Mining and mining rights in Newfoundland and Labrador

Mining grades in the Province of Newfoundland and Labrador are governed by the Minerals Act, SNL 1990 c. M-12 (the “Minerals ActBelow is a summary of the main aspects of mining land tenure in Newfoundland and Labrador including issuance of mining licenses, mining leases and surface leases.

Property of minerals

Title of minerals in Newfoundland and Labrador are vested in the Provincial Crown. Therefore, mineral exploration and mining in the Province of Newfoundland and Labrador are regulated by the government of Newfoundland and Labrador mainly through the province Department of Industry, Energy and Technology (there “department“). Under the Minerals Act“minerals” is defined as an inorganic substance of natural origin, including coal and minerals contained in mine tailings, excluding water, quarry materials as defined in the Quarry Materials Actpetroleum as defined in the Petroleum and Natural Gas Actor stratified deposits other than coal from which oil can be extracted by destructive distillation.

Historical

In addition to the tenure system created by the Minerals Act, in certain circumstances, the parties may hold mineral rights under historic land grants in fee simple. Although modern Canadian land grants generally exclude grants of underground mineral rights (they are, in turn, often governed by a separate mineral tenure system), historic grants have not always followed this practice. Holders of these lands in fee simple may therefore own both surface and underground mineral rights, and these rights may be held in perpetuity. A number of these historic grants still exist in Newfoundland and Labrador and fall outside the scope of the modern mining tenure regime established by the Minerals Act.

Mining permits

Mining licenses are issued by the Minister of Industry, Energy and technology in accordance with article 22 of the Minerals Act (hereafter called “Mining licenseA mining permit application may be for a maximum of 256 claims and all claims in the application must be coincident. A claim is a square measuring 500 meters by 500 meters (250,000 m²), or a quarter of a UTM grid square bounded by a corner of a UTM grid square. Subject to the conditions under which the mining license is issued, subsection 23(1) of the Minerals Act grants the holder the exclusive right to explore for minerals, in, on or under the area of ​​land described in the mining permit from the date of issue for a period of 5 years. A mining license may initially be held for a maximum of 20 years, provided that the licensee has complied with all terms, provisions and conditions of the license, that the required annual assessment work has been completed and made the subject to a report, and that the mining license be renewed every five years in accordance with article 28 of the Minerals Act. In accordance with article 28.1 of the Minerals Act, a mining license may be extended for additional periods of one year up to a maximum of ten additional years. A mining license extended pursuant to section 28.1 is limited to 100 coincident claims, cannot be consolidated with other licenses issued under the Minerals Act and is subject to the conditions set out in Schedule B of the Minerals Act.

In accordance with article 6 of the Minerals Act, a license may be transferred at any time during its term by sending an original duly signed transfer to the Registrar of Mining Claims. Any number of coincident map-staked permits may be aggregated to form a single permit, provided the number of aggregated claims does not exceed 256 map-staked claims, the permits are in good standing and held by the same person or company, no extension under article 28.1 of the Minerals Act are active and first year evaluation reports are submitted and accepted.

Upon expiration of a mining permit, the holder may request to convert the mining permit into a mining lease in accordance with article 31 of the Minerals Act. If the mining license is not converted, it will expire and, in accordance with article 27 of the Minerals Actany minerals in, on, or under the terrain affected by the exhale will be available for staking again.

Mining licenses are subject to the terms and conditions set out in the appendix to the Minerals Act and, pursuant to paragraph 22(3)(b) of the Minerals Actsuch other terms and conditions as may be set out in the license or as may be prescribed by regulation.

Mining leases

Pursuant to subsection 31(1) of the Minerals Actprovided that the equivalent of the first three years of assessment work has been completed and acceptable reports have been submitted, a licensee is at any time entitled to be issued a mining lease for the minimum area necessary to cover an identified mineral resource (hereinafter referred to as “mining lease“). A mining lease grants the Lessee the exclusive right to develop, extract, remove, process, sell, mortgage or otherwise dispose of all Unalienated Minerals, or those specified in the Lease, in, on or under the land described in the lease. Pursuant to paragraph 31(5)(b) of the Minerals Acta mining lease is subject to the following conditions:

Although the terms of the mining lease require a lessee to commence mining production within 5 years from the date of issuance of the mining lease, the Minister of Industry, Energy and Technology may, at the lessee’s request, relieve the lessee of its production obligation and extend the production obligation.

Pursuant to subsection 31(2) of the Minerals Actthe initial term of a mining lease must not exceed 25 years. However, pursuant to subsection 31(6) of the Minerals Act, the Minister shall, at the request of the lessee and after ensuring that the terms and conditions of the mining lease have been complied with, renew the mining lease for an additional term not exceeding 10 years from the date of expiry the initial term of the Mining Lease or a prior extension. In order to qualify for the extension, a lessee must demonstrate to the satisfaction of the Minister, including by confirmation from a qualified person, the existence of a mineral resource that is of sufficient size and quality to be potentially economical.

Surface leases

In order to develop a mineral resource, it is also necessary to obtain an assignment of surface rights in accordance with Article 33 of the Minerals Act to the area necessary to allow the lessee to implement the obligations imposed on it under the Lease and to carry out mining exploration, mining operations or the processing and development of minerals in, on or under the covered land by the Mining Lease (hereinafter referred to as a “Surface lease“). The term of a Surface Lease shall not extend beyond the period covered by the Mining Lease for which the Surface Lease is issued.

Annual rental

Subparagraph 31(5)(b)(i) of the Minerals Act provides that a mining lease is subject to the condition that a lessee pay in advance an annual rent of an amount prescribed by regulation for the area of ​​land to which the lease is to apply. The annual rent requirement is also mentioned in section 40 of the Regulations, which states that a mining lease must provide for the payment of an annual rent as indicated in Schedule B of the By-law. Appendix B establishes that the annual rental fee is $120.00 per hectare of land area covered by the mining lease.

Before issuing a mining leasethe Departmental Mineral Lands Division will correspond with the intended tenant to advise that a mining lease is ready for issuance and will be issued upon receipt by the Division of the first annual rental payment. The mining lease is subsequently provided when payment for the lease has been received.

Cox and Palmer has extensive experience working in the mining industry and is happy to provide legal and regulatory advice to mining companies seeking to explore, develop and invest in the mineral potential of Newfoundland and Labrador.

This article was written with contributions from Rachel Delaneylaw student at Cox and Palmer.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.