Strategic Minerals Corporation NL/Allan Kynuna, Darren Kynuna, John Keyes, Lavin Keyes, Lawrence Keyes, Malcolm Keyes, Helen Smith on behalf of the Woolgar Group/Queensland

[2003] NNTTA 83

NATIONAL NATIVE TITLE TRIBUNAL

Strategic Minerals Corporation NL/Allan Kynuna, Darren Kynuna, John Keyes, Lavin Keyes, Lawrence Keyes, Malcolm Keyes, Helen Smith on behalf of the Woolgar Group/Queensland, [2003] NNTTA 83 (9 July 2003)

Application No:        QF03/1

IN THE MATTER of the Native Title Act 1993 (Cth)

- and -

IN THE MATTER of a Future Act Determination Application

Strategic Minerals Corporation NL   (Applicant/grantee party)

- and -

Allan Kynuna, Darren Kynuna, John Keyes, Lavin Keyes, Lawrence Keyes, Malcolm Keyes, Helen Smith on behalf of the Woolgar Group (QC99/14)  (native title party)

- and -

The State of Queensland  (Government party)

DECISION ON WHETHER THE TRIBUNAL HAS JURISDICTION TO CONDUCT AN INQUIRY

Tribunal:  Hon C J Sumner, Deputy President
Place:  Brisbane
Date:  9 July 2003

Catchwords:               Native title – future act – application for a determination in relation to mining leases – jurisdiction – whether grantee party has negotiated in good faith – evidentiary onus on native title party to satisfy the Tribunal that grantee party has not negotiated in good faith – no deliberate misrepresentation about state of probable mine – no deliberate failure to provide information about ongoing exploration – failure to provide publicly available exploration information unreasonable and indicative of bad faith – different views by experts on exploration results not indicative of bad faith – constructive engagement in negotiations – agreement in principle reached – whole of negotiating behaviour to be considered – grantee party has negotiated in good faith.

Legislation:Native Title Act 1993 ss 24MD(3)(b), 25-44, 26(1)(c)(i), 29, 31, 33, 35, 36(2), 38(2), 41(3), 51(3), 52, 109(3), 240

Mineral Resources Act 1989, ss 281(3), 707(1), 707(5A)

Cases: Briginshaw v Briginshaw (1998) 60 CLR 336

Brownley v Western Australia [1999] FCA 1139, (1999) 95 FCR 152

Neat Holdings v Karajan Holdings & Others (1992) 110 ALR 449

Normandy Pajingo Pty Ltd and Battle Mountain (Australia) Inc/Queensland/Colin McLennan & Ors (Birri People), NNTT QF00/2, Hon C J Sumner, 29 September 2000

North Ganalanja Aboriginal Corporation v Queensland (1996) 185 CLR 595

Placer (Granny Smith) & Anor/Western Australia/Harrington-Smith & Ors, NNTT WF99/5, Hon CJ Sumner, 21 December 1999

Re Koara People (1996) 132 FLR 73

Rita Dempster & Ors (Southern Noongar)/Bayside Abalone Farm Pty Ltd & Anor/Western Australia, NNTT WF99/1, Hon E M Franklyn QC, 27 August 1999

South Blackwater Coal Ltd/State of Queensland/Cliff Kina & Ors, NNTT QF00/3, Hon C J Sumner, 27 March 2001

Strickland v Minister for Lands (1998) 85 FCR 303

Walley v Western Australia [1999] FCA 3, (1999) 87 FCR 565

Western Australia v Thomas (Waljen) (1996) FLR 124

Western Australia/Marjorie May Strickland (Maduwongga) & Ors, NNTT WF97/4, Hon CJ Sumner, 10 December 1997

Western Australia/Kevin Peter Walley & Ors, NNTT WF97/5, Hon C J Sumner, 25 March 1998

Western Australia/Arthur Dimer & Ors (Ngadju People); Cyril Barnes & Ors (Central East Goldfields People)/Equs Limited, NNTT WF99/10, Ms Patricia Lane, 9 August 2000

Western Australia/West Australia Petroleum Pty Ltd and Shell Development (Australia) Pty Ltd/Leslie Hayes & Ors, NNTT WF00/07, Hon C J Sumner, 1 June 2001

Western Australia v Ward (2002) 191 ALR 1

WMC Resources & Anor v Evans (1999) 163 FLR 333

Word & Phrases:                 ‘negotiate in good faith’

Counsel for the

grantee party:  Mr Michael Liddy

Solicitor for the

grantee party:  Ms Joanne Norris, solicitor Blake Dawson Waldron, Lawyers

Counsel for the

native title party:                 Mr Chris Athanasiou

Solicitor for the

native title party                  Ms Susan Gilmour, solicitor Suthers Taylor Lawyers

Counsel for the

Government party:             Ms Sue Brown

Solicitor for the

Government party:             Mr Conrad Lohe, Crown Solicitor, Crown Law

REASONS FOR DECISION ON WHETHER THE TRIBUNAL HAS JURISDICTION TO CONDUCT AN INQUIRY

Background

1. The State of Queensland (‘the Government party’) proposes, under the Mineral Resources Act 1989 (Qld), to grant for a term of 25 years to Strategic Minerals Corporation NL (‘the grantee party’/‘Strategic’) mining leases:

• ML 90122 (Sandy Creek) over 350.9 hectares of land; and

• ML 90123 (Flat Creek) over 124.7 hectares of land (‘the Mining Leases’).

1. Both Mining Leases, application for which was made on 17 October 1996, are to be located 108 kilometres north of Richmond in the Shire of Richmond and are part of the Woolgar Project. On 20 December 1998, the Government party, in accordance with s 29 of the Native Title Act 1993 (Cth) (‘the Act’/‘NTA’), gave notice of the grant. On 5 March 2003, the grantee party, pursuant to s 35 of the Act, made a future act determination application to the Tribunal.

2. The proposals are future acts covered by s 26(1)(c)(i) of the Act and cannot validly be done unless the right to negotiate provisions of the Act are complied with (Part 2, Division 3, Subdivision P (ss 25-44).

3. The following persons became a registered native title claimant over the area of the mining leases within four months of the s 29 notification day and are the native title party in respect of this application: Allan Kynuna, Darren Kynuna, John Keyes, Lavin Keyes, Lawrence Keyes, Malcolm Keyes, Helen Smith (NNTT Claim No QC99/14, registered on 20 April 1999).

4. The area has previously been utilised for pastoral purposes and currently Middle Park Holdings pastoral lease is owned by the Woolgar Valley Aboriginal Corporation which is a body associated with the native title party.

Good faith negotiations - jurisdiction

1. Before conducting an inquiry and making a determination the Tribunal must be satisfied that it has jurisdiction to do so and in particular be satisfied that the Government and grantee parties have negotiated in good faith as required by s 31(1)(b) of the NTA. Section 31 contains two obligations:

• the Government party must give the native parties an opportunity to make submissions to it, in writing or orally, regarding the future act (s 31(1)(a)); and

• the negotiation parties must negotiate in good faith with a view to obtaining the agreement of the native title parties to the doing of the future act with or without conditions (s 31(1)(b)).

1. Section 36(2) of the NTA says that if any negotiation party satisfies the Tribunal that any other negotiation party (other than a native title party) did not negotiate in good faith, the Tribunal must not make a determination. The practical effect of s 36(2) is to place an ‘evidential burden’ on the party alleging lack of good faith negotiations which would normally require it to produce evidence to support its allegations. (Rita Dempster & Ors (Southern Noongar)/Bayside Abalone Farm Pty Ltd & Anor/Western Australia, NNTT WF99/1, Hon E M Franklyn QC, 27 August 1999; Placer (Granny Smith) Pty Ltd and Granny Smith Mines Limited/Western Australia/Ron Harrington-Smith & Ors on behalf of the Koara people, NNTT WF99/5, Hon CJ Sumner, 21 December 1999)

2. The native title party contended that the grantee party had not fulfilled its obligation to negotiate in good faith. No contention was made in relation to the Government party nor in relation to the obligation contained in s 31(1)(a).

Legal principles

1. The principles applicable to the good faith issue were summarised in Placer (Granny Smith) & Anor/Western Australia/Harrington-Smith & Ors, NNTT WF99/5, Hon CJ Sumner, 21 December 1999 (at 9):

   ‘On the assumption that it is normally the native title party that will assert that the other negotiation parties have not negotiated in good faith the position, in summary, is that the Tribunal must be satisfied that the Government and grantee parties have negotiated in good faith with the native title parties with a view to obtaining the agreement of the native title parties to the granting of the mining leases with or without conditions.  Negotiation involves ‘communicating, having discussions or conferring with a view to reaching an agreement’ (Western Australia v Taylor (1996) 134 FLR 211 at 219 (‘Njamal’).  Good faith requires the parties to act with subjective honesty of intention and sincerity but this, on its own, is not sufficient.  An objective standard also applies.  The Government and grantee parties’ negotiating conduct may be so unreasonable that they could not be said to be sincere or genuine in their desire to reach agreement.  The Tribunal must look at the conduct of the Government and grantee parties as a whole but may have regard to certain indicia which were outlined in Njamal as a guide to whether the obligation has been fulfilled.  One of these indicia is whether the negotiation party has done what a reasonable person would do in the circumstances.  There is no requirement that the Tribunal be satisfied that the Government party has made reasonable offers or concessions to reach agreement but it is permitted to have regard to the reasonableness or otherwise of them if it assists in the overall assessment of a party’s negotiating behaviour.  Lack of good faith in the negotiations by the native title party will be relevant to whether the other parties have fulfilled their obligation and may impose a lesser standard on them.’

2. This approach was endorsed by the Tribunal in Western Australia/Arthur Dimer & Ors (Ngadju People); Cyril Barnes & Ors (Central East Goldfields People)/Equs Limited, NNTT WF99/10, Ms Patricia Lane, 9 August 2000.  Member Lane also said:

• that each party must act both honestly and reasonably with a view to reaching agreement about whether the act can proceed judged by what the parties say or do in the circumstances , but does not mean that parties are required to capitulate so as to reach agreement or otherwise act contrary to their interests (at 25); and

• all parties are required to adhere to the same standard of negotiating behaviour but what they do to satisfy the obligation must be judged by reference to the interests they seek to advance in negotiations, the behaviour of the other negotiation parties and the circumstances in which the negotiations take place (at 26).

1. The Njamal indicia are (at 224-225):

1. unreasonable delay in initiating communications in the first instance;

2. failure to make proposals in the first place;

3. the unexplained failure to communicate with the other parties within a reasonable time;

4. failure to contact one or more of the other parties;

5. failure to follow up a lack of response from the other parties;

6. failure to attempt to organise a meeting between the native title and grantee parties;

7. failure to take reasonable steps to facilitate and engage in discussions between the parties;

8. failing to respond to reasonable requests for relevant information within a reasonable time;

9. stalling negotiations by unexplained delays in responding to correspondence or telephone calls;

10. unnecessary postponement of meetings;

11. sending negotiators without authority to do more than argue or listen;

12. refusing to agree on trivial matters eg a refusal to incorporate statutory provisions into an agreement;

13. shifting position just as agreement seems in sight;

14. adopting a rigid non-negotiable position;

15. failure to make counter proposals;

16. unilateral conduct which harms the negotiating process eg issuing inappropriate press releases;

17. refusal to sign a written agreement in respect of the negotiation process or otherwise;

18. failure to do what a reasonable person would do in the circumstances (Njamal at 224-225).

1. Further relevant factors are enunciated in Western Australia/Marjorie May Strickland (Maduwongga) & Ors, NNTT WF97/4, Hon CJ Sumner, 10 December 1997 (at 13-21) and were considered (and modified in respect of whether there is an obligation on the Government party to make reasonable substantive offers) in subsequent Federal Court decisions.

2. It is now accepted that, while not obliged to, the Tribunal may have regard to whether the Government party has made reasonable substantive offers or concessions if it assists in the overall assessment of its negotiating behaviour (Walley v Western Australia (1999) 87 FCR 565, [1999] FCA 3 per Carr J at [15] and Brownley v Western Australia (1999) 95 FCR 152, [1999] FCA 1139 per Lee J at [35]-[36]).

3. The obligation to negotiate in good faith should be judged in the context of matters related to or connected with the doing of the future act (Walley v Western Australia [1999] FCA 3, (1999) 87 FCR 565 at [15]). The obligation does not extend beyond such matters but they may be the subject of negotiations if the parties see fit. Section 31(2) of the NTA confines the obligation to matters related to the effect of the act on the registered native title rights and interests of the native title party (and in the Tribunal’s view the other matters in s 39(1)(a)). (Western Australia/West Australian Petroleum Pty Ltd and Shell Development (Australia) Pty Ltd/Leslie Hayes & Ors (Thalanyji People), NNTT WF00/07, Hon C J Sumner, 9 March 2001 at [18]-[19]; Walley v Western Australia (1999) 87 FCR 565, [1999] FCA 35, per Carr J at [15]; Brownley v Western Australia (1999) 95 FCR 152, (1999) FCA 1139 per Lee J at [35]-[36].)

4. The terms of s 39 of the NTA (which set out the criteria which the Tribunal must take into account in making an arbitral determination whether the act may or may not be done) indicate the scope of matters in respect of which negotiations may be conducted (Brownley v Western Australia [1999] FCA 1139, (1999) 95 FCR 152).

5. The Government party is not required to negotiate about something different to the act proposed (Risk v Williamson (1998) 87 FCR 202 at 222).

6. Negotiation in good faith does not mean the Government party must capitulate or accept the other sides position or that agreement must be reached (Njamal at 222-223; Strickland v Minister for Lands (1998) 85 FCR 303 at 312).

7. Section 33 of the Act says that negotiations may include the possibility of payments to a native title party based on the amount of profits made, income derived or things produced by any grantee party (often referred to as royalty type payments). No such payment can be made a condition of the Tribunal’s determination (s 38(2) NTA). The law in relation to this issue is summarised in Western Australia/West Australia Petroleum Pty Ltd and Shell Development (Australia) Pty Ltd/Leslie Hayes & Ors, NNTT WF00/07, Hon C J Sumner, 1 June 2001 at [32]-[37] and South Blackwater Coal Ltd/State of Queensland/Cliff Kina & Ors, NNTT QF00/3, Hon C J Sumner, 27 March 2001 at [30]-[35].  The Government and grantee parties must receive and consider a proposal in a manner which has regard to the particular facts of the case and to merits of the proposal in all the circumstances without being under any obligation to reach agreement (Brownley v Western Australia (1999) 95 FCR 152 (at 168-169, [50]-[55]).

Contentions and Documents

1. In making its decision the Tribunal has had regard to the following contentions, submissions and documents provided by the parties.

2. The native title party ‘s contentions and submissions:

• Statement of Contentions dated 17 April 2003.

• Statement of Contentions (in reply) dated 21 May 2003.

• Submissions dated 28 May 2003.

• Submissions dated 30 May 2003 in reply to the Applicants submission dated 29 May 2003.

• Submissions dated 11 June 2003 in reply to the Government party’s Outline of Submissions faxed 3 June 2003.

• Further Submissions dated 8 July 2003.

1. The native title party’s affidavits and statements:

• Affidavit of Susan Gilmour (solicitor representing the native title party after approximately November 2001) sworn on 17 April 2003.

• Affidavit of Susan Gilmour sworn on 21 May 2003.

• Affidavit of Geoffrey Raymond Bennett (consultant geologist and resource analyst retained by Geosphere Pty Ltd) sworn on 21 May 2003.

• Affidavit of David Herrington Kloiber (resource and mining economist and Director of Geosphere Pty Ltd) sworn on 21 May 2003.

• Statement of David Herrington Kloiber of 22 May 2003.

1. The grantee party’s contentions and submissions:

• Statement of Contentions dated 14 May 2003.

• Submissions dated 30 June 2003 incorporating the original submission made on 29 May 2003 and Supplementary Submissions dated 30 June 2003.

1. The grantee party’s documents and affidavits:

• Form 5 Future Act Determination Application and annexed documents lodged with the Tribunal on 5 March 2003.

• Affidavit of Walter Arthur Charles Martin (Managing Director of Strategic) sworn on 14 May 2003.

• Affidavit of Walter Arthur Charles Martin sworn on 30 June 2003 with a copy of letter dated 29 June 2003 from Strategic (WAC Martin) to the Tribunal, the accuracy of which he confirms in the affidavit.  He also deposes that he read the contents of the letter to Roland Bartsch by telephone on 29 June 2003 and that Mr Bartsch also confirmed the accuracy of its contents.

• Affidavit of Walter Arthur Charles Martin sworn on 3 July 2003 annexing a text copy of a draft Report entitled ‘Woolgar Project Review’ dated 5 February 2003, commissioned by Barrick Gold Australia Limited and given to Strategic by Mr Bartsch on 4 March 2003 (‘the Barrick Report’).

• Affidavit of Barry Fehlberg (Technical Director of Strategic) sworn on 14 May 2003.

• Affidavit of Barry Fehlberg affirmed on 30 June 2003 in which he confirms the accuracy of the matters set out in the letter of 29 June 2003 from Strategic to the Tribunal.

• Affidavit of Roland Dieter Bartsch (Geological Consultant at Strategic and Project Manager for the Woolgar Project) sworn on 14 May 2003.

• Affidavit of Roland Dieter Bartsch sworn on 2 July 2003 annexing a copy of the letter dated 29 June 2003 from Strategic to the Tribunal, the accuracy of which he confirms.

• Affidavit of Joanne Gaye Norris (solicitor with Blake Dawson Waldron Lawyers) acting for Strategic since November 2000 sworn on 14 May 2003 and annexed to which were documents relevant to the negotiations.

1. The Government party’s contentions, submissions and documents:

• Statement of Contentions dated 12 May 2003.

• Outline of Submissions filed on 3 June 2003.

• Letter to the Tribunal dated 13 June 2003 in response to the native title party’s submissions in reply dated 11 June 2003.

• Supplementary Submission filed on 7 July 2003 in relation to the Barrick Report.

• Affidavit of Phillip Hewitt Dash, Manager of Project Facilitation, Bureau of Mining and Petroleum, Department of Natural Resources and Mines, Queensland Government, sworn on 7 July 2003.

1. I accepted the submissions from all parties that this matter could be decided ‘on the papers’ without the need for oral evidence and cross-examination.

2. While considering my decision and because of concerns about certain issues raised in the evidence I invited the parties (by letters dated 17 and 18 June 2003) to provide further submissions and documentary evidence in relation to them.  Strategic responded with the affidavits of Messrs Martin and Fehlberg of 30 June 2003, Strategic’s letter of 29 June 2003 to the Tribunal and the Supplementary Submission dated 30 June 2003 (‘the Supplementary Information’).  On receipt of this material the native title party formally requested from the grantee party a copy of the Barrick Report referred to in the Supplementary Information.  Although the existence of this Report was already known to the parties, this was the first formal request for its production.  While it would have been more conducive to the efficient conduct of these proceedings for the request to have been made earlier, Strategic agreed to produce the Barrick Report subject to restrictions on its public availability.  The native title party and Government party responded to the Supplementary Information and the Barrick Report.

Terminology used in reporting Mineral Resource and Ore Reserves

1. The Australian Code for Reporting of Mineral Resources and Ore Reserves (‘the JORC Code’) sets out minimum standards, recommendations and guidelines for public reporting of exploration results, Mineral Resources and Ore Reserves.  A Mineral Resource is a concentration or occurrence of material of intrinsic economic interest in such form or quantity that there are reasonable prospects for eventual economic extraction.  They are subdivided into ‘Inferred’ which is that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence; ‘Indicated’ is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence; ‘Measured’ is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence.

1. An Ore Reserve is the economically mineable part of a Measured or Indicated Mineral Resource.  It includes diluting materials and allowances for losses which may occur when the material is mined.  Appropriate assessments, which may include feasibility studies, have been carried out and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors.  These assessments demonstrate at the time of reporting that extraction could reasonably be justified.  Ore Reserves are subdivided in order of increasing confidence into Probable Ore Reserves and Proved Ore Reserves.

The Woolgar Project

1. An Environmental Management Overview Strategy (‘EMOS’) dated July 1997 which was prepared for the grantee party by C & B Consultants Pty Ltd and lodged with the Mining Lease Applications under the Mineral Resources Act described the Woolgar Project.  At that time the Woolgar Project area included the following mining tenements and applications for mining tenements:

   ML 2642        Soapspar inclusion
   ML 2793        Soapspar
   ML 2728        Shamrock (Perseverance)
   ML 2729        Mobray (sic)
   ML 2739        Mobray No 2 (sic)
   ML 90044      Sandy Dam
   MLA 90123    Flat Creek

   MLA 90122    Sandy Creek

2. All these areas fell within Strategic’s exploration permit EPM 9599 and the EMOS provided for the integration of existing tenements and MLAs 90122 and 90123 into one integrated project ‘being collectively designated as the “Woolgar Project”’.  MLA 90122 would be utilised for the extraction of ore and MLA 90123 (on which no exploitable ore resource has been identified) for the location of a tailings dam, a standard Carbon in Pulp processing plant and camp site.  Mining Lease 90044 had already been granted for the purposes of a water supply dam and there was an approved EMOS in place in respect to it.

3. The EMOS provided the following information:

• The Department of Mines and Energy had determined that an Environmental Impact Study was not required for the project on the basis of the currently proposed scale of operation.

• The status of the Woolgar Project was dependant on the gold price.  It was described as a late stage exploration project awaiting conversion to development status on the basis of either an improved gold price or the definition of additional resources.

• Final layout for the mining operations processing facilities and associated infrastructure could not be provided in detail until the additional resources were identified.  However, the nature of the ore bodies was well understood and sufficient metallurgical test work had been completed to provide a good description of the type of mineral processing facilities and the proposed mining methods.

• An airstrip to Royal Flying Doctor service standards had already been constructed approximately 5 kilometres to the south of ML 90122 and the EMOS proposal was for a fly in and fly out project from Cairns or Townsville.

• It was expected that 120 staff would be employed and located in a camp on ML 90123. 

• Initially an open pit mining method is proposed and the initial economic justification for the Woolgar Project was on this basis with the expectation of a minimum 5-6 years of open pit ore being defined.  If additional resources were found then the possibility of underground mining may arise. 

• The Woolgar Project is over the historic Woolgar Goldfields where the bulk of mining took place between 1882 and 1937.  There has been some more recent mining on the Soapspar deposit which is 6 kilometres to the north of ML 90122.

1. The affidavit of Walter Martin dated 14 May 2003 and the Supplementary Information provided more current information on the Woolgar Project where it is described as comprising:

• six mining leases – ML 2728 (Perseverance), ML 2729 (Mowbray 3), ML 2739 (Mowbray), ML 2642 (Soapspar), ML 2793 (Soapspar), ML 90044 (the dam area) and mining lease applications MLA 90122 and MLA 90123 lodged over a portion of EPM 9599 (all of which were identified in the EMOS);

• Exploration permit applications EPMA 11886 (lodged in 1997) and EPMA 13427 (lodged in 2001); and

• EPMA 14060 (lodged on 7 May 2003).

1. Strategic’s Annual Reports also refer to the area of the Woolgar Project.  The 2000 Annual Report noted the Woolgar Project to be EPM 9599 covering 145 square kilometres but that an additional 320 square kilometres was being sought through EPM application 11886.  The Annual Reports for 2001 and 2002 described the Woolgar Project as covering 714 square kilometres and EPMA 11186 and EPMA 13472 are shown as part of this broader area.  In Strategic’s quarterly reports to the Australia Stock Exchange (ASX), reference is made to the Western Woolgar Project (EPMA 11186) and the Eastern Woolgar Project (EPMA 13472) both of which are areas within the Woolgar Project area.  EPMAs 11186, 13472 and 14060 have not yet been granted.

2. The affidavits of Walter Martin and Barry Felhberg provide more information about the mineralised areas.  Mineralised areas on MLA 90122 are described as Lost World, Grand Central and Explorer.  Others on MLA 90122 which are of low significance on current knowledge have been designated Hillview, Hillview South and Camp.  Exploration is proceeding on EPM 9559 outside MLA 90122 and MLA 90123 on areas which have been designated as West Federal, Federal, West Grand Central, Myopia, Arena Wall, Shanghai, Finn and Explorer South.  In the Supplementary Information, Mr Martin explained that at the time of the 31 December 2001 ASX Report the term ‘Grand Central’ was used to describe a 3 kilometre long complex bifurcating structure that extended at least 2 kilometres beyond the borders of MLA 90122.  Since December 2001, the 2 kilometre area outside MLA 90122 has been renamed West Grand Central and West Federal.

3. In these proceedings, the Tribunal is only directly concerned with proposed ML 90122 and ML 90123 and the activity which will take place on them. Other tenements applied for may be the subject of subsequent negotiations under the NTA. Although not directly concerned at this stage with other mining leases, it appears that the facilities proposed for ML 90123 will be used for mining from tenements other than ML 90122 (for instance from the Soapspar deposit which is some 6 kilometres to the north).

4. The potential geographical area of the Woolgar Project is now much greater than initially described in the EMOS.  For the reasons set out below I consider it would have been more satisfactory negotiating behaviour for the grantee party to have kept the native title party better informed of the broader context (revealed in its Annual Reports and reports to the ASX) in which the negotiations were taking place.  Despite this it remains the fact that the negotiations were only directly about the Mining Leases and not all aspects of the Woolgar Project.

The EMOS assessment of the resource and economic viability

1. On the question of the assessment of the available resources and economic viability of the project the EMOS contained the following information:

• The joint venture partners (then Strategic and Arboyne NL – Strategic is now the sole owner of this project) have been undertaking exploration in the project region over the last 10 years, with defined ore reserves being 70-80 percent of that required to establish a long term viable mining operation at the then current gold price.

• Further resource extension drilling was planned for 1997 targeting in particular the Lost World ore body.

• The project development schedule for the Woolgar Project targeted establishing production in the last quarter of 1998 at in excess of 600,000 tonnes per annum with the actual production rate being dependent on the grade of ore and forward sales of gold.  It was anticipated that by the end of 1998 it would be possible to project a mine life of five to six years from the estimated resource base with the initial production output expected to be approximately 40,000 ounces of gold per annum.

• The ore resources to support the economic analysis in the first instance were sourced from a limited number of tenements.  The significant resources defined at the date of the EMOS were located on ML 2642/2793 (Soapspar), ML 2728 (Perseverance) and MLA 90122 as follows:

Location Name	Lease No.	Measured		Indicated		Inferred
		Tonnes	Grade	Tonnes	Grade	Tonnes	Grade
Lost World	90122	2,405,000	1.24	442,000	1.24	413,000	1.55
Grand Central	90122	248,000	1.20	188,500	1.11
Explorer	90122	149,000	2.10	53,000	2.70
Junior	90122	13,000	3.70
Soapspar	2793	619,000	1.93	141,000	1.59	62,000	2.13
Perseverance	2728	80,000	5.70
Sub-Total	2,677,000	1.41	980,200	1.41	796,500	1.98
Total All Categories  4,453,700							1.52

The native title party’s principal contentions

1. The native title party’s principal contentions in relation to the grantee party’s negotiating conduct are as follows:

• First, that the grantee party failed to inform the native title party of results of its exploration program which it commenced on MLA 90122 on 10 October 2001 and that this was significant and relevant information to the negotiations and the failure to inform occurred where the grantee party knew that the native title party did not have the information and where it was demanding its offer be accepted.  It is also alleged that by letters dated 24 April 2002, 16 May 2002 and 13 September 2002 the native title party requested the information but did not receive it.

• Second, that the grantee party misrepresented the probable size, scope, feasibility and quantity of gold production from the mining activity proposed for ML 90122 and ML 90123 by failing to alert the native title party to the results of the exploration program and misrepresenting the true extent of the amount of gold likely to be produced.

• Third, that the grantee party refused to negotiate when the results of the exploration program confirmed a reasonable basis for renegotiation of the proposed agreement.

1. The native title party asserted that the information was deliberately withheld and the misrepresentation made with a view to inducing the native title party to accept the grantee party’s proposal including the offer of compensation.  The conduct of the grantee party is said to be neither honest nor reasonable.  It is self evident that if the allegations of dishonesty are established then the conduct would amount to bad faith in the subjective sense in that the grantee party would not have conducted itself in an open and honest way during the negotiations.  The allegation amounts to an intention to deceive.  The native title party says that inferences to support these contentions can be drawn from the documentary evidence and on this basis has submitted that it is appropriate for a decision to be made on the papers.

2. In making my decision I have been mindful of the fact that the onus of establishing a failure to negotiate in good faith rests on the native title party and that the standard of proof in such a matter where dishonesty is alleged remains as in all civil cases on the balance of probabilities but in applying that standard the Tribunal must be conscious of the gravity of the allegations (Briginshaw v Briginshaw (1998) 60 CLR 336 per Dixon J at 362; Neat Holdings v Karajan Holdings & Others (1992) 110 ALR 449 (at 449-450, 451).

The negotiations generally between May 1999 and 30 November 2001

1. Between May 1999 and November 2001, there were substantial negotiations between the three negotiation parties (i.e. Government, grantee and native title parties) involving correspondence, telephone calls, face to face meetings and Tribunal mediation meetings convened pursuant to s 31(3) of the NTA. The following chronology of events gives an overview of the negotiations but does not go into the substance of each issue discussed as this is not necessary to make a decision on the good faith point.

2. A first negotiation meeting was held by telephone on 22 May 1999.  Mr Wally Martin, Managing Director of Strategic outlined the resource requirements for the viability of the project.  Mr Martin deposes that at the first negotiation teleconference meeting on 22 May 1999 he informed the Woolgar claimants (there were four members of the claimant group participating) that the projected scope of the Woolgar Project would require an operation producing in the region of 50-60,000 ounces of gold per year and that it was Strategic’s objective to prove up around 300,000 ounces of economically viable reserves before it would be in a position to commence a feasibility study.  If the feasibility was positive, Strategic could then arrange finance but this could not be done until the Mining Leases were granted.  He also advised that the then current resource calculations were of a low grade, that additional high grade resources were required to make the Project viable and that Strategic would be conducting further exploration programs to try and locate resources of a higher grade.

3. On 26 May 1999, the native title party provided to Mr Martin a paper outlining its negotiating position. This paper raised issues which are customarily dealt with in negotiations about the grant of mining leases under the right to negotiate provisions of the NTA including employment and training; equity in the project; Aboriginal landscape protection; environmental monitoring and protection; a code of behaviour of workers; a communication strategy about available jobs, events to take place and plans for any exploration, construction, mining, monitoring, decommissioning associated with the Project when known; cultural awareness training; infrastructure improvements to contribute to the upgrade of Middle Park over time; tourism; access to the mining leases; resolution of disputes through mediation; contracting opportunities; and rehabilitation. On the issue of compensation, the paper invited Strategic to table a suitable proposal for a royalty arrangement perhaps calculated using a formula tied to the price of gold and tonnage extracted from the mine.

4. On 31 May 1999, the Central Queensland Land Council Aboriginal Corporation (CQLC) who represented the native title party throughout the negotiations sent by fax letter to Mr Martin advice that a negotiation team had been established, that the Woolgar claimants were fully committed to reaching agreement and confident that an agreement could be reached on or before 20 June 1999.  A request was made for the other parties to pay the native title party’s costs in relation to making the agreement.  Mr Martin responded to the 31 May 1999 fax by committing the grantee party to reaching agreement but declining the request to pay costs associated with the agreement.  The Tribunal is aware that there have been cases where the grantee parties have contributed costs towards negotiations but declining to do so does not on its own amount to failing to negotiate in good faith.

5. Mr Martin, by letter dated 2 June 1999 responded to the native title party’s negotiating position on most of the issues raised but did not deal with compensation.  On 8 June 1999, the native title party provided its response and repeated its request for compensation by way of a royalty arrangement tied to the price of gold.

6. On 22 June 1999, a lengthy face to face meeting was held at Townsville involving representatives of all the negotiation parties at which major issues raised in the native title party’s negotiating position were discussed.  Five members of the Woolgar People Negotiating Team were present including some named claimants.  On the question of compensation Mr Miller offered to pay $0.10 per ounce for the life of the mine.  A Government party representative (Mr Mark Hoogsteyns) observed that Strategic’s plan was to mine 60,000 ounces per annum ‘for 5 years or longer’.  Based on this offer and Strategic’s assumption about the productivity of the mine, compensation would have amounted to $6,000 per annum.  The native title party countered with an offer of $1.00 per ounce of gold produced ($60,000 per annum), $5,000 per annum for 20 years and a joint venture mining contract with native title party interests.  Mr Martin said that some of the ore would come from the Soapspar deposit and ore from that area would be included in the calculation of compensation.  There were further discussions about compensation at the meeting.  Strategic increased its offer to $0.15 per ounce ($9,000 per annum) and $1,000 per annum for the term of the lease and no joint venture.  The native title party responded with a counter proposal of $2.00 per ounce ($120,000 per annum) and $5,000 per annum for 20 years.

7. On 20 July 1999, a site visit involving all negotiation parties took place including two named claimants.

8. On 26 July 1999, Mr Martin provided to the CQLC a RTN Draft Agreement.  The compensation offer ‘subject to determination of Native Title’ and ‘for the loss of Native Title Rights’ was 20 cents per ounce of recovered gold ($12,000 on Strategic’s assumptions) and a flat rate payment of $1,500 per annum during the life of the Mining Leases or in the event of a joint venture being established between the native title party and principal mining contractors 10 cents per ounce and a flat rate of $1,500 per annum.

9. On 31 July 1999, the native title party provided a draft Agreement to Strategic.  On the question of compensation it reflected the previous offer by providing for payment of $5,000 per year for the duration of the Mining Leases and $1.00 per ounce of gold extracted from the area the subject of the Mining Leases and a joint venture arrangement with the mine operator to share profits on a 50/50 basis; or $5,000 per year and $2.00 per ounce of gold extracted from the area the subject of the leases.  The compensation was said to be for the impairment of native title rights and interests.  The copy of the draft agreement shows notations (which I infer were made by Mr Martin) disagreeing to the basis for payment of compensation, agreeing to $2,000 per year for the duration of the leases, agreeing to 30 cents per ounce of gold extracted ($18,000 per annum on Strategic’s assumption) and disagreeing to the joint venture proposal.

10. The native title party’s 31 July 1999 draft Agreement confined the issues including compensation to the grant of the proposed mining leases ML 90122 and ML 90123.  Subsequent draft agreements exchanged between the parties were confined to the Mining Leases.  The coverage of the agreement does not seem to have been an issue in the negotiations until raised by Ms Gilmour in her letter to Strategic of 16 May 2002.  The native title party were legally represented throughout the negotiations and supported by the Native Title Representative Body, the CQLC.  It is inconceivable that the legal representatives would have thought that any aspect of the agreement applied other than in relation to the Mining Leases.  What does appear to be the case is that in its assessment of a viable resource to commence mining Strategic factored in resources from outside MLA 90122, such as Soapspar.  However, this was not concealed and was openly recognised in the EMOS.  I find that the draft Agreements discussed throughout the negotiations dealt only with the Mining Leases and not the Woolgar Project generally.

11. On 3 August 1999, by letter to Strategic, the native title party raised concerns about the adequacy of the EMOS and sought changes to the grantee party’s commitments in it.  There was a telephone communication between Mr Martin and Ms Jodie McFaul, Legal Officer at the CQLC and a follow up letter on 18 August 1999 from Ms McFaul again raising issues about the EMOS, requesting a response to the draft agreement and requesting a copy of the Plan of Operations.  Following a further follow up letter from CQLC on 1 September 1999, Strategic advised that lawyers were preparing a draft agreement.

1. On 8 September 1999 by letter to the CQLC and the Government party Strategic, through its lawyers Blake Dawson Waldron (BDW), provided comments on the native title party’s draft Agreement of 31 July 1999.  On the question of compensation Strategic’s position was that it would only pay compensation so as to obtain the native title party’s consent to the grant of the mining leases.  It would not be payable in recognition of any future impairment of any native title rights and interests claimed.  It repeated its position that it would not contribute to costs for negotiating the agreement.  It offered $1,200 per year until commencement of production and $3,500 per year for the remaining life of the mine with payment to be held in trust until native title is determined in favour of the Woolgar claimants.  It did not agree to the joint venture proposal involving profit sharing with the mine operator but offered to give favourable consideration to tenderers for mining contracts in a joint venture relationship with the Woolgar claimants where competitive.  The amount paid was to settle all potential compensation liability.  This letter withdrew the previous offers made by Mr Martin of royalty based compensation and offered a flat rate which was less than the previous offer on the assumptions of productivity used by Strategic.  No doubt this change in approach resulted from the legal advice received.  In the circumstances I do not find the withdrawal of the offer and the change in the basis for it as amounting to bad faith in the overall circumstances, although in some cases it could be.  Strategic did not refuse to budge from this offer, continued to negotiate about it and eventually made an offer of potentially more compensation partly based on the mine’s production.

2. On 6 October 1999, Ms McFaul provided a detailed response to BDW.  The native title party repeated the compensation offer made in the draft agreement of 31 July 1999 and did not agree that compensation should be paid into trust.  They reserved their position on the issue of whether payment would be in full settlement of any compensation claim against the grantee party until the issue of the amount of compensation was resolved.

3. A teleconference was held on 8 October 1999 which drafted a timetable for the next stage of negotiations.  The minutes envisaged that a face to face meeting would take place six weeks from 11 October 1999 ‘in the hope of reaching final agreement’.  There was further discussion about issues in dispute.  It was agreed that Mr Martin and Ms McFaul would have further discussions over the following two weeks in an attempt to resolve some of the major issues.

4. On 12 October 1999, Mr Martin provided Ms McFaul with some suggestions for inclusion in the agreement relating to employment, code of behaviour and cultural heritage inspection.  On 15 October 1999, Ms McFaul responded to these issues, accepting some suggestions and commenting on others.  On 21 October 1999, Mr Martin provided Ms McFaul a list of mining industry occupations he had obtained from the Chamber of Minerals and Energy.

5. On 29 October 1999, Ms McFaul provided to Mr Martin a revised draft of some clauses of the native title party’s original draft taking account of the amendments discussed between them.  The issue of compensation was not dealt with.

6. A further teleconference involving all parties was held on 29 October 1999. Following this meeting Ms McFaul forwarded to BDW on 2 November 1999 an amended draft s 31 agreement based on the original draft forwarded on 31 July 1999, her letter to BDW of 6 October 1999 and the teleconference discussions of 29 October 1999. The draft included the native title party’s compensation offer from its original draft of 31 July 1999 and a note of Strategic’s counter offer of $1,200 per year until commencement of production and $3,500 per year thereafter.

7. On 12 November 1999, Ms McFaul wrote to BDW requesting comments as a matter of some urgency and identifying Strategic’s main areas of concern as the cultural heritage management plan, jurisdiction, references to anti-discrimination laws and remedial action in the event of breaches of the Agreement and Code of Behaviour.  On 12 November 1999, the Government party provided a consolidated document of the agreed clauses.

8. On and around 17 November 1999 there were further telephone conferences and discussions between BDW and Ms McFaul. On 1 December 1999, BDW sought mediation assistance from the Tribunal pursuant to s 31(3) of the NTA.

9. On 9 December 1999, BDW wrote to Ms McFaul asserting that during negotiations the native title party had raised new issues which went beyond their original draft of 31 July 1999, that the current draft still included matters unacceptable to Strategic and that some issues raised by the Government party had not been incorporated or responded to.  The letter then provided further comments on the native title party’s draft agreement of 2 November 1999.  On the question of compensation Strategic offered to amend its proposal to a payment of $10.00 per hectare each year in respect of the Mining Leases (i.e. $4,750 per annum).  A draft ensuring discharge from liability for compensation was provided and the trust proposal for compensation payment reiterated.

10. On 20 January 2000, Ms McFaul responded in detail to the issues raised by BDW.  On the question of compensation, the native title party accepted the proposal but reiterated its proposal for additional payments of $2.00 per ounce of gold extracted from the Mining Leases.  A revised discharge clause was provided but the native title party rejected the trust proposal.

11. On 24 January 2000, a Tribunal mediation teleconference involving all parties was held presided over by Dr Mary Edmunds, a Tribunal Member.  The Tribunal’s notes reveal discussion over a range of issues.  On the question of compensation Ms McFaul confirmed the native title party’s latest offer and BDW agreed to forward an outline of the basis on which Strategic had formulated its compensation offer.

12. By letter dated 4 February 2000, Ms McFaul advised BDW of a letter it was sending to the Government party to enable it to produce a consolidated agreement.

13. On 28 February 2000, BDW wrote to Ms McFaul advising that it had received further instructions and was finalising their response but requested drafting and material from the native title party on certain outstanding issues.  Ms McFaul responded by letter dated 1 March 2000, which BDW then replied to on 3 March 2000.  It is apparent at this point that some tensions had developed between the native title and grantee party representatives over the progress of the negotiations and who was responsible for drafting particular clauses.

14. On 13 March 2000, BDW by letter provided Ms McFaul with further comments on the draft agreement and further draft clauses for comment.  On the question of compensation draft clauses were prepared to give effect to an offer ‘(calculated having regard to commercial principles) and related to the area of the mining leases, insofar as the Mining Leases, affect native title claimed over the area’.  The revised offer was:

• upon grant of the Mining Leases payment of $10.00 per hectare or part thereof of the total area of the Mining Leases;

• annual payment of this amount until commencement of mining operations;

• after commencement an annual payment of $15.00 per hectare or part thereof until the expiration of the Mining Leases; and

• payments no longer to be held in trust but made to the nominated body (defined as the Woolgar Valley Aboriginal Corporation) or a body or persons nominated by the native title party.

1. On 17 March 2000, a teleconference was held between the Tribunal’s Case Manager, BDW and Ms McFaul at which Ms McFaul identified four items for discussion at an impending teleconference to be held on 20 March 2000 viz:

• the administration/Aboriginal Liaison Officer position;

• the Woolgar Ranger program;

• the Cultural Awareness Induction Program; and

• the Cultural Heritage specialist.

BDW said that its clients wanted a response to the compensation proposal and reiterated that they did not have instructions to accept proposals based on royalties.

1. On 21 March 2000, following the discussions on 17 and 20 March 2000, Ms McFaul wrote to BDW with further comments and drafting proposals on the question of business developments for the native title party.

2. On 31 March 2000, Ms McFaul provided a detailed response by facsimile to BDW’s letter of 13 March 2000.  The response included draft clauses.  On the question of compensation Ms McFaul confirmed that, following the teleconference of 20 March 2000, BDW was to advise whether Strategic was prepared to offer compensation linked to production in addition to an annual fixed sum.  She continued to propose a payment of $2 per ounce of gold extracted in addition to a $10.00 per hectare annual payment commencing on signing the agreement and payable during further exploration and when productive mining commences.

3. On 12 April 2000 Ms McFaul wrote to BDW with a quote for the engagement of a cultural heritage specialist.

4. On 20 April 2000, BDW provided comments on Ms McFaul’s fax of 31 March 2000.  On compensation, Strategic accepted the $10.00 per hectare proposal (commencing on grant of the Mining Leases, not on signing the agreement) and offered in addition:

• $25,000 if production in any one financial year was between 50,000 and 60,000 ounces of gold; and

• a further $25,000 if production in any one financial year was between 60,000 and 70,000 ounces of gold (subsequently this offer was clarified by removing the 70,000 ounces limit).

1. On 16 June 2000, Ms Amber Magauran, Principal Legal Officer at the CQLC, now acting for the native title party responded by letter to BDW’s fax of 20 April 2000.  With respect to compensation she said that further advice would be sought concerning the method of connecting payment to productivity.

2. On 6 July 2000, Ms Magauran sent a copy of the draft agreement to BDW querying whether it was the agreed working draft.

3. On 26 July 2000, BDW sent its draft version of the Right to Negotiate Agreement to Ms Magauran identifying issues still to be resolved and including its offer of compensation.  The grantee party’s proposal also provided for annual indexation of payments based on the CPI; a discharge of any liability to pay further compensation; that the Agreement does not apply if a determination is made that the native title party does not hold native title; that the grantee party would make no claim against payments already made under the agreement if not all of the claimed native title is determined; and that the compensation payment did not  derogate from  any rights to compensation under the Mineral Resources Act for the pastoral holders. The general recital to the Compensation clause contained an acknowledgement by the parties that the payment of compensation is a condition agreed to by the grantee party as part of the right to negotiate process in order to obtain the consent of the native title party to the grant of the mining leases as required by the NTA. This offer of compensation and the rationale for it remained as part of the draft Agreement throughout the remainder of the negotiations.

4. On 7 August 2000, Ms Magauran advised BDW that she hoped she would have instructions from the native title party on the agreement following 10 August 2000.

5. On 14 September 2000, Darren Kynuna (one of the native title party claim group) and Deputy Chairperson of the Woolgar Valley Aboriginal Corporation, after Strategic notified them of their intention to conduct exploratory drilling, wrote to BDW expressing concern about exploration drilling activities which had caused damage to heritage areas in the past and requesting Strategic to provide details of its exploration program and monitoring to protected areas.  Strategic arranged for representatives of the native title party to inspect the drilling area.  Although not directly related to the negotiations, this action can be taken into account in assessing the good faith of Strategic in its dealings with the native title party.

6. On 21 September 2000, Ms Magauran advised BDW of her intention to seek advice from an independent adviser.

7. On 10 October 2000, a Tribunal mediation teleconference involving all negotiation parties was held at which various issues were discussed.  A timetable to attempt finalisation of the matter was set.  On 30 October 2000, Ms Magauran sent a ‘Discussion Document, Draft only’ of the Right to Negotiate Agreement to BDW.  It incorporated the substance of the grantee party’s most recent offer of compensation.  

8. On 1 November 2000 there was another Tribunal mediation meeting involving all parties.

9. On 16 November 2000, BDW wrote to Sean Sexton, the lawyer then also acting for the native title party noting that a response to the key issue of compensation had not been received and reiterated a desire to see an agreement reached as soon as possible.  A further Tribunal mediation conference organised for 4 December 2000 was cancelled as discussions between the native title and grantee parties were continuing.

10. On 30 January 2001, the Government party proposed reconvening discussions.  A Tribunal mediation meeting scheduled for 23 March 2001 was again postponed at the request of the parties.  BDW and Mr Sean McLaughlin, a barrister, now also representing the native title party were to meet on 28 March 2001 to progress the agreement.

11. On 25 June 2001, Ms Magauran sought instructions from her clients on a new working agreement.  On 9 July 2001, Ms Magauran asked BDW for an electronic version of the draft agreement to enable additional clauses suggested by Mr Sean McLaughlin to be inserted which was provided by E-Mail by Ms Joanne Norris on the same day.  On 8 July 2001, Ms Magauran sent to Ms Norris by fax further draft clauses.

12. Ms Norris deposed in uncontested evidence that on 4 July 2001 she had a discussion with Ms Magauran who advised that the Woolgar People were holding an Annual General Meeting in Cairns on 14 and 15 July and that she had a copy of the draft Agreement dated 28 July 2000 and clauses proposed by Sean McLaughlin which would be presented to the meeting.  According to Ms Norris, Ms Magauran advised her that the compensation clause was acceptable.

13. On 29 August 2001, Ms Norris sent by E-Mail to Ms Magauran the ‘latest version’ of the Right to Negotiate Agreement based on discussions with Mr Martin.  With respect to compensation this Agreement substantially repeated the previous clauses.  On 1 October 2001, Ms Magauran provided by fax further comments to Ms Norris on another draft based on the advice of Mr Sean McLaughlin.

14. On 10 October 2001, Ms Norris sent another draft Right to Negotiate Agreement to Ms Magauran noting that she had incorporated changes suggested in Ms Magauran’s fax and discussions between them but that Mr Martin had not yet considered the detail of the changes.

15. On 16 October 2001, the Government party responded to queries from Ms Norris about aspects of the agreement and particularly that under the Mineral Resource Act it was not possible for a miner to agree to leave infrastructure to the native title party after the Mining Leases terminate which was one of the changes negotiated between the native title party and grantee party.

1. Ms Norris deposed in uncontested evidence that she had telephone conversations with Ms Magauran on 15 October 2001 who advised that she had had good reports on the draft Agreement from a number of Woolgar applicants but there were three others who needed to see it.  After being unable to contact them it was agreed by Ms Magauran that the draft Agreement should be forwarded to the Government party.

2. On 17 October 2001, BDW sent to the Government party the draft Right to Negotiate Agreement noting that its client and ‘most of the registered native title claimants have reached consensus on the terms of the agreement’, which it said remained substantially the same as the June 2000 draft.  They requested finalisation as soon as possible, noted that Ms Magauran would be leaving the CQLC on 31 October 2001 and requested signatures prior to her departure.

3. On 24 October 2001, another Tribunal mediation teleconference was held involving all parties.  There was agreement that Ms Norris would redraft some of the clauses to reflect the discussion.  Ms Norris deposed that Ms Magauran had advised that the native title party were prepared to sign the Agreement but there were some issues about infrastructure and maps to be attached to the Agreement.  She also said that the Government party had 25 to 30 outstanding issues which were discussed during the teleconference.  The Tribunal’s notes of that conference recorded that, if the claimant group agreed to the redrafted agreement over the weekend of 27-28 October these matters would not need to be revisited subsequently.  The only outstanding issues would be any raised by the State’s legal team and these would be dealt with expeditiously.

4. On 26 October 2001, a further draft was sent by Ms Norris to Ms Magauran with some further limited comments.

5. On 30 October 2001, Ms Norris contacted Ms Magauran to enquire about the meeting of the Woolgar people held on 27 October 2001.  Ms Magauran advised that she did not have a lot of time to copy the Agreement before the meeting and although she spoke about the agreement most people did not have the current version.  Further, that given this difficulty and that comments from the State were still outstanding there was no resolution regarding the Agreement.

1. Ms Amber Magauran attended her last Tribunal mediation teleconference on 24 October 2001 and finished work with the CQLC on 31 October 2001.  Thereafter Ms Susan Gilmour acted for the native title party but until February 2002 was not employed full time by the CQLC.  Prior to that time there was telephone contact between Ms Gilmour and Ms Norris on 6 November 2001, the Government party sent its comments on the draft agreement to the parties on 15 November 2001 and on 30 November 2001 Ms Norris sent to the parties marked up and clean copies of the amended Right to Negotiate Agreement taking account of the State’s comments of 15 November 2001.

2. On the issue of the status of the Agreement at this point Ms Gilmour deposes that at a claimant group meeting on 8 May 2002 it was confirmed to her that neither the registered claimants, nor the broader native title claim group had agreed to the draft Agreement and that they were not happy with its terms and did not believe they had already agreed to them.

3. It is convenient to pause at this point to review the conduct of the negotiations up to 30 November 2001.  Leaving aside the native title party’s principal contentions about misrepresentation and deliberately withholding information I can find nothing to suggest that the negotiations were conducted other than in good faith by the parties.  By 30 November 2001 there was a draft Right to Negotiate agreement which all parties had contributed to and about which, following considerable discussion, there was substantial agreement between at least the parties’ legal representatives.  Further, Mr Martin on behalf of Strategic had been closely involved in the negotiations, as were from time to time a number of the Woolgar claimants.  The evidence also shows that meetings of the native title party were held on occasions to provide instructions to their lawyers.  The native title party was legally represented throughout and at least one independent barrister, Sean McLaughlin advised in relation to the agreement.  The draft Agreement dealt with topics which are normally found in agreements of this type including the native title party’s access rights, appointment of Community Liaison Officer by the native title party to be partly funded by the grantee party who would deal among other things with employment and contracting opportunities for the native title party, cultural heritage protection, assignment of the grantee party’s interests, cultural induction presentations for employees or contractors working on the Mining Lease areas, a code of conduct regarding Aboriginal cultural heritage, resolution of disputes and compensation.

1. It is clear from the documents that the negotiations were without prejudice, that rights were reserved to suggest further amendments and/or additions when proposals were advanced and that agreement on specific clauses was subject to agreement on the document as a whole.  Given this situation and advice from Ms Magauran about the claimant meeting on 27 October 2001 it cannot be said that final agreement had been reached.  However, it is difficult on the basis of the documents alone to reconcile Ms Magauran’s relatively optimistic view of the status of the draft Agreement leading up to her departure in October 2001 and the negative reaction to it from claimants at the claimant meeting on 8 May 2002, deposed to by Ms Gilmour.

2. Despite the apparent dissatisfaction with the draft Agreement at the 8 May 2002 meeting the evidence is clear that this was not an agreement drafted by legal representatives alone and then presented to their clients in a final form for approval.  Over a period of two and a half years from May 1999 to October 2001 there were considerable discussions between the parties, including some of the Woolgar claimants themselves (a Negotiating Team involving named claimants and representatives of the claimant group had been established).  While there had been no final agreement I am satisfied that the native title party were aware of the main features of the agreement being negotiated on their behalf.  I am also satisfied that there was substantial agreement between the legal representatives of the native title party and Strategic on the terms of the 26 October 2001 draft.

3. Whatever may be said about the status of the draft Agreement in October 2002, there is no basis (leaving aside the native title party’s principal contentions) to suggest that the grantee party did not negotiate in good faith up to this point.  Applying the principles applicable to good faith negotiations including the Njamal indicia it is clear that there were discussions with a view to reaching agreement, early communication after the native title party became registered, proposals made and exchanged, regular communications and contact, meetings attended, information exchanged, issues discussed in correspondence and in person, counter proposals were made and a preparedness to shift position on some issues (eg. compensation) was demonstrated by the grantee party.

Negotiations with respect to compensation to 30 November 2001

1. With respect to compensation the evidence shows that proposals were made by the grantee party, counter proposals considered and a preparedness to shift position demonstrated.

2. On 20 April 2000, Strategic’s proposal was $10.00 per hectare per annum and $25,000 per annum (if production exceeds 40,000 ounces) and $50,000 per annum (if production exceeds 60,000 ounces).  This would produce a potential total annual compensation payment of $29,750 or $54,750 depending on the productivity of mining from the Mining Leases.  This offer compared to the native title party’s starting position of $125,000 per annum based on $2.00 per ounce and $5,000 per year on the assumption made by Strategic of the mine producing 60,000 ounces per annum.

3. Strategic’s negotiating position was that it would not pay compensation for the impairment of native title rights and interests and this was reflected in the compensation clause of the October 2001 in principle agreement. This position was also demonstrated by the original offer that payments be made into trust pending a determination of native title (which is all the Tribunal is empowered to do if it imposes a condition for a payment in the nature of compensation in an arbitral determination). This is a position which the grantee party was entitled to adopt if it considered that the grant of the Mining Leases and consequent activities would not affect the enjoyment of the native title party’s rights and interests over the area. In this respect I also note that there is no evidence to suggest that the native title party in response to the Government party’s invitation under s 31(1)(a) of the NTA made any submission on this point, something which the Tribunal suggested is desirable as part of the negotiation process (Western Australia/Kevin Peter Walley & Ors, NNTT WF97/5, Hon C J Sumner, 25 March 1998 at 47; Normandy Pajingo Pty Ltd and Battle Mountain (Australia) Inc/Queensland/Colin McLennan & Ors (Birri People), NNTT QF00/2, Hon C J Sumner, 29 September 2000 at [13]).

4. With respect to compensation the 30 November 2001 draft Agreement incorporated the substance of the compensation provisions first made by the grantee party on 20 April 2000 and incorporated in its draft Agreement sent to Ms Magauran on 26 July 2000.  I infer from the fact that this clause was not substantially changed during this period, nor the subject of further discussions in any substantial respect that agreement in principle had been reached on it.  The grantee party eventually agreed to compensation partly based on the amount of gold produced.  If the production targets were met the native title party would have been entitled to the annual payments specified above.

5. There is no evidence before the Tribunal to enable it to assess the reasonableness or otherwise of these proposals when compared with other agreements of this kind.  What can be said is that the grantee party compromised on this issue in a number of ways viz by agreeing to a form of production based payment, conceding that the monies need not be held in trust and that no repayment of monies already paid would be sought if there was a determination that native title did not exist.

6. One of the objectives of the Act (s 3) is the recognition and protection of native title.  The protection is partially secured by the right to negotiate provisions which operate once an application for a determination of native title has been lodged and registered.  The rights are protected pending a final determination and during this period the registered native title rights and interests are treated as if they were determined native title rights and interests (see WMC Resources & Anor v Evans (1999) 163 FLR 333).

7. If negotiations fail to reach agreement including about payment of compensation whether under s 33 of the Act (royalty type payments) or otherwise, the Tribunal’s powers in making a determination with conditions are limited. A condition of a determination that royalty type payments be made is not permitted (s 38(2)) and any other monetary amount which is determined on account of a future determination of compensation by the Federal Court must be paid into trust (s 41(3)) and paid out following a final determination of native title and of compensation for the relevant future act (s 52).

8. Under the NTA compensation can only be determined by the Federal Court following a determination of native title, the Tribunal has no power to do so. For the impairment of native title by grant of a mining lease, which does not extinguish native title, compensation is determined by reference to the similar compensable interest test (ss 24MD(3)(b), 51(3), 240). This means that compensation is calculated on the same principles as compensation for mining on freehold land applicable in the relevant State legislation. Under the NTA there is no provisions for the assessment of compensation based on s 33 factors.

9. In Queensland the Mineral Resources Act provides for compensation for the effect of a future act on native title rights and interests including for activities carried out under the mining tenement (s 707(1)) and the general principles for the assessment of compensation in relation to other landholders contained in the Mineral Resources Act are also applied (s 707(5A)).  Those general principles include deprivation of possession of the surface of the land; diminution of the value of the land and improvements; diminution of the use made or which may be made of the land and improvement; severance of part of the land; surface rights of access and loss or expense which arises (s 281(3)).

10. The situation in Australia is that the law does not generally recognise private ownership of minerals.  These are the property of the Crown and royalties are not payable to private landholders whether holders of freehold or otherwise in relation to them.  Native title also does not extend to rights in minerals (Western Australia v Ward (2002) 191 ALR 1 at [382] and [461]).

11. Negotiations under the right to negotiate may and often do involve consideration of s 33 royalty type payments. Depending on the circumstances any proposal of this kind may need to be considered by a Government or grantee party but there is no obligation to agree (see above). However, the basic principles of compensation for impairment of native title by the grant of a mining lease which is ultimately determinable by a Court do not involve compensation by way of royalty type payments.

12. The High Court has confirmed that the right to negotiate provisions preserve ‘the status quo’ pending a final determination of native title (North Ganalanja Aboriginal Corporation v Queensland (1996) 185 CLR 595 (at 616)). The provisions for payment into trust of monies payable on account of compensation as a condition of a determination reflect the philosophy of the Act.

13. Given the principles for assessment of compensation under the NTA and the trust account provisions for a monetary condition under the right to negotiate provisions the native title parties (and their legal advisers) are placed in a position where they must consider whether a s 33 compensation offer is acceptable or whether to await a Court determination of compensation. The Tribunal acknowledges that this may not always be easy as there is to date no judicial guidance on the issue but it is the position which native title parties must often confront in negotiations.

14. It is also worth noting that Strategic’s proposal was open ended in time during the currency of the Mining Leases.  If the estimated productivity of the mine continued beyond six years then compensation would still be payable if the production criteria were met.  While there may be different views on the adequacy of the compensation offered, there can be no doubt (subject to the native title party’s principal contentions) that Strategic negotiated in good faith in relation to it.

The negotiations generally after 30 November 2001

1. Following Ms Gilmour’s commencement of full time work with the CQLC on 4 February 2002, the documents reveal that on 13 February 2002 Ms Norris sent by e-mail to Ms Gilmour a draft Right to Negotiate Agreement which she said had been agreed in principle between the native title parties and Strategic and sent to the State for finalisation on 17 October 2001.  She pointed out that the agreement itself had not substantially altered key terms since June 2000 and that the matter had a long history commencing in 1998.  Following telephone conservations between Ms Norris and Ms Gilmour, BDW wrote to Ms Gilmour on 10 April 2002 confirming ‘that you had advised us that your client is ready to sign the agreement and suggested either 8 or 9 May (to be confirmed by you after discussions with your clients) as the date the agreement will be signed at Middle Park’. In her affidavit evidence Ms Gilmour says that she disagrees with the statement in that letter. She says that she had not had the opportunity to take instructions from the native title party and could locate no material in documents held by the CQLC that indicated that such instructions had been received. Ms Gilmour’s view was that as the newly engaged solicitor she would require an opportunity to obtain instructions prior to confirming or otherwise her clients consent to the draft agreement. She does confirm in her affidavit (para 11) that Ms Norris was of the view that the native title party had in previous negotiations agreed to execute the proposed s 31(1)(b) agreement. She also says that both Dr Edmunds and Ms Norris had requested her to finalise the matter.

2. In order to seek instructions Ms Gilmour made arrangements to meet the Woolgar claimants on 8 May 2002.  In preparation for that meeting she wrote to BDW on 22 April 2002 seeking further information.  I set out the details of this letter in full together with other correspondence between the parties, between April and September 2002, as it provides a convenient summary of the parties’ position at that time.  Ms Gilmour initially clarified her position by advising that her clients were keen to finalise the agreement but she was not in a position to confirm her client’s readiness to sign as she did not have instructions and that the purpose of the meeting of 8 May 2002 was for her to obtain sufficient instructions in order for the agreement to be finalised which at that stage she expected to be able to do.  The letter then requested the latest information available to Strategic in relation to the following matters:

   ‘Ÿ       The Plan of Operations if one has been prepared.

   ·Confirmation that the expectation is still that the site has a life of five to six years, and that the ore is expected to be relatively low grade, 1.2g/tonne.  Details of the relationship between further exploration and these predictions.

   ·A recent map that shows the location of activities to date including the existing mining lease at Soapspar, projected activities pursuant to this mining lease application and the location of new exploration permits applied for.  A map that includes the boundaries of Middle Park holding would be particularly helpful.

   ·Whether Strategic Minerals NL still anticipates exploiting the deposits itself or whether the project may be sold to another miner prior to or during the operational phase.

   ·Estimate of revenue required for the operation of the mine and likelihood of revenue being approved.  This information will be treated in confidence.

   ·Projected commencement of operation, assuming agreement is finalised within this financial quarter.

   ·Any more recent description of the project as a whole.  The only document I have available to me is the EMOS of January 1998.’

The letter concluded by advising that while the information had been provided to her predecessors the request was now made ‘in the interest of attending to the finalisation of the agreement as a matter of priority’.

1. On 24 April 2002, BDW responded to Ms Gilmour in the following terms:

   ‘1.Plan of Operations.  A Plan of Operations has not been prepared as yet.  It will be formulated and submitted to the Department of Natural Resources and Mines following completion of a satisfactory final feasibility study and the decision to mine.

   2.Mine Life.  Our client has instructed us that the expected life of the mine remains 5 to 6 years, however this period may be extended depending upon the results of further exploration.  Current exploration results have revealed that the ore is expected to be relatively low grade and it is anticipated that approximately 1 million tonnes of ore will be extracted from the mine annually.  Production of gold is currently projected at between 50,000 and 60,000 ounces per financial year.  Please note all estimates are subject to completion of a final feasibility study anticipated to be completed within the next 12 to 18 months.

   3.Recent Map.  Mr Martin will endeavour to provide an updated location map on his return from holidays.

   4.Exploitation of the Deposits.  The intention is for Strategic to develop the deposits following completion of the final feasibility study.

   5.Estimate of Revenue.  Capital costs required for the operation of a mine of this type is estimated as being between 24 and 30 million dollars for plant and infrastructure.

   6.Commencement of Operations.  The commencement date of operations is dependant upon the results of the exploration program, the final feasibility study having regard to the economic situation prevailing at the time (including the gold price).  At this stage it is anticipated that mining operations will commence within the next 12 to 18 months (again dependant upon a satisfactory final feasibility study).

   7.Description of the Project.  The most recent description of the project is contained in the EMOS of January 1998, which we understand that you have already viewed.  It is likely that further environmental information will be required by the Department of Natural Resources and Mines in the future, copies of which will be available to you.

   Production Payments

   You have also previously requested further information regarding clause 11 (Compensation) of the RTN Agreement.  You have asked whether a percentage payment of the annual production of gold was ever discussed by the parties.  This issue has been extensively negotiated over the last 4 years with all parties agreeing to the current terms of clause 11.

   We hope this information assists your review.  We will endeavour to forward further material to you following Mr Martin’s return from holidays.’

2. Following the meeting with her clients on 8 May 2002, Ms Gilmour wrote to BDW on 16 May 2002:

   ‘I write to confirm that a meeting of the native title claim group was held on site at Middle Park station on 8 May 2002.

   Arrangements have been made that will allow for the finalisation and execution of an agreement without a need for a further meeting of the claim group.  I have instructions to pursue clarification of a number of specific matters and to arrange for execution of the agreement upon satisfactory resolution of those matters.

   The maps provided were helpful and your client’s assistance in that regard is appreciated.  The claim group was able to travel to the Sandy Creek site, although not as far as the water storage dam on ML90044.  Some member so of the claim group travelled to Soapspar although not all the claim group was able to attend.

   As a result of attendance on site, members of the claim group were able to properly consider the effect of the project on the Sandy creek watercourse and to better appreciate the scale and nature of the proposed operation.

   As you are aware, I have reviewed the considerable material held regarding the negotiations to date.  There are some issues that appear to have been raised but not addressed.  I anticipate that I may not have available to me all of the communication between the parties and have borne this in my mind.

   At the meeting on 8 May 2002, the native title claim group advised me of their understanding of the contents of the agreement.  In some respects, their understanding is not reflected in the latest document.  I bring these matters to your attention in order for you to comment.  I accept that some of the matters may have been dealt with previously and it may be that my clients are not aware of the outcome of previous discussions between the representatives.  On the other hand, the issues appear to be subsidiary matters that may have been overlooked and could now fairly easily be accommodated in line with the expectations and instructions that I have from the native title claim group.

   The issues on which the native title claim group have a different understanding are as follows:

   Infrastructure

   The native title claim group understands that, as the owners of the underlying title, a significant benefit to them of the development of the project would be the addition of some infrastructure that would be available for other operations at the cessation of the mining.  This was seen as some compensation for the major disturbance that would be caused to the Sandy Creek watercourse by the proposed method of mining.

   In order for the issue to be addressed expeditiously, I have attached a draft Infrastructure clause that may be added to the existing document.  The clause limits the dollar value of the infrastructure that is to remain.  The objective is to limit the any effect on the valuation of the project and also to avoid interference with the statutory obligation to rehabilitate.

   The transfer of limited in situ infrastructure is regarded as a modest and reasonable addition to the agreement.  It is based primarily on the claim group’s interests as the owners of the underlying title.  I also note this issue was raised in March 2000 but does not seem to have received close attention in recent times.

   Cultural Heritage Protection

   An initial issue that has arisen is the issue of site protection in relation to the other mining leases the subject of the Woolgar project and, in particular, the haul road to be constructed between Soapspar and the Sandy Creek site.

   It seems necessary to insert a definition of the ‘whole project’ so that it encompasses the two lease areas for which native title agreement is sought, and also extends to the other mining leases and associated roads and access areas that are being exploited and utilized as part of the project.

   The native title claim group is of the understanding that the miner’s undertaking in relation to a cultural heritage report and cultural heritage protection applies across the project.

   The native title claim group has an understanding that there were to be provisions for some redress in the event of damage to any site or object of significance.  The present Clause 17 does not provide for any specific response by the Grantee Party or its agents in the event of such damage.

   I am instructed that Middle Park was purchased by the ILC as a result of its cultural heritage value and that, with the increased access to the property, there has already been some damage to a significant site.  Such an event has increased the priority of this issue.

   Attached is a draft clause for your client’s consideration.  Again, the clause is a standard provision that reflects the expectations that the native title claim group have about the nature and intent of the operations.  The clause is expected to apply across the project.

   It would appear that the agreement intends to bind the Cultural Heritage Specialist without that entity being a signatory to the agreement.  Please advise the extent of the communication with the proposed Cultural Heritage Specialist and your comments about the enforceability of the provisions.

   Employment and Training

   The native title claim group has an understanding that the Grantee Party would be complying with the industry best practice standards with regard to the minimization of social impacts of the project by way of providing an employment opportunity.

   The understanding was that the employment opportunity presented by the development of the project on the lease would benefit both the native title claim group and the local community in Richmond.  It appears this issue was discussed although it does not appear in the agreement.

   Please confirm if there is still an expectation that there will be staff employed fly in fly out form Cairns.  If that is the case, there is scope for the involvement of employment and training agencies in Cairns sourcing workers from Yarrabah, which is the where the Middle Park ancestors were removed to.

   The expectation of the native title claim group was that the Grantee Party would set a participation target.  I understand there has been some discussion of the legality of this approach in terms of anti-discrimination legislation.  I note, however, that such targets are common in the mining industry and are a legitimate component of a miner’s response to the social impacts of development on local populations.

   Attached is a draft provision that reflects the industry standard for such targets.

   Environmental Monitoring

   I note that comments have been made on behalf of your clients previously regarding the statutory obligations that they are subject to in relation to environmental monitoring.

   The expectation that the native title claim group has is to receive early notice of documentation prepared in accordance with those requirements.  It is understood that, as the underlying title holder, the Nominated Body will receive that information.

   Attached is a draft clause that confirms that understanding.

   Compensation

   I would appreciate it if you could clarify whether the production of gold referred to in clause 11 is intended to refer to gold produced only from Mining Leases 90122 and 90123.

   The understanding of the native title claim group is that the production of gold referred to in clause 11 was production of gold across the project.  It appears that throughout negotiations, there has been a target figure of 60000oz of gold per annum for at least six years derived from across the project.  The documentation indicates that ore is required to be sourced from deposits located on the other mining leases on Middle Park in order to achieve the total target that has been widely discussed.

   If clause 11 is intended to refer to production only from Mining Leases 90122 and 90123, please confirm the manner in which your client proposes to distinguish the source of the ore given that the operation provides for a sole processing plant and provides for stockpiling of ore prior to processing.

   The issue is a critical importance as it appears unlikely that the production target would be met solely from the deposits on Mining Leases 90122 and 90123 over the projected life of the operation.  This means the agreement has quite a different effect than that understood by my clients.

   Other Matters

   ·I expect to provide a draft Code of Conduct that can be attached to the final document in the near future.

   ·I would request your clients consider the addition of the Change of Scope clause attached.

   ·The comments that have been made by the State do not refer to the latest draft of the agreement.  Could you please advise me as to whether the State’s comments have been addressed in full or whether the State has yet to indicate its agreement.  If your client has no objection, I am happy for a copy of this correspondence to be forwarded to the State for their comment.

   ·In relation to the effect of a native title determination, all parties are advised that the native title parties reserve the right to withdraw the native title determination applications that relate to the area in which the mining leases are located.  The reason for this reservation is that the native title parties may not have the financial resources to fully litigate the application.  It is suggested therefore, that clause 6 include a reference to the possible withdrawal of the application and provides for operation of the agreement notwithstanding.

   The final issue I am instructed to raise is the concern of the native title claim group regarding the speculative nature of the project.  There is some uncertainty at present as to when the proponents will commence operations and this is a matter that is in no way within the control or influence of the native title parties.

   There are risks for the native title claim group if there is financial failure of the project.  At present, the project is understood by them to be a marginal gold production proposal that will be sensitive to external factors.  The operation, if unsuccessful, can potentially have a serious negative impact on that section of the Middle Park pastoral lease if there is insufficient resources to maintain the tailings dam, to redirect Sandy Creek and to deal with flood events.

   As a sign of the financial bona fides of the project proponents and in consideration of the risk being assumed by the native title parties in relation to their underlying pastoral lease interest, I am instructed to suggest that the proponents pay a good faith payment upon the signing of the agreement.  The proposal assumes the terms of the agreement will be settled.  The figure suggested is the sum of $50000 to be paid to the Nominated Body being the pastoral lessee.  It is proposed that it is a one off payment and is payable on execution agreement by the native title parties.

   In the event that your clients agree to a good faith payment upon signing and assuming that the terms of the agreement are agreed, I can confirm that my clients are prepared to indicate their good faith by undertaking to finalise execution of the agreement by them within a period of one month from the date on which terms of the document are settled between your client and mine.’

1. ASX Report to 31 March 2003:  Visual drilling results on Explorer are described as very encouraging.  Rock sampling was carried out in several areas identified in a data review completed in January 2003.  Three areas were examined with the Aura Prospect ranking most highly.  The Report also contains details of the farm-in agreement with Barrick.  Strategic’s objective was to continue to define initial shallow high grade open cut resources at the Explorer deposit and other targets within the epithermal vein sets in the Sandy Creek area.  Barrick’s objective was to test the Woolgar deeps and surrounding tenement areas for a Barrick size gold operation.  Financial commitments are made by Barrick for the first year and subsequent years if it elects to produce.

Evidence of Barry Fehlberg

1. Mr Fehlberg refers to the distinction between mineral resources and ore reserves referred to above.  He says that a gold resource amount or positive exploration result are not in themselves indicative of the amount of gold, if any, which will eventually be mined, but is relevant and required to be reported to the market by the ASX.  The ore reserve is the amount of gold actually likely to be mined taking account of all factors which must be considered in making the assessment under the JORC Code.  He says that ‘Bonanza gold’ is an accepted term used to describe high grade gold.

2. Mr Fehlberg’s evidence repeats the estimate in Strategic’s report to the ASX to 30 September 2001 that the Lost World area holds a gold resource of approximately 254,000 ounces of gold contained within 5.6 million tonnes of material grading at an average of 1.4 grams per tonne of gold.  He says there are no finalised plans to mine this area because the low grade would not make it viable in current economic conditions.  With respect to the Explorer area, he assesses (‘a preliminary guess’) of the likely gold resource based on current known information as around 200,000 tonnes of material grading some 6.0 grams of gold per tonne equalling approximately 40,000 ounces of gold.  Exploration on Grand Central has revealed low grades of gold and is not viable on current prices.  His view is that the information in the facsimile from BDW to CQLC of 24 April 2002 is accurate.  He agrees with Mr Bartsch’s assessment of resources and reserves of the Lost World, Explorer and Grand Central areas.

Evidence of Roland Bartsch

1. Mr Bartsch estimates that the mineral resource figure of 250,000 ounces of very low grade ore at Lost World will result in 200,000 ounces of recovered gold.  With respect to the Explorer area, based on a conversion rate of ore reserve being 20-30% less than the mineral resource figure, he provides as a ‘reasonable approximation’ for the Explorer area drilled to date providing 40,000 ounces of gold at an average grade of 5 and 7 grams per tonne contained in about 200,000 tonnes of ore.  This would mean around 30,000 ounces of recovered gold from Explorer.  He considers Grand Central to contain a relatively small resource of very low grade gold which he has not factored into the likely total gold production from MLA 10922.  He is hopeful that after further testing a mine which can produce 300,000 ounces of gold from ML 10922 will become feasible, the majority of which would be from the Lost World area.  He explained that while Explorer may produce a higher grade ore, it is a much smaller resource, justifying classification of the mine as low grade overall.

The Geosphere Report

1. At the request of Ms Gilmour, Geosphere Pty Ltd was asked to comment on two aspects of the grantee party’s evidence, namely the EMOS and the meaning and effect of the exploration program on the Mining Leases in relation to the size, scope and feasibility of gold mining on them.  The Report was prepared jointly by Geoffrey Bennett (an experienced geologist and resource analyst) and David Kloiber (a resource and mining economist and Director of Geosphere).  In making their assessment they relied on relevant documents which are evidence in these proceedings and filed prior to 21 May 2003, the publicly available information and general knowledge of the Woolgar area.  Because of the deadline imposed they were unable to visit the area and the background research was more limited then normal.

2. The Geosphere Report summarises the increase in resources available since the EMOS in the following table:

Resource	Lease No.	EMOS 000t	Resource gm/t	Table 000 ozs	Current 000t	Resource gm/t	Table 000 ozs
Lost World	90122	3,260	1.28	134.1	5,600	1.40	254.5
Explorer	90122	202	2.25	14.7	200	6.20	40.0
Soapspar	2793	822	1.88	49.8	477	2.93	45.0
Others	various	170	3.48	19.1	170	3.48	19.1
TOTAL RESOURCES		4,454	1.52	217.7	6,447	1.73	358.6
Gain on EMOS Data			+45%	+14%	+65%

This table is based on Strategic’s assessment of the resource indicating a 294,500 ounce resource on MLA 90122 (at Lost World and Explorer) and 358,600 ounce resource overall.

1. Having regard to the significant increase in resources discovered, analysis of the exploration results and the future exploration program Geosphere conclude that there has been a substantial positive change in the prospective resources available for gold mining on MLA 90122 above the adjusted EMOS target of 300,000 ounces ‘to multiples of that total amount’.  It says that the conservative opinions of Messrs Fehlberg and Bartsch appear at odds with the enthusiasm displayed in Strategic’s public announcements.  Mr Fehlberg’s interpretation appears overly conservative and the Geosphere authors believe that ‘any reasonable person with a basic, relevant knowledge could well arrive at a wholly different conclusion on reading SMC’s published reports’.  With respect to Mr Bartsch, Geosphere says that his pessimistic views do not take into account the highly encouraging results from the 2001, 2002 and 2003 exploration program at Explorer and other prospects. Further that although the conservatism may be prudent, it is at odds with the stated intentions of Strategic to drill some 10 to 20,000 metres in the 2003 field season at considerable expense to further delineate and increase the known resources.  This program may well result in the Explorer and/or other prospects contributing a greater amount to gold resources than Lost World resource, the Report says.  In making its assessment Geosphere relied in part on the Barrick Report and farm-in agreement and the assessment of prospectivity made in that Report of a possible 2 million ounce gold ore body.The Report also observes that the positive exploration results led to an increase in Strategic’s share price and issued capital.

Possible discrepancies in the evidence relating to Grand Central

1. The Tribunal by letter dated 18 June 2003 sought further information from Strategic on what appeared to be discrepancies in the assessment made of the Grand Central deposit.  The ASX Report to 31 December 2001 noted the potential for further significant high grade gold mineralisation within the Explorer and related Grand Central vein array.  The 2001 Annual Report described Grand Central as ‘very prospective for new discoveries’.  By contrast Mr Bartsch’s affidavit (para 15) described the Grand Central area as a ‘relatively small resource of very low grade gold’.

2. In its Supplementary Information Strategic said that the Grand Central array referred to in the 3 December 2001 ASX Report included an area that extended at least 2 kilometres outside MLA 90122 which has now been renamed Western Grand Central and West Federal.  There was also an encouraging result well outside ML 90122 which supported the statement in the 2001 Annual Report, given that the intensity of drilling on Grand Central outside MLA 90122 has been of very low intensity compared with drilling within MLA 90122.  Strategic also provided evidence of information it had gained since 31 December 2001, including three site visits by Mr Fehlberg during 2002.  On the basis of this information Mr Fehlberg has concluded that an Explorer type discovery on the Grand Central vein array is now much less likely.  Further test drill holes recently completed at Western Grand Central have failed to reveal other high grade results thus reducing the prospectivity for new discoveries in these untested areas outside MLA 10922.  Strategic said that the overall prospectivity of the Grand Central vein below 100 metres both within and outside MLA 90122 is unknown.  On the basis of this information Strategic asserts that Mr Bartsch’s statement is accurate from the known mineralisation above 100 metres for the area within ML 90122.

Possible discrepancies in the evidence arising from the Barrick Report

1. The Tribunal sought further submissions and documentary evidence from the parties with respect to the following matters.

1. The Barrick farm-in agreement referred to in Strategic’s 31 March 2002 Report to the ASX which said:

   ·Barrick intends ‘to explore the deeps for major new gold deposits’;

   ·Woolgar has a high potential to host a large World-class gold deposit;

   ·both companies have different objectives, Strategic’s being to define initial shallow high grade open cut resources; and

   ·Barrick’s objective is to test the Woolgar deeps and surrounding tenement areas for a Barrick size gold operation.

2. The reference in Strategic’s Annual Report for 2002 to the Barrick Report which concluded that ‘the area could deliver a two-million ounce gold ore body which would meet the corporate objectives of any major gold producer’.

1. The Tribunal sought clarification of what is meant by ‘the area’ referred to in the 2002 Annual Report and ‘the Woolgar deeps and surrounding tenement areas’ in the March 2003 ASX Report.  The obvious potential discrepancy within the evidence was between Strategic’s assessment of a possible exploitable gold resource of 300,000 – 350,000 ounces compared with the potential of a 2 million ounce ore body referred to in the Barrick Report.

2. Strategic provided the following Supplementary Information in relation to the issues raised (letter from Mr Martin to the Tribunal of 29 June 2003 supported by affidavit):

• Barrick’s farm-in offer to Strategic was confirmed by Strategic’s Board on 22 April 2003 and immediately announced to the ASX.

• Barrick had commissioned the report the Barrick Report to assess the historical exploration technical data from the Woolgar Project with emphasis on the Sandy Creek area (including MLAs 90122 and 90123).  Bartsch Geoscience Pty Ltd (of which Roland Bartsch is the principal) was engaged to prepare the Report.

• Messrs Martin and Fehlberg had no involvement in the preparation of the Barrick Report except in Mr Fehlberg’s case to provide access to Strategic’s data base.

• The Report prepared by Bartsch Geoscience Pty Ltd for Barrick was entirely for the use of Barrick in its assessment of the Woolgar project and not prepared for Strategic.

• Strategic were provided with the draft Barrick Report prepared by Bartsch Geoscience on 4 March 2003 and authorised by Barrick to disclose only the extract cited above in Strategic’s 2002 Annual Report which was signed on 12 March 2003.  Strategic has not been provided with a final version of the Report.

• Strategic had made a decision in September 2002 to seek funding from the Commonwealth Attorney-General to such a determination from the Tribunal, more than six months before Strategic received a copy of the draft Barrick Report.  The Report was not in existence during the negotiations.  Approval for funding was given in February 2003.

• The reference to ‘the area’ in the 2002 Annual Report refers to Sandy Creek vein system, but also means the whole Woolgar Project.

• The reference to ‘the Woolgar deeps’ in the 31 March 2003 report to the ASX principally refers to the area below 100 metres from the surface in the Sandy Creek area and ‘surrounding tenement areas’ to other tenement areas making up the Woolgar Project.

1. With respect to the difference between 2 million ounces and 350,000 ounces.  Strategic provided the following Supplementary Information.

• In assessing the Project’s potential it is only gold that can be economically recovered (payable gold) which can be considered.

• The farm-in agreement covers all existing tenements and any future tenements within the Woolgar Project.

• It is Mr Bartsch’s view that theoretically a substantial ore body may be found below 100 metres from the surface but whether there is 2 million ounces of payable gold can only be proved after extensive exploration which the farm-in agreement gives Barrick the right to do.

• It is the intention of Strategic to continue exploration, subject to funds, and that it believes a successful mining operation will eventuate at Woolgar.  The intention to explore outside MLAs 90122 and 90123 and below 100 metres in depth was apparent in the EMOS and has never been concealed.

• Strategic is still of the view that the most likely scenario is for a mine developed by Strategic at Woolgar to produce approximately 50-60,000 ounces of gold per year over a five to six year period.

• The possibility of larger deposits exists but it is difficult to predict the likelihood of their discovery.

• Strategic have identified gold resources which it hopes will provide a viable resource of between 250,000-360,000 ounces of payable gold.

• A major company such as Barrick are interested in areas of more than 2 million ounces of payable gold resource which Mr Bartsch has advised is theoretically possible in the Woolgar Project area but which will require further exploration to be carried out which can be done pursuant to the farm-in agreement.

• Statements made have been limited to advising that a significant gold resource could theoretically exist at depth somewhere in the Sandy Creek area.  Even if a gold resource is confirmed, Strategic points out, that this would not necessarily indicate that it is economic to extract it.

1. With respect to the relevance of the Barrick Report to these proceedings involving MLAs 90122 and 90123, Strategic submits that it is not directly relevant because:

• it is the property of Barrick;

• it is concerned with the whole of the Woolgar Project, not just MLAs 90122 and 90123;

• it is primarily concerned with an assessment of the potential for mining 100 metres below the surface on MLA 90122 and MLA 90123;

• it is concerned with theoretical possibilities not known ‘resource’ or ‘reserve’ figures; and

• the report was not compiled until well after negotiations had concluded and after Strategic had determined to refer the matter to the Tribunal.

1. After provision of the Supplementary Information, Strategic, at the native title party’s request, produced the draft Barrick Report (which Mr Bartsch says does not differ in any material way to the final Report). 

2. The Government party provided a response to the Barrick Report and issues associated with it in relation to the size, scope, feasibility and quantity of gold production.  Phillip Dash of the Department of Natural Resources and Mines, after considering relevant documentation including the Barrick Report, concluded that:

• he had no cause to doubt the veracity of the statements made in Mr Martin’s letter to the Tribunal of 29 June 2003 in relation to the difference between a potential 2 million ounce ore body and a 350,000 ounce mining proposal; and

• the reference to 2 million ounces in the Barrick Report is only a theoretical possibility and highly speculative and the Report is based on a geological theory which covers a significantly larger area than the proposed Mining Leases.

1. The Government party confirmed its early submission that there is no basis to question Strategic’s view that the most likely scenario for a mine at Woolgar is one producing in the region of 50,000 – 60,000 ounces of gold per year over a five to six year period and that there is no basis for finding that the information provided by them was false or that there was no basis for the opinions they held.

2. The native title party’s further submissions from Counsel, Mr Athanasiou, can be summarised as follows. 

• The Barrick Report confirms the accuracy of the extract from it quoted in Strategic’s Chairman’s address in the 2002 Annual Report and therefore confirms the basis upon which Geosphere concluded that a reasonable person could reach a wholly different conclusion as to the prospectivity of the Mining Leases to that of Strategic; and confirms Geosphere’s view that the prospective resources from the MLA 90122 area have increased by some multiples of the EMOS target.

• That with respect to ‘the area’ referred to in the quote from the Barrick Report contained in Strategic’s 2002 Annual Report, the native title party acknowledges that the Sandy Creek vein system extends beyond the area of MLA 90122 but says that Mr Bartsch has downgraded the prospectivity and importance of ML 90122 to the overall project.

• That given its responsibility under the Corporations Act 2001 (WA) to provide accurate information in the Annual Directors’ Report, the Tribunal should accept that the statements made in the 2002 Annual Report about the potential of the Woolgar Project were seriously considered and well founded and not as the grantee party is currently arguing ‘speculative only’ or ‘highly speculative’ and that they demonstrate that Strategic hold the view that the prospective resources on MLA 90122 have improved substantially since October 2001.  Likewise it is implausible in the light of the Barrick Report that Mr Bartsch holds the same view about the speculative nature of this assessment.

• That the increased prospective resources whether above or below 100 metres from the surface are still relevant for the purposes of negotiations.

• That the Barrick Report is relevant to these proceedings.

1. I accept that the Barrick Report is a relevant document.  At the very least it explains the basis for the extracts from it in Strategic’s 2002 Annual Report and the apparent discrepancy between the proposal for a gold mine producing 300,000 – 350,000 ounces of gold and ore which may produce in excess of 2 million ounces.  Although Barrick engaged Mr Bartsch to prepare the Report, the information he had obtained as a consultant to Strategic was used in its preparation.  I can infer that it was prepared to assist Barrick to decide whether to take an interest in the Woolgar Project and that Strategic were aware of this when Mr Fehlberg provided information to assist in preparation of the Report.  The fact that it is the property of Barrick does not make it irrelevant.

2. Although produced six months after Strategic decided to refer the matter to the Tribunal it contains information about Strategic’s exploration results which are relevant to its assessment of the likely productivity of a mine on ML 90122. It is worth observing, without attributing blame that the earlier production to the Tribunal of the Barrick Report would have facilitated the efficient resolution of this issue. The Tribunal is not bound by the rules of evidence (s 109(3) NTA) and attempts to conduct its proceedings in a non-adversarial way by ensuring as far as practicable that all documents potentially relevant to its deliberations are produced.

3. The Barrick Report confirms that the gold mineralisation in the Sandy Creek area extends beyond the area of MLA 90122.  It refers to the main strikes as Hillview; Lost World, Grand Central, Myopia, China Wall and Shanghai (some of which are outside MLA 90122).  The gold mineralisation in the Sandy Creek area is said by Mr Bartsch to be over an area of approximately 16 square kilometres of which MLA 90122 is 3.509 square kilometres.  Mr Athanasiou from the document and plans has assessed the mineral deposit currently being actively examined as being within an area of 9 square kilometres thus making MLA 90122 approximately 39% of the area.

1. The evidence does not permit a definitive finding on the precise contribution which gold from ML 90122 might make to an eventual mine potentially exceeding 2 million ounces of gold.  I am, however, satisfied that while the 2 million ounce potential resource assessment is from an area larger than MLA 90122, the Barrick Report also contemplates an additional resource, some of it at depth on MLA 90122, which could be more than the current assessment of the resource on MLA 90122.

Conclusion on the native title party’s principal contentions

1. The native title party submits that on the basis of the documentary evidence I can infer that the grantee party behaved dishonestly by deliberately withholding relevant information and falsely misrepresenting the probable size, scope, feasibility and quantity of gold production from the mining activity proposed for ML 90122 and ML 90123 in order to improve its bargaining position on the issue of compensation.  I consider this issue by reference to each of the years 2000, 2001, 2002 and 2003 and the publicly reported information about prospectivity compared to the representations made in the negotiations.

2. 2000 Annual Report:  There is nothing in this report of activities during 2000 which is inconsistent with the representations made.

3. 2001 Reports (Annual and ASX):  During this year the assessment of the Lost World resource increased significantly over the EMOS assessment and Soapspar was marginally less producing a resource assessment of approximately 300,000 ounces from these deposits.  In addition, the increased prospectivity of the Explorer deposit was reported on without a resource assessment.  In October 2001 the negotiations produced the agreement in principle.  While the exploration to that point was encouraging and went some way to proving up an exploitable reserve, it could not be said that the representations made by Strategic to this time were inaccurate.

4. 2002 Reports (Annual and ASX):  The negotiations effectively ceased on 22 August 2002 for the reasons already given.  To this point the ASX Report to 31 March 2002 and 30 June 2002 continued to report on the increasing prospectivity of the Explorer deposit without an assessment of the resource available.  This was reaffirmed in the ASX Report to 30 September 2002.  It is during this period that the native title party contends that information was deliberately withheld and the false misrepresentation occurred.

5. That submission cannot be accepted.  There is no doubt that the prospectivity of ML 90122 has increased significantly since the EMOS as indeed it needed to in order to reach Strategic’s target for an economically viable mine and it is likely that it will increase further.  The EMOS contemplated further exploration to prove up the resource and this is still in progress, but not yet reached the point where Strategic considers mining on ML 90122 is economically feasible. Its 2002 Annual Report acknowledges that further drilling is necessary for commercial production.

6. The documents do not contain any explicit evidence of dishonesty and are an insufficient basis to draw the necessary inferences to make out the native title party’s case.  Strategic, through the sworn evidence of Messrs Fehlberg and Bartsch maintain that the view expressed in the 24 April 2002 letter remains the case and on this basis there was no need to make the exploration results available.  Against this is the opinion of Geosphere that the resource is much larger than claimed by Strategic.  However, in coming to its view Geosphere acknowledge the material available to it was to some extent limited by time constraints imposed.  It is also to some extent qualified by acknowledging that it may have been prudent for Mr Bartsch to be conservative.  They provide no assessment of what on current information they expect the mine productivity to be and express their conclusion cautiously by saying that ‘any reasonable person … could well arrive at a wholly different conclusion’.

7. With respect to the period from the end of September 2002 to the making of the application on 5 March 2003 further assessments have been carried out and the Barrick Report prepared which have not altered the opinion of Strategic’s officers and consultants about the likely resource available for the open cut mine which they propose.  Their view is now supported by an expert from the Government party, Mr Dash.  They conclude that further investigation may lead to additional resources including an underground mine sourcing ore partly from the MLA 90122 area but that it is by no means proved up.  There is no evidence to support a finding that the Barrick Report information was deliberately withheld from the native title party particularly as the time of its commissioning and preparation negotiations had ceased.

8. The allegations of intentionally withholding information and misrepresentation for an ulterior purpose cannot be made out.  Even if the documents disclosed a prima facie case, it would be impossible to make such a finding without hearing from the parties.  The rules of natural justice would require it and it is difficult on these facts to see how such a serious allegation could be made out without oral evidence and cross-examination.

9. While I have some concerns about the disparity between the optimism displayed in Strategic’s public reports and the caution exhibited in evidence before the Tribunal this has at least now been to some extent explained by the Supplementary Information and the Barrick Report.

10. I now turn to the reasonableness of the grantee party’s behaviour in failing to disclose the results of its exploration program and accept the native title party’s submission that this information should have been provided to the native title party at least up until the time that negotiations ceased.  In my view it is desirable and indicative of good faith in negotiations for a grantee party to keep a native title party up to date on relevant developments relating to a project during the course of the negotiations.  In some circumstances failure to do so could amount to not negotiating in good faith.  In this case it would have been desirable for the Annual and ASX Reports to have been made available.  Apart from anything else it might have avoided this challenge to good faith negotiations.  However, as stated, the grantee party submits that as its assessment of the probable size, scope, feasibility and quantity of gold likely to be produced from the mine did not change during the negotiations despite the positive exploration results and provision of the results would not have added anything substantial to the discussions.  There is sworn evidence from Strategic’s officers that the most likely mine remains one involving 300,000 (and possibly 350,000 ounces) extracted over five to six years.  This assessment is supported by an expert from the Government party, Mr Dash.  Geosphere are of a different opinion.  The Barrick Report suggests that a resource perhaps significantly greater than this may be identified on ML 90122 but that further exploration is required before this can be properly assessed.

11. With respect to the likely prospectivity of ML 90122 there is a difference of opinion amongst experts.  For the purposes of determining the good faith issue it is not necessary to resolve the issues in dispute even if this were possible on the basis of the written evidence.  In light of the sworn evidence I cannot find that Strategic’s view is not genuinely held so as to call into question their good faith in the negotiations.  In coming to an overall assessment of the grantee party’s negotiating behaviour I also take into account that the information which should have been provided was publicly available.  It is not unreasonable to expect representatives acting for native title parties involved in negotiations with a public company to research information about it which is publicly available.  This is not a case of a grantee party deliberately or inadvertently failing to disclose information which is only in its possession.  Indeed the fact that it was public information supports a conclusion that there was no deliberate intention to conceal it.  The grantee party’s lapse in ideal negotiating behaviour does not in the overall circumstances of this case mean that it failed to negotiate in good faith.

The EMOS as a basis for negotiations

1. The Geosphere Report also says that the EMOS does not provide a proper basis for negotiations about a proposed mining operation.  It is not a feasibility study which considers economic factors but rather an environmental study.  The mineral resources assessment is inadequate and the reserves are not mentioned.  It says that it is misleading to present the proposal described in the EMOS as a likely, definitive mining plan when it depends on future exploration which may or may not be successful.  Geosphere views the resource assessment as containing parameters which are part of a conservative wish list to support Strategic’s claims of a marginal cost operation useful for compensation negotiations while noting that the projections were based on information known at the time (1997) with hopes of further modest exploration success.  In my view there is no basis for a finding that the EMOS was deliberately written in such a way as to minimise the mine’s prospectivity with an eye to future compensation negotiations.

2. The experience in this matter shows that the Mineral Resources Act permits the Government party to grant a Mining Lease where an intention to mine has not yet been formed and further exploration is to be carried out to investigate the feasibility of an economic project.  This was recognised by the Warden in his Report on MLA 90122.  An application for a mining lease can only be based on the information known at the time.  On one view the Geosphere challenge to the EMOS could amount to a challenge to the Government party’s regulatory regime generally for the grant of all mining leases.  That is, the suggestion appears to be that there can be no negotiation in good faith unless there is certainty about all aspects of a proposal including the extent of the mining resources or reserves.  I cannot accept that view as a general proposition.  Every case will need to be considered on its merits and if the information about a proposed mine is insufficient to assess any impact on native title rights and interests (assuming there is information or evidence about them and how they are enjoyed in the relevant area) then this may impact on whether negotiations in good faith can occur or whether it is appropriate for the Tribunal to make a determination that the act may be done (see Western Australia v Thomas (Waljen) (1996) FLR 124; Re Koara People (1996) 132 FLR 73).

3. In this case I do not regard the EMOS as an inappropriate document to be used in the negotiations.  It provides some basic details of the Woolgar Project and identifies the major features of any mine including the use of ML 90044 for a water supply dam and ML 90123 for a processing plant, tailings dam and campsite and provides Strategic’s assessment of the mining resource based on previous exploration over 10 years which was updated during the negotiations.  The target for viability of a mine producing 50,000 – 60,000 ounces per year for 5-6 years was stated by Mr Martin at the outset.  For the greater part of the negotiations the native title party negotiated on this basis and there was ample opportunity for further information to be elicited from Strategic.  There may be situations where a grantee party has information about a project in addition to an EMOS and in the interest of constructive and open negotiations this material should also be disclosed to a native title party, but in this case the broad outline of the proposal remained the same.

The negotiating behaviour of the native title party

1. Strategic contended that the Tribunal should also take into account the behaviour of the native title party or their legal representatives which were detrimental to the negotiations.  There is no doubt, for instance, that the changeover of legal representatives within the CQLC from Ms Magauran to Ms Gilmour was less than satisfactory.  There was a lack of continuity in knowledge of the negotiations.  It caused a delay in finalisation of an in principle agreement and enabled issues which had been settled to be reventilated.  In the circumstances, I have not given any weight to this factor as I am unsure of the extent to which the claimant group itself was responsible for these problems.  It would not be appropriate to reflect adversely on the behaviour of the claimants if the problem lay with legal representatives and/or the Representative Body.

General conclusion

1. The negotiating behaviour of the grantee party must be looked at in the context of the negotiations as a whole.  It will often be the case that there are some aspects of negotiations which are not ideal.  As the negotiations involved the possibility of payment of compensation based on the productivity of the mine the grantee party should have made available to the native title party information (the results of ongoing exploration) relevant to this issue.  However, in this case the seriousness of this lapse is mitigated by the fact that the exploration results did not change in a major way its view of the prospectivity and probable size of the mine and that the information was publicly available and could have been obtained by the native title party.  The fact that there is a dispute amongst experts about the interpretation of exploration results is not sufficient to call into question the grantee party’s good faith.  There is ample evidence of the grantee party constructively engaging in negotiations with a genuine desire to reach agreement and this was almost achieved in October 2001.

Decision

1. The grantee party has fulfilled its obligation under s 31(1)(b) of the Act to negotiate with the native title party in good faith. The Tribunal has jurisdiction to conduct an inquiry and make a determination.

   Hon C J Sumner
   Deputy President
   9 July 2003