PERTH (miningweekly.com) – ASX-listed NuCoal Resources is preparing to launch a suit against former New South Wales Mineral Resources Minister Ian Macdonald and the New South Wales government, after the Independent Commission Against Corruption (ICAC) identified “corrupt conduct” regarding the grant of an exploration licence for the Doyles Creek project.

In its August findings, the ICAC found that Doyles Creek Mining (DCM) chairperson John Maitland had a personal relationship with Macdonald, with the Minister granting the exploration licence despite the decision being directly opposed by the Department of Primary Industries (DPI).

The ICAC found that DCM directors Craig Ransley and Andrew Poole, along with Maitland, provided the DPI with false information regarding the size of the resource and the identity of the institution that had entered into a partnership with DCM to establish a training mine at Doyles Creek.

The ICAC recommended that certain matters should be referred to the Director of Public Prosecutions and the New South Wales Crime Commission.

NuCoal, which acquired DMC in 2010, said on Thursday that it had been unaware of the corrupt conduct at the time of the purchase, stating emphatically that the company was an innocent party in the matter.

In a statement to shareholders, chairperson Gordon Galt warned that the company would have no clarity on the security of the tenure or a clear course of action until the New South Wales government considered the ICAC’s recommendations.

However, the company said that it would take whatever "realistic" steps it could to protect its legal position, including a potential mandamus against the current Minister for Mineral Resources to determine the renewal of the affected exploration licences.

The company had also instructed its lawyers to draw up the necessary documentation to initiate proceedings against Macdonald and the New South Wales government to compensate for damages.

The Doyles Creek tenement is estimated to contain about 512-million tons of resource, and has a provable ore reserve of 50.9-million tonnes across two target seams. The project comprises an underground mine and an associated training facility.