Thursday, June 23, 2005 - Web posted at 8:01:27 GMTReefton...

Thursday, June 23, 2005 - Web posted at 8:01:27 GMT

Reefton radiates on 'glowing' results

*JOHN GROBLER
REEFTON MINING NL, the Australian-listed exploration company that claims to have found a significant uranium strike south of Usakos, has reported a radioactive count 10 times higher than reported by a previous and much more extensive exploration for the same area.




The so-called "mining junior" says it has found a radioactive anomaly of 94 320 counts per minute (or 1 572 counts per second) in a limited sample - without differentiating whether it is thorium, potassium or uranium that is giving off the radioactive signal.

But the claim has raised eyebrows in local geological circles and concern has been expressed over the validity of the claim.

Previous results from extensive drilling and testing programmes in the same area showed an average count of 90 to 150 counts per second only, according to reports filed in the early 1980s with the Ministry of Mines and Energy's Geological Survey.

Nonetheless, the news of the radioactive discovery - titled 'New Uranium Find' in a press release on March 18 - was enough to send Reefton's share price soaring.

Investors in the Australian and London Stock Exchanges poured more than N$14 million into their shares.

The Mining Commissioner, Erastus Shivolo, this week declined to confirm or deny that a team of geologists from Geological Survey sampled some of the same material Reefton claimed to have used, but found so little uranium as to be insignificant.

"I have not been mandated by my Minister [Errki Nghimtina] to discuss this issue with the press," Shivolo said yesterday.

One technical expert in instrument calibration pointed out that counts per second were not a reliable indication of the actual grade of uranium ore.

"The only reliable figure is parts per million (ppm) … counts per second are meaningless," he cautioned.

The Namibian has reliably established that the Ministry's own geologists have been extremely sceptical about Reefton's claims, given that the area is famous for emitting a false radioactive signal attributable to other radioactive elements such as thorium and potassium.

Reefton's remarkable initial results appear to be largely based on just 12 samples their geologist, Gary Hemming, obtained from their so-called Erongo Pyro-Metallic Project leases on the farms Hakskeen, Hoopverloor, Sukses and Vergenoeg (EPLs 2805-2811).

Reefton's management has made much of the fact that various paleo-channels were "discovered" in the EPLs (Exclusive Prospecting Licences) owned by Reefton via wholly owned Black Range Mining (Pty) Ltd.

The news was greeted by yet another rise in share price, as small investors in especially Australia tried to get on the bandwagon.

Old reports filed on the same Exclusive Prospecting Leases (EPLs) in 1980 and 1982 by the now defunct Omitara Mines Exploration Company and Grosse Klein Spitzkoppe Exploration Company respectively made it clear that Reefton might be doing more mining at the various stock exchanges than on their leases.

According to a report filed by Spitzkoppe Exploration, it drilled 142 holes of an average of 20 metres each in a grid across the most significant of these paleo-channels between 1980 and 1982.

The results were not encouraging: "uranium mineralisation appears to occur with random and irregular frequency in a horizon about two metres below the surface" of between one and two metres thick only, the report said of the Hakskeen prospect.

Background radiation in the surrounding granite rock was in fact higher than that in the paleo-channels (ancient, in-filled valleys), where the uranium was supposed to occur, the report explained.

"No distinct radiometric anomalies were located and the background varies from 90 counts per second to 150 cps over the calcretes and 150 to 200 cps over outcropping granites," the Atomic Energy Board report remarked of its measurement of radioactivity in the area.

Reefton, which also owns two large diamond exploration licences (EPLs) north of Moewe Bay, has so far collected about three million Australian dollars (about N$14 million) for shares sold.

Last week, on the news of its licence being renewed over the diamond and base mineral leases, Reefton issued another 50 million shares and debentures worth another AUD $3 million (about N$12 million).

Hemming, who took exception to an earlier report by The Namibian questioning the validity of the uranium find, at the time insisted that "continuous reporting … was the key to understanding" what Reefton was doing at Hakskeen.

The Australian Stock Exchange, which also appeared doubtful over Reefton's share price volatility, halted trading in their shares after The Namibian first reported on the matter and forced the company to issue more details of its alleged uranium find.

Former CEO Simon D Gilbert blamed the "negative publicity" for "wiping out" 20 per cent of shareholders' value, and falsely claimed that The Namibian was to print a retraction on the original story.

Less than two weeks after their "new uranium discovery", Gilbert resigned and exercised his share options.

Three weeks later, the MD Viktor Nikolaenko also resigned, leaving Chairman Simon Moore in charge.

Uranium, as during the 1970s energy crisis, has come into favour again as the exorbitant price of oil forces countries to look for other sources of energy.

Industry boosters claim as many as 69 new nuclear reactors could be built over the next 15 years in especially the developing world (China, India and Russia) alone.

Reefton's share price, which had been languishing in the single digits, increased sharply after it first announced the 'new uranium find' on March 18 this year.

Since then, the share price has slowly dropped back (see graph), prompting Reefton to request the ASX last month to halt trading in their shares to prevent them losing more value.

So far, Reefton has shown a negative Operating Cash Flow of AUD $1 606 000 (about N$7,7 million), mostly money borrowed from public investors by selling additional shares worth AUD $3 278 000 (about N$15,7 million).

Of the N$7,7 million cash they have spent so far, N$4 million went to exploration and evaluation (AUD $843 000), and some N$3,7 million (AUD $785000) on administration.

Reefton's geologist Hemming, when asked to explain why they would obtain radiometric readings as much as 10 times higher than previous extensive drilling programmes produced, accused this reporter of deliberately and falsely discrediting Reefton.

"For you to report your own in-house feasibility at this early stage of knowledge on the Erongo licences, you will further damage the newspaper's credibility and again will falsely discredit Reefton's exploration in Namibia," Hemming wrote.

Instead, he demanded that he be told where the previous drilling reports cited here have been filed with the Ministry of Mines and Energy.

The relevant department said they have not received any request from Reefton for such reports yet, "…as would have been the case if Reefton had done their desk study," an official said.

* John Grobler is a freelance journalist.

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