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News Release
March 28, 2001
SouthernEra Nears Completion of Messina Platinum Project Financing C$8 Million
Equity Bought Deal Accepted to Continue Development and Increase SUF Ownership
of Messina
Toronto...Patrick Evans, President and CEO of SouthernEra, announced today that
significant progress has been made in securing the full amount of the financing
required to complete construction and start-up of the Company's 70.4% owned
Messina platinum group metals ("PGM") project in South Africa.
Final credit committee approval is expected in April from Rand Merchant Bank
("RMB") which has been given the mandate by Messina Limited to arrange
non-recourse project debt financing. Messina Limited is a South African
corporation which owns 100% of the Messina project. "RMB has indicated that,
subject to final credit committee approval, cash flow from our recently
announced Accelerated Production Initiative ("API") will be credited against
the project's equity requirements, thereby significantly reducing the equity to
be raised," said Mr. Evans. Through RMB's efforts, Messina has received a term
sheet from a major South African financial institution which includes
subordinated debt funding and a project completion guaranty. Messina is also
in the final stages of concluding an off-take agreement with a major
international automotive manufacturer containing floor-price protection
provisions as required by RMB. "We believe we are now very close to meeting all
of RMB's requirements to complete the project debt financing," Mr. Evans said.
SouthernEra is examining a number of alternatives for increasing its equity
interest in Messina by meeting Messina's need for additional capital to
continue development while the project financing is being completed. The
Company recently received the necessary regulatory approvals from the South
African Reserve Bank to increase its interest.
Accordingly, SouthernEra has accepted a bought deal equity financing proposed
by a syndicate led by Haywood Securities Inc., a Canadian investment dealer.
SouthernEra will issue to Haywood a total of 3.0 million units at a price of
C$2.75 per unit for gross proceeds of C$8.25 million. Each unit consists of
one common share and one common share purchase warrant exercisable at C$3.00
for 12 months and C$3.50 for a further 6 months. Until closing, which is
expected on or before April 11, 2001, Haywood will have the right to purchase
an additional 500,000 units under the same terms and conditions. This
financing has been structured as a special warrants offering to be cleared by a
prospectus.
"This offering will be used to maintain the momentum of Messina's project
development as we complete the project's financing by purchasing additional
shares from Messina's treasury thereby increasing SouthernEra's ownership in
Messina," said Mr. Evans. "A primary objective for SouthernEra in the financing
of the Messina project is to maximize the SouthernEra shareholder's
participation in Messina's cash flow."
SouthernEra Resources Limited is an emerging platinum group metals producer
with interests in diamond production and exploration. The common shares of
SouthernEra are traded under the symbol SUF on the Toronto Stock Exchange.
SouthernEra owns 70.4 percent of Messina Limited, which is listed on the
Johannesburg Stock Exchange under the symbol MES.
These securities have not been offered and will not be registered under the
United States Securities Act of 1933, as amended or the securities laws of the
United States of America, and may not be offered or sold in the United States
unless registered under applicable securities laws or unless an exemption from
such registration is available.
FOR FURTHER INFORMATION PLEASE CONTACT:
SouthernEra Resources Limited
Patrick C. Evans, President and CEO at
Telephone: (416) 359-9282, Fax: (416) 359-9141; or
Rudi P. Fronk, Director at
Telephone: (416) 367-9292;
or
e-mail: inbox@southernera.com
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