FMG to use RIO's Rail line - NEXT STOP RHODES RIDGE
Wayne Swan's decision demonstrates Australian governments support FMG
WARDENS COURT HEARING 4-5 DECEMBER
The Rhodes Ridge project will increase FMG's inventory by a massive amount with grades that will enable them to weather any falls in the IO price.
Winning this case should see FMG and CAZ SP return to their former levels IMO.
For those that came in late:
From http://www.news.com.au/perthnow/story/0,21598,23884246-948,00.html
June 18, 2008 02:49pm CAZALY Resources and fellow iron ore company Fortescue Metals Group are ready for a long legal battle to gain control of Rio Tinto's Rhodes Ridge project.
The junior explorer announced today it had teamed up with FMG to potentially explore development of the Rhodes Ridge iron ore tenements in Western Australia's Pilbara region.
The land is estimated to contain at least two billion tonnes of high grade hematite - one of the largest undeveloped iron ore resources in WA.
Cazaly shares soared, almost doubling to a high of 70 cents before settling back to 58.5 cents, up 26 cents or 80 per cent at 1403 AEST.
Cazaly lost a three year battle with Rio Tinto over the ownership of the Shovelanna iron ore deposit, also in the Pilbara, in April.
Cazaly and FMG believe Rio Tinto and its Rhodes Ridge joint venture partners Hancock Prospecting Pty Ltd and Wright Prospecting Pty Ltd have effectively ``warehoused'' the land without doing any meaningful work on it for the past 35 years.
This is virtually the same argument put forward by Cazaly during the Shovelanna dispute
Cazaly said development and mining should have commenced by about 1982 at the latest under the joint venture's agreement with the state government.
Cazaly has lodged tenement applications for the Rhodes Ridge project and seeks to prove that the joint venture's rights of occupancy is invalid.
The issue will be debated at a forthcoming hearing with the Department of Industry and Resources' (DoIR) Mining Warden.
``No date has been set for the hearing,'' a DoIR spokeswoman told AAP.
``The warden is now waiting for further submissions from the parties involved before setting a date.''
The joint venture objects to the Cazaly's lodgement of tenement applications and maintains it holds rights of occupancy.
Cazaly claims the rights to occupy the tenements has not been validly renewed by Rio Tinto and its partners and that there are ``numerous'' defects in the renewal process.
``I can't go into the details (of the renewal documents) because it is a legal matter but suffice to say it was initially a five-year state agreement with various obligations on the previous holders that we believe haven't been met,'' Cazaly co-managing director Nathan McMahon told AAP.
``There is no right to occupancy.
``These resources aren't there for one particular company - they are there for the benefit for the state.
``We believe the state agreement is an empty shell and along with FMG, we want to go and develop the thing.''
Mr McMahon said a long legal stoush was ``possible, but we look forward to having FMG in our corner and doing what is right, honest and fair''.
``It's good to get partners involved who have shown themselves to be dynamic.
``There is no doubt that FMG have been great for WA at all levels, not only the state royalties generated by them but also putting in their own infrastructure and getting stuck into their (Pilbara) project, which was previously undeveloped.
``They've been great for the WA economy and the mining industry.''
Under an agreement between Cazaly and FMG, Cazaly will independently battle to gain the rights to the project.
If successful, the tenements will be transferred to Fortescue, which will fund, develop and operate mining operations, paying royalties to Cazaly.
Analysts agreed Rio Tinto would fiercely fight to retain control of the project, as it had successfully done during the Shovelanna dispute.
Wright Prospecting declined to comment, and Rio Tinto and Hancock Prospecting did not immediately respond to AAP's queries.
Shares in Fortescue were up 50 cents, or 4.78 per cent, to $10.95 at 1403 AEST.
FMG Price at posting:
$2.85 Sentiment: LT Buy Disclosure: Not Held
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