Froneman says Dominion a solid asset as Uranium One continues its slide

22nd February 2008 By: Matthew Hill

While distressed uranium-miner Uranium One's stock continued its downward spiral on Friday, shedding a further 15%, questions had been raised about the legitimacy of its Dominion Reefs Uranium Mine, near Klerksdorp, after 2008 production forecasts were slashed by one-quarter.

However, Neal Froneman, who suddenly stepped down as Uranium One CEO on Thursday, said he continued to believe that the project was solid.

"I am still of the view that Dominion is a solid asset," he told Mining Weekly Online in a telephone interview.

Uranium One was trading 15% down at around R32 a share by 11:00 in Johannesburg, before regaining some ground to close at just more than 10% down for the day.

Consultancy firm SRK Consultants compiled the competent persons report on the project in 2006, and the author who signed it off said that the firm had done it in compliance with international standards.

Partner and corporate consultant Roger Dickson said that SRK had no reason to believe that its report was not 100% accurate.

A media report on Friday said that Anglo American had compiled a report on Dominion ten years earlier, which reported a recovered grade that was less one-half of what SRK cited.

Dickson said that he had not seen such a report, nor was aware of the existence of one.

He said he "found it quite hard to believe" that Anglo American would have spent R20-million on such a report, as the media report suggested.