TORONTO (miningweekly.com) – ASX- and TSX-listed Intrepid Mines on Friday said it would appeal a split ruling on a case it brought before the State Administrative Tribunal, in Surabaya, East Java, to set aside the transfer of two mining leases for the Tujuh Bukit copper/gold project to a new company controlled by some of Indonesia’s richest men, including tycoon Edwin Soeryadjaya.

Intrepid was effectively locked out of the $5-billion project after the controllers of the PT Indo Multi Niaga (PT IMN) joint venture (JV) company transferred the ownership of Intrepid's 80% shareholding to another vehicle, PT Bumi Sukses Indo (BSI).

After the leases were transferred, the shareholding had changed such that PT IMN was no longer a shareholder in BSI. Intrepid said Indonesian legislation provided that mining leases were not transferable, with an exception for transfers to majority-held subsidiaries.

A new shareholder, Hong Kong-based private equity investor Quantum Pacific, in June led a push to take over the Intrepid board and pursue a plan to negotiate with Soeryadjaya to win back a stake in Tujuh Bukit within nine months.

But a majority of shareholders rejected that plan in a vote, supporting the board and the battle to win back rights to Tujuh Bukit, which may hold 19-billion pounds of copper and 30-million ounces of gold.

The company instituted legal proceedings, seeking that the decisions of the Bupati of Banyuwangi (the local government chief executive) to approve the transfer and the subsequent changes in shareholding in BSI, be declared illegal.

On Thursday, the tribunal handed down a split judgment in the matter.

Two judges ruled against the company on a procedural point of lack of legal standing, saying that it had no standing to challenge the actions of the Bupati of Banyuwangi in circumstances where it was not yet a shareholder in PT IMN. They did not consider the merits of the case.

The third judge, in his dissenting verdict, accepted the company's standing to institute proceedings and went on to examine the merits of the matter, concluding that the Bupati of Banyuwangi had acted contrary to Indonesian law in approving the transfer of the mining leases and the subsequent corporate reorganisation of BSI.

"We believe that the findings of the dissenting judge, Judge Tri Cahya Indra Permana, provide a solid foundation for an appeal to the State Administrative Appeals Court of Surabaya, which we shall be pursuing,” executive chairperson Ian McMaster said.

Separately, the company confirmed that through its subsidiary, Emperor Mines, it had filed an arbitration notice with the Singapore International Arbitration Centre, starting proceedings against PT IMN and the other JV parties regarding breaches of the various JV agreements in place between them and the company.