SouthernEra Diamonds Releases Third Quarter Res...
SouthernEra Diamonds Releases Third Quarter Results
Shares Issued and Outstanding: 85,380,418
TSX: SDM
AIM: SRE
TORONTO, Nov. 15 /CNW/ - The Board of SouthernEra Diamonds Inc. today
announced the following highlights from the third quarter of 2004:
- The successful completion of a plan of arrangement whereby the
platinum and gold businesses of the Company were transferred to a
newly listed public company, Southern Platinum Corp. and
SouthernEra Resources Limited was renamed SouthernEra Diamonds
Inc.
- The discovery of new kimberlites at two of the Company's projects
in Canada's North West Territories.
- Commencement of drilling at the Company's Hope 1 Project in South
Africa and the discovery of a second kimberlitic indicator
anomaly, Hope 2.
- Completion of drilling at the Yilgarn Diamond Project in
Australia.
Subsequent to the quarter, the Company announced:
- The discovery of a meta-kimberlite pipe at the Makongonio Project
in Gabon.
- The appointment of Canaccord Capital (Europe) as the Company's UK
Nominated Advisor and Broker.
- The discovery of further new kimberlites at the Makongonio Project
in Gabon.
- The conclusion of a brokered private placement agreement with
Canaccord Capital Corp. to place approx. 5.9 million flow-through
common shares at a price of $0.85 per share.
Earnings
Mine operating costs at Klipspringer decreased to $0.5 million in the
third quarter of 2004 from $2.6 million in the third quarter of 2003 as the
Company incurs only costs associated with the necessary care and maintenance
of the operation.
The Company recorded a net loss from mining operations of $0.9 million
compared to a net loss in the comparable quarter of 2003 of $2.3 million. The
Company is studying alternative mining methods and optimal levels of
production at Klipspringer with the intention of resuming mining operations in
the near term. Start up costs in all the alternatives being studied are not
expected to be significant.
Corporate, general and administrative expenses of $0.8 million were
comparable to the third quarter of 2003. The current quarter, however,
includes a portion of non-recurring costs associated with the reorganization
of the Company.
In the third quarter, the Company incurred an after tax loss of $2.2
million (2 cents per share) from continuing operations versus a $3.3 million
loss (5 cents per share) in the third quarter of 2003. Cash flow used in
continuing operations for the quarter was $2.7 million (3 cents per share),
compared to a use of $4.4 million (7 cents per share) in the third quarter of
2003. The Company realized a net loss, including discontinued operations, for
the three months to September 30 of $10.6 million (12 cents per share)
compared to a $4.2 million loss (7 cents per share) in the third quarter of
2003.
Operations Update
On September 1, 2004, SouthernEra transferred its platinum group metals
and gold businesses to a new Canadian public company called Southern Platinum
Corp. SouthernEra Resources Limited was also named SouthernEra Diamonds Inc.
and continues to hold all the diamond assets of the Group. Shareholders of the
Company at the close of business on September 1, 2004, were automatically
issued shares in Southern Platinum Corp. on a one-for-one basis.
Revenues generated by the Messina Platinum Mine in the months of July and
August and their associated costs are included in the Group's results in the
third quarter of 2004 but are segregated in the discontinued operations
sections of the statement of operations.
The Klipspringer Mine continued on care and maintenance in the third
quarter. The Company therefore recognised no diamond sales in the current
quarter. In the comparable quarter of 2003, 16,100 carats were produced from
processing of 40,600 tonnes of fissure ore. Until such time as the mine is
once again placed back into operation, no revenue will be derived from the
sale of diamonds.
During the quarter the Company continued to advance its numerous diamond
exploration projects, which included drilling programs in Canada, South
Africa, Gabon and Australia. SouthernEra's global diamond exploration program
is the fourth most active after the majors DeBeers, BHPB and Rio Tinto.
The Company also continues to maintain its 18 percent free-carried
interest in the Camafuca Diamond Project in Angola. During the quarter
discussions continued with the Angolan Government diamond agency, ENDIAMA, to
finalise the incorporation of the operating company for Camafuca.
The full, unaudited interim financial statements and management's
discussion and analysis for the quarter ended September 30, 2004 are available
at www.southernera.com.
Some statements contained in this news release are forward-looking and,
therefore, involve uncertainties or risks that could cause actual results to
differ materially. Such forward-looking statements include comments regarding
exploration work. Actual results could differ materially from those
anticipated. The Company disclaims any obligation to update forward-looking
statement.
SouthernEra Diamonds Inc.
Consolidated Balance Sheets
(in thousands of United States dollars)
(unaudited)
September 30, December 31,
2004 2003
-------------------------------------------------------------------------
Assets
Current assets:
Cash and equivalents $ 3,980 $ 64,023
Accounts receivable 4,971 13,133
Inventories - 1,197
-------------------------------------------------------------------------
8,951 78,353
Property, plant and equipment 4,475 179,606
Development projects 13,576 13,616
Exploration projects 16,693 16,919
Future income taxes - 3,403
-------------------------------------------------------------------------
$ 43,695 $ 291,897
-------------------------------------------------------------------------
Liabilities and shareholders' equity
Current liabilities:
Accounts payable and accrued liabilities $ 1,187 $ 12,866
Income taxes payable 12,834 11,862
Current portion of long term debt - 16,064
-------------------------------------------------------------------------
14,021 40,792
Long-term liabilities:
Long term debt - 55,944
Future income taxes 1,473 1,772
Environmental rehabilitation provision 1,007 1,981
-------------------------------------------------------------------------
16,501 100,489
-------------------------------------------------------------------------
Non-controlling interests - 17,315
Shareholders' equity:
Common shares 127,787 232,814
Share purchase warrants 518 518
Contributed surplus 2,293 2,293
Deficit (103,029) (70,155)
Cumulative translation adjustments (375) 8,623
-------------------------------------------------------------------------
27,194 174,093
-------------------------------------------------------------------------
$ 43,695 $ 291,897
-------------------------------------------------------------------------
These interim financial statements have not been subjected to a review by
the Company's external auditors.
The accompanying notes form an integral part of, and should be read in
conjunction with, these consolidated financial statements.
SouthernEra Diamonds Inc.
Consolidated Statements of Operations
For the Periods Ended September 30
(in thousands of United States dollars, except income
(loss) per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
-------------------------------------------------------------------------
Diamond sales
revenue $ - $ 653 $ 10 $ 2,313
Direct costs:
Mining operations (531) (2,557) (917) (5,929)
Amortization (337) (355) (1,264) (1,048)
-------------------------------------------------------------------------
(868) (2,912) (2,181) (6,977)
-------------------------------------------------------------------------
Loss from mining
operations (868) (2,259) (2,171) (4,664)
Interest expense (353) - (934) -
General and
administration
expenses (810) (793) (2,518) (2,124)
-------------------------------------------------------------------------
Loss before the
undernoted (2,031) (3,052) (5,623) (6,788)
Foreign exchange
loss (446) (455) (1,737) (3,270)
Interest income 154 - 154 -
-------------------------------------------------------------------------
Loss before taxes (2,323) (3,507) (7,206) (10,058)
Income tax:
Future recovery 138 233 284 362
-------------------------------------------------------------------------
Loss after income
taxes (2,185) (3,274) (6,922) (9,696)
-------------------------------------------------------------------------
Net (loss) profit
of discontinued
operations (8,459) (971) (25,952) 7,434
-------------------------------------------------------------------------
Net loss for the
period $ (10,644) $ (4,245) $ (32,874) $ (2,262)
-------------------------------------------------------------------------
Basic and diluted
loss per share
Continuing
operations $ (0.02) $ (0.05) $ (0.33) $ (0.16)
Discontinued
operations $ (0.10) $ (0.02) $ (0.09) $ 0.12
Net per common
share $ (0.12) $ (0.07) $ (0.42) $ (0.04)
-------------------------------------------------------------------------
Consolidated Statements of Deficit, Contributed Surplus and
Cumulative Translation Adjustments
For the Nine Months Ended September 30
(in thousands of United States dollars)
(unaudited)
2004 2003
-------------------------------------------------------------------------
CONTRI- CUMULATIVE CONTRI- CUMULATIVE
BUTED TRANSLATION BUTED TRANSLATION
DEFICIT SURPLUS ADJUSTMENTS DEFICIT SURPLUS ADJUSTMENTS
-------------------------------------------------------------------------
Beginning
of period $ (70,155) $ 2,293 $ 8,623 $(57,869) $ 1,635 $ 206
Transferred
to Southern
Platinum
Corp. - - (8,998) - - -
Translation
gains
(losses)
net for
the period - - - - - 4,346
Fair value
of share
options
granted
and vested - - - - - -
Net income
loss for
the period (32,874) - - (2,262) - -
-------------------------------------------------------------------------
End of
period $(103,029) $ 2,293 $ (375) $(60,131) $ 1,635 $ 4,552
-------------------------------------------------------------------------
These interim financial statements have not been subjected to a review by
the Company's external auditors.
The accompanying notes form an integral part of, and should be read in
conjunction with, these consolidated financial statements.
SouthernEra Diamonds Inc.
Consolidated Statements of Cash Flows
For the Periods Ended September 30
(in thousands of United States dollars)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
-------------------------------------------------------------------------
Net income (loss)
for the period $ (2,185) $ (3,274) $ (6,922) $ (9,696)
Adjustments for
non-cash items:
Amortization 337 355 1,264 1,048
Accrued interest 353 - 934 -
Fair value of
granted and
vested share
options 146 (492) 662 -
Future income taxes (138) (233) (284) (362)
Gain on sale of
fixed assets - 26 - -
Foreign currency
translation loss
(gain) 446 455 1,737 3,270
-------------------------------------------------------------------------
(1,041) (3,163) (2,609) (5,740)
Change in non-cash
working capital
balance (1,620) (1,234) 3,641 11,656
Cash used in
discontinued
operations (4,646) 5,156 (23,003) (10,896)
-------------------------------------------------------------------------
Cash provided by
(used in)
operations (7,307) 759 (21,971) (4,980)
-------------------------------------------------------------------------
Financing activities:
Issue of common
shares for cash - 864 98 44,571
Cash used in
discontinued
financing
activities (11,316) - (21,911) -
-------------------------------------------------------------------------
Cash provided by
financing
activities (11,316) 864 (21,813) 44,571
-------------------------------------------------------------------------
Investing activities:
Exploration and
development
projects (5,229) (1,583) (7,338) (4,892)
Property, plant
and equipment (13) (140) (430) (274)
Proceeds from
sale of fixed
assets 397 - 397 -
Cash used in
discontinued
investing
activities (3,606) (12,890) (8,457) (31,658)
-------------------------------------------------------------------------
Cash used in
investing
activities (8,451) (14,613) (15,828) (36,824)
-------------------------------------------------------------------------
Increase (decrease)
in cash (27,074) (12,990) (59,612) 2,767
Foreign exchange
gain (loss) on
cash held in
foreign currency (229) 279 (431) (311)
Cash and equivalents
- beginning of
period 31,283 29,092 64,023 13,925
-------------------------------------------------------------------------
Cash and equivalents
- end of period $ 3,980 $ 16,381 $ 3,980 $ 16,381
-------------------------------------------------------------------------
Cash and cash
equivalents
comprise:
Cash 3,980 115 3,980 115
Short-term
investments - 16,266 - 16,266
-------------------------------------------------------------------------
$ 3,980 $ 16,381 $ 3,980 $ 16,381
-------------------------------------------------------------------------
These interim financial statements have not been subjected to a review by
the Company's external auditors.
The accompanying notes form an integral part of, and should be read in
conjunction with, these consolidated financial statements.
For further information: SouthernEra Diamonds Inc., Patrick Evans,
President and CEO, Mark Rosslee, Senior Vice President and CFO, or
Chris Reynolds, Vice President Finance, Controller and Secretary, Telephone:
(416) 359-9282, Fax: (416) 359-9141, E-mail: inbox(at)southernera.com,
www: southernera.com
(SRE)
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