rtm, page-2

re: rtm - peterhaus Hi peterhaus

It's a bit negative. I really shouldn't publish this as I have a few opts but in the interest of fair play

Question Marks Over 'Uranium Find'

The Namibian (Windhoek)

April 7, 2005
Posted to the web April 7, 2005

John Grobler
Windhoek

THE announcement by an Australian-listed mining company, Reefton Mining NL, that it has made a uranium discovery on the farm Hakskeen outside Usakos, has been greeted with widespread scepticism by analysts and geologists.

Rather, it is being suggested, the 'uranium discovery' might well have been the result of alleged sloppy geology, as the specific deposit is well known to be thorium, another radioactive substance that is sometimes used in fluorescent lighting fixtures.


"I would be very, very sceptical of any announcement of a major uranium find at Hakskeen," said Cape Town-based geologist Dr Nick Stevens, who has written his doctorate on the geology of the area where Reefton said it made its find.

On March 18, Reefton NL announced to the Australian Stock Exchange (ASX) that it has identified four new radiometric anomalies in close proximity to the Langer Heinrich deposit.

The Langer Heinrich deposit is again close to the Roessing deposit, which is the fourth largest uranium mine in the world.

In the announcement, titled 'New Uranium Discovery', Reefton NL said: " the company has discovered a new uranium target at its wholly owned Erongo Polymetallic Project in central Namibia, Africa".

"The company has commenced radiometric surveying returning significant readings of up to 94 320 counts per minute, thereby indicating the presence of uranium-bearing mineralisation," the letter to the ASX Company Announcement Office stated.

Reefton also said it had found "radiometric anomalies" at three other farms in the area, namely Vergenoeg, Sukses and Hoopverloor.

The company said these anomalies "occur within alluvial basins interpreted to have developed on palaeochannels similar to the Langer Heinrich uranium deposit owned by Paladin Resources Ltd located south of Hakskeen".

The Langer Heinrich deposit is a proven uranium-vanadium deposit.

BOOMING PRICES

Booming uranium prices appear to have created a bull market for new uranium discoveries, and Reefton's stock price shot up in the week after the announcement, made late last month.

Its stock increased by another 40 per cent on the London-based Alternative Investment Market, a somewhat speculative venture capital market.

According to Reefton, the price of uranium has increased from an annual month-end spot price of US$11,54 per pound (about N$70 per pound) to US$21,75 per pound (about N$130,50 per pound, or N$293,63 per kg).

Current world production is estimated at 46 000 tons a year, while the estimated demand is 79 000 tons a year.

With especially developing economies like India and Russia opting to build more nuclear power stations to cope with exponential growth in demand for electricity, analysts projected that there would be a massive shortfall in world uranium production.

Another Australian company, Paladin Resources, which owns the rights to the Langer Heinrich uranium deposit, recently raised more than US$38,9 million (about N$233 million) on the international market for the development of the new mine.

Pending some environmental impact assessments and feasibility studies, construction of a mine at Langer Heinrich is expected to start by the middle of this year.

WRONG KIND OF ROCK

Professor John Moore of the Rhodes University Geology Department said in a telephonic interview that he would be very surprised if real and viable quantities of uranium were to be found at Hakskeen.

While many of the rock formations between Usakos and the coast display levels of radioactivity (the Spitzkoppe are considered to be quite "hot"), Moore said that Hakskeen basically had the wrong kind of rock for a genuine uranium deposit.

The Hakskeen area is something of a legend among geology students, and many master's degree students have, over the years, visited this site as part of their training to differentiate between real and false indications of uranium deposits, he explained.

"Thorium is a close relative, if you will, of uranium, and in the process of its radioactive decay, produces small quantities of uranium," Moore said.

But the deposit at Hakskeen consisted largely of thorium potassium and small quantities of uranium, with most of the radioactivity attributable to the thorium, he noted.

The area was part of an extensive, French-sponsored aerial radio-magnetic survey in the early 1990s, and subsequent drilling at the site proved that it was unlikely to contain any uranium.

Dr Nick Stevens also pointed out that as a granite-based deposit, it was unlike the Roessing or Langer Heinrich deposits.

"It is what we call a monozite, a rare earth phosphate normally associated with heavy beach sands but one that also can give off a radioactive signal," he said.

He elaborated that the sophisticated modern Geiger counters used by geologists would be able to show differences in radiation from thorium, potassium or uranium.

"Each one gives off a distinct signal, which you can tweak on a computer to see what exactly it is you are looking at," he said.

All the granite formations between the Ebony siding, on the way to Swakopmund, and the coast gave off radio-active signals, Stevens said.

"A place like Spitzkoppe would also give a strong radioactive signal, but in that kind of granite formation it is basically geologically implausible," he said.

The ASX also appeared to have had its doubts over the likelihood of the new uranium find, and at one point suspended trading in Reefton shares to ask the company to issue further clarifying information.

Reefton Mining also has an Exclusive Prospecting Licence along the Skeleton Coast in an area north of Moewe Bay, where for the past four years it has been struggling to prove a viable diamond deposit.

So far, it has only been able to produce micro-diamonds - diamonds smaller than 0,20 of a carat - although these have been favourably priced.

But Reefton seemed very sure of its uranium find, and announced that the company had retained the services of Dr Christian Schlag, a well-known uranium geologist, to substantiate the find.

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They also announced that they were to start drilling in the area to prove their find.

E-mails to solicit comment from Reefton's offices in Perth had not been answered at the time of writing, and their local geologist, Greg Hemming, could not be traced for reaction to Moore and Stevens' assessments