News has just come to hand that Arkaroola wilderness sanctuary despoiler Marathon Resources has been granted approval by the state government to proceed with its rectification plan.
This refers to its obligation to return to its original condition the area in which it had unlawfully buried drill cuttings and domestic waste at Mt Gee and other sites within the sanctuary.
The approval is conditional on a number of specific conditions that the government is expected to spell out to the company in meetings to be held “as soon as possible.”
There are a number of questions that immediately arise.
What are the details of the clean-up? What is being reburied and how? What waste is being removed, and where to? What is the timeline?
More importantly, why is there talk from Marathon about a recommencement of its drilling program? Just hours before its licence suspension was announced back in February, Marathon said it had "completed sufficient drilling to enable us to conduct the next exploration phase, including environmental and others studies..."
We questioned at the time for whom was the drilling suspension a victory, and suggested that Marathon was obviously playing games and laughing at having either outwitted the government, or having friends on the inside of government.
South Australian Greens MP Mark Parnell – whose bill to ban all exploration and mining activity in the state’s nature sanctuaries was defeated earlier this year – has described the explorer’s actions as “systematic and sustained disregard by Marathon of their surroundings”.
With Marathon trading at a yearly low of 0.765 cents, we can expect to see some massive share purchases as the parasite class buys in on the good news of the clean-up approval.
Interestingly, HSBS Custody Nominees (Australia) Ltd has raised its stake to nearly 8 million shares, or 13.1% of issued capital, putting it in front of the Chinese (CITIC) and Queenslanders (Talbot Group Holdings Pty Ltd), both of whom have 10.45% of the total.
Also of interest is the increasing censorship of comments about Marathon on the Hot Copper online stock market forum for alleged downward ramping of the company. This one’s still up there though (and it’s not from me!), but it makes some interesting and prescient points, particularly about the timing of the cleanup….prescient, because it was written a few days ago, just before today’s news:
In the current financial climate investors appetite for speculative stocks is diminishing.
All uranium stocks have also fallen considerably.
Stocks that do not have a clearly defined resource, have been dumped even more. So PDN and ERA have held up better than say MTN.
Prices of Uranium has fallen.
This has affected the viability of many projects.
So forgetting the environmental issues.
Mt Gee at current uranium prices if open cut, would probably be a reasonably profitable project.
Probably still worth doing, but not a huge money spinner.
But at current uranium prices, needing to go underground to avoid environmental issues, the project is far less attractive and would probably find it difficult to attract investors, as there are better projects out there.
So the project could be dead just based on economics, and the huge impost of needing to go underground.
The $500M touted around by Stuart Hall alerted many to the large cost of this project.
Uranium grade is low, Oil prices high, mining must be underground, so the cost of mining is higher than other projects.
Then add the huge question mark of whether they will ever be allowed to mine there, and if they do, how many years will it take and how many court battles and protests.
For many investors its all just too difficult.Here we are into August and the clean up plans are still not approved.
MTN really can't schedule drill rigs if the cleanup plan has not been approved.
MTN has a drilling window of October - April.
Unless they get cracking they will not get drill rigs on site this drilling season.
Then next year MTN need to renew the lease.
There is additional risk that the South Australian Government will not renew the lease.
If the SA Government cancelled the lease they would have had to pay Marathon huge compensation.
If the lease is not renewed, it costs the government nothing.
There is no news that is driving the share price.
Two of the most experienced directors are gone, the original geologist is gone.
Until something positive happens, where can this go?