Prospecting Rights

Propsecting rights are issued on the premis of 5 years first, then a renewed period of 3 years. The total therefore is 8 years. It does happen that according to your propsecting work programme the propsecting will last about 3 years then the Department issues the first right for only 3 years. In this case you still qualify for a 3 year renewal making it 6 years in total. 

No you may not. After this answer you may think that you can and just need to find the way. The long answer, like the short answer is: 'you may not'. Look at the licence conditions which you agreed to when you received your right and in there you commited to not sell you prospecting right. 

Prospecting rights, in South Africa, should take 300 calendar days to be awarded. Since moving to the 1-System the timeframes has been regulated. From this answer we can discuss the variations that occur and then understand why it has never made 300 days.

Deviations triggered by the applicants:

• Supporting documents not submitted (maps; BEE profile not sorted; requests for additional copies)
• Quantum’s not paid on time

The above does not mean that the problem only lay with the applicant. The competent and commenting authorities also contribute towards delays.

• Comments not received from the commenting authorities
• Competent authority loses files (moved offices; fires; staff rotation)

Another part of the loss of time is the public that riggers delays. These take many forms but the stock in trade has been:

• Submit objections to the DMR which can trigger a delay that can be up to 2 years.
• Utilise attorneys to cover the process in paperwork
• Submit appeals
• Deliberately join the process as late as possible

The South African mineral right regime therefore aims for 300 days but the reality is to always plan for 700+ days. 

You have not said if you are applying afresh or if you are attmepting to purchase one.

Applying anew

A budget of R220,000 is a reasonable estimate of the costs. Added to this is a further budgt of R50,000 for the rehab quantum.

Purchasing

Here you are at the mercy of a few things. Is it a good geology propsect? What is your level of desperation? I have seen properties on offer at the R100-million mark. This is entirely unrealistic for several reasons. Write to us to discuss this further, being mindful that in South Africa it is not actually possible to sell or buy a propsecting right in the traditional sense of it being a product. What you are buying is a right, much like an option. 

Specialists are required by the Department. The ill usually indicate what speciailsits are required however there are early guidelines that can be followed and you can determine for yourself which specialists to contract in. .

The stages are simple, rightsare applied for and when you have been approved, you have the final three steps to cover. Granting – Execution –Registration. The granting occurs when the Department issues you with a letter that says something to the effect ‘your right has been granted’. This granting letter can come with some conditions, for example, ‘we require 6 copies of your regulation map’, or ‘make payment of your guarantee and first years prospecting fees’.

Once tose steps are done you progress to the Executon stage. The longest we say from granting to execution was 2013 (granted) to 2017 (executed) because the Department did not process the application. When we were made aware of the situation it took us 6 weeks to get execution sorted. The delays can be caused by:

• Not paying PR fees;
• Not paying guarantess;
• Not responding to the Departments questions and call for information on BEE;
• Not providing details of your public notary.
• The file is misplaced or lost
• An earlier date was missed and the Department does not proritise you for signing then ext right.
• The granting letter did not correctly provide the departmental Manager with authorisation to sign.

If all the above is in place then the right is executed within a 4 week window.

You are not explaining the level of detail in the ‘who’ and you are not saying where you live. You are also not saying how soon you need to know the answer. I will answer and in between make allowances for different parts of the country.

1. The easiest is to submit a PAIA request to the DMR in your province. Irrespective of where you are in South Africa you can also submit an application directly to the DMR offices Pretoria. This process of submitting is quick, however the answer can take MANY MANY months. The cost of a PAIA request is R35 and must be done on the requisite form.
2. The answer you receive back will essentially state that: ‘Company XYZ has a prospecting rights for commodity A, Commodity B and Commodity C. This was awarded on 1 January 2010 and expires on 31 December 2015”. 
3. At this point you have the answer to your question above.
4. Thereafter you can decide if you know enough or if need to delve into who owns Company XYZ by doing a Director search. You will not easily be able to identify the shareholders if at all.

There are many variations on this question and level of details. For example you could find the applicant is a Trust in which case a different route is required to find those ‘owners’. In our experience this is a process of often 4 months but as long as 18 months. Maybe this is too long in which case, you want to first do a search of the DMR SAMRAD database.

Alternatively contact us for a quote and we set the ball rolling, do the follow ups and send you the information as it becomes available. We are asked to provide information to attorneys or estate agents when farms are being bought/sold and can provide the information as required, to the level of detail required.