The Kidman Resources Ltd (ASX: KDR) share price has been crushed this morning, falling as much as 21% lower, making it one of the worst performers on the All Ordinaries Index.
Kidman shares have recovered slightly and are sitting 14.23% lower at $1.08 at the time of writing.
Kidman was placed in a trading halt last Wednesday pending an announcement regarding the recommendation of the Mining Warden for Perth, WA in respect of Kidman’s applications for exemption from past minimum expenditure obligations on tenements related to its Mt Holland Lithium Project.
The company announced this morning that late last Wednesday it received notification that the Warden has recommended the Minister refuse the applications.
According to the statement, the Warden’s recommendation is not binding, and the minister has the discretion to grant certificates of exemption to Kidman and its subsidiaries, notwithstanding the recommendation.
Both Kidman and its joint venture partner Sociedad Quimica y Minera de Chile (SQM) believe that there are compelling reasons why the Minister should exercise his power under the Mining Act to grant certificates of exemption and clear the way at an early stage for the joint venture to continue to progress the Mt Holland Project. The company is preparing detailed submissions to the Minister outlining the reasons why the certificates of exemption should be granted.
If the Minister grants the exemptions, the forfeiture applications regarding the relevant tenements will be unsuccessful and Kidman and SQM will continue to develop the Mt Holland Lithium Project.
However, if the Minister follows the Warden’s recommendation not to grant the exemptions, the forfeiture applications regarding the relevant tenements will then proceed to a contested hearing before the Warden, incurring delays to the Mt Holland Project.
Kidman and SQM have so far invested more than $55 million in the Mt Holland Project, which is considered of strategic significance to Western Australia. The project is expected to directly create more than 350 jobs by 2021, plus additional jobs through the construction phase.
The Kidman Resources share price has climbed 19.13% in the last 12 months, compared to a gain of 8.39% for the S&P/ASX 200 Index.