Shares digital

Natural resources group Carnegie Minerals (CME:AIM) has fiercely denied allegations it has been illegally mining uranium in Gambia. The company’s mineral sands operations have been shut down after the government ordered an investigation of its activities, resulting in its mining licence being withdrawn.

It has also been accused of illegally mining titanium and iron oxide. The junior resources group said these commodities were natural components of ilmenite, for which it had a licence to mine.

The company said traces of uranium were commonly found when mining ilmenite. Carnegie said it had already informed the Gambian government of the metal’s presence, saying it was worthless as the uranium could not be economically extracted.

President Yahya Jammeh claimed last month Gambia had made its first uranium discovery. The country’s economy has historically been driven by tourism but there are hopes mining will become as important.

Carnegie, which started production eight months ago in Gambia, has been forced to leave behind a large stockpile of heavy mineral concentrate, worth around £750,000, which it may not be able to retrieve. At the end of December it had 32,000 tonnes of stock on site, equal to around 13% of production for the last three months of 2007.

Charlie Northfield, a Carnegie engineer, was arrested last week upon entering Gambia in connection to the illegal mining claims. As Shares went to press, Carnegie was working with the UK Foreign & Commonwealth Office to get Northfield released from jail.

The company has written off the value of its Gambian assets on its balance sheet, estimated to be around £1 million. The attributable figure to Carnegie is relatively low as the project was funded by Astron, a chemicals producer.

Shares says: The share price has halved but Carnegie still has opportunities in Senegal, where exploration has discovered higher grades than Gambia.

by: Dan Coatsworth