Interesting to note in the announcement that “Argonaut currently...

Interesting to note in the announcement that “Argonaut currently holds 30% and Straits holds 70% of EL 4296”.

Previously ARE had 100% and Straits “had the right to earn a 70% interest in the project, pursuant to the terms of the Joint Venture, by spending $7 million on exploration”.

Straits was only ever able to drill the initial 3 holes before all drilling stopped due to the native title issues. So at a cost of approximately $300k per hole let’s say total drilling costs were $1 million. All up exploration costs may have been $2 million. So I suspect that the remaining $5 was spent on legal fees!

Don’t know how spending $5m in legal fees relates to “spending $7m on exploration”. Pity the terms of the Joint Venture did not dictate that $7m had to be spent on legitimate exploration (surveying, analysis,drilling etc).

Anyway, let’s not forget why ARE "got into bed" with Straits in the first instance some years ago. It was because ARE would not have been able to fund the deep drilling required at Torrens.

The only problem now is that Straits has run out of cash. Straits is currently in survival mode and its share price is now sub 10c. Yet they have managed to grab a 70% stake in Torrens by “drilling 3 holes”.

And now we also have ARE’s Chairman, Pat Elliott saying that “The Torrens Joint Venture will now consider its approach to a retrial in the ERD Court but it will do so with the significant benefit of guidance provided in today’s ruling.”

Great! What with? How much more money are they willing to spend on legal fees? Remember, ARE will be committed to 30% of all legal fees now. And for what? This whole legal and native title process could still take years to resolve. The natives will possibly again appeal in another drawn out process (Why not! The expenses don’t come out of their pockets). And the legal system will again be the ultimate beneficiary.

But this is where it gets real interesting.

Here we have both ARE and Straits, who in all probability would not be able to fund a drilling program at Torrens even if the green light was given today. In fact, I would say that a 3rd joint venture partner would need to get involved … possibly diluting ARE’s interest from 30% to 10%.

This whole Torrens fiasco just does not make any economic sense anymore. They should just auction the rights to anyone silly enough to make a bid for the Torrens permit.

I just think that it is about time that Pat Elliot started talking pragmatic and economic sense, stopped wasting any more ARE funds on the bottomless pit that is Torrens and stop taking ARE shareholders for mugs.

ARE should focus 100% and spend their very last dollar on their “one last roll of the dice” … Lumwana.