1. Introduction to Metallic and Industrial Mineral Rights in Alberta
Coal and Mineral Rights in Alberta - Part 2
September 16, 2006
Introduction to Metallic and Industrial Mineral Rights in Alberta
Coal & Mineral Development Unit, Alberta Energy
Note: This presentation provides a basic overview of metallic and industrial mineral rights in Alberta (I.e. non energy).
A separate presentation provides a more general overview of mineral rights in Alberta.
Alberta Energy 2006 1
Coal and Mineral Development Unit. Alberta Department of Energy

2. MINING IN ALBERTA TODAY
                                                                 
Alberta Energy 2006

3. Alberta Energy 2006

4. Alberta’s Potential for Gem and Metallic Mineral Wealth
Courtesy of AGS Alberta Energy 2006

5. Coal and Mineral Rights in Alberta - Part 2
Mining Locations in Alberta
September 16, 2006
Excludes sand, gravel and sulphur
Legend
City
Fort McMurray
Coal
Oil sands (surface mineable)
Limestone & Other Stone
Salt
Edmonton
Placer Gold
Brick Clay & Shale
Iron & Magnetite
Calgary
Ammonite Shell
Lethbridge
Alberta Energy 2006
Coal and Mineral Development Unit. Alberta Department of Energy

6. Surface Mining Operation
Alberta Energy 2006

7. Coal and Mineral Rights in Alberta - Part 2
September 16, 2006
Mines in Alberta
Million Tonnes per year
Syncrude Oil Sands Mine (plus million tonnes of overburden)
155.0
Coal: Highvale Mine
12.5
Limestone: Proposed Muskeg Valley quarry
7.0
Limestone: Other major operations combined
5.6
Coal: Genesee Mine
4.5
Coal: Sheerness Mine
3.4
Coal Valley Mine
2.3
Coal: Paintearth, Vesta, Whitewood, Grande Cache Mines
Over 2.0 per mine
Small Mines: Coal; Iron; Ammonite
Less than 0.05 per mine
Except for limestone operations, most metallic and industrial mineral mines in Alberta today are small: produce under 50,000 tonnes per yr
The Highvale Mine is the largest coal mine in Canada.
The bituminous coal mines producing coal for export are : Coal Valley and Grande Cache
Syncrude
Oil sand mined in a typical year — 74 million BCMs (banked cubic metres) or 155 million tonnes per year. In 2001, 164.7 million tonnes were mined. Overburden and rejects handled in 2001 — 83.6 million BCMs or 175.4 million tonnes.
Cheviot: -- The pit, near Hinton, Alberta, west of the capital Edmonton, is expected to initially produce 1.4 million tonnes of coal a year, but that could grow to 2.8 million tonnes in 2005 if there is enough demand.
Grande Cache Coal Corporation (GCCC) Preliminary Prospectus:
Marketable Production –initially approx 0.75million tonnes/yr; up to 2.5 million tonnes/yr
Alberta Energy 2006
Year 1 2 3 4 5 6 7
ROM
984
1,487
2,354
2,482
2,583
3,358
2,681
Saleable
753
1,149
1,801
1,856
2,549
2,028
1,850
Coal and Mineral Development Unit. Alberta Department of Energy

8. Coal and Mineral Rights in Alberta - Part 2
September 16, 2006
MINERAL RIGHTS
This part of the presentation pertains to metallic and industrial minerals, which include a variety of mineral substances such as precious metals (gold, silver, platinum, etc), base metals (iron, lead, zinc, nickel, etc.), precious stones (diamonds, garnets, etc.), building stone (limestone, sandstone, etc.) and industrial minerals (salt, lime, etc.)
Metallic and Industrial Minerals
Alberta Energy 2006
Coal and Mineral Development Unit. Alberta Department of Energy

9. Province as Owner of Minerals
Coal and Mineral Rights in Alberta - Part 2
September 16, 2006
Province as Owner of Minerals
Mines and minerals transferred from federal government to Alberta in 1930
Province owns mines and minerals in 81% of land in Alberta
Canadian practice has been for federal government to transfer administration and control of government owned mines and minerals to the provinces as they are created.
Alberta created in 1905, transfer occurred in 1930.
High proportion of mines and minerals owned by Canada and transferred to Alberta because
Increasing value of mines and minerals recognized by 1930 so not divested by Canada prior to transfer
Alberta sparsely populated so most land in Alberta, including mines and minerals, was government owned -still currently 60 percent of surface.
Alberta Energy 2006
Coal and Mineral Development Unit. Alberta Department of Energy

10. Coal and Mineral Rights in Alberta - Part 2
September 16, 2006
Role of Alberta Energy
Minerals tenure
Grants mineral rights to private developers for development
Collection of mineral revenues
Royalties; Rent; Bonus Bid
Advocates reasonable surface access
Surface access is handled through Sustainable Resource Development, the Surface Rights Board and private contract with landowner
Access to Resources
Generally grant rights by tender to highest bidder (oil, gas, and oil sands; and coal in some cases.
Rights granted in the form of agreements, e.g., mineral leases and licenses, authorizing exploration and development.
Generally based on “use it or lose it” principle which requires timely development in order to maintain the agreements.
Government does not interfere with access to privately owned mineral rights. This is a matter of private contract between the owners and developers of those rights.
Alberta still owns 60% of surface in Alberta – Managed by SRD
Where access can’t be negotiated – Access and compensation governed by SRB.
With the rapid pace of development in Alberta comes increased population and increased demands for use of the surface.
Alberta Energy 2006
Coal and Mineral Development Unit. Alberta Department of Energy

11. Metallic and Industrial Mineral Agreements
A permit (“claim”) grants the right to explore for Alberta-owned metallic and industrial minerals
A lease grants rights to Alberta-owned metallic and industrial minerals for the purpose of development and mining
Alberta Energy 2006

12. Goals of Alberta Minerals Tenure
To give industry the opportunity to explore and develop minerals for the greatest benefit of Albertans
To place mineral rights in the hands of those with the interest and means to explore and develop Alberta’s mineral resources
To make mineral rights available to others as soon as possible upon termination or expiry of an agreement
Alberta Energy 2006

13. The Life Cycle of A Mine PERMIT LEASE $ Increased An ‘Idea’
Exploration
LEASE
Development
Mine
Reclamation
$ Increased
Wealth $
Courtesy of AGS Alberta Energy 2006

14. The Right to Conduct Exploration and Mining Activities
Coal and Mineral Rights in Alberta - Part 2
September 16, 2006
The Right to Conduct Exploration and Mining Activities
The right to the minerals is separate from the right to conduct mining and exploration
Department of Sustainable Resource Development administers approval of exploration programs
Natural Resources Conservation Board administers approval to mine
Department of Human Resources and Employment administers worker health and safety requirements
Department of Environment administers environmental protection and reclamation
Timeliness and least administrative cost is important to mineral developers and investors. The fewer departments involved in approval, the easier it is for the client, and the faster and more efficient it is to approve.
When multiple departments have to be involved it is best to provide “one window” to the applicant, with one department providing a service point to the client along with the coordination with other departments.
Exploration Approval: To conduct a specific exploration program causing disturbance in a specific location: $100 fee per program
The Department of Energy reviews applications and advises of any mineral rights concerns, e.g. approval of bulk samples; whether the exploration program is working within valid mineral rights in locations where the minerals are Alberta-owned
Agreement holders do not have “protected airspace” – someone could fly over their property to conduct an aeromagnetic survey. Exploration approval not required for this because there is no ground disturbance.
Alberta Energy 2006
Coal and Mineral Development Unit. Alberta Department of Energy

15. Coal and Mineral Rights in Alberta - Part 2
September 16, 2006
In Alberta use a variety of exploration techniques.
Mineral exploration companies are interested in metal content of sediment (particulate; placer) and bedrock (hard rock). There are few locations where the non sedimentary bedrock is near surface and cost of clearing or working through the sedimentary overburden is a major consideration for mine economics.
Courtesy of AGS Alberta Energy 2006
Coal and Mineral Development Unit. Alberta Department of Energy

16. Mineral Rights for Exploration in Alberta
Coal and Mineral Rights in Alberta - Part 2
September 16, 2006
Mineral Rights for Exploration in Alberta
A permit (“claim”) grants the right to explore for Alberta-owned metallic and industrial minerals
Application fee: $625 per agreement
Size: to 9,216 hectares
Term: years, not renewable
Annual rent: None
Work requirement: Yes, exploration work
Alberta Energy 2006
Coal and Mineral Development Unit. Alberta Department of Energy

17. Coal and Mineral Rights in Alberta - Part 2
September 16, 2006
Map Staking
Alberta adopted map staking in 1967
Lands are selected from a map
Ground staking not required to stake claim
Other provinces using this method today:
British Columbia
Newfoundland
Nova Scotia
Quebec
Saskatchewan and Manitoba in the surveyed areas of those provinces
The trend is towards map staking online: “point and click” application.
Quebec, BC, NF have implemented.
Alberta Energy 2006
Coal and Mineral Development Unit. Alberta Department of Energy

18. New Claymore Resource Ltd.
St. Paul Area
New Claymore Resource Ltd.
Photo courtesy of Bob Riziuk and
New Claymore Resources Ltd.
Edmonton
Alberta Energy 2006

19. Work Requirement
To maintain a a permit, exploration expenditures and results must be reported to Alberta Energy.
Type of work accepted on a permit:
Prospecting
Trenching and drilling
Geological, geophysical, geochemical surveys
Laboratory work, assay and analysis
Alberta Energy 2006

20. Exploration Work Requirements in Alberta
Every 2 years must file work on permit
Report cost of work done
Report on geological data and results
Report released to public after 1 year
Work required goes up over time:
Period 1 (Year 1-2) $ 5 / hectare
Periods 2 and 3 (Year 3-4, 5-6) $10 / hectare
Periods 4 thru 7 (Years 7-14) $15 / hectare
Alberta Energy 2006

21. Drill Core and Samples
On behalf of the Minister of Energy, Alberta Energy may direct an exploring company to provide drill core or mineral samples
Material is selected by an Alberta Geological Survey (AGS) geologist in negotiation with the company
Material is delivered to the Provincial Mineral Core Research Facility in Edmonton, operated by AGS
Alberta Government makes drill core and samples public after 1 year
Alberta Energy 2006

22. Coal and Mineral Rights in Alberta - Part 2
September 16, 2006
Mountain Lake Area
Marum Resources Inc.
New Claymore Resources Ltd.
One of the exploration programs interested in diamonds.
Photo courtesy of Bob Riziuk and
New Claymore Resources Ltd.
Edmonton
Permit map courtesy of Alberta Energy
Alberta Energy 2006
Coal and Mineral Development Unit. Alberta Department of Energy

23. The Right to Mine
Alberta Energy 2006 23

24. Metallic and Industrial Mineral Lease
A lease grants Alberta-owned mineral rights for the purpose of development and mining
Company can request a permit go to a lease if deposit is found and mining is being considered
If a deposit is already known, a company can apply for a lease without holding a permit
Lease usually grants right to all metallic and industrial minerals in that location, not just those of immediate interest to the company
Alberta Energy 2006

25. Terms of A Lease Term: 15 years, renewable
Size: Maximum 2, hectares
Annual Rent: $3.50 per hectare
Work Requirement: None, but can only renew if a mine is operating or planned
Alberta Energy 2006

26. Coal and Mineral Rights in Alberta - Part 2
September 16, 2006
Thank you!
The End
Coal and Mineral Development Unit. Alberta Department of Energy