Ernst Henry Story - A Comedy Of Errors

The Age

Tuesday August 31, 1993

KATE LENTHALL

1974: Savage Exploration pegs mining leases near Cloncurry. The Savage agent who pegs the leases makes errors in the description of one of them, ML2671.

1989: WMC decides to explore the area and a year later enters a joint venture with Hunter Resources, which had acquired prior exploration tenements.

WMC plans further exploration. Confusion over the pegging of ML2671 arises.

August 1990: Anomalies recognised through electromagnetic surveys, adjacent to the boundary of the lease.

May 1991: Further exploration carried out on the bulk of ML2671 based on an in-principal agreement that Savage would sell a number of its tenements to WMC _ including ML2671.

October 1991: a formal option agreement signed.

Late October 1991: drilling commenced on ML2671 and strong mineralisation was intersected on the first hole. Three more holes were drilled and the discovery was announced in December 1991.

June 1991: WMC/Hunter gave notice of exercise of the option.

October 1992: Savage starts legal action against WMC and Hunter seeking a recision of the option on the grounds of misrepresentation and trespass as well as an allegation of fraud.

5 July 1993: Trial commences and later settled after evidence from one of WMC's employees leads it to conclude that Savage was likely to win the case.

26 July: The option is rescinded and WMC relinquishes all claims to ML2671, pays $17.5 million to Hunter and legal costs.

Late July 1993: A board inquiry into the matter is launched.

© 1993 The Age

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