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

To: Claude Cormier who wrote (3039)	4/21/1999 11:44:00 AM
From: gemsearcher	Respond to of 7235

Hi Claude. Mike Curran's February report strongly highlighted the need for SUF to demonstrate that it could produce sustainable cash flow post- M1; i.e. "Longer term , we remain unconvinced that [SUF's] adjacent Klipspringer property could maintain the high levels of earnings and cash flow that we are forecasting from the M-1 operation in 1999 and 2000". I assume that the Messina deal (in addition to the price drop) has led to the upgrade - I will try to post his new report if someone doesn't beat me to it. Regards. gemsearcher

To: Claude Cormier who wrote (3039)	4/21/1999 11:55:00 AM
From: marcos	Read Replies (3) \| Respond to of 7235

He was ballyhooing wim at several dozen thousand percent above its current level. But he's gotten a few right as well ... here's some bits from his piece today - "We view the acquisition as presented as a viable and positive addition that could complement SouthernEra's existing ... [...] In terms of the valuation of the asset in Southernera, we need to know what SouthernEra's ultimate interest in the project will be; a range of 54% to 100% remains possible. We also need to know the cost and financing method for this acquisition by suf, which also has a significant range of US10mil to US20mil depending on the ultimate interest suf is able to acquire. Suf does not have adequate funds on hand to complete the purchase, but likely has access to capital from lending sources. suf would also likely have to arrange for additional financing to fund its share of capital required to construct the Messina platinum mine. At this point in time, we are using a valuation of C$2.42 per suf share for the Messina acquisition... [...] Adding our Messina valuation of 2.42/sh to our current valuation of 5.88 for suf's diamond assets generates a price objective of 8.30 .... we are therefore upgrading suf from neutral to accumulate in both intermediate and longer terms." Took some liberties with the typing there, can't copy and paste from those adobe files when they use two columns ... there are some great tables, anybody who has a friend with a Midland account should get the file passed to them ..... quite an extensive detailed writeup on Messina ..... cheers