Mining ban led to withdrawal, court told


An Australian gold mining company pulled out of a joint gold prospecting venture with an Irish company when it learned of a ban on mining in parts of Co Mayo, the High Court in Dublin was told yesterday.

Mr David Jones, general manager of Newcrest gold exploration company, said his company was shattered on hearing of Mayo County Council's decision in 1991 to impose a ban on mining a prospect in Cregganbawn area, near the town of Louisburgh.

He said his company was hoping to develop the prospect with the Irish publicly quoted company, Glencar Exploration.

Early results from Glencar's prospecting in the area were extremely encouraging, Mr Jones said. The potential size of the find was startling. Gold was even visible on the rock above ground, which was extremely unusual.

The Cregganbawn prospect had a possibility of producing 250,000 ounces of gold at $500 an ounce, giving a potential value of $125 million, he said. About one third of this sum would represent profits to shareholders or re-investment.

Mr Jones said Newcrest was prepared to pay £1.6 million for a 51 per cent stake in a joint venture with Glencar to conduct a further appraisal of the prospect.

But, in November 1991, his company received a fax from its potential Irish partner advising that Mayo County Council had introduced a ban on mining in its development plan for the county.

The ban shattered his company's confidence about developing the Creggenbawn project.

Mr Jones said he first became aware of opposition to mining in Mayo in September 1991 when he was told of a group of mainly urban based anti-mining activities in the county.

His company was about to sign the joint venture contract when it learned of the mining ban.

Mr Jones was giving evidence in an action for damages taken by Glencar against Mayo County Council. The company is seeking more than £2 million in damages over the mining ban contained in the Mayo County Development Plan. The ban was introduced in 1991 and was overturned by the High Court a year later.

The case, before Mr Justice Kelly, continues today.