GMT on Wednesday. Fears of UNITA attacks has led some foreign concessions to halt operations while the outbreak of full blown war has halted many civil engineering projects needed to exploit the river beds where Angolan's alluvial diamonds rest. Foreign companies have been uneasy in the former Portuguese colony since November when gunmen attacked the Canadian Diamond Work's (Toronto:DMW.TO - news) operated Yetwene mine, killing eight workers and kidnapping 10 employees who remain missing. The attack is believed to have been carried out by UNITA. Toronto-based SouthernEra Resources (Toronto:SUF.TO - news) shutdown its Luo and Cassanguidi concessions in the diamond-rich northeastern province of Luanda Norte in Janaury because of fighting. Previous rounds of fighting between Angola and UNITA, the National Union for the Total Independence of Angola, had seen increased Angolan diamond supplies on world markets as UNITA used diamonds from its territory to fund its forces. But the renewed violence has seen a different pattern with supplies falling, providing a boost to world prices already helped by an upturn in jewellery demand in Asia and other supply disruptions from Russia and other African producers. ''When it comes to the Antwerp trading market we're told there are less Angolan diamonds appearing on the market...UNITA has taken its eye off the mining ball and focused on the running of the war,'' said Hilton Ashton at B.O.E. Securities. UNITA was using financial reserves built up over the last five years to fuel its war machine, analysts said. British-based human rights group Global Witness put UNITA's earnings from illicit diamond sales at $3.7 billion between 1992 and 1998, enough to re-equip for further fighting. ''All the indications are that there are a lot less diamonds coming out of Angola. Any escalation in the war can be good for De Beers,'' said Keith Bright at Fedsure Asset Management. Diamond analysts estimate that $600-700 million worth of diamonds are produced each year, of which UNITA mines just under half. The Angolan government says diamond output rose to 2.764 million carats in 1998, worth $431.9 million. PHIL

To: Andrew who wrote (2528)	3/3/1999 12:10:00 PM
From: VAUGHN	Read Replies (2) \| Respond to of 7235

Hello Andrew, Goalie, Peter, Confluence & ALL Thanks for all the kind words. Just a quick follow up. KF called with a few corrections to my post which I note below. Also with some additional info. Again I caution before I go on. As before, this post is my understanding of what was said and while I attempted to write down everything, some things might have been confused in the translation. Therefore, please DO NOT attribute any of this information as being completely accurate nor sourced from anyone else but me. This is NOT a KF or SUF NR. My post paragraphs are reprinted in lower case and where a change has been made it is in UPPER CASE. Translation: Kim and his team have sampled stream and other sediments between the Leopard fissure on the Rusland farm IN THE CENTRAL AREA all the way to the M-1 pipe (9km) on the Marsfontein farm to the east and another 5.5 km, direction and distribution not indicated. They have found consistent indicator minerals of a quality suggesting economic source(s) and therefore it would appear that a strong likelihood exists for one or more fissure like deposits to connect the two distant farms through what is believed to be a corridor of weakness in the earth's crust. THE 14.5KM FIGURE COMES FROM THE WESTERN EXTREMITY OF RUSLAND THROUGH TO JUST BEYOND THE M-1. Kim also had the following tid bits of interest: - There is a fissure in the wall of the M-1 pipe meandering back and forth within a diabase dike. Because of its shifting position, actual width has not as yet been determined, but it appears to be of a similar width as the Leopard fissure. No information on strike. The kimberlite in these two intrusions is different and therefore the M-1 does not appear to be a blow but rather a younger pipe intruding a pre-existing dike which intruded a pre-existing diabase. SUPPOSITION : THIS COULD BE AN EXTENSION OF THE LEOPARD FISSURE. THERE IS ALSO A DIABASE CAP OR SILL PARTIALLY LIMITING HALF OF THE M-1'S SURFACE EXPOSURE HOWEVER PUBLISHED M-1 RESOURCE CALCULATIONS ALREADY COMPENSATE FOR THAT. - THE DIABASE IS WEAKLY DIAMONDIFEROUS DUE TO IT BEING INTRUDED BY THE AFOREMENTIONED FISSURE AND ITS 300,000 TONNES HAVE BEEN AND WILL BE STOCKPILED FOR SLOW INCLUSION IN MILL FEED. IT ACTUALLY AIDS THE CRUSHING PROCESS. - THE DIABASE IS RUNNING .20-.25CARATS PER TONNE - THE DIABASE RESOURCE HAS NOT BEEN INCLUDED IN ANY ANNOUNCED RESOURCE CALCULATIONS - THERE ARE ALSO 220,000 TONNES OF LOW GRADE GRAVELS STOCKPILED RUNNING ROUGHLY .32 CARATS PER TONNE WHICH HAVE ALSO NOT BEEN INCLUDED IN PUBLISHED RESOURCE CALCULATIONS. - The largest intact gem quality found to date was 99 carats but had AVERAGE colour. IT WAS NOT INCLUDED BUT RATHER IT HAD A STRESS FRACTURE DIVIDING THE STONE BY ROUGHLY 1/3 – 2/3'S - ALL THESE LARGE STONES I AM REFERRING TO WERE FROM THE M-1 - THERE HAVE ALSO BEEN SOME 40 AND 50 CARAT STONES BUT THEY WERE NOT GEM QUALITY. - The next largest gem was a 32 carat which had EXCELLENT colour and NO INCLUSIONS. - that large stone that was believed to be shattered by mechanical recovery was in fact intact until it got to the acid CLEANING circuit. Its many flaws were filled with cementing minerals which were dissolved by the acid and it literally fell apart once the cement was eliminated. It is now believed that its various parts added up to approximately a 200 carat original weight. I also hope to get further information on the following three kimberlites referenced in the 1997 AR and will pass along any information. - Preliminary investigations of the large but irregular Pruissen pipe. IT COULD BE A SWARM OF FISSURES AND DYKES BUT PROBABLY NOT HIGH GRADE - Preliminary investigations of the Doornrivier kimberlite. IT APPEARS TO BE A FISSURE AND PROBABLY IS AN EXTENSION OF THE ONE INTERSECTING THE M-1. DB'S HAS DONE THE WORK ON IT AND SUF HAS NOT AS YET BEEN UPDATED ON IT. THIS IS A GOOD SIGN THAT THE FISSURE SYSTEM MAY CARRY ON TO THE EAST WELL BEYOND THE M-1. - Preliminary investigations of the Meinhardskraal fissures and adjacent indicator mineral anomalies. THIS APPEARS TO BE A FISSURE SYSTEM RUNING THROUGH THE FARM. INITIAL INVESTIGATIONS ARE THAT IT IS A SWARM OF THIN STRINGERS MAKING UP AN EXTENSIVE INTRUDED ZONE – GREAT CHEMISTRY – MICRO DIAMONDS FOUND THROUGH GEOCHEMICAL SAMPLING PROCESS – NOT MAJOR FOCUS HOWEVER DUE TO NEED TO FOCUS ON PRIORITY OF LOOKING FOR PIPES AND THICKER FISSURES AND TO MAKE SURE SUFFICIENT EXPLORATION OCCURES WHERE PERMITS AND OPTIONS ARE UNDER TIME LIMITS AND MINIMAL REQUIREMENTS. - TWO ANNOUNCEMENTS COMING FROM KIM AND HOWARD - POSSIBLY THIS WEEK. My thanks to Kim for getting back to me and I hope all of you enjoy the coming months. Regards (and fingers still crossed)