17th May 2005 06:00
SouthernEra Diamonds 2005 First Quarter Results (All amounts are in United States dollars unless otherwise noted) Shares Issued and Outstanding: 102,066,601 TSX: SDM AIM: SRE TORONTO, May 16 /CNW/ - The Board of Directors of SouthernEra DiamondsInc. ("SouthernEra") (the "Company") (TSX: SDM, AIM: SRE) today reported onthe Company's 2005 first quarter results. The Klipspringer Diamond Mine continued on care and maintenance in thefirst quarter of 2005. The Company therefore recognized no diamond sales inthe quarter. In the comparable quarter of 2004, the recovery from productionwas nominal. Mine maintenance costs at Klipspringer in the first quarter of 2005 of$0.2 million were offset by sales of scrap materials, down from $0.6 millionin the first quarter of 2004. Amortization charges of $0.2 million relate tothe Klipspringer diamond recovery plants and the corporate group fixed assets.Overall, the Company recorded a net loss from mining operations of$0.2 million in the first quarter compared with a loss in the comparablequarter of 2004 of $0.5 million. The Company is studying alternative mining methods and optimal levels ofproduction at Klipspringer with the intention of resuming mining operations inthe near term. Start up costs in each of the alternatives being studied arenot expected to be significant. Corporate, general and administration expenses of $0.8 million areslightly less than the first quarter of 2004 of $1.1 million. The foreign exchange gain in the current quarter of $1.5 millioncomprises net unrealized gains on Canadian and South African currencydenominated monetary assets and liabilities and reflects the relative movementagainst the Company's reporting currency (the US dollar). The South AfricanRand, in which currency the Company's main monetary liabilities are stated,weakened slightly against the US dollar in the quarter, resulting in the gain.In the first quarter of 2004 there was a comparable net exchange loss of$1.3 million due to the strengthening of the Rand in that quarter. In the first quarter, the Company incurred an after tax profit of$0.2 million from continuing operations versus a $2.8 million loss in thefirst quarter of 2004. Cash inflow from operating activities in the first quarter of 2005amounted to $0.9 million versus cash outflows of continued diamond operationsof $3.0 million in the first quarter of 2004. In the current quarter, theCompany expended cash to fund care and maintenance costs at the KlipspringerMine, continued exploration and development activities, and general andadministration expenditures. The increase in the Company's cash and cash equivalents balance as atMarch 31, 2005, versus December 31, 2004 reflects two private placementfinancings completed during the quarter net of continued exploration anddevelopment costs. Where the Company has determined that exploration and development resultsremain promising, the amounts expended on these projects are included on thebalance sheet. The March 31, 2005 balance approximated $31.2 million(December 31, 2004- $29.9 million). Please refer to the Company's website (www.southernera.com) to view thefull financial results for the first quarter of 2005. SouthernEra Diamonds is one of Canada's largest fully integratedinternational diamond companies with extensive diamond exploration in fivecountries including Canada, Australia, Gabon, the DRC and South Africa. Thisrepresents the fourth most active global diamond exploration program after themajors DeBeers, BHPB and Rio Tinto. The Company also operates the KlipspringerDiamond Mine in South Africa and maintains an 18 percent free-carried interestin the Camafuca Diamond Project in Angola. For further information: SouthernEra Diamonds Inc., Mr. Chris Reynolds,Senior Vice President and CFO, or Ms. Sharon Allan, Investor Relations,Telephone: (416) 359-9282, Fax: (416) 359-9141, E-mail:inbox(at)southernera.com, www.southernera.com (SDM.) ENDSOUTHERNERA DIAMONDS INCRelated Shares:
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