(REUTERS) -- Mining and exploration company Straits Resources and its partner Argonaut have lost a court appeal to explore an area in South Australia that they believe holds huge copper and gold resources, the companies said on Monday.
The ruling by the Supreme Court of South Australia overturns an approval given by a state minister for drilling on the Torrens tenement, with the court saying the minister should have bowed to Aboriginal owners as it is a heritage site.
Argonaut's shares sank 10 percent to A$0.045 after the ruling was announced, while Straits Resources' shares were yet to start trading.
This is obviously a very disappointing outcome, Argonaut Chairman Patrick Elliott said in a statement.
The interpretation of the AHA (Aboriginal Heritage Act) contained in this judgment has the potential to prevent any development in South Australia on land where traditional ownership can be asserted, he said.
Under the Torrens Joint Venture, Straits can earn a 70 percent interest in Torrens.