Drilling Report

SouthernEra Awarded Two Diamond Prospecting Permits in South Africa

 

    Company Concludes Black Economic Empowerment Exploration JV

    Shares Issued and Outstanding: 74,732,883

    TSX: SUF

    AIM: SRE

 

    TORONTO, May 5 /CNW/ - SouthernEra Resources Limited ('SouthernEra')

(TSX: SUF, AIM: SRE) announced today that the Company has been awarded two new

diamond prospecting permits in South Africa. The first permit, over the Hope

Diamond Project, was awarded on March 31 and the second permit, over the

Prieska Diamond Project, was awarded yesterday, May 4, 2004. Both permit areas

are located on the Kaapvaal Craton.

    The Hope Project covers 1,110 hectares of State owned mineral rights in

South Africa's Limpopo Province and is located within one of SouthernEra's

priority regional diamond target areas. The Project is focused along the same

regional structural lineament that controlled the emplacement of SouthernEra's

well-known Marsfontein diamondiferous kimberlite cluster. The Marsfontein

Diamond Mine, built and operated by SouthernEra in joint venture with DeBeers

in 1996, produced US$246 million in revenue in less than two years.

    Exploration at Hope commenced immediately after Easter with the

collection of loam samples for the recovery of kimberlitic indicator minerals

and a program consisting of ground geophysics. An airborne survey is scheduled

to be flown shortly following which drilling will commence.

    The Prieska Diamond Project is situated 25 kilometers northeast of the

town of Prieska in South Africa's Northern Cape Province. The Prieska Project

area is approximately 7,000 hectares and hosts the known Sanddrift Group    

2-type diamondiferous kimberlite fissure and blow. The current phase of

exploration on the property is centered on six kimberlitic indicator mineral

anomalies distinctly separate from the known fissure and blow.

    Kimberlite has been confirmed in two of three percussion holes drilled on

one of these anomalies. A total of 100 garnets were probed from the drill

samples. Forty percent of the garnets indicate that they are derived from a

high interest calcium poor harzburgitic source with G10-type chemistry. A

significant population of diamond inclusion spinel is also present. Further

drilling of this anomaly will commence shortly.

    Indicator mineral abundances on the remaining five kimberlitic indicator

mineral targets are similar to those recovered from the previous grid sampling

over the target from which kimberlite has been confirmed. Garnet abundances of

greater than 20 grains are present in several samples.

    High interest kimberlitic indicator mineral chemistry results have been

obtained from two of the anomalies at the Prieska Project. One of these

anomalies is a spinel and garnet anomaly containing 30 percent G10-type

garnets. The other is a garnet and ilmenite anomaly containing 27 percent 

G10-type garnets from a total of 55 grains probed. The presence of ilmenite

may signify the presence of a Group 1-type kimberlite source. Follow-up

sampling of these targets will commence immediately to further refine drill

targets and ground magnetic surveys will be conducted over the indicator

mineral anomalies.

    Commenting on the award of the prospecting permits, SouthernEra President

and CEO Patrick Evans said: 'We are extremely pleased that the Hope and

Prieska prospecting permits have been issued to the Company. This marks the

culmination of a successful multi-year grass roots exploration program in

South Africa. Both projects have the potential to host diamondiferous

kimberlites. Advanced exploration at the projects is now underway.'

    In applying for these diamond prospecting permits, SouthernEra satisfied

the requirements of South Africa's new Mining Charter. SouthernEra has

concluded a joint venture heads of agreement with a Black Economic Empowerment

(BEE) consortium comprising of Imbewu Mineral Resources (Pty) Limited and Ten

G's Investments (Pty) Limited who jointly will hold a 30 percent participating

interest in the two projects. In addition, a 5 percent interest in the

projects will be set aside for a community trust that will be established in

the event that a mine is found and developed within the project areas. The

trust will provide for social and economic development in the area of the

mine. Through this Joint Venture SouthernEra will meet all the objectives of

the Mining Charter, including the implementation of a technical skills

transfer program relating to exploration, development and mining activities.

    South Africa is one of six countries in which SouthernEra is engaged in

diamond exploration. Others include Canada, Gabon, Australia, the DRC and

Botswana. The Company is currently also drilling kimberlite targets in Canada.

Drilling of kimberlite targets is set to commence this quarter in Gabon and

Australia and in the DRC and Botswana during the second half of the year. The

Company also maintains its 18 percent free-carried interest in the Camafuca

Project in Angola. This represents the fourth most active global diamond

exploration program after the majors DeBeers, BHPB and RTZ.

 

    SouthernEra Resources is also an independent producer of platinum group

metals (PGMs) and has an extensive PGM and gold exploration program. The

Company's common shares are listed on the Toronto Stock Exchange (SUF) and the

London Stock Exchange's AIM market (SRE).

 

 

    /For further information: PLEASE CONTACT: SouthernEra Resources Limited,

Mr. Patrick Evans, President and CEO, or Howard Bird, Vice President

Exploration, Telephone: [phone], Fax: [phone], E-mail:

inbox(at)southernera.com, www.southernera.com/

    (SUF. SRE)