There is at present no active prospecting for gold in Co Mayo despite a substantial find there and the overturning of a ban on mining in parts of the county, the High Court was told yesterday.
Mr Hugh McCullough, chief executive of Glencar Exploration Company, said Mayo County Council's 1992 ban on mining in parts of the county had undermined confidence in his company and in mining in Co Mayo.
The ban had scotched future exploration in the area and his company's business was very much affected. "The perception in the market was that we were attached to a dead duck in Co Mayo," he said.
Glencar was seen as attached to a gold prospect in Co Mayo with great potential which could not be realised. His company's shares had fallen from 32/33p before the ban to 8p after the imposition of the ban which covered the entire area of Glencar's exploration licences. The ban covered the area from Achill Head to Killary.
He was giving evidence on the third day of an action for damages over the council's mining ban, which was overturned by the High Court in late 1992. Glencar and Andaman Resources plc are seeking more than £2 million in damages against Mayo County Council.
In court yesterday, Mr McCullough told Mr Rory Brady SC, for the plaintiffs, that the State in 1991 had a policy in favour of exploration consistent with environmental concerns. His company had been engaged in joint venture negotiations with the Australian gold mining company, Newcrest, with a view to developing a gold prospect in Co Mayo and final terms were agreed in November 1991, Mr McCullough said.
He was stunned when the ban was formally adopted in February 1992. Glencar cut back on exploration activity, Newcrest withdrew from the joint venture and, despite efforts, Glencar could not secure another partner.
Despite the overturning of the ban, all exploration activity in the areas of Co Mayo for which Glencar had exploration licences had come to a stop. Cross-examined by Dr Michael Forde SC, for Mayo County Council, Mr McCullough denied that his company had held on to the exploration licences because it intended to resume exploration.
He said he could not operate on the basis that the council may not have intended the ban to be irrevocable.
The case continues before Mr Justice Kelly today.
