My goodness ...... I hope he has a portfolio of millions ...
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http://www.smh.com.au/news/business/down-there-cazaly--hit-by-mine-loss/2006/04/24/1145861284904.html
Down there Cazaly - hit by mine loss
By Jamie Freed
April 25, 2006
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CAZALY Resources shares tumbled as much as 80 per cent yesterday as investors around the nation expressed outrage over the West Australian Government's decision to hand back the Shovelanna iron ore deposit to Rio Tinto.
By far the biggest complaint was that the WA Resources Minister, John Bowler, has refused to explain why it was in the "public interest" for Rio to regain control of Shovelanna.
Rio accidentally let the lease on the tenement lapse last year due to a late courier delivery and it was swiftly picked up by Cazaly.
Cazaly lined up funding from Investec and an offtake agreement from BHP Billiton and planned to develop Shovelanna within three years, giving the state government $17 million a year in royalties. Its shares had rocketed from 29c to $2.12 since September.
Rio had not drilled a hole on the deposit in 20 years and is unlikely to mine it for at least another 10 because it lies 100 kilometres from the company's nearest infrastructure.
But, after Cazaly pegged the deposit, Rio filed a rare protest to the WA Government arguing it was in the public interest for it to keep the deposit.
The David versus Goliath story had captivated the mining industry and investors from around the country.
Several callers to Liam Bartlett's radio show on Perth's 6PR defended Cazaly yesterday and implied the minister's decision harkened back to the days of the WA Inc scandal. None defended Rio Tinto.
"The law is the law, and this smells strongly of people with money being able to override the rights of the individual," said a caller named Chris.
In February WA premier Alan Carpenter said he had discussed the issue with Rio chief executive Leigh Clifford during a "courtesy call" to the miner's London office in December.
In contrast, Cazaly joint managing director Clive Jones said his company never had any face-to-face meetings with Mr Carpenter or Mr Bowler.
"We basically made our submissions as requested," he said. "What Rio said behind closed doors, we'll never find out about. But I'm sure it was all above board."
Mining heirs Gina Rinehart and Michael Wright each owned part of the Shovelanna deposit in a joint venture with Rio but let the big miner take the lead in pursuing the "public interest".
Mr Wright was understandably pleased by Mr Bowler's decision.
"It was the right decision," he said. "Rio put a hell of a lot into it."
But Jason Marocchi, a spokesman for WA Liberals leader Paul Omedei, called on Mr Bowler to explain his decision.
"He's been hiding," Mr Marocchi said. "He put out a statement late Friday and we haven't heard from him since. We weren't privy to what the arguments were on both sides but we certainly think the Government has an obligation to investors in Cazaly and to the market as to why the decision was made."
For shareholders who took a punt on Cazaly, there may be little recourse unless the decision is successfully appealed. A WA Supreme Court challenge is planned.
Investor Jim Nastovski said he lost $200,000 when the share price plummeted yesterday. "I had faith in the legal system and that after all the corruption scandals happening, I thought this time the Government would have had no choice but to go strictly by the letter of the law," he said.
Cazaly shares closed down $1.455 at 65.5c after hitting 41c yesterday. Shares in Echelon, which had 14 per cent of Shovelanna, fell 51c to 44c.
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