by Robert J Lee
A West Australian mining company, Kimberley Minerals, was accused of claim-jumping and fraud in the WA Mining Warden’s Court by advertising for development funds for a lease it did not own.
The decision handed down by Warden John O’Sullivan on June 18 has rendered all leases insecure, valueless and wide open to claim jumping according to Spinifex Abrasives Queensland shareholder Mr John Koehler.
The company had spent considerable funds on exploration drilling and attracting investors over a number of years but this fact was disregarded by Warden O’Sullivan.
“Warden O’Sullivan ruled off-lease, related costs such as prospectus developments, engineering, environmental assessments and marketing cannot be allowed as a lawful form of required expenditure which means a lease can be forfeited at the whim of a mining warden without any basis at law,” Mr Koehler said.
“This ruling means that field work would have to be repeated endlessly and needlessly, long after completion of necessary exploration or risk having the tenement forfeited.
“This ruling has grave implications for mining-related Australian Taxation Office claims since 1978.”
Photographic evidence showing Kimberley Minerals staff trespassing on Spinifex Abrasive’s lease to take samples then being falsely represented in a prospectus and advertised on LinkedIn was tabled in the court.
This photographic evidence was not denied by Kimberley Minerals.
Warden O’Sullivan in his judgement ignored this damning evidence which if proven under the 1978 Mining Act prohibits an offender from holding any leases in Western Australia.
Arguing the case was Spinifex Abrasives director and geologist Laurie Molloy who said he was forced to appear in court by Warden O’Sullivan in spite of a medical certificate describing serious injuries he received after a fall.
“The Warden said he would issue a warrant for my arrest if I didn’t show up in court. When I got to court I took off my shirt to show the Warden the physical injuries I had which slowed me down considerably,” Mr Molloy explained.
Kimberley Minerals did not answer a query from Cairnsnews about any relationship between its company directors and Warden O’Sullivan after speculation of widespread corruption in the mining industry following the Warden’s finding.
The company did not reply to a query if it had continued to publicly or otherwise source development funds from investors for the disputed lease since the court hearing in November 2019.
Warden O’Sullivan ordered the lease be forfeited to Kimberley Minerals.