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Part B: Mineral Rights - Part B-2: Exploration - 25. Exploration Licensing | 25.6 Rights of a Licence Holder

Provisions that address what possession of an exploration licence allows the licence holder to do or what the licence holder may be entitled to are collectively treated as rights. The rights of an exploration licence holder are usually exclusive exploration rights at depth within the licenced area. Although the licence usually relates to specified minerals only, under most mining laws no other exploration or mining licence can be granted to another party over the same area, except a short-term quarrying licence.

The exploration licence entitles the holder to carry out exploration activities, as defined; but not to engage in mining. The exploration licence holder generally also has the exclusive right to apply for an exploitation licence over the same area, in whole or in part, during the term of the licence.

Depending on the defined nature of the exploration right, the licensee may have the right to pledge, mortgage or transfer the licence.

25.6 Example 1:

Article [_]

(1) A prospecting licence confers on the holder an exclusive right to prospect for mining materials, within the boundaries of the holder's area, including surface area and depth of the right, as well as an exclusive right to dispose of any products extracted as part of said prospecting.

(2) It confers on the holder an exclusive right to request and obtain an operating licence, at any time during term of validity for the prospecting licence, if they have performed their obligations under the present Act, in the the event they discover one or more mineral deposits within the area under the prospecting licence.

(3) A prospecting licence constitutes a movable, indivisible right and, may not be subleased, subject of a pledge or a mortgage.

Article [_]

(1) A prospecting licence holder shall have the right to freely dispose of products extracted during the prospecting and assaying, provided that the prospecting work does not in fact constitute operating work.

(2) Disposals shall only be possible under the following conditions:

(a) the prospecting licence holder has made a prior declaration relating to the products extracted, to the Mining Department (Administration des Mines);

(b) the prospecting licence holder has paid the mining taxes relating to said extracted products, unless an exemption has been granted for the samples by the Mining Department and the Department for the Economy and Finance (Administration de l'Economie et des Finances).

(3) The maximum quantities of samples which may be collected shall be specified by decree.

Article [_]

The rights of a mining right holder shall relate to the entire extent of the demarcated area under the mining title, with no limit as to depth, extending down within vertical lines based on the defined area on the surface.

Article [_]

(1) A mining right may be assigned or transferred subject to the prior written approval from [the regulatory authority] and under the conditions provided for by decree.

(2) Any agreement for the transfer or assignment of a mining right must be subject to the condition precedent of said authorisation.

(2)The approval of [the regulatory authority] shall be automatic where the mining right holder has fulfilled their obligations under the [Code][Act][Law].

Annotation

Drawn from Côte d’Ivoire’s mining law (2014), this provision states that the exploration licence confers on the licence holder an exclusive right to explore for minerals other than industrial minerals and to apply for an exploitation permit to develop commercial deposits identified within the licence area. It is a generous provision in that the exploration licence includes an exclusive right as to all such minerals, rather than specific types or classes of minerals as in some mining laws. Furthermore, that exclusive right includes the right to apply for an exploitation licence for multiple deposits within the licenced area - as opposed to a single deposit as in some more restrictive mining laws - provided that the licence holder is in compliance with its obligations under the Mining Code.

According to this provision, the exploration licence holder has the right to dispose of products extracted during the course of exploration. However, such right is subject to the condition that the exploration work not constitute exploitation work, and to the further conditions that the licence holder (a) submits a declaration to the Regulating Authority prior to any such disposition and (b) pays the mining taxes (e.g. royalties) applicable to the mineral products. Exemptions from the mining tax payment obligation are to be granted for samples, the maximum amounts of which are to be set by regulation.

The exploration licence is not eligible for pledge, mortgage or sublease; but it may be transferred with the approval of the Regulating Authority, to which the licensee is entitled if in compliance with its obligations under the Mining Code.

25.6 Example 2:

Article [_]

(1) Subject to the provisions of this [Act][Code][Law] and the Regulations, an exploration licence confers on the holder the exclusive right to carry on exploration operations in the exploration area for minerals to which the licence applies.

(2) In the exercise of the rights conferred by this section, the holder may, subject to section [_] (on restrictions on the right of a mineral licence holder to enter land), either himself or by his employees or agents, enter upon the exploration area and erect camps and temporary buildings and may erect installations in any water forming part of the exploration area.

(3) The holder of an exploration licence for gemstones who in the course of carrying out exploration operations under the exploration licence recovers gemstones, may dispose of the gemstones by sale to a licenced dealer and shall promptly following any such sale submit particulars thereof to the [Regulating Authority], showing the name and business address of the dealer, a description of the stones, their weight and a copy of a receipt given by the purchaser for the price received.

(4) The holder of a an exploration licence for gemstones who recovers gemstones in the course of exploration operations shall for the purpose of holding the gemstones and selling them pursuant to subsection (3) be deemed to be a mineral right holder.

(5) The exploration licence holder is authorized to apply for a retention licence.

(6) The exploration licence holder is entitled to apply for and obtain a special mining licence or a mining licence, subject to compliance with the application requirements specified in other articles.

Annotation

Drawn from Tanzania’s mining law (2010), which calls an exploration right a prospecting licence, this provision provides for an exclusive exploration right that entitles the holder to enter the exploration area and erect camps and temporary buildings thereon in connection with the holder’s exploration activities. It also entitles the holder of a “prospecting” licence for gemstones to sell gemstones recovered during exploration to a licenced dealer. In the event of such sales, the prospecting licence holder is required to submit the particulars of the transactions to the Commissioner of Mines in order to enable the Mining Administration, among other things, to confirm that the licenced dealer has paid the applicable royalty, or enforce such payment by the dealer if it has not been made. The mining law provides that licenced dealers and licenced brokers are responsible for the payment of royalties on gemstones that they purchase.

This provision also authorizes the licence holder to apply for a retention licence and to apply for and obtain a “special mining licence” (which is long term) or a mining licence (which has a shorter term), subject to compliance with the relevant application requirements.