In brief: mining rights and title in Greenland

This was an article written by Nuna Law; if you have trouble reading it, might you need to use in-cognito mode

https://www.lexology.com/library/detail.aspx?g=b390940a-aef4-4398-a2fd-2858a9881c1e



Exploration licence

An exploration licence is exclusive, precluding the granting of a similar licence in the same area to other parties. However, permanent residents may carry out the non-commercial collection of loose minerals without a licence in the licence area. An exploration licence is granted for a five-year period and at the expiry of the first licence period, the licensee is entitled to be granted a new licence for the same area for five years. At the expiry of the second licence period (years six to 10), the licensee may be granted additional new three-year licences for years 11 to 13, 14 to 16, 17 to 19 and 20 to 22 for the same area, wholly or partly, provided the terms of the licence have been complied with. However, the licensee is not entitled to have these licences granted.

During the licence period, the licensee is obliged to spend a fixed minimum of exploration expenses per calendar year calculated as the sum of an amount per licence per year and an amount per square kilometre per year stipulated in the standard terms. In addition, a yearly licence fee is payable from year six of the licence period.

Within 12 months of the termination of the activities under the licence or the granting of a new licence in continuation of this licence, the licensee must:

• remove all installations, buildings, stored items, etc, in the area that has been established for the activities under the licence, except when the non-removal of these installations, etc, has been approved by the MLSA; and
• carry out final clean-up activities in the affected areas and remedy any damage to the terrain and vegetation caused by those activities.

Exploitation licence

The holder of an exploration licence who has discovered and delimited deposits that he or she intends to exploit, and who has otherwise met the terms of the licence, is entitled to be granted an exploitation licence. If an activity is assumed to have a significant impact on social conditions and the environment it is a condition for obtaining an exploitation licence that an environmental impact assessment and a social sustainability assessment have been through a public consultation process and approved by the MLSA. The licence is granted for those parts of the area that contain deposits that the licensee intends to exploit. The licence is granted for a period of 30 years unless a shorter period has been laid down as a condition for granting the licence. The government may extend the period for exploitation. The total period is subject to a maximum of 50 years.

An exploitation licence may only be granted to public limited liability companies domiciled in Greenland. The company may only perform activities covered by licences granted under the Mineral Resources Act and must not be taxed jointly with other companies, unless joint taxation is compulsory. It is required that these companies may not be more thinly capitalised than the group of which the company forms part, but the company’s loan capital must always exceed the shareholders’ equity up to a ratio of 2:1. The licensee shall, further, have the necessary expert knowledge and adequate financial background with respect to the exploitation activities in question.

Following the granting of an exploitation licence and prior to commencement of development and production the licensee must submit a development plan (including a closure plan) for MLSA approval. The licensee is also obliged to enter into an impact benefit agreement with the government and the relevant municipality imposing obligations for the licensee regarding the use of Greenland labour and enterprises and also regarding the education of Greenland labour.



Note as Jefferies was focusing on in regards to Environmental Impact Assessment (EIA), and Social Sustainability Assessment (SSA); being handled by COWI (judging by the excerpts of text). Under the yellow highlight it does actually appear there is fast tracking occurring for exploitation licence, despite the challenges of approval and executing of fieldwork programmes. If indeed the EIA, and SSA can be completed <12 months, and or await for necessary variables we could be seeing necessary steps to open the existing pit.

The trouble that Kvanefjeld is in is the uncertainty in orange highlight. This doesn't impact EPM directly, but demonstrates like more mining frameworks there is tendency to have a use-it or lose it approach, which dissuades from tenement banking. I envisage still that we will see the likes of Amaroq Minerals Ltd. (formerly AEX Gold Inc.) will struggle to keep their tenements package unless they manage to get into production themselves in a meaningful way. They literally have 6 concurrent projects so have quite bit of fieldwork to undertake once the minimum tenements spend is back into play.