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Mineral And Mining Rights In Nova Scotia – Mining


Mineral rights and tenures in Nova Scotia (the
“Province”) are governed by the Mineral Resources
Act
(Nova Scotia) (the “Act”) and the Mineral
Resources Regulations
(Nova Scotia) enacted under the Act (the
“Regulations”). This article provides a brief overview of
the forms of mineral tenure in the Province.

Ownership of Minerals

Title to minerals in Nova Scotia, together with the right to
explore, mine and produce minerals, is vested in the Provincial
Crown, unlike other jurisdictions in which ownership may be
privately held. Consequently, the exploration, exploitation and
production of minerals in the Province must be undertaken pursuant
to leases and licences granted by the Province, unless otherwise
exempted under the legislation. “Minerals” are defined
under the Act as comprising solid inorganic or fossilized organic
substances. Ordinary stone, sand, gravel, peat, gypsum, and
limestone are exempted from this definition, but compliance with
the Act may still be required for the production of these
substances; for example, a “non-mineral registration”,
issued pursuant to the Act, is necessary for the production of
gypsum and limestone.

Mineral Rights and Tenures

The Act contemplates two principal forms of mineral tenure,
being exploration licences and mineral leases. Broadly, an
exploration licence permits a licensee to explore for minerals and
extract minerals for testing purposes and may be issued by the
Registrar of Mineral and Petroleum Titles (the
“Registrar”). A mineral lease is required for the
production and mining of minerals and may be issued by the Minister
of Natural Resources and Renewables (the “Minister”) upon
application from the holder of one or more exploration
licences.

Carrying on mineral exploration or production without the
requisite permissions may result in severe penalties under the Act,
including monetary fines and imprisonment. Directors, officers, and
agents can also be found liable for offences committed by a
corporation where they directed, authorized, assented to,
acquiesced in or participated in the commission of the offence.

Exploration Licences

Exploration licences permit the holder to carry on prospecting
and exploration activities within a designated geographical area.
Licences are issued upon an application to the Registrar which
consists of the following information, pursuant to the
Regulations:

  1. the minerals subject to the exploration licence;

  2. the area and location of the minerals;

  3. a description of the claim, the tracts and the claim reference
    map; and

  4. the applicant’s name, address for service in the Province,
    and their occupation or business.

Exploration licences are initially valid for a two-year period
and may be renewed upon the completion and reporting of sufficient
assessment work or the submission of a payment in lieu of the
required work (or the application of other sufficient work
credits). Pursuant to the Regulations, the value of work required
may increase depending upon the number of prior renewals of the
licence, and payments in lieu are only permitted where no payment
has been made during the previous five terms of the licence.

The holder of an exploration licence must ensure that they have
sufficient permissions or rights of access to the surface property
in order to conduct work. In the case of Crown land, written
consent from the Minister is required to access the land. Where the
land is privately owned by a third party, the holder must obtain
verbal or written consent from the landholder, depending on whether
the activities planned will disturb the ground. Under the
Regulations, written consent from a landholder must be filed with
the Registrar.

If a landowner will not consent to allow a licensee access to a
surface property, the licensee may make an application to the
Minister for a discretionary grant of access to pass over or enter
upon and work the lands, upon submission of an application in the
form set out in the Regulations. Where the Minister determines
surface access rights should be granted to the licensee, the
Minister may impose terms and conditions on the licensee and may
set the amount of compensation to be paid by the licensee to the
landowner in exchange for access to the lands.

Mineral Leases

If an exploration licence holder determines the area covered by
their licence is viable for mineral production (and, among other
requirements, can delineate a mineral deposit), the licensee may
apply for a mineral lease under the Act. A mineral lease grants the
lessee the exclusive right to all or a specified group of minerals
within a defined area of land, and to carry out the mining or
production of the specified minerals. In exchange for these rights,
among other conditions, the lessee must pay a prescribed Crown
royalty in the manner and amounts set out in the Act and
Regulations.

An application for a mineral lease must be filed with the
Registrar and contain the following information, pursuant to the
Regulations:

  1. the minerals to be leased;

  2. the location of the minerals, including the claim, the tracts
    and claim reference map showing the claim boundaries, surface
    rights affected, nearby roads, buildings and power lines, and
    drill, trench, testing pit, and sample locations;

  3. the applicant’s name, contact information and exploration
    licence number; and

  4. technical information prescribed by the Regulations including a
    table of mineral resources and reserves, geological cross-sections,
    a feasibility study, a boundary survey, and mining and mineral
    processing information.

In addition to an application to the Registrar, the applicant
will also be required to complete any necessary environmental or
impact assessments, and obtain corresponding approvals, under other
provincial and federal legislation, including the Environment
Act
(Nova Scotia) and the Impact Assessment Act
(Canada). Pursuant to the Act and Regulations, as well as the terms
of certain industrial approvals, lessees must also post security
with the Registrar to cover reclamation costs. The amount of
reclamation security can be significant, and may be paid in cash,
or by the delivery of an irrevocable letter of credit or other form
of security acceptable to the Minister.

A lessee must undertake to commence mineral within five years of
the receipt of the mineral lease. As with exploration licences,
mineral leases may be renewed upon application to the Registrar.
Leases may also be transferred or assigned, but any transfer or
assignment will require the consent of the Minister, and the Act
further deems a change of corporate control to be a transfer
requiring consent. In order to maintain a lease, rents and
royalties must be paid on or before the anniversary date of the
mineral lease. When a mineral lease expires and is not renewed, all
rights in and to the minerals revert to the Province.

The Act also empowers the Minister to vest surface property in
the lessee in the event that land is required by the lessee for a
mine or any operation connected with or incidental to a mine,
provided that the land cannot otherwise be acquired from the owner.
Vesting order applications must demonstrate the lessee’s need
to acquire the land and detail the proposed arrangement under which
the lessee is willing to acquire the land. Under the Act, the land
subject to the vesting order is deemed to be expropriated by the
lessee. Vesting orders can be a formidable tool for developers and
operators, and the process and determination of compensation will
follow the procedures set forth in the Expropriation Act
(Nova Scotia).

Cox & Palmer has extensive experience working in the
mining industry and is pleased to provide legal and regulatory
advice to mining companies looking to explore, develop and invest
in the mineral potential of Nova Scotia.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.



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