A lawyer for one of five people on trial in Kalgoorlie over an alleged million-dollar gold swindle says there was only a "handshake" agreement to seal a lucrative mining deal.
Simon Leslie Gash, 57, and his business partner, Russell Wilson Holden, 51, are fighting money laundering and fraud charges as part of the trial, which also involves three former senior employees of gold miner FMR Investments.
Mr Gash's lawyer, David Grace KC, told the court that the business partners wanted to process about 8,000 tonnes of gold-bearing ore, they had mined themselves, at FMR Investments' Greenfields Mill near Coolgardie.
There has been no suggestion in court that the men mined that gold illegally.
The court has heard 8,465 tonnes of gold ore was allegedly stolen and used to supplement the material supplied by Mr Gash and Mr Holden for a milling campaign.
The court heard the group then transferred money from processing the ore into bank accounts which they could access.
State prosecutor Paul Usher yesterday told the court the allegedly stolen ore was a "clean-up pile" which was waste material stored near a tailings dam at Greenfields Mill.
He said the ore belonged to FMR Investments.
But a lawyer for the gold miner's former general manager, Patrick Rhyan Keogh, 42, has said he had permission to profit off the mineralised waste as a "reward".
Mr Keogh has pleaded not guilty to stealing as a servant and various other charges.
Handshake deal
The court heard Mr Gash and Mr Holden's business Aqua Alluvial Pty Ltd had used Greenfields Mill on four occasions for toll treating in previous years and never had a formal contract.
Toll treating is when miners deliver ore to a mill for processing into gold bars on a contract basis.
"The quid pro quo was a 50:50 split, that was the agreement Aqua Alluvial reached," Mr Grace said during his opening address on behalf of his client Mr Gash.
"They've never had a written agreement … there's always been a handshake.
"That's the way things were done, there's nothing magic about that, nothing sinister ... a man's word is gold."
Mr Grace told the court it cost about $200,000 a day when the Greenfields Mill was shut down for cleaning after a milling campaign.
He said the processing plant typically required about 15,000 to 20,000 tonnes of ore for a campaign otherwise milling became "uneconomic" and his client knew they needed more ore.
Mr Grace told the court that the business partners became aware in 2018 through former mill manager Christopher Robert Burns that a "pile of pollluted waste could be used to reach the amount needed".
He said Aqua Alluvial paid $170,000 to clean the waste stockpile near the tailings dam, removing contaminants such as wood and steel which could affect the milling process.
He said FMR Investments got its cut, which was "not an insignificant amount", as formal admissions in court by Mr Gash and his co-accused revealed $838,084 was paid to cover the cost of milling.
The campaign between December 27, 2018 and January 7, 2019 processed 16,931 tonnes of ore, which yielded 1,881 ounces of gold later sold to the Perth Mint.
Mr Grace said there was "nothing unusual" about Aqua Alluvial receiving a $1.8 million payment from FMR Investments at the conclusion of the campaign, or arranging for Mr Keogh and Mr Burns to "receive the appropriate share".
He said electronic funds transfers from their business accounts showed there was "no false names" and "no subterfuge" used, and that the men had "nothing to hide".
"There was no fraudulent means … this was all above board," he said.
"They received only what they were entitled to."
Mr Grace said the business partners were entitled to believe Mr Keogh and Mr Burns as senior employees had the authority to process the ore.
"They had no grounds to believe otherwise," he said.
"They believed what they were told … they were entitled to 50 per cent and that's what they kept … not a cent more."
Business partners
Documents tabled in court by the prosecution show Mr Holden registered Aqua Alluvial Pty Ltd with the Australian Securities and Investments Commission [ASIC] in 2002, and that Mr Gash became a director of the company in 2011.
The pair are also business partners in Yilgangi Queen Goldmines Pty Ltd, KBD Haulage Pty Ltd, and Eazyoz Resources Pty Ltd.
Mr Holden's lawyer, Paul Yovich SC, told the court his client had never met Mr Keogh, and only spoke with him on the phone once, instead dealing mostly with Mr Burns.
"They had their gold in their ore and that's all they wanted," he said.
"He [Mr Holden] wanted to see the benefit of the fruits of their labour."
Mr Yovich said the business partners had acted in good faith.
"He engaged in a process he believed was above board, not cheating anybody, not defrauding anybody," he said.
"All they wanted was their gold, and that's what they got."
Could they keep the money?
It came after Mr Usher told the court earlier this week that Mr Holden and Mr Gash "knew" the proceeds of the milling campaign belonged to FMR Investments and not Mr Keogh and Mr Burns.
Mr Usher told the court that a spreadsheet sent by Mr Burns to Mr Gash on January 23, 2019, broke down the payments from the campaign, which was a $1.17 million share for Aqua Alluvial.
He also said the spreadsheet showed Mr Keogh and Mr Burns would each be paid $587,291.
"Could they keep the money?" Mr Usher asked the jury.
"You've heard the numbers ... that's big money.
"The state says they [Mr Holden and Mr Gash] knew, knew well, that Mr Keogh and Mr Burns did not have authority."
Besides Mr Keogh, who lives in East Fremantle, and Mr Burns, who turns 76 today and now lives In Geographe, the other accused is the former mill foreman Morgan Whitney Dombroski, 33, of Boulder.
She has pleaded not guilty to charges of stolen or unlawfully obtained property, and engaging in a transaction involving money that is the proceeds of an offence.
The trial, which began on Tuesday and is expected to last four weeks, continues.
