MESSINA LIMITED
(Registration Number: 1950/035912/06)
Share Code: MES
ISIN : ZAE00004438
News Release
MESSINA PHASE 1 PRODUCTION TO INCREASE BY 50%
JOHANNESBURG, 23 April 2002... The Board of Directors of Messina Limited
announced today that it has decided to proceed with an immediate deepening
of the main shaft at its Messina platinum mine to increase the mine's Phase
1 production by 50%. With this decision, the project will now achieve its
originally planned full production rate of 80,000 tonnes per month at the
end of the 3rd quarter of next year, six months later than the original
schedule, but will then continue through to a new full production rate of
120,000 tonnes per month by the end of the first quarter of 2004.
The surface facilities now nearing completion are fully capable of
processing 120,000 tonnes per month. Recent trial mining under the
Accelerated Production Initiative ("API") has confirmed the feasibility of
converting to a more mechanized long-hole stoping mining method, which will
increase mine productivity and throughput. "It therefore makes enormous
sense to deepen the shaft and access additional ore before the main shaft is
equipped and commissioned for production. While the shaft is being deepened
from its Current level of 432 metres to 730 metres, we will also develop a
greater number of working levels to enable the mine to sustain the higher
production rate," said Patrick Evans, Messina Limited CEO. During the
expansion production will continue from the API operation at 20,000 tonnes
per month.
"In simple terms, we are deferring around US$20 Million in cash flow from
2003 into 2004, with the benefit of continuing to generate an additional
US$20 million in cash flow each year thereafter, assuming no changes in
metal prices. To achieve this 50% expansion, capital costs are estimated at
about US$22 million of which nearly half is future expenditure moved
forward. The economics of this expansion are therefore extraordinarily
accretive for our shareholders," said Mr. Evans. He noted that the Company
and its holding company SoutherEra Resources Limited were currently in
discussions with its banking syndicate to fund a significant portion of this
initiative.
With this expansion, mine capacity will begin to approach an appropriate
rate for the size of the Phase 1 ore body. "Phase 1 measured resources to
the bottom of the deepened shaft now stand at approximately 18 million
tones, about 12 years at the expanded rate of 120,000 tonnes per month," Mr
Evans said.
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
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