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Liberia confusion hits minerals firm

Commonwealth Gold, a minerals company capitalised at pounds 30m whose shares trade over the counter on the volatile Ofex exchange, may have to cut earnings projections as a result of deep confusion over its interests in war-torn Liberia.

In April, when it was floated in Britain as the operating arm of Johannesburg- based Amalia Gold, Comgold's prospectus stated that an "agreement of understanding" had been "reached and a mandate signed by the Chairman of the Council of Ministers for Liberia for the [Amalia] Group to manage and develop the mineral resources of the entire country".

The agreement mentioned a new joint venture, the Liberian Resources Corporation (Liberes- co), to be held 60 per cent by the state and 40 per cent by a Liberian company controlled by Comgold's parent, which would net it 25 per cent of the sales of Liberia's minerals.

In September, at a company presentation in London attended by the Liberian mines minister, Jenkins Dunbar, Comgold forecast that its annual income from Liberia's diamonds would reach $100m (pounds 63m) by 2002, and said it would derive additional revenues from the sale of Liberian gold and iron ore.

During the last week of September, Liberian president Charles Taylor discussed the deal with Amalia during a visit to South Africa. But Mr Dunbar told Reuters last month that "Amalia has no contract to exploit iron ore or to exploit any natural or mineral resources from Liberia".

Peter Trickey, Comgold and Amalia finance director, denied the company's prospects in Liberia have deteriorated. In an interview, he noted that the company's agreement was ratified by the Liberian parliament in June and said: "We're very satisfied that our agreement with the Liberian government is as watertight as we can get it."

But the granting of Liberia's oil exploration rights to Birmingham-based Broadway Hydrocarbons Liberia in April 1996 - 10 months before Comgold's deal - raises further doubts about the ability to follow through on agreements made there.