Retention of Proceeds from Testing Activities on Leases and Patented Lands

ERO number
019-4446
Notice type
Act
Act
Mining Act, R.S.O. 1990
Posted by
Ministry of Northern Development, Mines, Natural Resources and Forestry
Notice stage
Decision
Decision posted
Comment period
October 7, 2021 - November 21, 2021 (45 days) Closed
Last updated

This consultation was open from:
October 7, 2021
to November 21, 2021

Decision summary

A decision has been made to proceed with amendments to the Mining Act to allow lessees, licencees and owners of mining lands to sell and retain the proceeds from materials extracted for the purposes of testing without the requirement for a mine production closure plan to have first been filed.  Bill 13 received Royal Assent on December 2, 2021.

Decision details

Amendments have been made to the Mining Act to allow lessees, licensees and owners of mining lands to sell and retain the proceeds from materials extracted for the purposes of testing without the requirement for a mine production closure plan being filed.

The activities (extracting materials for the purposes of testing) may be deemed by the Director of Mine Rehabilitation to be either early exploration or advanced exploration, after consideration of the proponent’s application, based on how the proposed activities fit within existing regulatory thresholds. If permission is granted, proponents are then required to comply with the regulatory requirements applicable to early exploration or advanced exploration activities but would not be subject to the requirement to file a mine production closure plan. This would allow proponents to also offset the costs of testing by retaining proceeds from any sales.

The amendments would provide holders of all forms of mining land tenure with the same opportunity to sell the end product of testing without first filing a mine production closure plan.

The relevant amendments to the Mining Act would be proclaimed once the related regulations have been developed and filed.

There are no anticipated costs, or cost-savings, to proponents to comply with these amendments. The amendments are not expected to impact small businesses and are not expected to result in a change of annual costs. However, greater clarity regarding the ability to sell the end product of a bulk sample, and any retention of proceeds may help proponents offset a portion of the costs of early or advanced exploration on their mining claim.

Comments received

Through the registry

2

By email

1

By mail

0
View comments submitted through the registry

Effects of consultation

We received three comments. The summary of comments is as follows:

  • Proposal is confusing.
  • Thresholds should be set for the amount of testing that is reasonable before a closure plan is necessary to ensure environmental impacts are addressed.
  • Concern that not requiring a mine production closure plan will mean a lack of mitigation/rehabilitation in place for mining activities.
  • Support for the proposal; the amendments are especially important for junior exploration companies that have significant costs and little-to-no income.

The amendments do not change thresholds for extraction of material for testing. The existing thresholds in the Mining Act and its regulations for the extraction of bulk samples for testing are not affected by this proposal. The ministry will consider comments received when developing regulations and policy associated with the legislative amendments.

 

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Original proposal

ERO number
019-4446
Notice type
Act
Act
Mining Act, R.S.O. 1990
Posted by
Ministry of Northern Development, Mines, Natural Resources and Forestry
Proposal posted

Comment period

October 7, 2021 - November 21, 2021 (45 days)

Proposal details

Under the Mining Act, the definition of “mine production” and the resulting requirement for a mine production closure plan, is triggered whenever a proponent is mining with the intention to sell materials or stockpile them for future sale. Small-scale testing activities (sampling) are caught by that definition if the proponent’s intention is to sell the tested minerals (often done to offset the costs of the testing).

Currently, where mining claimholders have obtained ministerial permission under section 52 of the Mining Act, the ministry allows mining claimholders to sell materials extracted for the purposes of testing, and retain proceeds to the extent of eligible cost recovery, without first filing a mine production closure plan. Lessees, licensees and owners of mining lands, however, cannot sell any quantity of material without first filing a mine production closure plan.

The ministry is proposing to amend the Mining Act to allow lessees, licensees and owners of mining lands to sell and retain the proceeds from materials extracted for the purposes of testing without the requirement for a mine production closure plan being filed.

The activities (extracting materials for the purposes of testing) may be deemed to be either early exploration or advanced exploration, after consideration of the proponent’s application, based on how the proposed activities fit within existing regulatory thresholds. If permission is granted, proponents would then be required to comply with the regulatory requirements applicable to early exploration or advanced exploration activities but would not be subject to the requirement to file a mine production closure plan. This would allow proponents to also offset the costs of testing by retaining proceeds from any sales.

The proposed legislative amendments would provide holders of all forms of tenure to mining lands with the same opportunity to sell the end product of testing without first filing a mine production closure plan.

The proposal is anticipated to result in a cost savings for lessees, licensees and owners of mining lands selling materials extracted for the purposes of testing, if they are required to obtain an early exploration plan or permit instead of filing a mine production closure plan. The proposed changes will provide an opportunity for lessees, licensees and owners of mining lands to generate revenue when testing to offset the costs of proving their resource/market, helping to provide business certainty.

When materials are being extracted, an advanced exploration closure plan or exploration permit/plan is required. However, small-scale testing activities (sampling) fall under the definition of mine production if the intention is to later sell the tested minerals (which can be done in an effort to offset the costs of the testing).

The proposed amendments would allow the Director of Mine Rehabilitation, on application by a proponent, to deem the activities as early exploration or advanced exploration if he or she determines that the sale of the materials is the end product of extraction carried out for the purpose of testing mineral content. This would allow the proponent to put any proceeds towards the costs of testing before potentially undertaking a mine production closure plan. The ability to delay the need for a mine production closure plan could result in improved testing that would show whether or not going to mine production is viable. If it is not viable, and the project does not proceed, the mine production closure plan would not be required, resulting in the removal of the costly development of a closure plan.

The cost of a mine production closure plan varies, based on size, type of mine (underground vs open pit) and site-specific considerations.  The cost could vary from $250,000 to $500,000 per closure plan.

In reference to preparing the cost of a closure plan, the amount of revenue from the sale of the sample would also vary on the amount and type of material and market.  It is estimated that the sale amount would not be overly substantial or in some cases, non-existent.

Comment

Commenting is now closed.

This consultation was open from October 7, 2021
to November 21, 2021

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