Premier passes buck in Shovelanna row JOHN PHACEAS New Premier...

Premier passes buck in Shovelanna row

JOHN PHACEAS

New Premier Alan Carpenter has sidestepped what is looming as one of the State Government’s most controversial rulings, handing responsibility for the contest over the rich Shovelanna iron ore project in the Pilbara to Kalgoorlie-based Resources Minister John Bowler.

Mr Carpenter, who remains Minister for State Development, yesterday said Mr Bowler would decide on competing claims to the big deposit by exploration minnow Cazaly Resources and Rio Tinto.

Mr Bowler is also Minister Assisting the Minister for State Development, who legally has jurisdiction over the matter.

Rio has been lobbying the Government hard for the return of the Shovelanna lease after failing to renew its tenements in August, when Cazaly swooped to peg the ground.

Though Rio claims granting the ground to Cazaly is not in the State’s interest, the junior has already struck a deal to sell ore from the deposit to BHP Billiton, which is mining an adjoining deposit, Orebody 18.

In its defence, Cazaly argues Rio has not drilled a single hole at the project for 16 years and that the mining giant has no plans to bring it into production in the foreseeable future.

Mr Carpenter’s decision to hand responsibility to Mr Bowler dashes any likelihood of an imminent decision, with the Murchison-Eyre MLA yet to receive legal advice from the State Solicitor’s Office.

A spokesman for Mr Bowler said the Minister was being briefed on the matter but that it was too early to predict when a decision would be possible.

“It’s still going through the submission process — John has received a briefing on the broad procedural aspects and the process is ongoing,” he said. “So he’s had a briefing on the procedure it will go through but not on the actual project.”

The outcome of the matter is likely to have widespread implications for the industry in WA as a test of the “use it or lose it” principle underpinning the State’s mining title laws.

It also has massive implications for the thousands of investors who have bought Cazaly shares on its prospects of securing legal title to the project.

After pegging the ground, Cazaly shares jumped from 30¢ to as high as $2.40 and yesterday closed steady at $1.50.

Cazaly’s founders yesterday topped up their own holdings by converting options with a strike price of just 15.02¢.

Chairman Clive Jones paid $7510 to convert 50,000 options into shares now worth $75,000, managing director Nathan McMahon’s Kingsreef Pty Ltd paid $20,490 to convert 136,440 options into shares worth almost $205,000, and non-executive director Kent Hunter paid $26,400 to convert 175,766 options into shares worth more than $263,000.

The trio now own shares worth $6 million, $7 million and $1.5 million respectively, plus options exercisable at 35¢ and 50¢ by 2008