minesite article: telling it how it is

in case this hasn't already been posted...unlikely given the 100s (thousands?) of posts since Friday but just in case...


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As Anticipated By Minesite, Cazaly’s Pretensions To the Shovelanna Iron Ore Tenement Are Dead And Buried.

By Our Man In Oz

Even in London, 20,000km from the epicentre, expect to hear yowls of pain over the weekend from the silly sausages who disregarded Minesite’s advice and played the Cazaly Resources iron ore tenement pegging game in Australia. In two simple words: “they lost”. News of the loss came out after the ASX closed today, but not before speculators with nothing to do before the weekend bid the stock up an extra A5 cents to A$2.12, a price which capitalises a company with nothing to tell but a terrific story at a very stretched A$108 million. On Monday, when the Oz market re-opens it’s London to a brick that Cazaly will do what its namesake Aussie Rules footballer did every time he flew for a high mark – crash back to ground level.

For non-followers of the great Cazaly caper here’s a potted explanation. Last September this small explorer named after a pre-war football great, Roy Cazaly, stunned the market by announcing that it had pegged the rich Shovelanna iron ore tenement in Western Australia’s Pilbara region. For the previous 30 years, Shovelanna had been controlled by Rio Tinto. Cazaly’s pegging was a result of Rio Tinto lodging its renewal paperwork late, largely because a courier left it in his van on the way to the mining warden in Marble Bar. Within days, Cazaly soared from A20 cents to A$2.40 – with a cheer squad hailing the little Aussie battler’s big win over the multinational.

Not cheering was Minesite, as readers will have noted in a report posted on November 25. Take care was the message then – and follow the cash. What more excitable punters failed to do was cross-check Cazaly’s version of events with those from Rio Tinto, which is something the WA Mines Minister was always going to do before he handed control of a tenement from one company to another. And, despite what the cheer squad said, Rio Tinto had a case; it had paid for the renewal of Shovelanna, even if the paperwork was in a truck somewhere up the Great Northern Highway. Not only did Rio Tinto pay via a cheque lodged with the WA Mines Department office in Perth, but the Department’s web site even acknowledged that the payment was specifically for Shovelanna. Even the most simple minded speculator should have been able to work out that an exchange of money is a pretty definite expression of intent, even if the d___og ate the paperwork, or someone left it in a van.

That, as events have turned out, is exactly how WA’s Mines Minister, John Bowler, has seen the case; not that he uses such colourful words. In true civil-service speak, Bowler simply says has had “determined that in the public interest the application by Cazaly Resources for an exploration licence over the ground formerly held by Rio (what, no Tinto, Minister?) should be terminated. Bowler’s statement goes on: “I have carefully examined and considered the very substantial submissions presented by both parties and I am satisfied that the public interest is best served by terminating Cazaly’s application to explore the Shovelanna prospect.”

Cazaly’s cheer squad is crying foul. Chief executive, Nathan McMahon, said he is “extremely disappointed” with the decision, questioning whether it is in the best interests of the State. In fact, he goes as far as to say: “The Mining Act as we know may have been struck a fatal blow” .. and assorted other end-of-the-world-type statements. But, under WA Mining Law Cazaly does not really have a leg to stand on. In cases like this the Minister’s decision is final. Naturally, that may not stop an appeal, but it’s fairly certain that Bowler will have carefully wrapped his decision in layers of red-tape and Queen’s Counsel opinion. If Cazaly wants to challenge in the courts it will be a case of Minnow v Queen – which always makes for legal fun, but rarely results in a win for the Minnow. McMahon makes a muted reference to future action: “the company will be reviewing the Ministerial advice in detail before deciding on the next, if any, course of action”, but that sounds more like bravado than conviction.

Other side players in the Cazaly game will also be licking their wounds over the weekend, including BHP Billiton which cheekily offered Cazaly a deal to buy the ore at Shovelanna when it went into production, and Andrew Forrest from Fortescue Metals, who said he had a deal to buy Shovelanna.

As Minesite said on November 25 there was every indication coming from Rio Tinto that it had done all in its powers to comply with WA Mining Laws. Unfortunately, things sometimes happen in the outback and, apart from that, which id___iot dreamed up a system whereby the money goes to an office in Perth, and the paperwork goes by truck to an office in a fly-blown, failed goldmining town, 1,500km to the north.

Please forgive us just a small “we told you so”.


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