4.0 Introduction

The most secure form of mineral tenure is a mining lease. A lease is a contract between the Crown and the mineral claim holder and, as such, cannot be altered without mutual consent. Prior to issuing a lease, there is a requirement for a legal survey which firmly establishes the boundaries and secures title, by eliminating further opportunity to assert a conflicting right. Leases are issued for a term of 21 years, and they provide the security required by a claim holder, at a time when a substantial investment is needed if the claim holder wants to develop the property towards production. This high level of land tenure security is also required by the claim holder if they are looking for financial assistance. Investors are more likely to provide financial support for a property with a long-term tenure than they are for mineral claims. Changes proposed for provisions relating to mineral leases are:

• require refundable deposits for extensions of time to complete legal surveys, and
• set a time limit for accepting representation work performed on a mineral lease.

4.1 Surveys (s. 54, 55, 56 and 57)

Issue:

Many lease applicants do not contract a surveyor to conduct a legal survey of their mineral claim until they apply for their lease. The lease cannot be granted until a legal survey of the claim is recorded. Consequently, it may take the Department up to two years after the original application is made to issue the lease. This situation creates an administrative burden for staff who must continually correspond with the lease applicant until the survey is filed and approved, and a lease issued.

Current Status:

Under the Canada Mining Regulations, the maximum term of a claim is ten years. Converting to a lease is the only option for retaining a claim beyond ten years. A mineral claim must be legally surveyed before a mining lease may be issued. Although an application for a lease must be received on or before the tenth anniversary, many applicants request, and are routinely granted, an extension to submit either the preliminary or final survey plan. The final survey plan must be approved by the Surveyor General of Natural Resources Canada, which requires additional time.

Analysis:

Final year lapsing noticeofgenerally prompt the client to contact the Mining Recorder to find out how to take a claim to lease. If the survey has not already been completed, the client is advised to submit an Application for Lease, filing fee and first year's annual rental, along with a letter explaining why the survey has not been done and asking for more time to perform the survey.

In such cases, clients apply for the lease but are unable to meet the conditions for granting a lease because the survey has not been completed. The application must then be rejected, but the client may be allowed, under s.58(6), up to 60 days to submit evidence that they have completed the survey. The file must be monitored continually to determine when the client has complied with the provisions of the regulation by completing the survey; otherwise, the lease application is technically invalid.

Options:

1. Remove the provision to allow for a time extension to submit the survey plan.

2. Establish specific criteria for allowing extensions of time to submit a survey plan.

3. * Provide for three month extensions, with escalating fees for each subsequent extension, and require that rental fees must be paid yearly, in advance, and that extension fees are non-refundable, even if the lease is not issued.

4. Require submission of a refundable deposit, set at a level high enough to discourage use of the option, and encourage claim holders to expeditiously complete surveys. The deposit would be refunded when the final approved survey is received from the Surveyor-General.

5. Require that a preliminary survey plan, as a minimum, must accompany a lease application, and establish a set time by which the final survey must be submitted to the Surveyor General.

4.2 Work Filed on a Lease for Rental Reduction (s. 60(2))

Issue:

There is currently no time frame set out for how much time a lease holder has to file a representation report for work done on a leased claim. This is causing problems with paying the lease rental, or portions thereof, to claimant groups under land claim agreements.

Current Status:

When representation work reports are submitted years after representation work is done on a lease, the lease rent has to be adjusted. The lease holder may be refunded the portion of the rent that was overpaid, but the Crown also has to adjust the portion that was paid to claimant groups for rent of leases grandfathered under land claims.

Analysis:

A lease holder can reduce the amount of their rental payment by up to fifty percent of the rent owed, by performing and reporting representation work on the claim. Imposing a time limit within which the lease holder must file the report would solve the problem of unexpected rent refunds. However, stricter guidelines may create a disincentive to file work, and the Crown would lose the opportunity to collect geoscience information about work on leases.

Options:

1. * Specify the lease holder has one year to file the work that was done in the previous year, if she or he is seeking a rent reduction.

2. Set a regressive scale for rent reductions so that (as an example) representation work submitted in the year it was done would be credited for 50%, representation work submitted a year after it was done would be credited for 40%, up until five years after the work was done, at which time no credit would be given.

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