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:
- the minerals subject to the exploration licence;
- the area and location of the minerals;
- a description of the claim, the tracts and the claim reference map; and
- 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:
- the minerals to be leased;
- 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;
- the applicant's name, contact information and exploration licence number; and
- 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.
