OK thats really interesting
@jman0076 that the WMC Diamonds Division Southstar database would have been a huge dataset/database, as this screenshot from the IGO 2005 Annual Report shows:
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So we know that sometime between 1997 and 2005 that WMC "monetized" this old WMC database by selling the data to IGO (and probably a number of other companies at the time). In that screenshot above it also mentions the "residual samples" so it might be that there were a large number of physical samples kept in storage by WMC and they added a 1.5% gross royalty rider, but we don't know if IGO used a residual sample and re-assayed for gold or if they just used an existing assay result for gold in the heavy mineral concentrate that was already in the database. Whatever the case I found that in the IGO 2005 Annual Report that there might have been a sunset clause which would have expired in 2009, but we know the "discovery" of Tropicana is around 2005-ish so that makes things awkward.
The thing I am wondering is that I would think that with the BHP/S32 de-merger process that as BHP kept all the WMC assets (WA Nickel operations and Olympic Dam etc) then surely all the WMC intellectual property (this database being a good example of that) would also have been
retained by BHP and not by owned by S32.
Whomever signed that agreement in 1997 for IGO was crazy, as that WMC database agreement puts an enormous amount of ground in WA potentially as subject to an open-ended 1.5% gross royalty to WMC (and its successors). I notice that a lot of IGO management and board were all ex-WMC guys at the time, and reading that IGO 2005 report there are numerous references to ex-WMC assets purchased to become part of IGO, not unsurprising given the shared ground, exploration history and the career paths of the senior IGO team at the time. It seems that their well-intentioned attempt to give credit to previous WMC exploration might have put themselves on the hook for a legal problem.
The takeaway from this fiasco is never attach royalties to a database because companies come and go and databases migrate/change/get altered as companies pick up ground and drop ground and historical proprietary data might get merged in with other open source (e.g. publicly available government) data and then current exploration data which might then get accessed in datarooms or become part of a future merger or de-merging activity. Royalty agreements should only ever have a defined limit that can be drawn on a map without any arguments and also preferably have a sunset date.
If the legal case happens it will all revolve around whether the WMC data was open file or not (probably not at the time but would eventually become open file data within the WA Dept of Mines databases and reporting system), I expect that as the data was already all digital then it would make sense at the time to use the WMC database, rather than reinventing the wheel and digitizing all the data points and assay data again, and it was probably during queries of the WMC database that some geologist noticed a soil or RAB sample with a bit of gold in it that eventually became a "Target" among probably dozens or hundreds of other targets generated from the WMC database and IGO's own IP, when this becomes a target there may or may not have been other open file data and some IGO work done like mapping/sampling/geophysics to rank the targets before they are tested by drilling. It seems that one of these targets eventually became the Tropicana mine.
This is all going to rely on events and evidence that might be at least 20 years ago and some people may not even be around anymore to give testimony, so this is going to be quite the wild goose chase through incomplete and very historical and possibly non-digital data. It will be quite the spectacle as we could see lawyers arguing about geological exploration techniques and how mineral exploration works in a court room as well as some pretty interesting intellectual property law and contract law.. I think this could open a bigger can of worms for all involved once S32/IGO/BHP/RMS and many others realize the consequences of taking this royalty agreement attached to a database to court
(20min delay)
