Interim Results

SouthernEra Diamonds 2005 Second Quarter Results

 

    Shares Issued and Outstanding: 102,066,601

    TSX: SDM

    AIM: SRE

 

    (All amounts are in United States dollars unless otherwise noted)

 

    TORONTO, Aug. 11 /CNW/ - The Board of Directors of SouthernEra Diamonds

Inc. ("SouthernEra") (the "Company") (TSX: SDM, AIM: SRE) today reported on

the Company's 2005 second quarter results.

    The Company recorded a net loss from mining operations of $0.1 million in

the second quarter compared with a loss in the comparable quarter of 2004 of

$0.3 million. Costs related to ongoing care and maintenance costs and charges

for amortization of machinery and equipment. The Company is studying all

alternatives with respect to the Klipspringer property including evaluating

alternative mining methods and optimal levels of production with the intention

of resuming mining operations in the near term.

    Corporate, general and administration expenses of $1.5 million increased

from the comparable period in 2004 of $0.7 million reflecting the increased

costs the Company incurs as a stand alone diamond company versus the shared

costs of the platinum and diamond businesses. The increase is offset by the

receipt, in the current quarter, of $1 million from Southern Platinum Corp. on

settlement of change of control provision triggered by the purchase by Lonmin

Plc of Southern Platinum Corp.

    The foreign exchange gain in the current quarter of $0.6 million

comprises net unrealized gains on Canadian and South African currency

denominated monetary assets and liabilities and reflects the relative movement

against the Company's reporting currency (the US dollar). The South African

Rand, in which currency the Company's main monetary liabilities are stated,

weakened slightly against the US dollar in the quarter, resulting in the gain.

    In the second quarter, the Company incurred an after tax loss of

$0.3 million from continuing operations versus a $1.9 million loss in the

second quarter of 2004.

    Cash outflow from operating activities in the second quarter of 2005

amounted to $1.7 million versus cash inflows of continued diamond operations

of $7.5 million in the second quarter of 2004 reflecting working capital

movements in the two periods. In the current and comparative quarters, the

Company expended cash to fund care and maintenance costs at the KJV, continued

exploration and development activities, and general and administration

expenditures.

    At June 30, 2004, the Company held approximately $33 million of

(December 31, 2004 - $29.9 million) exploration and development project value

on its balance sheet at June 30, 2004 where results remain promising. Projects

are situated in Canada, Gabon, the DRC, South Africa and Angola.

    Please refer to the Company's website (www.southernera.com) to view the

full financial results for the second quarter of 2005.

 

   

    For further information: SouthernEra Diamonds Inc.: Mr. Chris Reynolds,

Senior Vice President and CFO, or Ms. Sharon Allan, Investor Relations;

Telephone: [phone], Fax: [phone], E-mail:

inbox(at)southernera.com, www.southernera.com

    (SRE)