Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Confluence who wrote (2726)	4/6/1999 8:32:00 AM
From: don jackson	Read Replies (1) \| Respond to of 7235

SouthernEra and Canabrava Join Forces in Brazil. TORONTO, April 6 /CNW/ - SouthernEra Resources Limited (SUF - TSE) and Canabrava Diamond Corporation (CNB - V) are pleased to announce that they have signed an agreement to explore for and develop the Canabrava Project diamond properties in Brazil. The Canabrava Project is located 400 kilometres southeast of Brasilia and comprises approximately 480,000 hectares of exploration concessions. The Canabrava Project is located on the southwestern margin of the Sao Francisco Craton within the Upper Cretaceous Alto-Paranaiba Igneous Province. This is one of the largest alkaline igneous provinces in the world. Kimberlites and lamproites, both of which can host economic amounts of diamonds, fit within this category of alkaline igneous rocks. The region is well known for its production of large, high quality gem diamonds. More than 50 diamonds weighing between 100 and 726 carats have been reported from the area. Brazil was the world's major diamond producer prior to the discovery of diamonds in South Africa. Exploration work on the Canabrava Project in Brazil is well advanced and includes extensive airborne and ground geophysical surveys, geochemical sampling and drilling. This work has been successful in locating more than 100 kimberlite and lamproite pipes. Only eight of these pipes have been tested for micro-diamonds. Of these, three returned positive counts. In addition, more than 500 geophysical and/or geochemical targets remain to be tested. Work completed by Canabrava over the past 6 months has identified a number of targets with excellent mineral chemistry. These targets will be the immediate focus of the Joint Venture exploration programme. Under the terms of the Agreement, SouthernEra can earn a 50% interest in the Project by spending a total of US$20 million over 7 years. US$1.5 million must be spent by SouthernEra within the first 24 months of the agreement. SouthernEra will have an option to reduce the US$20 million earn-in obligation to US$15 million by subscribing for a Private Placement for US$1 million worth of Canabrava shares (at the then current market price) on or before 10th December, 1999. Once SouthernEra has earned its 50% interest, exploration expenditures will be made by both parties on a pro rata basis. Where the management committee determines that a feasibility study is warranted within a designated part of the Project or where an aggregate of US$20 million has been incurred by the Joint Venture, SouthernEra will have the right to earn a 60% interest in each Specific Project Joint Venture by funding 100% of the cost of the feasibility. SouthernEra will, furthermore, have the right to increase its interest to 70% by assuming 100% of the construction costs to commercial production. SouthernEra will recover the construction costs out of 90% of net operating cash flow. A one-time cash payment of US$5 million will be paid to Canabrava within a time period of less than 5 years following commencement of commercial production. In addition to primary source diamond deposits, the Canabrava Project Properties host a number of potentially significant alluvial diamond deposits which have and still are producing both large and high quality, fancy, coloured diamonds of considerable value. The fancies include pink, blue, green and cognac coloured diamonds. SouthernEra will have the right to dedicate up to 20% of its earn-in commitment to explore and develop the secondary alluvial diamond deposits on the Canabrava Project. During the earn-in period, SouthernEra will be entitled to 50% of the net operating cash flow from the alluvial deposits. When SouthernEra earns a 60% interest in any property, SouthernEra's interest in the alluvial diamonds will be increased to 60%. SouthernEra's interest will be further increased to 70% with the commencement of commercial production of a primary diamond mine. A colour photograph of recent production of fancy diamonds will be posted shortly on SouthernEra's web site. SouthernEra brings to the Project proven expertise and an enviable discovery record both in Canada and in southern Africa. Canabrava Diamond Corporation is 59.6% owned by Southwestern Gold Corporation (SWG-T) and is actively exploring for diamonds in Brazil and Canada. Chris Jennings, President of SouthernEra Resources Limited remarked that SouthernEra is committed to growing the company and increasing shareholder value by discovering new diamond sources in prospective areas of the world.