Kiss of life for Ngamiland zinc, silver project
Mbongeni Mguni | Friday January 29, 2016 15:52
The Ministry of Minerals, Energy and Water Resources yesterday ended an acrimonious three-year legal battle over mining rights that had at one point dragged in the Office of the President.The ministry re-awarded Mount Burgess, an Australian junior miner, rights to a small patch of ground in Ngamiland beneath which potentially lies 33 million tonnes of zinc, lead and silver.
Mount Burgess, led by battle-hardened mining veteran, Nigel Forrester, took up arms after a May 13, 2013 decision by Minerals minister, Kitso Mokaila to reject the company’s application for an extension of the prospecting licence.
The prospecting licence in question, PL69/2003, had been the subject of 10 years of strenuous exploration during which the Australian junior miner spent a total of $15.7 million (P132.5 million) on various studies eventually estimating that at least 33 million tonnes of mineralisation existed beyond the Ngamiland sands.
Mokaila, using his statutorily granted discretion, declined to Mount Burgess a further renewal of the licence, citing the non-completion of a feasibility study, which had been part of an agreed prospecting programme.
Forrester countered that Mount Burgess could not produce the feasibility study as no power was available at its sites. Under an Australian Securities Exchange mandatory mineral development code, a feasibility study cannot be said to have been conducted if the availability of electricity cannot be demonstrated.
Mokaila was unmoved and the battle began, with Mount Burgess first appealing to the then Vice President, Ponatshego Kedikilwe, before proceeding to the High Court and the Court of Appeal, which dismissed the Australian company’s challenge last July.
At one point or another in its three-decade history, the Australian company had projects in Australia and Namibia, but by 2015, the zinc and silver below the Ngamiland sands was its only asset.
Judge President Ian Kirby’s decision appeared to be the final nail in the coffin for shareholders who had weathered zero returns, retrenchments and other desperate measures during the battle with government.
Kirby however, left the door ajar for Mount Burgess, with a sliver of hope shining through.
“It remains open to the appellant, should it be so advised, to start afresh by seeking leave to bring late review proceedings and if successful, to launch its review afresh complying with all the requirements of the rules,” he ruled in July. In November, the ministry advised Mount Burgess that it was “at liberty to submit a new application” for the area. Forrester jumped at the chance and on December 7 lodged an application for a new prospecting licence over the same ground.
This week, the company announced a trading halt on the Australian Securities Exchange, with most investors bracing for an announcement on the application.
Yesterday, the company proudly announced that it had re-secured the area. “The Ministry for Minerals Energy and Water Resources advised the company’s representative in Botswana that it had granted Mount Burgess a new Prospecting Licence, PL 043/2016 over the project in Western Ngamiland,” the company stated.
By law, the prospecting licence potentially gives Mount Burgess seven more years, which include two renewals, within which to bring the zinc, lead and silver project to commercial production.
And Forrester, who carried Mount Burgess with loans from his own pocket during its battles with government, is eager to get on with advancing the project.
Already, arrangements are being made to finalise a power solution for the area, while preliminary costs of the various activities need to take the project to a Bankable Feasibility Study (BFS), have also been done.
Forrester will have to secure a further AUS$6 million (P57 million) to move the project to the BFS, but given his tenacity in the past three years, shareholders will be backing him up.
Through despair to victory
13 May 2013: MMEWR Minister Kitso Mokaila rejects Mount Burgess Botswana (MBB)’s application for extension of PL69/2003, submitted 14 months earlier on 29 March 2012. PL69/2003 contains resources developed by the company and its wholly owned subsidiary MBB, at a cost of $14.5 million
6 June 2013: MBB appeals to the Vice President of Botswana, Ponatshego Kedikilwe, seeking a reversal of the decision not to extend PL69/2003.
11 July 2013: Mokaila rejects MBB’s appeal to the Vice President saying MBB should have obtained the Minister’s approval to amend the prospecting programme as a result of the lack of power. He adds that irrespective of its requirement to comply with Australian Securities Exchange (ASX) mandatory code, MBB should have complied with the Mines and Minerals Act
8 October 2013: MBB’s Notice of Motion and Founding Affidavit to set aside Minister Mokaila’s decision, is registered in the High Court of Botswana. Copies are served on the Minister and on the Attorney General as respondent.
21 October 2013: The Attorney General as Respondent serves on MBB a Notice of Intention to Oppose MBB’s Notice of Motion and Founding Affidavit. She raises points of law in limine.
28 April 2014: The High Court rules that MBB’s Application for Renewal of PL69/2003 be struck out with costs, as the Minister was not joined in the proceedings, only the Attorney General was cited as the respondent.
26 May 2014: MBB lodges a Notice of Appeal in the Appeal Court of Botswana, seeking a reversal of the ruling handed down by the High Court.
30 July 2015: Judge President of the Court of Appeal, Ian Kirby rules against MBB, dismissing all four grounds of appeal in a 26-page judgement
10 November 2015: MBB announces that MEWR has indicated that it is ready to engage should a fresh application be made for a prospecting licence
7 December 2015: MBB submits the new application for a prospecting licence over its former ground in Western Ngamiland
25 January 2016: On a Monday evening, MEWR advises MBB that it has been granted a new prospecting licence over the Ngamiland project