Higher production at the Marsfontein diamond mine in South Africa kept
During the three months ended June 30, the diamond miner earned $1.9 million (or 7 cents per share) on revenue of $13.7 million, compared with $4.1 million (16 cents per share) on $8.1 million in the corresponding period of 1998. The recent quarter included $3 million in writeoffs, though this was offset by a 38% rise in production at Marsfontein.
Net earnings in the first six months of this year were $6.8 million on $25.5 million in revenue, compared with $4.7 million on $17.4 million in the first half of 1998. Likewise, cash flow jumped to $18.8 million from $4.2 million.
SouthernEra’s share of recent quarterly production from Marsfontein, in which it holds a 40% interest, was 110,600 carats. The average recovery grade dropped 6% to 228 carats per 100 tonnes, as did the price of the stones recovered, which fetched US$114 per carat, owing to their smaller size and unfavourable shape.
Reserves in the M1 pipe are sufficient for another year of production at the current mining rate, but both grades and stone sizes are expected to decrease as miners tap the deeper-lying material. Also, SouthernEra is writing off the costs of acquiring the mineral rights over the remaining reserves and consequently expects amortization charges per tonne to double from the amount recorded in the first six months of this year.
Exploration has led to the discovery of six more kimberlite anomalies on the property, bringing to 18 the number now known to exist. Ten of these have been defined by geophysical surveying, and drilling is under way.
Meanwhile, development of the Leopard fissure continues at the company’s wholly owned, adjoining Klipspringer property. Monthly mining rates are expected to increase by 9,000 tonnes, to 15,000 by year-end. Exploration elsewhere on the property continues as well.
Also in progress is a bankable feasibility study on the nearby, but separate, Messina platinum project, where SouthernEra can earn a 54% interest from Southern African-based Impala Platinum (T.M.N., May 3/99). Reserves there are divided between two deposits, Voorspoed and Doornvlei, which together host 51 million tonnes grading 6.4 grams combined platinum group elements per tonne.
Exploration also continues at the company’s various projects in Angola, Brazil and Canada’s Northwest Territories.
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