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Permitting: Exploration & Mining Licenses

Permitting: Exploration & Mining Licenses

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Transcript

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Hello, and welcome to the con. I think this is the final episode of the Con. And today we're going to be talking about permitting, exploration licence permitting, mine permitting, and all the permits in between. An earlier session of the con, focused on jurisdiction and to some extent, or to some degree, there's a certain amount of overlap between the two subjects. But by splitting them up like this, I can get away from perhaps some of the broader political risk points and strategic points and focus a little bit more at some case studies and examples of really what goes into the permitting. A key aspect of the risk about permitting and why it's important to investors and the general public, is because permitting generally takes a long time. It costs a bit of money and of course, there's a time value of money. So £100 pounds or $100 in your pocket today, is worth more than $100 in your pocket in 2, 5, or in 10-years’ time. So, it's really important to understand if you're looking at a smaller company where it is in the permitting process. And then again, if you're looking at this sector as a whole, and you're looking at some of the bigger projects coming on, it's worth understanding the permitting process with the risks associated with permitting, so that you can accommodate the timeline of when that big project is going to drop into the system. If you're looking at a Copper porphyry, or Copper-Gold porphyry, which is going to have a meaningful impact on the supply of a commodity, or Copper or Gold or any other positive just going to have a meaningful impact on the supply of that commodity, then you're going to want to understand when it's going to come on. Because it might affect the deficit supply demand deficit, or it may push the commodity into surplus, for example, in a smaller market, like PGM, or Cobalt or Tin.

So what do we mean by permitting, and at its most basic, you're talking about the exploration licence or the prospecting licence it's your ability to walk into a country to say that you want to explore, having done the research or spoken to the locals or met a businessman in a bar, whatever the process is about your area selection, you want to get a new licence area from the government. So it's the ability for you to start exploration in a new country, and then advance that exploration permit through the various phases probably got relinquishment phases, we have got spending commitments, and after a certain amount of time, you have to relinquish 50% of the licence area typically and so on, and so on, you spend more money in a smaller and smaller area as you focus in on the hopefully on an economic project, or you drop the whole area entirely. Then you have to go on to a mining or an exploration licence, which is typically got a much smaller curtilage, a much smaller area, rather than 1000s of hectares, 10s or 1000s of hectares, you're talking about hundreds of hectares, or less around your mine. And that is where you have the right to extract ore from your mining licence. But I'm just dividing your permits into exploration or prospecting licence or mining and exploration licences, of course, have a simplistic because there are so many components that fall under the bracket of permits.

In some places you need to once you've got Feasibility Study and once the returns on the prospective returns of the ore deposit are known, you need to finalise some of the floating elements in a mining code for some mining codes need degree of flex. So you might have to pin down the exact Royalty rate that you're going to pay on your deposit because the government is going to change that there's a sliding scale of Royalties depending on your profitability. And all of that needs to be agreed. Of course, when you're looking at getting a mining permit, to get your mining permitted, your final permit you have to get lots of pre- permits beforehand and you have to maintain those permits in good standing. Typically, the most challenging suite of permits that you require to get your mine permit is of course your environmental and your kind of your social or your First Nations permits.

While I was researching this podcast, I came across a worked example for a mine in Alaska. It listed the agencies that wanted to speak to and various environmental permits that it needs to achieve. And I think that's just worth me running through them. The agency or the departments in American or the US departments that you need to speak to, just to engage with them so that you understand you're not missing anything includes the Department of Natural Resources, the Department of Environmental Conservation, the Department of Fish and Game, the Department of Transportation, Public Fisheries, the Department of Commerce, Community and Economic Development, Department of law, the US Environmental Protection Agency, the US Army Corps of Engineers, the US Fish and Wildlife Service, National Marine Fisheries Service, Bureau of Land Management, US Forestry Service and the National Park Service. Those are just the department's you've got to deal with. Then you've got a whole series of states level permitting you to get and then you to get federal level permits.

The list I'm about to give you here is not exhaustive, okay, this is just for one mine in Alaska. Obviously, it's a large mine and obviously interacts with the watercourse. It's you're not just dealing with land use, but also water use. So the majority of the permits you need at the state level include the plan of operations approval, reclamation and bonding, waste management permits and bonding, water discharge permits, certification of ACOE. I don't know what that means. The sewage treatment system approval, air quality permits, fish habitat and fishway permits, water rights, right of way and access, tideland leases, dam safety certification, cultural resource protection, you need a monitoring plan for the surface, the groundwater and wildlife. That's all at the state level and it's not exhaustive and then at the federal level, you need to have US Environmental Protection Agency air quality permit review, US EPA Safe Drinking Water Act, US ACOE section 404, dredge or fill permit, section 10 rivers and harbours act, section 106 historical and cultural resources protection and MFS threatened Endangered Species Act consultation and MFS Marine Mammal Protection Act and MFS essential fish habitat, fish and wildlife coordination Act, US FWS threatened and endangered species act consultation, USFWS bald eagle Protection Act clearance, USFWS Migratory Bird protection, USFWS Fish and Wildlife coordination act. You know that's mining in Alaska, it sounds like a nightmare. It is a nightmare. And it's not surprising, but in the US, it takes about 10 years to get your mine permitted.