Northern Mineral Exploration Assistance Regulations (C.R.C., c. 332)

Short Title

1 These Regulations may be cited as the Northern Mineral Exploration Assistance Regulations.

Interpretation

2 In these Regulations,

applicant

applicant means a person or group of persons whose application for a grant has been received by the Minister; (requérant)

application

application means an application for a grant; (demande)

Canadian securities dealer

Canadian securities dealer means a person who holds, under a law of a province relating to trading in securities, a subsisting and unsuspended licence or registration that entitles him to trade in the shares of companies; (courtier en valeurs du Canada)

Director

Director means the Director, Northern Policy and Program Planning Branch, Department of Indian Affairs and Northern Development; (Directeur)

exploratory work

exploratory work means surface examinations, aerial mapping, surveying, bulldozing, geological, geophysical and geochemical examinations and any other investigations relating to the subsurface geology, and includes,

• (a) in relation to exploration for oil and gas, the drilling of an exploratory test well,

• (b) in relation to exploration for minerals, the drilling of diamond drill holes or equivalent holes in a number satisfactory to the Minister, and

• (c) all works necessarily undertaken in connection with any operation specified in this definition, including the construction and maintenance of those facilities necessarily connected therewith and the building and maintenance of airstrips and roads required for the supply of or access to exploratory operations; (travaux de prospection)

gas

gas means natural gas; (gaz)

grant

grant means a grant authorized by the Minister pursuant to these Regulations; (subvention)

holdings

holdings means

• (a) claims located or granted and lands leased for prospecting under the Yukon Placer Mining Act,

• (b) mineral claims or locations and leases thereof within the meaning of the Yukon Quartz Mining Act,

• (c) mining claims or claims, leases thereof and permits or prospecting permits within the meaning of the Canada Mining Regulations,

• (d) oil and gas leases and permits within the meaning of the Canada Oil and Gas Land Regulations,

• (e) locations and leases thereof and permits within the meaning of the Territorial Coal Regulations, and

• (f) leases issued pursuant to the Territorial Dredging Regulations; (titres)

minerals

minerals means metals occurring in their natural state, ores of metals, coal and other naturally occurring substances capable of being mined, other than oil, gas and substances ordinarily obtained from a quarry; (minéraux)

Minister

Minister means the Minister of Indian Affairs and Northern Development; (ministre)

northern Canada

northern Canada means that part of Canada described in the schedule; (Nord canadien)

oil

oil means

• (a) crude petroleum and other hydrocarbons regardless of gravity that are produced at a well head in liquid form by ordinary production methods,

• (b) any hydrocarbons, except coal and gas, that may be extracted or recovered from surface or subsurface deposits of oil sand, bitumen, bituminous sand, oil shale or other deposits, and

• (c) any other hydrocarbons except coal and gas; (pétrole)

program expenditure

program expenditure means an amount expended in carrying out a program of exploratory work or a stage thereof; (dépenses du programme)

recipient

recipient means an applicant whose application has been approved by the Minister pursuant to paragraph 5(1)(a); (bénéficiaire)

year

year means a 12-month period ending on March 31st. (année)

Grants for Exploratory Work in Northern Canada

• 3 (1) Upon the application therefor to the Minister by one or more persons described in subsection (2) who intend to do exploratory work on holdings in northern Canada, the Minister may, subject to these Regulations, authorize the payment to such person or persons of a grant in respect of the program expenditure for that exploratory work.

• (2) The persons referred to in subsection (1) are

  • (a) any individual who satisfies the Minister that he is

    • (i) a Canadian citizen not less than 18 years of age, and

    • (ii) entitled by reason of beneficial ownership or lease or option agreement to enter on the holdings in respect of which the application is made and conduct thereon a program of exploratory work;

  • (b) any corporation incorporated in Canada, other than a corporation described in subparagraphs 66(15)(h)(i) and (ii) of the Income Tax Act, that is either

    • (i) a private corporation whose issued and outstanding shares are beneficially owned

      • (A) by Canadian citizens,

      • (B) by one or more corporations described in subparagraph (ii), or

      • (C) partly by Canadian citizens and partly by one or more public corporations described in subparagraph (ii),

      in a number that causes the total votes of the shares so owned to be not less than 50 per cent of the total votes that could, under the voting rights attached to all the shares of the private corporation issued and outstanding, be voted by the holders thereof,

    • (ii) a public corporation whose common shares are listed on a Canadian stock exchange or are offered for sale in Canada to the public through a Canadian securities dealer, or

    • (iii) a corporation whose issued and outstanding shares are beneficially owned by one or more public corporations incorporated in Canada (whose shares are listed on a Canadian stock exchange or are offered for sale in Canada to the public through a Canadian securities dealer) in a number that causes the total votes of the shares so owned to be not less than 50 per cent of the total votes that could, under the voting rights attached to all the shares of the corporation issued and outstanding, be voted by the holders thereof; and

  • (c) any corporation incorporated in Canada and described in subparagraphs 66(15)(h)(i) and (ii) of the Income Tax Act

    • (i) that satisfies the Minister that, until the program of exploratory work in respect of which the application is made has been completed or discontinued, substantially all of its expenditures for exploratory work will, unless the Minister otherwise agrees, be made for exploratory work in northern Canada,

    • (ii) whose issued and outstanding shares are not beneficially owned by one or more other corporations described in subparagraphs 66(15)(h)(i) and (ii) of the Income Tax Act in any number that would cause the total votes of the shares so owned to be in excess of 15 per cent of the total votes that could, under the voting rights attached to all the shares of the corporation issued and outstanding, be voted by the holders thereof, and

    • (iii) that is a corporation described in subparagraph (b)(i), (ii) or (iii).

• (3) No grant shall be authorized by the Minister to be paid to an applicant comprised of a group of persons unless

  • (a) the members of the group have, by an agreement in writing approved by the Minister, formed an association for the purpose of carrying on exploratory work on holdings in northern Canada;

  • (b) the members of the group have, in a manner satisfactory to the Minister, appointed one member of the group or another person satisfactory to the Minister as their agent for the purpose

    • (i) of receiving all correspondence and notices in respect of their application, and

    • (ii) receiving any amount paid as or on account of a grant authorized by the Minister to be paid to the group; and

  • (c) each member of the group undertakes, in a manner satisfactory to the Minister, to be bound jointly and severally by the terms and conditions imposed by these Regulations and by all obligations assumed by the group in making application for the grant.

• (4) No grant shall be authorized by the Minister to be paid to a corporation unless the corporation satisfies the Minister that it is the beneficial owner of or of an undivided interest in the holdings in respect of which the application is made or that on completion of the proposed program of exploratory work or of a stage thereof it is, in priority to all others, entitled to become the beneficial owner of such holdings or of an undivided interest therein.

Application for Grant

4 Every person or group of persons requesting a grant shall submit to the Minister an application, under oath by all persons who are party to the application, giving full particulars of the proposed program of exploratory work, including

• (a) a description of the areas on which it is proposed to do exploratory work and of the holdings to which they relate,

• (b) estimates, by classes of expenditure satisfactory to the Minister, of the proposed program expenditure for the exploratory work, a statement of the basis on which such estimates were made and of the purpose of each class of expenditure,

• (c) if the exploratory work is to be carried out in stages not all of which will likely be completed in the same year, giving

  • (i) the estimated period of each stage, and

  • (ii) full particulars of the exploratory work proposed to be carried out in each stage, including the information required by paragraphs (a) and (b) and a description of the areas to which each class of expenditure is proposed to be applied, and

• (d) three copies of all available preliminary reports, photographs, maps and other factual material upon which the program of exploratory work is based,

and shall submit such other information, documents and undertakings as are required by these Regulations or by the Minister.

Authorization of Grant by Minister

• 5 (1) When the Minister has received a completed application and is satisfied that the program of exploratory work that the application discloses may further the economic development of northern Canada, he may

  • (a) approve the application;

  • (b) determine the amount of the program expenditure;

  • (c) fix the day by which the program of exploratory work is to be completed; and

  • (d) authorize, subject to the terms and conditions set out in these Regulations, a grant to the recipient in an amount not exceeding 40 per cent of the lesser of

    • (i) the program expenditure determined by him pursuant to paragraph (b), and

    • (ii) the portion of that program expenditure borne by the recipient.

• (2) At any time before the whole of a grant has been paid to a recipient, the Minister may, at the request of the recipient and on such information as the recipient may provide or the Minister may require, vary any amount determined or authorized or any date fixed pursuant to this section.

• (3) All applications shall be dealt with by the Minister in the order in which they are completed.

• (4) For the purposes of this section, an application is completed when

  • (a) an application fulfilling the requirements of section 4 has been received by the Minister; and

  • (b) all information, documents and undertakings required by these Regulations or by the Minister have been submitted to the Minister by the applicant.

Payment of Grant

• 6 (1) Subject to subsection (2), no amount shall be paid to a recipient as or on account of a grant unless the recipient has satisfied the Director that the recipient has

  • (a) in relation to oil or gas, drilled an exploratory test well, or

  • (b) in relation to minerals, drilled diamond drill holes or equivalent holes in a number satisfactory to the Director,

  and a statement of program expenditure has been submitted by the recipient to and has been approved by the Director in accordance with sections 7 and 8.

• (2) Where, on the basis of the results of a recipient’s exploratory work, the Minister is satisfied that drilling is not warranted, he may waive the requirement to drill imposed on the recipient by subsection (1).

• 7 (1) Within 90 days after the day on which a program of exploratory work in respect of which the Minister has approved a grant, or a stage of that program, has been completed, the recipient shall submit to the Director three copies of a statement, in a form satisfactory to the Minister and under oath by all persons who comprise the recipient, of the program expenditure in respect of that exploratory work giving full particulars of the exploratory work done and of the expenditures made in doing the exploratory work, including

  • (a) a description of the areas on which the exploratory work was done and of the holdings to which they relate,

  • (b) a description of the exploratory work,

  • (c) details of the expenditures made in doing the exploratory work and of the purposes for which the expenditures were made, and

  • (d) three copies of all reports, photographs, maps and other factual material with respect to the exploratory work

  and such other information as the Director may require.

• (2) Where the intervals between the submission of successive statements of program expenditure pursuant to subsection (1) would otherwise be greater than three months, the recipient may, whether or not the program of exploratory work or another stage thereof has been completed, submit an interim statement of expenditure to the Director not less than three months after the day on which the last previous statement was submitted.

• 8 (1) The Director shall consider a statement or interim statement of program expenditure submitted to him in accordance with section 7 and if, on the information disclosed therein and such other information as he may require, he is satisfied that it accurately and fully shows the exploratory work done and the expenditures made in respect of such work and that such work and expenditures are in accordance with the application as approved by the Minister, he shall

  • (a) approve the statement of expenditure; and

  • (b) determine the amount payable to the recipient as or on account of the grant in respect of that statement of expenditure.

• (2) The Minister shall pay to the recipient the amount determined under subsection (1), but all such payments are subject to the terms and conditions specified in these Regulations and to the observance of all undertakings given by the recipient.

• 9 (1) Notwithstanding section 8, the Director shall not, except where subsection (2) applies, approve a statement of program expenditure unless he is satisfied that the recipient owner is the beneficial owner of or of an undivided interest in all of the holdings described in the statement.

• (2) Where a recipient is not the owner of or of an undivided interest in all of the holdings described in a statement of program expenditure, the Director may approve the statement of program expenditure if the Minister, on the basis of such information as he may require, is satisfied that the recipient is entitled, in priority to all others, to become the beneficial owner of or of an undivided interest in any holdings described in the statement of program expenditure of which the recipient is not then such beneficial owner.

• 10 (1) No amount is payable to a recipient as or on account of a grant after the recipient has discontinued the program of exploratory work in respect of which the grant was authorized or a stage of that program, unless the consent of the Minister to the discontinuance of such program or stage is given in accordance with subsection (2).

• (2) The Minister may consent in writing to the discontinuance of a program of exploratory work or of a stage of that program if he is satisfied that further exploratory work in respect of the program or that stage, as the case may be, is not warranted.

Undertakings

11 No amount is payable to a recipient as or on account of a grant unless the recipient has

• (a) undertaken to make payment in accordance with these Regulations to Her Majesty in right of Canada of any amounts that become owing by the recipient by reason of any provision of these Regulations;

• (b) authorized the Minister to make public, at any time after two years from the day fixed by him for completion of the program of exploratory work, any information disclosed to the Director pursuant to section 7;

• (c) undertaken not to assign, transfer, give away, abandon, mortgage, pledge or otherwise charge or grant any interest in or in any way disentitle or disable himself from acquiring holdings described in his application

  • (i) except with the prior written consent of the Minister and subject to any conditions that the Minister may in giving his consent impose, or

  • (ii) except after the written notice contemplated by section 15 has been given to the recipient by the Minister;

• (d) undertaken, on behalf of the recipient and the recipient’s agents, officers, employees and servants, not to represent or imply by any means that the approval of the recipient’s application by the Minister or the payment to the recipient of any amount as or on account of a grant connotes a favourable opinion of Her Majesty or of any officer or employee of Her Majesty as to the presence of oil, gas or minerals in any of the areas to which the holdings described in the recipient’s application relate;

• (e) undertaken to repay to Her Majesty in right of Canada any amount paid to the recipient as or on account of a grant together with simple interest thereon at the rate of 10 per cent per annum from the day on which such amount was paid to the recipient, if

  • (i) the recipient or any agent, officer, employee or servant of the recipient commits a breach of any undertaking given by the recipient pursuant to these Regulations, or

  • (ii) the recipient or any agent, officer, employee or servant of the recipient either before or after this undertaking is given, knowingly makes a false or misleading statement or fails to disclose a material particular in an application or other document or wilfully furnishes any false or misleading information; and

• (f) given to the Minister an undertaking satisfactory to him that the recipient will employ in connection with his exploratory work persons residing in the area in which the work is to be carried out to the fullest extent possible having regard to the availability and qualifications of those persons.

Repayment of Grant

• 12 (1) Subject to section 15, an amount equal to the total amount paid to a recipient as or on account of a grant becomes owing by the recipient to Her Majesty in right of Canada on the day on which production for gain is commenced on any of the holdings described in the recipient’s application.

• (2) The Director shall, on the basis of such information as he may require from the recipient or as the recipient may provide and any other information that he may obtain, determine whether production for gain has commenced on any of the holdings described in the recipient’s application and the day on which it commenced.

• (3) Subject to these Regulations, any amount that becomes owing by virtue of subsection (1) shall bear simple interest from the day it becomes owing at a percentage rate equal to the sum of two plus the average of the interest rates stated on the face of long term Government of Canada bonds outstanding during the calendar year next preceding the calendar year in which the amount becomes owing.

• 13 (1) Subject to this section, any amount that becomes owing by a recipient by virtue of section 12 shall be paid by the recipient by paying to Her Majesty in right of Canada not less than 10 per cent of that amount or the balance of that amount remaining unpaid, whichever is the lesser, together with all accrued interest, on each anniversary of the day on which that amount became owing by the recipient.

• (2) Subject to subsection (3), where a recipient is a public corporation whose shares are listed on a Canadian stock exchange or whose shares are offered for sale in Canada to the public through a Canadian securities dealer, the recipient may at any time, if the Minister agrees, pay the whole or any part of any amount that becomes owing by virtue of section 12 or of the balance of any such amount from time to time remaining unpaid by issuing to Her Majesty in right of Canada fully paid common shares of the recipient.

• (3) Where the Minister agrees to the payment by a recipient of any amount in the manner provided by subsection (2), the value of the common shares of the recipient for the purpose of determining the number of such shares that shall be issued by the recipient to Her Majesty in right of Canada in payment of such amount is,

  • (a) in the case of shares listed on a Canadian stock exchange, the closing market quotation of those shares, on the day the Minister agrees to that manner of payment, on the Canadian stock exchange where the principal trading in those shares ordinarily takes place; and

  • (b) in the case of shares not listed on a Canadian stock exchange but offered for sale in Canada to the public through a Canadian securities dealer, the closing market quotation, on the day the Minister agrees to that manner of payment, in a daily newspaper in the city where the principal trading in those shares ordinarily takes place.

• (4) Where only part of an amount that becomes owing by virtue of section 12 or of the balance of such amount from time to time remaining unpaid is paid by a recipient in the manner provided by subsection (2), the amount thereafter remaining unpaid shall be paid by the recipient to Her Majesty in right of Canada by paying not less than 10 per cent of such amount or the balance thereof remaining unpaid, whichever is the lesser, together with all accrued interest, on each anniversary of the day on which a payment was made in the manner provided by subsection (2).

• (5) A recipient may pay the whole of any amount that becomes owing by virtue of section 12 or of the balance of such amount from time to time remaining unpaid, together with all accrued interest, at any time without notice or bonus.

• (6) The Minister may forgive the whole or any part of the unpaid balance of any amount that becomes owing by a recipient by virtue of section 12 and of any accrued interest thereon if

  • (a) payment of that amount has been commenced by the recipient in accordance with this section; and

  • (b) it appears to the Minister that production for gain is no longer feasible in the areas to which the holdings described in the recipient’s application relate.

14 Where the Minister is of the opinion that circumstances affecting the carrying on of production for gain justify, he may by notice in writing to a recipient

• (a) increase the minimum amount payable yearly by the recipient pursuant to subsection 13(1) or (4); or

• (b) in respect of the recipient, decrease the minimum amount payable yearly pursuant to subsection 13(1) or (4) or reduce the rate of interest specified in subsection 12(3) or both decrease the minimum amount payable and reduce the rate of interest.

15 No amount shall become owing by virtue of section 12 where the recipient is notified in writing by the Minister that it appears to the Minister that the exploratory work done by the recipient in the areas to which the holdings relate has disclosed no indication of oil, gas or minerals in quantities likely to make production for gain feasible in the future.

General

16 A recipient who becomes liable to make a repayment to Her Majesty in accordance with an undertaking given by the recipient pursuant to paragraph 11(e)

• (a) shall not thereafter be paid any amount as or on account of a grant; and

• (b) shall be deemed thereafter not to be a person described in subsection 3(2).

17 Where copies of any reports, photographs, maps or other factual material required to be submitted by an applicant or a recipient pursuant to paragraph 4(d) or paragraph 7(1)(d) have previously been submitted to the Director pursuant to any of the Acts or Regulations referred to in section 2, the applicant or recipient, as the case may be, shall, upon so notifying the Director be deemed for the purposes of these Regulations to have submitted them pursuant to paragraph 4(d) or 7(1)(d) as the case may be.