3rd Quarter Results

SouthernEra Releases Third Quarter Results

 

    Shares Issued and Outstanding: 51,828,400

    TSX: SUF

    AIM: SRE

 

    TORONTO, Nov. 29 /CNW/ - SouthernEra Resources Limited is pleased to

announce the following highlights from the third quarter of 2002:

 

    - SouthernEra Joint Venture awarded new platinum properties in South

      Africa: 7.8 million ounces of PGMs added to Resource Base

    - Trading in the Company's common shares commences on London Stock

      Exchange's AIM

    - Drill program defines 1.44 million ounce mineral resource at Millennium

      Platinum

    - Camafuca diamond operating joint venture agreement signed

    - Yamba Lake diamond project yields encouraging diamond results

    - SouthernEra underwrites Messina Limited Rights Offer

    - Messina Phase 2 Feasibility Study completed by SRK, upgrading mineral

      resource to 6.3 million ounces

    - SouthernEra added to S&P/TSX Composite Index

    - Messina Platinum commissions Phase 1 (Voorspoed) Main Shaft and

      Concentrator Plant

 

    Subsequent to September 30, 2002:

 

    - Additional drilling at Yamba Lake completed

    - Shaft Deepening Capital Costs reduced by 50% following optimization

      study at Messina Phase 1 Mine

    - Messina Rights Offer concluded

    - Company reports progress at Millennium Platinum second phase drilling

      program

 

    Operations Update

 

    The Company's 70.91 percent subsidiary (70.42 percent at September 30,

2002) Messina Limited and its wholly owned subsidiary Messina Platinum Mines

Limited, continued to make good progress in developing the Phase 1 Mine.

Equipping of the main shaft to 430 metres was concluded, while development and

production at the 150 and 200 metre levels continued through the secondary

shaft.

    Following the recently announced optimization study, the conventional

shaft sinking will conclude at the end of November. Development of a decline

ramp system below the 350 metre operating level has commenced following

completion mid-year of the design for the implementation of the mechanized

long hole stoping method at the Phase 1 Mine. By leading with the ramp

development to 730 metres, it is possible to raise-bore and slipe the Phase 1

shaft system.

    As planned, the Phase 1 Main Shaft was commissioned on August 19 and the

construction of the main 90,000 tonnes per month concentrator plant was

commissioned on September 12.

    The focus of activity has now shifted to development on the 275, 350 and

400 metre levels to support the build-up of production to 80,000 tonnes per

month during the third quarter of 2003 and 120,000 tonnes per month during the

second quarter of 2004.

    At the Company's 50 percent-owned Klipspringer Diamond Mine, sinking of

the decline was completed during the quarter. Fissure development and mining

is now the focus of activity. In the current quarter, tonnage throughput was

61,900 tonnes. Average grade in the quarter was 40 carats per hundred tonnes,

yielding 24,900 carats.

    The Company incurred a net loss for the three months to September 30 of

$0.7 million (1 cent per share) on revenue of $0.9 million, compared to a loss

of $0.8 million (2 cents per share) on revenue of $0.7 million in the third

quarter of 2001. Cash flow used in operations for the quarter was $3.0 million

(6 cents per share), compared to a source of $1.6 million (2 cents per share)

in the third quarter of 2001.

    For the nine months ended September 30, the net loss was $4.3 million  

(9 cents per share) versus $3.8 million (12 cents per share) for the

comparable period in 2001. Cash used in operations totaled $4.1 million     

(8 cents per share) compared to $0.8 million (3 cents per share) for the nine

months in 2001.

 

    SouthernEra Joint Venture awarded new platinum properties in South

    Africa: 7.8 million ounces of PGMs added to resource base

    The award of three new platinum properties (the Dwaalkop Properties) to

SouthernEra and its 50 percent joint venture partner, Mvelaphanda Resources,

increased the PGM resource base at the Greater Messina to approximately 25

million ounces. The newly acquired properties contain both the UG2 and

Merensky Reefs and are located between Phase 1 (Voorspoed) and Phase 2

(Doornvlei) Projects currently being developed by Messina Limited,

SouthernEra's 70.42 percent subsidiary (following the conclusion of the

Messina rights issue, see news release dated November 11, 2002, this interest

increased to 70.91%).

 

    Trading in the Company's Common Shares Commences on the London Stock

    Exchange's AIM

    Trading in the Company's common shares on the London Stock Exchange's AIM

commenced on August 13, 2002. In support of its application to AIM the Company

published an AIM admission document pursuant to the AIM rules of the London

Stock Exchange. The document includes an independent competent person's

report.

 

    1.44 million ounce mineral resource at Millennium Platinum

    The initial drilling program at the Company's Millennium Project in

Mpumalanga Province, South Africa successfully intersected the UG2 Reef and

defined an inferred resource of 10.03 million tonnes, grading 4.46 grams per

tonne (5PGE + Au), containing 1.44 million ounces of precious metals. The

mineral resource defined is restricted to portions 10 and 11 of the farm

Blaauwbank 168 JS only, less than 20 percent of the prospected area to be

drilled.

 

    Camafuca Operating Joint Venture Approved

    The Council of Ministers of Angola approved the operating agreement for

Project Camafuca and authorized the formation of the operating company,

Sociedade Mineira do Camafuca, Lda (SMC). Following the incorporation of the

operating company and the issuance of the necessary mining licenses, it is

anticipated that production at Camafuca could commence during 2003.

 

    Yamba Lake Diamond Project Results

    SouthernEra's first drill hole into the Sue kimberlite pipe on the

Company's 60% controlled Yamba Lake project in the Northwest Territories of

Canada intersected 172 metres of kimberlite yielding a sample of 226.7

kilograms. The sample returned 77 microdiamonds (using a 0.106 millimetre mesh

bottom screen) plus 18 macrodiamonds having one dimension greater than or

equal to 0.50 millimetres. Subsequent to the quarter a further three holes

tested the Sue kimberlite pipe. The three additional drill holes; Y02-09,  

Y02-10 and Y02-11 yielded sample sizes of 190.95, 147.9 and 151.33 kilograms

and returned 5, 4 and 6 macrodiamonds respectively, having one dimension

greater than or equal to 0.50 millimetres (see news release dated October 29,

2002).

 

    SouthernEra underwrites Messina Limited Rights Offer

    The Messina Limited rights offering consisted of 20 rights for every 100

shares currently in issue. Each right enabled the purchase of one common share

of Messina Limited at a price of South African Rand (R) R60. A total of

2,592,979 rights were issued to the shareholders of record of the 12,964,895

Messina Limited shares issued and outstanding for total proceeds of R155.6

million. The rights offer was concluded subsequent to the quarter and the

Company's ownership in Messina Limited increased to 70.91 percent.

 

    Messina Phase 2 Feasibility Study completed by SRK

    The Company announced the completion of the Bankable Feasibility Study

for its Messina Phase 2 Project on the Doornvlei Property by SRK Consulting.

The Property is 100 percent owned by Messina Limited, which in turn is   

70.91 percent owned by SouthernEra Resources Limited (70.42 percent at

September 30, 2002). An indicated mineral resource of 6.3 million ounces,

grading 5.08 grams per tonne (5PGE + Au) has been defined at Doornvlei. The

expected operating mine life is 23 years with full production of 120,000

tonnes per month with an annual average production rate of approximately

173,000 ounces of 5PGE + Au.

 

    SouthernEra added to S&P/TSX Composite Index

    SouthernEra's admission followed the quarterly S&P/TSX Composite Index

Review and the subsequent announcement on September 17 by Standard and Poor's.

The index changes outlined in the announcement occurred after the close of

trading on the Toronto Stock Exchange on September 20, 2002.

 

    Messina Platinum Commissions Phase 1 (Voorspoed) Main Shaft and

    90,000tpm Concentrator Plant

    Following cold commissioning, the 90,000 tonnes per month main

concentrator plant was handed over for hot commissioning on September 12, nine

days ahead of schedule and approximately 12 percent under budget. Final

commissioning occurred on September 19, 2002.

    SouthernEra Resources Limited is an independent producer of platinum

group metals and diamonds. The Company also has an extensive PGM and diamond

exploration program. The common shares of SouthernEra are traded on the

Toronto Stock Exchange (SUF) and the London Stock Exchange's AIM (SRE).

 

 

    For further information: PLEASE CONTACT: SouthernEra Resources Limited,

Patrick C. Evans, President and CEO; or Dr. Sally Eyre, Vice President

Corporate Affairs, Telephone: [phone], Fax: [phone], e-mail:

inbox(at)southernera.com

 

    SUF. SRE