Shovelanna Legal Action continues.

On the 28th of August 2007 the Western Australian Court of Appeal delivered its judgment in relation to Cazaly Iron Pty Ltd’s application to quash the decision of the former Minister for Resources to terminate Cazaly’s application. The Court of Appeal has refused Cazaly’s application to quash the decision.

Cazaly believes this judgment has jeopardised the future development of the Western Australian resources industry and in particular the iron ore industry. It is clear from this judgment that iron ore had, and is, being treated differently to any other commodity under the WA Mining Act -it had its own set of rules. It had been extremely difficult to reconcile this decision with what was in the best interests of the State and appears as an impediment to anybody wanting to get on with the business of finding and developing the State’s resources.

West Kalgoorlie Gold Project 

Cazaly reached an Agreement with Carbine Resources Ltd whereby Carbine would earn a 50 percent stake, with an option to increase to 70 percent, in Cazaly’s entire gold exploration and development portfolio in the Kunanalling, Ora Banda, Grants Patch, Carbine and Split Rocks regions. These tenements covered approximately 533 square kilometres and contained mineral resources of 612,400 ounces of gold.

The joint venture intended to commence exploration drilling in June 2007 and had secured drilling equipment for this programme. Drilling would focus on prospects along the Kunanalling shear, principally the Mick Adam,Wadi, Burgundy and Picante deposits. Additionally, mine development options would be re-assessed as a priority.

The joint venture allowed Cazaly to focus on its iron ore strategy whilst maintaining exposure to a strategic package of tenements that it had spent a considerable amount of time and effort assembling. The Agreement was consistent with the Company’s focus on the iron ore sector whilst retaining exposure to the quality gold assets. Drilling at the Backflip prospect had been highly encouraging with the best results being 9 metres @ 16g/t Au. 

Parker Range Joint Venture (Iron Ore)

Cazaly Resources Ltd (ASX: CAZ) entered into an iron ore farm-in agreement with Gondwana Resources Ltd (ASX: GDA), covering the Parker Range Project. Details of the farm-in agreement were announced by GDA 3rd July 2007.

The Parker Range Project lay approximately 15 kilometres south-east of the Marvel Loch town site and approximately 50 kilometres by road south of the Perth–Kalgoorlie rail. Potential existed for the delineation of an iron mineral resource.

The Yilgarn Iron Province had a history of large-scale iron production, with the first iron ore exported from Western Australia coming from the Koolanooka deposit in the Yilgarn during the mid-1960s. Iron ore mining in the Yilgarn had been characterised by modest production from several small and dispersed hematite deposits, such as Koolyanobbing. The Parker Range Project was subject to iron ore exploration during the 1960s and reconnaissance exploration identified goethite, hematite and magnetite mineralisation.

Other Projects 

The Company retained significant free-carried interests in other exploration projects including Mt. Clifford, Goongarrie, Bardoc and Jutson Rocks, among others. The Company had several active exploration projects including additional Pilbara Iron ore tenements and the Jillewarra base metals project.