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MESSINA LIMITED
(Registration Number: 1950/035912/06
Share Code: MES
ISIN Code: ZAE 000004438
News Release
Johannesburg, 17 January 2002
The following is an extract of a news release issued by SouthernEra
Resources Limited, Messina's holding company, in Toronto on 14 January 2002.
The extract relates to matters dealing with the company's Messina Platinum
Project.
Messina Phase 1 PGM Production on Schedule for 2002 Start-up
Progress towards Phase 1 production start-up of the Messina project
continues on schedule for the end of the 3rd quarter of this year and the
expenditure is well below budget.
A feasibility study completed in February 2000 was based on Messina's
Voorspoed resource to a depth of only 575 metres (Phase 1), resulting in a
planned production rate of 159,000 ounces of 5 platinum group metals
("PGMs") plus gold with an estimated average operating cost of US$147 per
ounce of payable metal (net of nickel and copper by-product credits) and a
mine life of 17 years.
While the Phase 1 project remains well within the budget of 488 million
South African Rand, it is significantly below budget in U.S. Dollar terms as
a consequence of a substantial depreciation of the Rand during the course of
2001. The full impact of this gain is being assessed on Messina's capital
and operating costs and will be reported to shareholders in the near future.
Progress at Phase 1 (one of three phases of planned development) has now
reached an advanced stage. The main shaft has been sunk to a depth of
approximately 420 meters. Shaft sinking will be completed in February. The
changeover from sinking to permanent headgear will be completed in April.
Equipping of the shaft is scheduled for completion in July, when the main
shaft will be fully operational.
Construction of the Phase 1 ore processing plant is also progressing well
and is on schedule for commissioning before September 30, 2002. Earthworks
are now more than 90 percent complete; procurement of critical path items is
on schedule; two ore silos have been completed; and civil work is in
progress for the mills, flotation and thickener sections.
Underground development is also progressing well. Three raise-boring
machines are currently in use to complete the waste and reef passes. The
400-meter level development is complete. Development on the 275 and 350-
meter levels has been completed to the raise-bore holes. Development to reef
on these two levels will start once the main shaft has been commissioned.
Channel and drill sampling, conducted during development on both the UG2 and
Merensky PGM reefs at the 150 and 200-meter levels, have confirmed the
precious and base metal grades used in the feasibility study. Structural
features such as potholes and minor faulting encountered during mining
operations on the UG2 reef are within the parameters defined by the
feasibility study. Importantly, both reefs are clearly visible for mining
operations, which will assist in grade control.
As part of the equity funding of Phase 1, Messina financed and constructed
the Accelerated Production Initiative ("API"), which commenced production
late last year. Based on current production build-up, the API is expected
to reach its planned throughput rate of 20,000 tonnes per month during the
current quarter. Cash flow from the API is credited to Phase 1 equity
requirements. Recoveries achieved from the API plant have now reached 86
percent, well above the 80 percent recovery anticipated from this plant.
Most encouragingly, chrome recoveries from UG2 feed are well below
expectations. Chrome recoveries are expected to drop even further once ore
from the Merensky reef is blended with UG2 ore. Smelters impose a special
charge based on the chrome content of concentrates they process.
SouthernEra and Messina CEO, Patrick Evans, said "the performance of the API
project is most encouraging. Besides helping to satisfy equity funding
requirements, the API project is also providing our mining and metallurgical
teams with valuable experience and information which should assist in a
smooth start-up of Phase 1 production later this year."
FOR FURTHER INFORMATION PLEASE CONTACT:
SouthernEra Resources Limited
Patrick C. Evans, President and CEO
Telephone: (416) 359-9282
Fax: (416) 359-9141
e-mail: inbox@southernera.com
www.southernera.com
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