Reorganisation Proposals

SouthernEra Considers Reorganisation Proposals

 

    Separate Listings for Platinum Holdings and Diamond Holdings Under

    Consideration

    Shares Issued and Outstanding: 74,679,193

    TSX: SUF

    AIM: SRE

 

    TORONTO, April 12 /CNW/ - SouthernEra Resources Limited ('SouthernEra')

(TSX: SUF; AIM: SRE) announced today that its Board of Directors is actively

considering reorganisation proposals that would allow SouthernEra to separate

its platinum holdings and diamond holdings into two separate public

corporations.

    SouthernEra has its roots twelve years ago as a successful diamond

exploration, development and mining company. The Company expanded its mining

interests in 2000 to include platinum group metals (PGMs) when it acquired a

controlling interest in the Johannesburg-listed, Messina Limited. Over the

past four years, SouthernEra's interest in Messina Limited has grown from its

original 54 percent to its current level of 73.1 percent. Messina Limited's

only asset is 100 percent of Messina Platinum Mines Limited, which controls

three PGM lease areas - the Voorspoed, Doornvlei and Zebediela sections of the

Greater Messina Platinum Project - located on the Bushveld Igneous Complex in

South Africa, which hosts approximately 80 percent of the world's known

platinum resources.

    SouthernEra's PGM exploration and business development initiatives have

resulted in substantial growth of the Company's PGM asset base to the point

where SouthernEra is now widely recognised as a leading PGM development

company. Following the acquisition of the controlling interest in Messina

Limited in 2000, SouthernEra discovered the 3.7 million ounce Millennium

Platinum Project in 2001, and in 2002 SouthernEra, in joint venture with

Johannesburg-listed Mvelaphanda Resources, acquired the 7.86 million ounce

Dwaalkop Section of the Greater Messina.

    In a period of three years from 2000 to 2003, PGMs under SouthernEra's

control grew from about 10 million ounces to approximately 28 million ounces,

or approximately 280 percent. Considerable additional growth potential exists

at the Greater Messina, at the Millennium Platinum Project and at three other

early stage PGM exploration projects in South Africa and Gabon that are

controlled by SouthernEra. Amongst all the platinum mining companies,

SouthernEra currently has the strongest production growth potential, estimated

in excess of 300 percent between 2003 and 2006.

    Throughout this period of growth in platinum group metals, SouthernEra

has continued to build on its earlier success as a diamond exploration,

development and mining company. In 1996 SouthernEra discovered the rich

Marsfontein Diamond Mine in South Africa, which was mined out in 2002. For the

first two years of its life Marsfontein was the world's richest diamond mine.

During the same period the Company built and operated the more marginal

Klipspringer Diamond Mine, also located in South Africa. Despite having

achieved its full production level from the expanded underground operations in

January 2003, the impact of the extraordinary strength of the South African

Rand during 2003 prevented the mine from achieving profitability and mining

operations were temporarily suspended in December 2003. With the third-highest

value rough diamonds in South Africa and with a life of more than 8 years,

operations at the Klipspringer Mine will recommence once the Rand depreciates.

    In addition to its diamond mining interests, SouthernEra currently also

has an 18 percent free-carried interest in the world's largest known         

diamond-bearing kimberlite complex, the Camafuca Diamond Project in Angola. A

2000 feasibility study conducted by the Company proved up resources of 23

million carats valued at $109 per carat. SouthernEra also has a number of

highly prospective diamond exploration projects in six countries - Canada,

South Africa, Gabon, Botswana, the DRC and Australia. These range from early

stage reconnaissance projects to advanced projects that are currently being

drilled. SouthernEra is Canada's most active global diamond exploration

company. Only the three major diamond producers - DeBeers, BHP and RTZ - have

larger global exploration programs.

    In order to enhance the value for shareholders of both its platinum and

diamond holdings, the Board of SouthernEra believes that the unbundling of the

Company into separately listed platinum and diamond mining companies may be

appropriate. In order to accept a definitive reorganisation proposal the Board

will require, among other things, adequate comfort with respect to the tax

impact on SouthernEra and its shareholders, assurances that financing will be

available to the company formed to hold the diamond assets and completion of

legal due diligence. A reorganisation plan will be subject to receipt of all

necessary regulatory and legal approvals (including approval by the Toronto

Stock Exchange) and subject to final approval by the Board of Directors.

SouthernEra anticipates that it will be in a position to provide further

details of the reorganisation proposal in the proxy circular for the

SouthernEra annual and general meeting.

 

    SouthernEra Resources is an independent producer of platinum group metals

and diamonds. The company also has an extensive PGM, gold and diamond

exploration program. The common shares are listed on the Toronto Stock

Exchange and the London Stock Exchange's AIM market.

 

 

     For further information: SouthernEra Resources Limited, Mr. Patrick

Evans, President and CEO, Telephone: [phone], Fax: [phone],

E-mail: inbox(at)southernera.com, www.southernera.com

    (SRE)