1st Apr 2005 14:36
SouthernEra Diamonds 2004 Year-End Results (All amounts are in United States dollars unless otherwise noted) Shares Issued and Outstanding: 100,566,601 TSX: SDM AIM: SRE TORONTO, April 1 /CNW/ - The Board of Directors of SouthernEra DiamondsInc. ("SouthernEra") (the "Company") (TSX: SDM, AIM: SRE) today reported onthe Company's 2004 year-end results. On September 1, 2004, the Company, through a Plan of Arrangement,transferred all of its platinum group metals and gold mining, exploration anddevelopment businesses (the "Platinum Division") to a new public company,Southern Platinum Corp. Shareholders of the Company on September 1, 2004 wereautomatically issued shares in Southern Platinum Corp. on a one-for-one basis. SouthernEra is engaged in diamond exploration, mine development andmining activities internationally. Exploration activities in 2004 wereconducted in Canada, South Africa, Gabon, the Democratic Republic of Congo(the "DRC"), and Australia. The Company's 56%-owned Klipspringer Diamond Mine ("Klipspringer") inSouth Africa continued on a care and maintenance basis throughout most of2004, due to the continued strength of the South Africa Rand ("Rand"). TheCompany's revenue in 2004 was derived from its share of minimal incomereceived from the sale of diamonds produced at the Klipspringer Diamond Mineearly in the year. The sale of PGM concentrate from the Messina PlatinumProject for the first eight months of the year is included in the net lossfrom discontinued operations. Revenues for this period from the sale of PGMconcentrate amounted to $ 23.8 million. No significant revenue was generated in 2004 from diamond sales atKlipspringer, compared to $3.2 million recognized in 2003 from the sale of37,885 carats. Care and maintenance costs in 2004 amounted to $1.3 million and arecomprised of site maintenance, dewatering and security of the mine site.Mining costs for mining operations in 2003 amounted to $9 million. In 2004 the Company revaluated the carrying cost of its plant andequipment at Klipspringer and recognized a $1.9 million charge to thestatement of operations. Amortization in 2003 of $1.4 million recognized onlythe depreciation of equipment over fixed lives. In summary, care and maintenance cost in 2004 and mining activities in2003 resulted in a loss from mining operations, after amortization, of $4.5 million versus a loss in 2003 of $10.4 million. In 2004, $2 million of interest expense was recorded as a period costrelating to accrued interest on tax liabilities and interest paid on a Randoverdraft facility at Klipspringer. The overdraft facility was fully repaid inSeptember 2004. Corporate, general and administration expenses increased from $1.2 million in 2003 to $3.5 million in 2004. This $2.3 million increasereflects the increased level of corporate activity, including legal, financialand accounting advice associated with the division of SouthernEra ResourcesLimited into two separate public companies. The administrative costs alsoinclude a $1.0 million charge for the fair value of granted and vested sharepurchase options to directors, officers and employees of the Company. In 2004 exploration and development project cost write-downs of thecarrying values of certain activities in Canada's Northwest Territories and inSouth Africa amounted to $3.0 million. These write-downs relate to specificdiamond prospects where exploration results fell below the consistentlyapplied criteria the Company has set for continued involvement, and suchexploration activities have been terminated or put on hold. Where the Companybelieves that exploration and development results remain promising, theamounts expended on these projects are included in the balance sheet -approximately $16.2 million at December 31, 2004 (2003 - $16.9 million),exclusive of the development costs at the Camafuca Diamond Project in Angola. The foreign exchange loss of $1.6 million comprises, in the main, netunrealized losses on South African and Canadian currency denominated monetaryassets and liabilities and reflects the relative movement against theCompany's reporting currency (the US dollar). South African Rand, in whichdenomination the Company's main monetary liabilities are stated, strengthenedagainst the US dollar in the year, resulting in a net loss. In 2003 there wasa net exchange loss of $4.5 million also due to the strength in the Rand inthat year. Overall, the Company incurred a loss before taxes of $14.5 million in2004, comparable to the loss in 2003 of $14.6 million. Please refer to the Company's website (www.southernera.com) to view thefull audited financial results for the year ended December 31, 2004. 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: PLEASE CONTACT: SouthernEra Diamonds Inc., Mr. Chris Reynolds, Senior Vice President and CFO, Telephone: (416) 359-9282, Fax: (416) 359-9141, E-mail: inbox(at)southernera.com, www.southernera.com (SDM. SRE)ENDSOUTHERNERA DIAMONDS INCRelated Shares:
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