Excellent summaries, Confluence, Vaughn & Goalie! Seems to me that everyone involved in the conflict came to the realisation that the only way out of years of legal battles was a negotiated settlement. This way, SUF gets quick cash flow (the whole point of M1) to develop the much larger Klipspringer, they cede some of M1 to DB in the interest of avoiding a costly, drawn out battle, the Minister comes out without having to expropriate (politically very tricky, whichever way you cut it) the heirs go away, presumably having been paid by DB. The larger picture is that SUF's long-term potential with Klipspringer and Camafuca will continue to unfold (as it would in any case have done).
My personal belief about M1 is that, in the long run, SUF could perhaps have won the day in court over M1. SUF discovered the diamonds, and the way in which the rights were registered and ended up in DB's hands was and is highly irregular and questionable. However, to fight that battle in court for years would not have benefitted anyone (except perhaps DB) and therefore would not have been advisable. If DB really thought they owned the mineral rights outright or that they weren't registered by the "heirs" and obtained by DB in a manner that was legally questionable, they wouldn't have made the deal with SUF. That being the case, the 40% will not have been the only thing SUF gained. Remember, the marketing rights were obviously part of the negotiation. Note also Confluence's comments regarding DB having to pay the heirs, possible charges to DB for use of the plant, etc. However that's all small potatoes next to the value of SUF's 100% owned Klipspringer. Like I said, I think Confluence's, Vaughn's and Goalie's summaries are excellent. Read 'em again!
By the way, here's a short article from today's Mail and Guardian:
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De Beers, SouthernEra end Marsfontein dispute
TUESDAY, 11.30AM:
THE dispute between Canadian-listed SouthernEra Mining and De Beers over the ownership of mineral rights on a diamond-rich Northern
Province farm has been resolved. The companies have established a joint venture, with SouthernEra having a 40% share and De Beers managing the project with a 60% share. SouthernEra's existing treatment plant on the nearby Modderfontein farm will be used, while
diamonds from the project, and SouthernEra's nearby
Klipspringer project, will be sold through De Beers.
The agreement follows a somewhat acrimonious tussle
between the two companies. De Beers examined the
Marsfontein field a decade ago, but passed over it.
When SouthernEra began prospecting on Marsfontein, 29
people who claimed to be heirs grouped together and applied
to the Pretoria High Court for an interdict that would stop
Minerals and Energy Minister Penuell Maduna from
converting the Canadian company's prospecting licence into a
mining licence. There was a dispute over the heirs' rights to the land, as their claim was irregularly registered by Maduna's department earlier this year. They should have registered their claim
within two years of the original owners' deaths in the sixties.
Despite a SouthernEra challenge, the heirs struck a secret
deal with De Beers entitling it to mine.
This led SouthernEra to request that Maduna expropriate the
mineral rights, a request that now falls away.
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Nempela |
