** Shares of Alara Resources AUQ.AX fall as much as 18.2% to A$0.027, their lowest level since June 23; stock last down 9.1%

** Middle East focused mineral explorer says its joint venture company Al Hadeetha Resources, which operates Al Wash-hi Majaza mine in Oman, served with legal proceeding

** Says proceedings, initiated by 16 individual residents from villages near Al Wash-hi project, seeks to suspend project related activities and to make the project license invalid

** About 1.4 mln share change hands, about 5.9x their 30-day average volume

** Stock down ~21% this year, including the day's move

(Reporting by John Biju in Bengaluru)

((John.Biju@thomsonreuters.com;))