Statement re progress at Messina Platinum

SouthernEra Reports on Progress at Messina Platinum

 

    Shares Issued and Outstanding: 61,674,459

    TSX: SUF

    AIM: SRE

 

    TORONTO, Sept. 10 /CNW/ - SouthernEra today reported on developments

relating to the Company's subsidiary Messina Platinum. Highlights include:

 

    -  SouthernEra increases its shareholding in Messina Limited

    -  Messina Rights Offer receives regulatory approval and timetable set

    -  Guidance on 80,000 tonnes per month build-up restated

    -  Drilling program on Phases 2/3 and 4 progresses.

 

    Over the period from May 22 to July 8, SouthernEra acquired an additional

167,841 shares in Messina Limited. These shares were purchased through a

series of market transactions on the Johannesburg Stock Exchange at prices

ranging from R41 to R60 per share. This represents approximately one percent

of the issued and outstanding shares of Messina Limited. Accordingly,

SouthernEra now owns 71.98 percent of Messina Limited, up from 70.91 percent

previously.

    In addition, on September 4 SouthernEra's subsidiary Messina Limited

announced the final approved terms of the new rights offer, which is being

underwritten by SouthernEra. A total of R270,706,980 (approx. US$35.6 million)

will be raised through the issue of 4,511,783 new Messina shares at an issue

price of R60 per share. The Johannesburg Stock Exchange has approved the

listing of the rights from September 22 to October 3, and the listing of the

new Messinashares on October 13. The proceeds from the exercise of the rights

will be used by Messina to reduce its unsecured debt obligations to

SouthernEra, which as of June 30, 2003 totaled R313,740,000 (approx.

US$41.5M). SouthernEra advanced these funds to Messina to finance the

construction and development of the recently commissioned Phase 1 mine, as

well as feasibility and pre-feasibility studies currently underway at Phases

2/3 and 4.

    By underwriting the rights offer, SouthernEra could increase its

ownership in Messina Limited to as much as 78.28 percent, assuming no other

shareholders elect to exercise. Alternatively, if the minority shareholders in

Messina elect to follow their rights, they will contribute as much as

R75.85 million (approx. US$10 million) to Messina's treasury. The results of

the rights issue will be announced on October 14.

    At the Messina Project steady progress continues with the development of

the Phase 1 mine. In the 12 months since the successful commissioning of the

main shaft and main concentrator plant, Messina has been able to ramp up

production to well over 40,000 tonnes per month. This first production  

build-up target was achieved on schedule at the end of the second quarter of

2003. Messina has now restated its guidance with respect to the next build-up

target of 80,000 tonnes per month, which will now be achieved during the

fourth quarter of 2003 rather than at the end of the third quarter. The full

production rate of 120,000 tonnes per month remains on track to be achieved

during the second quarter of 2004.

    The two upper levels of the mine - the 150 and 200-meter levels - are

well established and are approaching steady state production. While progress

is being made with the build-up of production on the newly commissioned 275

and 350-meter levels, performance of the development contractor's mechanical

equipment has been less than satisfactory. To address this issue, Messina has

accelerated the switchover to track-bound haulage on these levels, resulting

in a modest delay in achieving the 80,000 tonnes per month production level.

    Finally, the drilling program in support of the feasibility study at

Messina's Phases 2/3 and the pre-feasibility study at Phase 4 is progressing

well. There are currently seven drill rigs operating at Messina. To date,

8,335 meters of the planned 39,680 meters have been drilled. Eight of the

planned thirty-nine drill holes have been completed and a further six are in

progress. The general strike and dip continuity of the two platinum rich reefs

have been confirmed by the drilling already completed. The Phase 2/3

feasibility study is on track for completion at the beginning of 2004 and the

Phase 4 pre-feasibility study is on track for completion by year-end 2004. The

Company will be announcing drill results shortly.

    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,

Dr. Sally Eyre, Vice President, Corporate Affairs, Telephone: [phone],

Fax: [phone], E-mail: inbox(at)southernera.com, www.southernera.com

    (SUF. SRE)