article from mining news - ceo interviewed

Reefton's Namibian problems emerge


Jesse Riseborough


Tuesday, April 05, 2005
INVESTORS reacted angrily this morning to news from uranium hopeful Reefton Mining that renewal applications for prospecting licences at both its Erongo uranium and Skeleton Coast diamond projects in Namibia have yet to be approved.

The shareprice shed 32.5% in morning trade to 8.1c, continuing a turbulent few days for the explorer including the surprise exit late last week of managing director Vladimir Nikolaenko.

The company reported "significant delays" in dealings with the mining commissioner of the ministry of mines and energy in Namibia, and said it had engaged legal counsel to pursue the approvals.

"It is the board's view that the period of time the commissioner has taken to consider the renewal applications for the Erongo polymetallic and Skeleton Coast diamond projects is inappropriate and unreasonable," the company stated in a release to the market this morning.

Reefton chief executive officer Simon Gilbert told MiningNews.net today that Reefton were still awaiting the response from the Namibian Government, which he hoped would be achieved within the next two days, but acknowledged it could take longer for the issue to be resolved.

"Essentially we are waiting for a formal response from the Namibian government indicating the status of our renewal applications for our Namibian leases, and they were requested to respond to us by the close of business yesterday which they haven't done," Gilbert said.

"We don't know at this stage [when this will happen], hopefully sooner rather than later. All being well we could get response within the next 24-48 hours but of course it could take longer as well."

Reefton said the renewal application for the Erongo polymetallic project was initially lodged in March 2003 while the renewal application for the Skeleton Coast diamond project was lodged in August 2004.

Gilbert said a legal team representing Reefton would be meeting with the president of Namibia today in a bid to expedite the process. He also claimed that a failure to resolve the issue would have a major negative economic impact on the small African nation.

"We have engaged senior counsel, and they will be speaking with various levels of the [Namibian] government today including the president to expedite resolution of this issue, which obviously has significant consequences for Reefton but also major ramifications for Namibia as a country,"

Gilbert added that the failure to renew the licences at this point would have no impact on the drilling program at Erongo announced last week. However he was unable to state the short term impact it would have on Reefton's operations in Namibia.

"Obviously we are trying to seek resolution on this issue. Primarily the projects are the same as they were a week ago. They are advancing well but obviously we need to resolve this other issue regarding the ground," Gilbert said.

Gilbert said he didn't think the massive volume of shares traded on the market this morning necessarily represented growing scepticism about the company's operations in Namibia. More than 137 million shares have been traded in the opening two hours, representing a turnover of almost $13 million.

"There a probably a lot of day traders that are responsible for a lot of the volume, but as I have mentioned the projects are in good standing, and it is just now an issue of whether or not the renewals are going to be accepted. The investors, you would expect to be watching closely, and could potentially view this as a buying opportunity considering the state of the projects."

Gilbert added that Reefton believed there was be no chance the licences would not be renewed and ruled out any connection between today's announcement and the resignation of managing director Nikolaenko.

Last month the stock jumped 81% to around 12c before hitting a 52-week high of 18c (March 22) on the back of back of a new focus on uranium.