What is an Independent Tenement Report (Solicitor’s Report on Tenements)?

In short, an Independent Tenement Report, or a Solicitor’s Report on Tenements is a report prepared by an appropriately qualified person, detailing the current status of the tenement(s) comprised in the report. Most often, the term Independent Tenement Report, or a Solicitor’s Report on Tenements (or even an Independent Solicitor’s Report) is used in relation to reports prepared in accordance with the VALMIN Code for inclusion in prospectus reports, however the terms can also be prepared for a suite of other purposes, including due diligence enquiries and for auditing purposes.

We explain the most common uses for the terms Independent Tenement Report, or Solicitor’s Report on Tenements and the work done by the experienced team at Hetherington Legal when preparing these reports.

Independent Tenement Report or Solicitor’s Report on Tenements for Prospectuses

As all experienced mining and mineral exploration companies know, being able to fund innovative and promising exploration programs and mining projects is not always easy.  For anyone experienced in investing in mining and mineral exploration companies, being able to identify a good project that has tangible odds of returning significant returns for investment can also be difficult.

A key step in both processes, particularly for any exploration IPO or mining IPO on the share market is the preparation and publication of a mining prospectus, which will include key information relating to the company’s exploration and mining projects, including its tenements. When preparing a prospectus, ASIC requires operators to comply with various legislative requirements, as well as the requirements of key industry codes, namely the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) and the Australasian Code for the Public Reporting of Technical Assessments and Valuations of Mineral Assets (VALMIN Code).

Among other things, the VALMIN Code requires reports prepared for the purpose of informing investors or potential investors and their advisers when making investment decisions, including prospectus reports, to include a sufficiently recent enquiry detailing the status of tenements comprised in the project. The VALMIN Code requires the following details relating to mining tenements and exploration tenements comprised in the prospectus:

• Tenure area, expiry and renewal dates,
• expenditure commitments, rents and rates, security bonds or reclamation liability,
• obligations to any third party, including, but not limited to, joint venture or royalty agreements, and
• title and location of any contiguous and geologically related Tenure that, in the opinion of the Practitioner, may have a Material bearing on the value of the Tenure under consideration.

In its report ‘Regulation of corporate finance: July to December 2018’, ASIC specified as follows in relation to tenement information contained in a prospectus report.

“When technical specialists are engaged to provide opinions involving the application of legislation, we consider it necessary that the report is prepared by an appropriately qualified legal practitioner to allow investors to make an informed assessment of its reliability.”

The regulators of other stock exchanges such as the Toronto Stock Exchange (TSX) have similar requirements when reviewing the content of prospectuses.

Enter Hetherington Legal’s Independent Tenement Report, also known as a Solicitor’s Report on Tenements, depending on where you’re from. The team at Hetherington Legal have extensive experience in preparing Independent Tenement Reports for inclusion in prospectus reports and understand the requirements of market regulators when reviewing reports and finalising prospectuses. We understand the process and requirements of relevant industry codes, including the JORC Code and the VALMIN Code. Importantly, being part of the broader Hetherington Group, Hetherington Legal has a wealth of knowledge when it comes to tenements, tenement management and tenement administration across NSW, Western Australia, Queensland, Victoria, South Australia, the Northern Territory and Tasmania.

The requirements of Independent Tenement Reports can vary depending on the requirements of the lawyers leading the prospectus process, the relevant jurisdictions for the target tenements and types of tenements in question. This being said, each Independent Tenement Report prepared by Hetherington legal for inclusion in prospectuses will include the following basic requirements:

• Compliance with the requirements of the VALMIN Code and any other industry codes for applying to the jurisdiction and tenement types in question.
• A detailed overview of the tenements verified against Government records.
• A summary of any third-party interests.
• Material considerations including Aboriginal heritage and Native Title compliance.

Independent Tenement Reports for Due Diligence and Internal or External Auditing Purposes

An Independent Tenement Report prepared for due diligence purposes or as part of an internal or external audit process is not necessarily bound by the requirements of various stock market listing rules or industry codes. To that end, a tenement due diligence may be narrower or wider in scope than a report prepares for a prospectus, depending on the needs of the entity commissioning the report.

Hetherington Legal is able to provide a variety of information in our Independent Tenement Reports and tenement due diligence reports to suit the needs of our client. This may include a detailed history of the tenement, extensive reviews of compliance history and detailed analysis of land tenure and overlapping constraints that may impact future development potential. Our experienced team of mining lawyers are able to draw on the skills of Hetherington’s tenement consultants and Hetherington Environmental’s environmental consultants to provide a tailored report covering a wide variety of components, including.

• Tenement information and history.
• Tenement obligations and tenement compliance.
• Expenditure commitments expenditure history.
• Reporting obligations, including environmental reports and exploration reports and reporting compliance history.
• Review of Native Title compliance and Aboriginal heritage matters
• Details of relevant environmental approvals and a related obligations.
• Summary of existing operational documents including programs of works, mining operations and plans, activity approvals.
• Community consultation and stakeholder relations, including compensation agreements and access agreements.
• Constraints analysis and land tenure overview, including land tenure, reserved land, exempted areas and other land types.

Give the team at Hetherington Legal a call for more information about services offered, including Independent Tenement Reports and Solicitor’s Reports on Tenements.