Epithermal Gold Pty Ltd, Re [1993] QMW 195

REPORT AND RECOMMENDATION OF WARDEN PURSUANT TO SECTION 7.26 AND 7.27 OF THE MINERAL RESOURCES ACT, 1989. IN THE MATTER OF: APPLICATION FOR MINING LEASE NUMBER 10152 IN THE CHARTERS TOWERS MINING DISTRICT. BEFORE: F.W. WINDRIDGE, WARDEN. APPLICANT: EPITHERMAL GOLD PTY LTD. REPORT: This Application for a mining lease under section 7.1 of Part 7 of the Mineral Resources Act 1989 (the act) for the purpose of mining for SILVER, GOLD, COPPER, MOLYBDENUM, LEAD, ANTIMONY, TIN, TUNGSTEN, and ZINC is for an area of EIGHT (8) hectares situated on Wandovale Pastoral Holding and a Road Reserve, about 70 kilometres south west of Greenvale. Power to grant such a lease is vested in the Governor in Council pursuant to section 7.3 of the act after recommendation by the Minister pursuant to section 7.28(1)(a). All minerals are the property of the crown (s.1.9). The grant of a lease does not create any estate or interest in the land (s.1.11), although there is the power to determine title to land (s.10.20(5). [1993] QMW 195 -- 1 of 13 -- The Application was lodged at the Mining Registrars Office at CHARTERS TOWERS on 21 APRIL 1993, and a certificate of application was issued on 21 APRIL 1993 (s.7.18(1)(a), setting the last date for receipt of objections as 3 JUNE 1993 (S.7.18(1)(b). No objections were lodged pursuant to Section 7.20 of the Act. The following matters have been taken into account and considered in making my recommendations pursuant to Section 7.26(3). (A)HAVE THE PROVISIONS OF THE ACT BEEN COMPLIED WITH? The material indicates that the Applicant company is an eligible person as defined in Section 1.8, and is thus entitled to make the application under Section 7.2 of the Act. I accept, on the material before me, that the land applied for is not within a reserve as defined in the act; that there is no building of the kind mentioned in section 7.6(a) (i) and (ii) on the land; and that there is no feature of the kind mentioned in section 7.6(2)(b) on the land or within 50 metres laterally of the land. I find the application is therefore not in respect of land over which, pursuant to Section 7.6 of the act, a mining lease shall not be granted without the consent of another person or persons. The applicant has negotiated a compensation agreement with the Dalrymple Shire Council in respect of road reserves. This agreement -- 2 of 13 -- 3 is to be taken as consent. This area was previously held by Arshay Pty Ltd as claims and were not converted over to a lease or leases during the transitional period. There is now a conditional surrender lodged in respect of those claims but lodged in the name of Epithermal. It is irrelevant if the same persons constitute Arshay Pty Ltd and Epithermal Gold Pty Ltd. The outstanding royalty returns and surrender must be lodged in the name of Arshay the current registered lessees. At the time of marking out and making the application, the applicant was the holder of PROSPECTING PERMIT 10263 (S. 7.1). A declaration of posting was lodged on the 6 SEPTEMBER 1993 (s.7.18(5). I am satisfied, on the material, including the uncontested information in the application form and the declaration of posting and advertising that all the provisions of the act (other than the provisions requiring the hearing) have been complied with or substantially complied with (s.11.6). Initially there appeared to be some confusion in relation to marking out and location. However, this now appears to have been resolved to the Registrars satisfaction. For convenience, the hearing of this application was conducted at Cairns on 5th November 1993. The applicant appeared and submitted further material in support of the application . -- 3 of 13 -- 4 Service of documents was in accordance with section 11.14. I find that I am satisfied that (a) the provisions of the act have been complied with; (b) there is no valid objection; and (c) the consent of any trustee or other person is not required. (B)IS THE LAND APPLIED FOR MINERALISED OR IS THE OTHER PURPOSE FOR WHICH THE LEASE IS SOUGHT APPROPRIATE? I am satisfied that the resources sought are minerals as defined in section 1.8 of the act. I accept the Applicants advice and I am satisfied on the detailed information given by them that the purpose for which the lease is sought is appropriate. The applicant has held the area for a number of years in the name of ARSHAY PTY LTD. Through the activity of others and their own investigations under a joint venture arrangement, the applicant has the results of exploration. The reports and drill hole summaries are submitted. The economic viability of the project is a matter for the applicants commercial assessment, and not a matter for this Court. However, the submission indicates drilling was disappointing, and for that reason Newmont Australia Limited did not continue to explore the tenements. (p 8 of report - attached. ) If might be advisable for an experienced geologist to review and comment on the results . -- 4 of 13 -- 5 (C)IF THE LAND APPLIED FOR IS MINERALISED WILL THERE BE AN ACCEPTABLE LEVEL OF DEVELOPMENT AND UTILISATION OF THE MINERAL RESOURCES WITHIN THE AREA APPLIED FOR? I am not satisfied the applicant has sufficient resources to develop the land to an acceptable level at this stage. There is a lack of hard evidence on this point. The applicant indicates that several options for development and treatment are open to them, and finance will depend on which course is taken. In view of this a limited term should be granted, with no discount under EMOS evaluation . (D)IS THE AREA SOUGHT AN APPROPRIATE SIZE AND SHAPE? There is nothing in the information supplied by the Applicant to suggest that the surface area of the land in respect of which the mining lease is sought is not an appropriate size and shape. (E)IS THE TERM SOUGHT APPROPRIATE? The term of lease applied for is FIVE years. I am satisfied that the term sought is appropriate and will allow for mining and rehabilitation to be completed. The applicant has the option of renewal under section 7.43 of the act if mining is not completed, -- 5 of 13 -- 6 or surrender at an earlier date under section 7.64 if mining and rehabilitation is completed prior to the expiry date. However, if there is a lack of development within three years, the Hon. the Minister may well consider show cause action. (F)HAS THE APPLICANT THE NECESSARY FINANCIAL AND TECHNICAL CAPABILITIES TO CARRY ON MINING OPERATIONS UNDER THE PROPOSED MINING LEASE? The only evidence the applicant puts forward in relation to financial resources is contained in Paragraph 1 of his submission lodged with the Court on 5 November 1993. It lacks detail of resources and sources despite the request to put forward further information in relation to financial resources. The applicant appears to have qualifications and experience in the mining industry sufficient to complete the mining operation (Carr V Simnovec (1980) 26 SASR 263 at 268, and Pacminex V Aust. Nephrite Jade Mines (1974) 7 SASR 401 at 415.) (G)HAS THE PAST PERFORMANCE OF THE APPLICANT BEEN SATISFACTORY? There is no material before me to suggest that the past performance of the Applicant has been satisfactory or unsatisfactory. The applicant could not point to any current or completed project where his performance could be assessed. The local Field Officer will be available to monitor performance and -- 6 of 13 -- 7 rehabilitation. The Inspectorate should monitor the methods adopted for mining, ensuring that industry standards are maintained and all machinery is operated in a safe and competent manner by licensed persons where necessary. It will be necessary for the applicant to appoint a registered mine manager and for that manager to maintain a mine record book. The nearest Inspector of Mines must be notified at least 14 days before the commencement of operations. (H)WILL THE OPERATIONS TO BE CARRIED ON UNDER THE PROPOSED MINING LEASE CONFORM WITH SOUND LAND USE MANAGEMENT? The land appears to be used for low intensity grazing and it seems the proposed mining operation will cause no significant disturbance to stock or stock watering or management facilities. Information has been supplied as to the Applicants site management proposals. The evidence leaves me with no reason to believe that the proposed mining operations do not conform with sound land use management. (I)WILL THERE BE ADVERSE ENVIRONMENTAL EFFECTS CAUSED BY THE PROPOSED OPERATION, AND IF SO, THE EXTENT THEREOF? The proposed mining activity is in an isolated area away from -- 7 of 13 -- 8 human habitation. Mineral treatment activities on site appear to be planned in such a way as to be unlikely to have a deleterious effect on any river system. Chemicals will be used in the separation process, subject to the final plan adopted by the applicant. It is possible that the treatment will be off lease at another operation conducted by others. If constructed for the project, any tailings dams can with the consent of the landowner be left as watering points for stock or native fauna, or decommissioned in the approved way. An EMOS has been lodged and accepted by the Registrar. The applicant has accepted special conditions. (J)WILL THE PUBLIC RIGHT AND INTEREST BE PREJUDICED? No factors prejudicial to the public right and interest have been identified. From the evidence that is available, it appears that there are no public utilities running on or across the application land. The right of way of any person will not be affected. There is no evidence to suggest that there are endangered flora or fauna on the application area. There is no evidence to suggest that there are any sites of historical interest or aboriginal significance on the application area. If any such sites are identified, the E.M.O.S. document can be amended to allow for site protection or avoidance strategies. -- 8 of 13 -- 9 (K)HAS ANY GOOD REASON BEEN SHOWN FOR A REFUSAL TO GRANT THE MINING LEASE? The economic viability of this project is a commercial decision of the applicant, and not this Court. When all other aspects of the application are taken into account and considered, I am satisfied that the objects of section 1.3 (a), (b), (c), (d), (e) and (g) will be attained if a mining lease is granted for the term recommended, for the following reasons: (1)a small scale operation is planned. (2)it is unlikely that the land applied for is of any interest to a large scale miner. (3)the location of the proposed mining operation and the method of mining is unlikely to cause environmental or public interest concerns. (4) a realistic security deposit, subject to E.M.O.S. discounts if appropriate, will be imposed to guard against financial failure of the miner to ensure rehabilitation is completed. (5) the applicant appears to have sufficient experience in the industry to accurately assess the potential of the project. (6) there is a market for the product and the project will provide employment. To my knowledge there has been no gazettal of the land as claimable land under Section 2.12 of the Aboriginal Land Act 1991. No person claiming any right or interest under "native title" has lodged any objection under Section 7.20 of the Act. It appears it would not -- 9 of 13 -- 10 be possible to notify such a person in the normal way of service of a notice. The name of such a person claiming title would be unknown as there is no list or roll of such persons. However, such a person is not put to any disadvantage as the requirement of publication of the application under Section 7.18(3)(d) is intended to notify any person who does not fall within the definition of "owner" as defined in Section 1.8 of the Act. The application area is situated within a pastoral lease granted over the area by the State of Queensland. It would appear that this grant has extinguished any "native title" that existed and there would appear to be no grounds for any claim of "native title" by any person ( MABO v queensland (1992) 66 ALJR 408) Even assuming that "native title" was not extinguished by prior grant and was able to co-exist with the mining title, and a person was able to substantiate his status as "an owner", any claim for compensation would be restricted under Section 7.38(3) of the Act and in all probability, subject to the evidence admitted, a minimal or nominal award would be the final result. In my view no good reason has been shown for a refusal to grant the lease application (Carr V Simnovec, Pacminex V Aust. Nephrite Jade Mines.), except for the reservations about financial resources and mineralisation. (L)IS THE PROPOSED MINING LEASE OPERATION AN APPROPRIATE LAND USE, -- 10 of 13 -- 11 TAKING INTO CONSIDERATION THE CURRENT AND PROSPECTIVE USES OF THE LAND? The material indicates that the land is currently used for grazing purposes and appears, on the evidence and subject to any further evidence that may be tendered in any compensation hearing, to be suitable for no other use. In my view, there appears to be no risk of significant conflict between the current land use, or any prospective land use, and the proposed mining operation. The proposed mining operation appears, on the evidence, an appropriate land use, taking into account the current and prospective uses of the land. A compensation agreement or determination of the Court will compensate the landowner for any conflict or loss over land use (s.7.36). I note that a compensation agreement has been filed with the Registrar in accordance with section 7.36(2 of the act. This recommendation is based on an assessment of the information supplied. Should there be any dispute over damage or loss, or should the miner depart from his plan of operations or EMOS and cause loss or damage or interruption to the management of the property not envisaged or not foreseen in the terms of the compensation agreement, the parties are at liberty to apply to the Court for a determination or award of compensation and if necessary, -- 11 of 13 -- 12 injunctive relief under the powers contained in Section 10.20(4) APPENDICES: The following documents are appended: * Copy of declaration dated 30 August 1993. * Questionnaire completed on 27 July 1993. * Copy of compensation agreements (one undated.) * Copy of special conditions. * Copy of submissions and page 8 . RECOMMENDATION: Upon consideration of all the matters set forth in section 7.26(3) of the act, I recommend to the Honourable , the Minister that the mining lease be granted over the whole of the application area for a term of FIVE years. (s.7.26(2)(a) subject to the following conditions: -- 12 of 13 -- 13 (a) the department review and assess the mineralisation through the reports submitted. (b) if there is no development work in the three years following grant, the applicant be called on to show cause. (c) due to lack of hard evidence of financial resources, no EMOS discounts be granted until the applicant has a proven track record. Dated at BRISBANE this 11th day of November, 1993. F.W. WINDRIDGE MINING WARDEN. -- 13 of 13 --