IMPORTANT NOTICE – MINING TENEMENT HOLDERS – PAYMENT OF ANNUAL RENT & FINES
NEW DEBT RECOVERY POLICY – 1 JULY 2016
As of 1 July 2016 the Department of Mines & Petroleum (DMP) has given notice that;
- Annual Rent not Paid by the Anniversary Date and which remains outstanding after Forfeiture action for non-payment of rent, OR, after outright Surrender of the tenement, and
- Fines imposed by the Minister for Mines and Petroleum – for non-payment of rent, expenditure breach, POW or Mining Proposal breach and which are not paid,
Constitute a Debt under Section 114B of the Mining Act
- Debt Recovery Action will be commenced for all Outstanding Debts.
It was previously possible to avoid payment of ‘overdue rent or fines’ by simply surrendering the tenement or letting it be forfeited. This is no longer the case.
AVOIDANCE ACTION
Tenement Holders need to Surrender any ‘unwanted’ Mining Tenement prior to the Annual Anniversary Date – this action will avoid non-payment of rent/fines becoming a Debt.
Note: Beware of any Caveats/ Mortgages or Joint Venture Agreement obligations that could delay the registration date of a surrender.
BACKGROUND
The Department of Mines and Petroleum (DMP) has given notice via Department newsletters that Annual Tenement Rent and any Fines imposed, that remain outstanding after the tenement Anniversary date or the Fine payable due date;
- Will constitute a Debt and
- Debt Recovery Action will be commenced
Section 114B of the Mining Act provides:
The expiry, surrender or forfeiture of a mining tenement does not affect the liability of the person who was the holder of the mining tenement immediately before its expiry, surrender or forfeiture –
- to pay any rent, fee, royalty, penalty, or other money on any other account, payable on or before the date of expiry, surrender or forfeiture under, or in relation to, the mining tenement;
DMP’s ACTION 1 January 1982 to 30 June 2016 HAS BEEN TO;
- Issue a Notice of Intention to Forfeit when;
- Annual tenement rent is not paid within 30 days after the anniversary date
- Exemption from expenditure is refused and there is an expenditure shortfall.
- Form 5 Report is lodged more than 60 days after the anniversary date.
- The Mineral Exploration Report remains outstanding after a 30 day warning letter has been sent.
- Impose a fine for:
- Late payment of rent.
- Breach of expenditure conditions.
- Late lodgement of a Form 5 or MER.
- Forfeit the mining tenement when:
- The annual tenement rent is not paid.
- Fines for breach of expenditure or late lodgement of a Form 5 or MER, are not paid by the due date.
DMP’s ACTION FROM 1 JULY 2016 WILL BE EXPANDED, TO INCORPORATE DEBT RECOVERY:
- A Notice of Intention to Forfeit will be issued stating that if the rent has not been paid or the Form 5/MER report not been lodged by the nominated day (35 days from the date of the letter), the tenement will be The notice will also contain a warning that Debt Recovery Action will be commenced even if forfeiture is an outcome.
- If the rent/fine is not paid by the nominated date:
- Forfeiture will take place.
- A further ‘Final Notice’ will be issued stating that unless the outstanding amount (rent/fine) is paid within 30 days Debt Recovery Action will commence. Additional costs will be incurred as a result of this action.
HOW TO AVOID THE DEBT RECOVERY ACTION
This proposed Debt Recovery Action can be avoided by:
- Rent Related;
- Reviewing the need to retain the mining tenement well ahead of the Anniversary Date (we suggest 3 months).
- Taking action to Surrender unwanted mining tenements prior to the Anniversary Date, allowing time (we suggest at least 1 month) for any Caveats/Mortgages/Joint Venture decisions – which could delay registration of the surrender.
- Fine Related – Expenditure, Reporting, Environmental Breach;
- Reviewing the need to retain the mining tenement during the 30 day period that submissions can be made in response to the Intention to Forfeit notice.
- Surrendering the mining tenement prior to the fine/penalty being imposed.