THE Ministry of Mines and Energy yesterday confirmed that Australian mining company Reefton Mining NL had essentially lied about its "major new uranium discovery" and had broken the law (Minerals Act of 1992) in prospecting for a mineral that it had no right to look for at the time.
A statement from the Ministry is expected to put a final nail in the coffin of Reefton's uranium-mining ambitions in Namibia. It also faces some serious questions about its diamond mining in the environmentally sensitive Skeleton Coast Park.
Most damning, the ministerial statement made it clear that Reefton's main geologist and director, Gary Hemming, had failed to do a proper desk study - i.e. check on old mining reports for this area - before making his sensationalist claims about a new uranium discovery.
"This 'new discovery' was already discovered in the 1970s and is documented in 'The Mineral Resources of Namibia' (1992), a publication of the Geological survey of Namibia," a press release signed by Mines and Energy Minister Errki Nghimtina stated yesterday.
Reefton's share price took a hammering after it announced that its application for a prospecting licence had been turned down, plummeting to US $0.055.
Reefton is listed on the Australian, Canadian (Toronto) and London alternative investment stock exchanges - the so-called 'Penny Stock Exchanges'.
Nghimtina yesterday confirmed that the mining company, which also owns five diamond Exclusive Prospecting Licences (EPLs) on the Skeleton Coast, had in fact broken the law - and then compounded the mistake by announcing it to the rest of the world.
The Perth-based company had applied for seven EPLS for precious stones, semi-precious stones, industrial minerals and base and rare minerals over land situated southeast of Usakos.
The licences were applied for on behalf of its wholly owned Black Range Mining (Pty) Ltd company.
Uranium was not included in these applications, but Reefton seemingly took advantage of the rising demand for nuclear fuel and rising commodity prices - without amending its licence application in terms of Section 73 of the Act - to announce it had made a "major new uranium find."
"The Ministry had noticed a breach of the Minerals Act, when the Company announced on March 18 2005 that it delineated a new uranium occurrence," the statement said.
On the back of its "major discovery" Reefton's share price shot through the roof, trebling in as many days as investors piled in to capitalise on the price of uranium, which had nearly doubled over the last year in response to oil prices breaching the US $50 per barrel level.
But to add insult to injury, Reefton actually went ahead and started drilling in the area for nuclear fuels without notifying the Mining Commissioner, Erasmus Shivolo, as required by Section 53 of the Minerals Act, the Ministry said.
"The above indicated that the Company violated the Act and therefore, in accordance with Section 69 of the Act, the Minister refused the application for amendment of the licence by Reefton Mining NL," the statement concluded.
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Reefton is now also expected to face an official enquiry by the Australian Stock Exchange about large volumes of shares that were traded immediately before it announced its "major uranium discovery" on March 18.
Reefton CEO Simon D. Gilbert and MD Viktor Nikolaenka both resigned within a month after the "uranium discovery" - but not before exercising their share options.
RTM Price at posting:
0.0¢ Sentiment: Sell Disclosure: Not Held
