Marathon dismissed new CEO Stuart Hall on November 1st 2007. He departed the same day. They put Director Denis Woods in charge of mining Arkaroola Wilderness Sanctuary at the heritage listed Mt Gee site, kept Wieslaw Bogacz on analysis, and re-assigned ex-CEO Santich to a newly created exploration and new project development Division.
Marathon said
The Company also advised that management of the 100% owned[1] Mt Gee Uranium Project, in South Australia’s Northern Flinders Ranges, would be separated from Marathon’s other exploration projects.
Effective immediately, Mr Denis Wood has been appointed Executive Director in charge of the Mt Gee Uranium Project, while Dr John Santich, a founder of the company and former CEO, will manage exploration and new project generation.
Dr Vic Bogacz will provide exploration and mineral system analysis to both new divisions of the Company. (announcement 1 November 2007)
This means Santich was taken off direct management of mining in Arkaroola, and Denis Woods was put there instead.
Woods was first planted on the board when Talbot holdings and CITIC bought in at a cost of $3,575,000 each. Woods was Director - Resource Development of Talbot Group Holdings, so it’s a fair guess he’s Talbot’s nominee. Chen Zeng went on to represent CITIC’s interest.
This statement, attributed to Hall, might help explain his departure:
Marathon chief executive, Stuart Hall, told Minesite on the sidelines of a uranium conference in Western Australia, that the current mine plan was to drive into the Mt Gee orebody from outside Arkaroola, thus avoiding any surface disturbance. The exact direction and angle of the drive, which would run for about two kilometres, is yet to be decided because recent drilling is expanding the resource, and finding rich material at greater depth. “The structure appears to be getting richer at depth, so we need to do more work before finalising mine design,” Hall said. Ongoing drilling and environmental data collection is expected to last the rest of 2007, with 2008 taken up with pre-feasibility studies, leading into a full feasibility study in the first half of 2009, and a possible start on construction later that year.
From http://www.aussiestockforums.com/forums/showthread.php?t=1780&page=54, viewed 31/1/08, 10:19 am.
This was an expensive speculation, personally, and for the portfolio. Basically, they have no idea where to start, surrounded as they by an A class sanctuary with a heritage listed deposit. It would cost a small fortune and take a long time to drive a tunnel that distance and make it big enough to cart out 1,500,000 tonnes of ore a year. Hall’s statement is not entirely unwarranted though because Marathon has at various times sought to mitigate legitimate environmental concerns by referring to underground mining as a way of minimizing disturbance to the sanctuary and the heritage listed Mt Gee.
They will face several major concerns:
- Their track record is abysmal, having obtained an unsavoury public profile when police were called in and photographed taking charge of rubbish, including drill waste, buried in the shallows following exploratory drilling. Who could have tipped them off so soon after Hall’s departure? Surely not the new management. If they can’t manage their rubbish, how can they manage uranium?
- The areas they used to bury the drill tailings, and the area they propose to use for “atmospheric leaching” are subject to severe erosion during downpours. This is an area which has, on average, very low rainfall, so vegetation is scarce. It is also an area which gets the tail end of tropical monsoonal thunderstorms producing spectacular downpours. They arrive in the middle of summer, vegetation is sparse, and the rain is intensive. Over 360mm fell in January 1974, and over 400mm in March 1989. The “conceptual site” to process the ore sits astride two major drylands watercourses. This means that there is a real risk to downstream flora and fauna. Flash floods will not only cut roads, they will carry radioactive ore far and wide. Nothing new in that. That’s how Beverley, out on the flood plain between the ranges and Lake Frome, got the stuff in the first place.
- By contrast, a steady water supply is a problem. The state government has already voiced concern about over use of the artesian basin. Marathon has yet to source the steady supply it needs for processing. Arkaroola itself has a well placed history of concern over scarce water supplies for human consumption.
- The Liberals are planning to introduce legislation to stop mining in the area, partly because water is short.
- ALP policy states:
o (Item) 94. In relation to mining and milling, Labor will:
o prohibit the mining of uranium within national parks under IUCN protected area category 1A, category 1B, and category 2, and listed world heritage areas.
Marathon said
The Company also advised that management of the 100% owned[1] Mt Gee Uranium Project, in South Australia’s Northern Flinders Ranges, would be separated from Marathon’s other exploration projects.
Effective immediately, Mr Denis Wood has been appointed Executive Director in charge of the Mt Gee Uranium Project, while Dr John Santich, a founder of the company and former CEO, will manage exploration and new project generation.
Dr Vic Bogacz will provide exploration and mineral system analysis to both new divisions of the Company. (announcement 1 November 2007)
This means Santich was taken off direct management of mining in Arkaroola, and Denis Woods was put there instead.
Woods was first planted on the board when Talbot holdings and CITIC bought in at a cost of $3,575,000 each. Woods was Director - Resource Development of Talbot Group Holdings, so it’s a fair guess he’s Talbot’s nominee. Chen Zeng went on to represent CITIC’s interest.
This statement, attributed to Hall, might help explain his departure:
Marathon chief executive, Stuart Hall, told Minesite on the sidelines of a uranium conference in Western Australia, that the current mine plan was to drive into the Mt Gee orebody from outside Arkaroola, thus avoiding any surface disturbance. The exact direction and angle of the drive, which would run for about two kilometres, is yet to be decided because recent drilling is expanding the resource, and finding rich material at greater depth. “The structure appears to be getting richer at depth, so we need to do more work before finalising mine design,” Hall said. Ongoing drilling and environmental data collection is expected to last the rest of 2007, with 2008 taken up with pre-feasibility studies, leading into a full feasibility study in the first half of 2009, and a possible start on construction later that year.
From http://www.aussiestockforums.com/forums/showthread.php?t=1780&page=54, viewed 31/1/08, 10:19 am.
This was an expensive speculation, personally, and for the portfolio. Basically, they have no idea where to start, surrounded as they by an A class sanctuary with a heritage listed deposit. It would cost a small fortune and take a long time to drive a tunnel that distance and make it big enough to cart out 1,500,000 tonnes of ore a year. Hall’s statement is not entirely unwarranted though because Marathon has at various times sought to mitigate legitimate environmental concerns by referring to underground mining as a way of minimizing disturbance to the sanctuary and the heritage listed Mt Gee.
They will face several major concerns:
- Their track record is abysmal, having obtained an unsavoury public profile when police were called in and photographed taking charge of rubbish, including drill waste, buried in the shallows following exploratory drilling. Who could have tipped them off so soon after Hall’s departure? Surely not the new management. If they can’t manage their rubbish, how can they manage uranium?
- The areas they used to bury the drill tailings, and the area they propose to use for “atmospheric leaching” are subject to severe erosion during downpours. This is an area which has, on average, very low rainfall, so vegetation is scarce. It is also an area which gets the tail end of tropical monsoonal thunderstorms producing spectacular downpours. They arrive in the middle of summer, vegetation is sparse, and the rain is intensive. Over 360mm fell in January 1974, and over 400mm in March 1989. The “conceptual site” to process the ore sits astride two major drylands watercourses. This means that there is a real risk to downstream flora and fauna. Flash floods will not only cut roads, they will carry radioactive ore far and wide. Nothing new in that. That’s how Beverley, out on the flood plain between the ranges and Lake Frome, got the stuff in the first place.
- By contrast, a steady water supply is a problem. The state government has already voiced concern about over use of the artesian basin. Marathon has yet to source the steady supply it needs for processing. Arkaroola itself has a well placed history of concern over scarce water supplies for human consumption.
- The Liberals are planning to introduce legislation to stop mining in the area, partly because water is short.
- ALP policy states:
o (Item) 94. In relation to mining and milling, Labor will:
o prohibit the mining of uranium within national parks under IUCN protected area category 1A, category 1B, and category 2, and listed world heritage areas.
- Mt Gee and several other sites within Arkaroola Wilderness Sanctuary are listed on the national register.
- 100% owned is misleading. Marathon means its license to explore is owned by them. They only have an exploration lease. They don’t own it. Arkaroola Wilderness Sanctuary owns the pastoral lease over this area, which means, ultimately, that it’s leased from the Crown. It is subject to a Native Title Claim. Traditional owners and custodians have yet to be consulted about all this.
- There are signs the state government is getting tetchy. Resources Minister Paul Holloway is reported a saying, “He (Holloway) said Marathon Resources had been told repeatedly the government would not permit mining in the Mt Gee Region (Arkaroola Wilderness Sanctuary) which caused significant disturbance in the sanctuary.” (Advertiser, 29/1/08, page 11.
Unfortunately, both Holloway and Rann still use weasel words like that to leave the door open for mining the heritage listed area.
Rann’s on record as having said,
“Questioned whether he would rule out mining in the sanctuary he replied, ‘There’s an exploration license going on right now and it’s in an area outside the area that people are talking about in terms of a national park, so the answer is no.’” The Australian 21/1/08, page 2.
Not in a national park, and he is not ruling out mining either which means he is ruling it in. A well briefed, and cunningly irrelevant and distracting distinction because it is a sanctuary established under the National Parks and Wildlife Act and it has the highest environmental classification possible under law – class A.
Three ministers have remained remarkably silent over this issue. Federal Minister Garrett has a role to consider proposals to desecrate Class A environments. What’s his position?
State Minister Lomax-Smith, as Minister for Tourism, recognized Arkaroola Wilderness Sanctuary for the state’s premier tourism award. What is her position?
And, given Marathon’s track record, State Minister Gago as Minister for the Environment would be justified right in signaling her intention to ban mining.
And ban it they should. It is, on the scale of things, an insignificant deposit. Marathon has downgraded its estimates of what might be recovered. New national figures show huge deposits, easier to access, in other locations. The heritage listed Mt Gee contains about 00.37% of Australians indicated and inferred reserves. No point destroying the whole of its heritage to get at it.
Marathon can’t afford it anyway. Marathon is running out of money. Its 2007 Annual Report includes the following note:
“NOTE 25 – Economic dependency
As a junior explorer the Group has only sufficient funds on hand to meet ongoing minimum short term corporate and exploration commitments. As a consequence the Directors are considering the following activities:
- negotiate to farm out the Group’s surplus exploration commitments;
- steps to identify sources of additional capital; and
- reduction in the rate of expenditure.
The Group is economically dependent on the achievement of one or all of the above options.” page 49, Marathon Annual Report 2007
By the time the Director’s take out their fees, Marathon’s in no position to pay for a 2k tunnel. All they will do is put more of who knows whose money after a bad investment in the first place.
Goldstream (2001), CRA (1990 - now Rio Tinto) and Exoil (1970), giants in the industry, let their leases lapse.
So too should Marathon.
[1] This is strictly open to interpretation and in dispute. It is subject to a Native Title Claim, and Arkaroola Wilderness Sanctuary owns the pastoral lease. Marathon has no more than a license to explore.
1 comment:
From Last Qtr Report
"Drilling Program
The $7.2 million, 50-hole drilling program commenced in November 2007 with up to four drill
rigs operating at one time. The results of the program, which aims to increase the confidence of
the existing inferred resource, are not expected until June 2008."
Increase the Confidence or increase the stash of uranium? (Marathon Man Article makes exactly this point -'cheshire cheese')
Only guessing and will get a proper formulae shortly but say: on published amounts , 7 drill holes only...total drill sample drill approx 250m, average eU3O8 .07%, would imagine a metre section of drill material could way 20kg, total sampling say 5000kg, comes out at 3.5kg...of uranium (total drill well in excess 100 holes?)...a question I have put to Nat Heritage....what has Marathon done with the many kilograms of uranium taken from the Mt Gee Area and when is the federal government, SA Govt and police going to step in reclaim it?
Nigel
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