Axiom Mining will re-apply for a prospecting licence covering the Isabel Nickel Project in the Solomon Islands after the nation’s Court of Appeal ruled that the land where the deposit is located remains customary land.

The ruling was part of a judgment delivered by the court on March 21 in a civil appeal case brought by Sumitomo Metal Mining (SMM) Solomon Limited and others over the project. SMM appealed that in 2011 the government should not have cancelled its licence to develop the Isabel nickel laterite discovery.

In a statement ASX-listed Axiom said that the Court of Appeal had delivered a mixed outcome for the company.

The Court held that Sumitomo was not entitled to a prospecting licence because it held three prospecting licences over other areas and had not applied for a mining lease or commenced mining in any of those areas.

The Court held that due to errors made by the Commissioner of the Lands, the land where the Isabel deposit is located remains customary land.

Consequently, the Land Register is to be rectified to remove the registration of the perpetual estate and as such, Axiom KB’s lease and prospecting licence are invalid.

Axiom KB was ordered to pay the legal costs of the group of customary landowners that appealed the decision of the High Court but the Court made no adverse findings about the conduct of Axiom KN or its officers.

Large Japanese mining company Sumitomo and junior explorer Axiom have been in dispute over the Isabel discovery since 2011. Sumitomo won an international tender for prospecting licences in 2010. The licences were cancelled in 2011 and similar rights were later that year awarded to Axiom.

Sumitomo in 2013 sued the Solomon Islands Government and Axiom, claiming that the government wrongly cancelled Sumitomo’s rights and wrongly granted similar rights to Axiom, even though Axiom did not take part in the 2010 international tender.

The High Court of the Solomon Islands in 2014 rejected all of Sumitomo’s claims, and Sumitomo filed an appeal to the Court of Appeals, the country’s court of final appeal.

Axiom chief executive officer Ryan Mount said, “While this is not the judgment that we had hoped for, Axiom remains optimistic and will continue to invest in the mineral-rich Solomon Islands.

“Axiom has a strong relationship with landowners in Isabel and together we have started the process of re-applying to develop the project.”

Axiom is currently in discussions with legal advisors and the Solomon Islands Government, and will soon provide further detail on the status of its San Jorge tenement and the company’s strategy.