Drilling Report

SouthernEra Joint Venture Commences Drilling Program at Phase 3

    (Dwaalkop Section) of Greater Messina Platinum Project

 

    Shares Issued and Outstanding: 61,674,459

    TSX: SUF

    AIM: SRE

 

    TORONTO, July 21 /CNW/ - SouthernEra Resources Limited announced today

that the in-fill drilling program at the 7.8 million ounce Dwaalkop Section

(Phase 3) of the Greater Messina has commenced. This follows the award by

South Africa's Department of Minerals and Energy at the beginning of July of

the Prospecting Permit to the SouthernEra/Mvelaphanda Joint Venture.

    The Dwaalkop Section is one of four phases that comprise the Greater

Messina Platinum Project. With two platinum rich reefs striking approximately

20 kilometers, the Greater Messina has a declared resource of 24.38 million

ounces of five platinum group elements and gold (5PGE+Au). This resource has

been declared to a depth of 1,000 meters. Drilling at the Greater Messina to a

depth of 1,550 meters indicates that the reefs are open to depth, although it

will take approximately 30 years to mine the resource to a depth of 1,000

meters.

    The current declared resource at the Dwaalkop Section (Phase 3) to 1,000

meters is as per the table below.

 

                -------------------------------------------------------------

                 Measured and Indicated         Inferred

                -------------------------------------------------------------

                Tonnes    Grade       Ounces    Tonnes    Grade       Ounces

                (000's)   5PGE + Au   (000's)   (000's)   5PGE + Au   (000's)

                          (g/t)                           (g/t)

    -------------------------------------------------------------------------

    Merensky                                    17,080    3.49        1,916

    -------------------------------------------------------------------------

    UG2         14,650    6.74        3,175     12,700    6.74        2,752

    -------------------------------------------------------------------------

    Total       14,650    6.74        3,175     29,780    4.88        4,668

    -------------------------------------------------------------------------

   

    The in-fill drilling program has been designed in conjunction with SRK

Consulting, with the objective of establishing an indicated resource on the

Merensky and UG2 reefs, to depths of 1,000 meters and 1200 meters,

respectively. This program will be undertaken in strict accordance with the

standards and guidelines of the South African Code for Reporting of Mineral

Resources and Mineral Reserves (SAMREC) and will be conducted under SRK

approved operating standards and procedures.

    Through the drilling program, 19 vertical holes will be sunk across the

strike length of 6 kilometers. The holes are expected to intersect the

Merensky reef at depths of 100, 500 and 800 meters, with corresponding

intersections of UG2 reef at depths of 400, 800 and 1,100 meters.

    Two deflections are planned from each main reef intersection to provide

representative coverage. All reef intersections will be assayed for three

platinum group elements and gold (3PGE+Au) using the lead collection method

with quality control samples (blank and standard) inserted in a ratio of 1:10.

A further 1:10 sub-set of samples will be analysed for individual platinum

group metal elements using the NiS method.

    The priority will be to delineate the shallower portion of the resource

to 500 meters, following which the bankable feasibility study will be

completed. It is estimated that the resource to 500 meters will be completed

by the beginning of the fourth quarter, with the deeper resource completed by

year-end.

    At the Phase 1 (Voorspoed Section), the 120,000 tonne per month mine was

commissioned during the fourth quarter of last year. Underground development

to support the 120,000 tonne per month production rate is currently underway,

with the 40,000 tonne per month target having been achieved at the end of the

second quarter. At full production, the Phase 1 mine will produce

approximately 200,000 ounces of 5PGE+Au at a cash margin of approximately $165

per ounce.

    At the Phase 2 (Doornvlei Section), a bankable feasibility study was

completed by SRK Consulting in mid-2002. The mining license for Phase 2 was

issued last June. In view of the uniform continuity of the two platinum rich

reefs across the 10.6-kilometer strike of Phases 2 and 3, consideration is

being given to their joint development. A scoping study undertaken by SRK

Consulting recommends this. It is expected that this will be confirmed by the

feasibility study currently underway, which will be completed at the beginning

of 2004.

    Based on the Phase 2/3 scoping study, it is anticipated that a 240,000

tonne per month mine will be built to access the combined 15.86 million ounce

resource at these two phases. This should support annual production in excess

of 340,000 ounces of 5PGE+Au for a period of approximately 30 years.

    At the Phase 4 (Zebediela Section), a pre-feasibility study is currently

underway to upgrade the 3.17-million ounce inferred resource to the 'measured'

category. Following completion of this study at the end of this year, a

bankable feasibility study at Phase 4 will commence in 2004. Once all four

phases are commissioned, the Greater Messina is expected to support annual

production of approximately 700,000 ounces of 5PGE+Au.

 

    SouthernEra Resources is an independent producer of platinum group metals

and diamonds. The company also has an extensive platinum group metal 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 - Dr. Sally Eyre,

Vice President, Corporate Affairs, Telephone: [phone],

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

    (SUF. SRE)