Court ruling costs Newcrest a golden opportunity
A court has quashed an exploration licence on the border of Newcrest's giant Cadia Valley goldmine in central NSW.
The licence application was made during the stewardship of disgraced former mining minister Ian Macdonald in 2008 and the renewal was granted in 2011.
Amid the Independent Commission Against Corruption's revelations of mates' deals, the judgment by Justice Nicola Pain in the NSW Land and Environment Court sends a message that the judiciary is prepared to go one step further than the ICAC, and the government, in determining who should hold mining and exploration leases.
The decision represents a blow for Newcrest, Australia's biggest goldminer. Justice Pain found in favour of Gold and Copper Resources, a small exploration company run by Brian Locke, and quashed the government's decision to renew Newcrest's exploration licence. The licence, EL3856, covers about 70 per cent of Newcrest's exploration area in NSW and it surrounds its Cadia Valley mining leases. Cadia is the biggest underground mine in Australia. It contains about $200 billion in gold. Newcrest has spent $2 billion on its development.
A spokeswoman for Newcrest said only one of Gold and Copper's four claims was established in the judgment. "Overall, the ruling was positive for Newcrest," she said. "GCR was not able to establish its claim of false and misleading conduct in the renewal."
Analysts saw the judgment as posing little risk to Newcrest's other licences around the Cadia project and said there would be no impact on the group's earnings.
Gold and Copper has five legal actions in train. The next two concern the Cadia orebody. One alleges that Newcrest continued to mine without a proper licence.
Newcrest told the ASX in October "none of the claims has merit".