Mining in the Northwest Territories and Nunavut has become one of the most important components of these northern economies. The Northwest Territories and Nunavut Mining Regulations (the “Regulations”) regulate exploration, licensing, and claim staking, and establish a royalty system for mining activity on Crown lands, in these two territories. This article will attempt to provide a brief overview of some of the Regulations dealing with different types of property interests available to prospectors and mining companies interested in investing in the Northwest Territories or Nunavut.
Any individual or corporation who wishes to engage in mineral exploration in the Northwest Territories or Nunavut must hold a valid license to prospect renewables on a yearly basis. An individual or a corporation may acquire three types of mineral interests under the Regulations:
(i) a Permit to Prospect;
(ii) a Claim, and;
(iii) a Mining Lease.
Records for Permits to Prospect, Claims and Mining Leases are recorded at the Mining Recorder’s offices for the respective mining districts of the Northwest Territories and Nunavut.
A Permit to Prospect is a permit which gives the exclusive right to a prospector to undertake prospecting activities within a determined area subject to any rights previously acquired or applied for by any person in the area to which the Permit to Prospect applies. It is valid for a three-year period for areas located south of the 68th parallel of north latitude and for a five-year period for areas located north of the 68th parallel of north latitude. No person other than a permittee or a person authorized by the permittee to act on his behalf may locate claims within a prospecting permit area.
A Claim is a property interest in a determined area granting an exclusive right to a Claim holder to an exclusive license to search for, perform representation work in relation to, and win all minerals within the Claim area for a period of 10 years. Once a Claim is properly located, the locator must record the Claim with the Mining Recorder with 60 days from the date of locating the claim. After a Claim is recorded, the holder of a recorded Claim must perform representation work to keep the Claim in good standing. During the two-year period immediately following the date the Claim is recorded, a Claim holder must perform representation work of at least $4.00 per acre. During each subsequent one year period, a Claim holder must perform representation work of at least $2.00 per acre.
Any holder of a recorded Claim may apply for a Mining Lease not later than 30 days after the 10th anniversary of the recording of the Claim. A Mining Lease is valid for a term of 21 years from its effective date and on expiry of the term of a lease, the lessee, including a lessee of a lease previously renewed, may apply for a renewal of the lease for a further 21 years as long as the said lessee respected all of the obligations under the said Mining Lease. A lease may be surrendered by a lessee at any time by giving a notice of surrender in writing to the Mining Recorder.
Anyone interested in acquiring an interest in mineral properties should always keep in mind the advantages, disadvantages and requirements of maintaining mineral properties in good standing with the Mining Recorder. While a Permit to Prospect may be sufficient to carry out exploration, a Claim will be required to acquire exclusive rights to explore the potential of the land and a Mining Lease will be required to bring a property into commercial production. The choice of using a Permit to Prospect, a Claim or a Mining Lease as the appropriate way to hold an interest in a mining property will usually depend upon which stage a mining company is in its development cycle for an economically viable exploitation of a mine.