Statement re Brokered Private Placement

SouthernEra Diamonds Announces C$5 million Brokered Private Placement

 

    Shares Issued and Outstanding: 102,066,601

    TSX: SDM

    AIM: SRE

    /NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE

    UNITED STATES./

 

    TORONTO, and LONDON, July 14 /CNW/ - SouthernEra Diamonds Inc. (TSX: SDM;

AIM: SRE) today announced the entering into of a brokered private placement

agreement with Haywood Securities Inc. for the sale of 6,800,000 Flow-through

Common Shares and 5,000,000 Units for gross proceeds of approx. C$5 million.

    The Flow-through Common Shares will be placed at C$0.44 per Flow-through

Common Share for gross proceeds of approx. C$3 million. The Units will be

placed at C$0.40 per Unit for gross proceeds of C$2 million. Each Unit will

consist of one common share and one-half of one common share purchase warrant.

Each whole warrant shall be exercisable to acquire one common share at an

exercise price of C$0.65 for a period of 24 months from the closing date,

which is expected to be July 28, 2005. SouthernEra has granted Haywood

Securities an option, exercisable prior to the closing, to increase the size

of the offering by up to approx. C$2 million through the placement of

additional Flow-through Common Shares and/or Units (or any combination

thereof) under the same terms and conditions.

    The proceeds from the placement of the Flow-through Common Shares will be

used to advance SouthernEra's Canadian diamond exploration projects. The

proceeds from the placement of the Units will be used to advance SouthernEra's

international diamond exploration and development projects and for general

corporate purposes. The Placement is subject to regulatory acceptance.

 

    SouthernEra Diamonds is Canada's largest fully integrated diamond company

with extensive diamond exploration in six countries including Canada,

Australia, Gabon, the DRC, Zimbabwe and South Africa. This represents the

fourth most active global diamond exploration program after the majors

DeBeers, BHPB and Rio Tinto. The Company also operates the Klipspringer

Diamond Mine in South Africa and maintains an 18 percent free-carried interest

in the Camafuca Diamond Project in Angola.

 

    The securities offered have not been registered under the U.S. Securities

Act of 1933, as amended, and may not be offered or sold in the United States

absent registration or any applicable exemption from the registration

requirements. This press release does not constitute an offer to sell or the

solicitation of an offer to buy nor will there be any sale of the securities

in any state in which such offer, solicitation or sale would be unlawful.

 

    This press release includes forward-looking statements. All statements

other than statements of historical fact included in this press release, and

all statements regarding plans, objectives and expected performance, are

forward-looking statements. These forward-looking statements have been based

on current expectations and projections about future events, including

numerous assumptions. Forward-looking statements generally can be identified

by the use of forward-looking terminology such as "ambition", "may", "will",

"expect", "intend", "estimate", "anticipate", "believe", "plan", "seek" or

"continue" or negative forms or variations of similar terminology. Such

forward-looking statements involve known and unknown risks, uncertainties,

assumptions and other factors related to SouthernEra Diamonds Inc.

    Forward-looking statements involve risks, uncertainties and assumptions.

Actual results may differ materially from those expressed in forward-looking

statements. Given these risks, uncertainties and assumptions, you are

cautioned not to put undue reliance on any forward-looking statements. In

addition, the inclusion of such forward-looking statements should under no

circumstances be regarded as a representation by SouthernEra Diamonds Inc.

that it will achieve any results set out in such statements or that the

underlying assumptions used will in fact be the case.

 

   

    For further information: Canada: SouthernEra Diamonds Inc., Mr. Patrick

Evans, President and CEO, or Mr. Chris Reynolds, SVP and CFO, Telephone:     

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

www.southernera.com; UK and Europe: Ms. Carina Corbett or Mr. John

Carrick-Smith - 4C-Burvale Limited, Telephone: ++44(0)207-907-4761, Fax:

++44(0)207-907-4769, E-mail: corbett(at)4c-burvale.co.uk; South Africa:

SouthernEra Diamonds Inc., Mr. Peter Ibbotson, Vice President, Marketing, 

Telephone: ++27-11-442-6923, Fax: ++27-11-442-6993, E-Mail:

sufjhb(at)icon.co.za

    (SDM. SRE)