COVID-19 Relief for Saskatchewan Mining Companies

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Bennett Jones LLP[co-author: Jayce Eadie - Summer Student]

On June 12, 2020, the Government of Saskatchewan announced amendments to The Mineral Tenure Registry Regulations in response to the state of emergency declared on March 18, 2020, due to the COVID-19 pandemic. On June 18, 2020, the amendments passed third reading.

The amendments will grant relief to mining exploration companies by easing the expenditure requirements for holders of permits, claims, and leases. The amendments apply to companies engaged in the exploration of Crown minerals such as uranium, gold, copper, zinc, cobalt and rare earth elements in Saskatchewan, however, they do not apply to companies engaged in the exploration of other Crown minerals such as alkali minerals, oil and gas, coal, quarriable substances, or helium.

What Are the Expenditure Requirements?

Pursuant to sections 37, 44, and 53 of the regulations, the holder of a Crown mineral disposition by permit, claim, or lease must satisfy their respective expenditure requirements during a given assessment work period. The particular expenditure requirements and duration of an assessment work period varies for permits, claims, and leases, and generally consists of a dollar amount per hectare per assessment work period, or a minimum dollar amount per claim or lease per assessment period. Assessment work that may contribute to satisfying expenditure requirements includes various exploration-related activities such as airborne or ground geophysical surveys, drilling and logging, geochemical surveys, geological surveys, prospecting, and trenching and stripping. If the holder of a claim or lease does not satisfy their respective expenditure requirements during a given assessment work period, they may make a non-refundable cash payment or pay a deficiency cash deposit to the Minister that is equivalent to the deficiency within 90 days after the end of the period in which the expenditure is required. Payment of a cash deficiency deposit provides the holder with the option to meet additional expenditure criteria in the subsequent assessment work period that may make them eligible for a partial or full refund of the deposit. Failure to comply with expenditure or deposit requirements may result in the issuance of a penalty pursuant to section 25(2) of the Crown Minerals Act.

The New Changes

The amendments provide that:

  • the Minister may waive the expenditure requirements for the work assessment period subsisting at the time of the declaration on March 18, 2020, and for the subsequent assessment work period with respect to the permit, claim or lease;
  • any expenditures made with respect to a mineral disposition during the aforementioned relief period that is registered by the Minister may be applied toward any expenditure requirements of the regulations; and
  • any holder that pays or has paid a deficiency cash deposit for the assessment work period immediately before March 18, 2020, may be eligible for a refund of the deposit.

Relief in Other Jurisdictions

These amendments follow measures taken in other Canadian jurisdictions since the World Health Organization declared COVID-19 a pandemic. In Alberta, on March 23, 2020, Alberta Energy published Information Letter 2020-09, which was later replaced by Information Letter 2020-21. The Information Letter provides that Alberta Energy is prepared to offer one-year extensions for petroleum and natural gas agreements, oil sands agreements and metallic and industrial mineral permits expiring from March 20, 2020, up to and including March 31, 2021, provided that extension applications are submitted to Alberta Energy prior to agreement expiry.

In British Columbia, on March 27, 2020, the Chief Gold Commissioner of British Columbia issued an order extending the time limits for various obligations of mining companies to December 31, 2021. This includes extending the period for registering a statement of exploration and development, registering payment instead of exploration and development, and registering a rental payment under the Mineral Tenure Act. The order also extended the time limits for making an application to extend the term of a coal licence and making a payment of rent for a coal lease under the Coal Act.

In Ontario, on April 17, 2020, the Ministry of Energy, Northern Development and Mines announced relief for claim holders. Claim holders with claim anniversary dates on or before December 31, 2020, may request via email no more than 30 days before the anniversary date for their claim for the issuance of an exclusion order removing the requirement to carry out assessment work for a period of up to 12 months in respect of the claim and any claims contiguous to the eligible claims.

Conclusion

These new amendments, like the similar programs implemented by other jurisdictions, will assist in mitigating some of the hardships experienced by mining exploration companies due to the COVID-19 pandemic by providing more time to raise capital to meet the expenditure requirements and access the mineral disposition sites to carry out exploration activities.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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