3rd Quarter Results

SouthernEra Diamonds 2005 Third Quarter Results

 

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

    Shares Issued and Outstanding: 112,279,101

    TSX: SDM

    AIM: SRE 

 

    TORONTO, Nov. 9 /CNW/ - The Board of Directors of SouthernEra Diamonds

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

the Company's 2005 third quarter results.

    The Company recorded a net loss from mining operations of $0.3 million in

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

$0.9 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 or for the disposition of its

interest in the property.

    Corporate, general and administration expenses of $2.6 million increased

from the comparable period in 2004 of $1.8 million reflecting a $0.8 million

fair value charge to earnings of options granted and vesting during the

current quarter and an additional $0.8 million charge for severance and

related costs.

    A foreign exchange loss in the current quarter of $0.4 million reflected

the net unrealized gains on Canadian currency denominated monetary assets and

liabilities, and losses on South African Rand denominated working capital,

relative to the US dollar, the Company's reporting currency. Both the South

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

stated, and the Canadian dollar strengthened slightly against the US dollar in

the quarter, resulting in the loss. A comparable loss in the third quarter of

2004 resulted from similar currency fluctuations.

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

$3.5 million versus a $2.2 million loss in the third quarter of 2004 from

continuing operations.

    Cash outflow from operating activities in the third quarter of 2005

amounted to $1.2 million versus cash outflows of continued diamond operations

of $2.7 million in the third quarter of 2004 reflecting the loss from

continued operations and 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.

    Where the Company has determined that exploration and development results

remain promising, the amounts expended on these projects are included on the

balance sheet. The September 30, 2005 balance approximated $35 million

(December 31, 2004 - $29.9 million).

 

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

full financial results for the third 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

    (SDM. SRE)