- Deccan Gold Mines shares hit record highs after Supreme Court ruling on mining rights
- Supreme Court upheld pre-2015 mining lease rights for Deccan Gold's Ganajur Project
- The ruling allows the company to proceed with its long-delayed gold mining project
Shares of Deccan Gold Mines hit back-to-back record highs for two consecutive sessions this week after after the Supreme Court upheld the pre-2015 mining lease rights and ruled in favor of the company for its long-delayed Ganajur Gold Project in Karnataka. The small-cap stock soared 20% to hit a fresh lifetime high on Monday and extended gains to hit another record high on Tuesday in early trade after the opening bell amid a positive momentum in the domestic stock market on strong global cues.
On June 16, shares of Deccan Gold Mines opened at Rs 192.60 and gained 4.6% to hit a 52-week high mark of Rs 201.44 apiece on the NSE. Shares last traded 1.36% higher at Rs 195.22 apiece while the benchmark NSE Nifty 50 was trading 0.495 higher at 23,970.50 in morning hours. The stock has soared 16% in one week, 60% in one month and 62% on a year-to-date basis. The gold mining company commands a market cap of Rs 3,875.71 crore, according to stock exchange data.
ALSO READ: Hindalco, NALCO Share Prices Fall over 4% As LME Aluminum Prices Slide
Deccan Gold Mines Share Price: What's Fuelling The Rally?
The Supreme Court verdict means the company can finally move ahead with its Ganajur Gold Project in Karnataka, a plan that had been stuck for years because of changing mining laws. The top court held that the mining lease rights and approvals granted before the 2015 amendments to the Mines and Minerals Act remain valid. Since the company's subsidiary had secured key approvals before 2015, its rights are protected despite later changes in mining regulations.
In a regulatory filing to the stock exchanges on Monday, the gold and critical minerals company said that Justices Prashant Kumar Mishra and Atul S Chadukar-led bench of the apex court, in its order dated June 9, ruled that the company's vested and accrued rights would continue to exist irrespective of subsequent amendments, as an order to grant a mining lease and requisite approvals had been taken before 2015.
"The Court further clarified that such cases would not be treated as "pending applications" as of 2015 and therefore would not be hit by the post-2015 statutory regime mandating auction, nor by the lapse provisions introduced subsequently in 2021," it said. The government made amendments to its mining laws (MMDR Act) in 2015. This put many older mining applications into a legal deadlock. Deccan Gold Mines' subsidiary had applied for a lease before these changes took place.
ALSO READ: Russian Oil Imports Hit Two-Year High As India's Post-Hormuz Strategy Takes Shape
The SC has now ruled in favour of legacy applicants, stating that mining rights established before the 2015 law overhaul are legally protected and valid. This clears the path for the company's Ganajur Gold Project in Karnataka. In 2015, the company had said that its subsidiary Deccan Exploration Services Pvt Ltd had been granted the mining lease for the Ganajur gold project. The project is estimated to contain around 3.08 lakh ounces of gold resources.
The Ganajur-Karajgi PL block comprises the highly rated Ganajur Main gold deposit and several satellite prospects such as Ganajur SE, Karajgi Main, Karajgi East, Ganajur South, Ganajur Central and Karajgi Hut, hosting gold materialisation in banded iron formations, making it an important asset with strong long-term growth potential for the mining company.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
