Prospectus - Kingsrose Mining

2.1 Western Australia
Tenements in Western Australia are granted subject to various conditions prescribed by the Mining Act
1978 (WA), including payment of rent, expenditure and reporting requirements and each tenement is
granted subject to standard conditions which regulate the holder’s activities or are designed to protect the
environment. These standard conditions are not detailed in this Report.
The holder of a granted prospecting licence, exploration licence or mining lease is required to spend, or cause
to be spent, a set amount per hectare or, in the case of exploration licences, per block in each tenement year
on exploration or mining activities and a “Form 5” expenditure report must be lodged within 60 days after the
anniversary date of the mining tenement. The Tenement Schedule sets out the details of the current minimum
expenditure obligations for each granted Tenement. The Company may apply for exemption from compliance
with the minimum expenditure requirements on certain grounds set out in section 102(2) of the Mining Act
1978 (WA) or at the discretion Minister. A failure to comply with the expenditure requirements renders the
mining tenement open to forfeiture.
The holder of a mining tenement wishing to access private land or certain areas within a pastoral lease may
have to agree the terms of compensation for the rights to access and work the land. We express no opinion on
whether such arrangements are required or have been obtained.
2.2 Prospecting Licences
A prospecting licence entitles the holder, to the exclusion of others, to explore for minerals in the area of the
licence but not to conduct commercial mining. A prospecting licence may cover a maximum area of 200
hectares and remains in force for up to 4 years but does not include a right of renewal.
The holder of a prospecting licence has the right to apply for one or more mining leases over any of the land
the subject of the prospecting licence prior to the expiry of the prospecting licence. A prospecting licence,
subject to a conversion application to a mining lease, remains in force pending the determination of the
application for that mining lease.
There is no restriction on the assignment of a prospecting licence.
2.3 Exploration Licences
An exploration licence entitles the holder, to the exclusion of others, to explore for minerals in the area of
the licence but not to conduct commercial mining. The maximum area of an exploration licence in Western
Australia is 70 graticular blocks (between 196 and 231 square kilometres depending on the latitude).
An exploration licence remains in force for up to 5 years and may be extended in certain circumstances by 2
further periods of 1 or 2 years on application. The prescribed circumstances where the Minister is satisfied
that delays or difficulties in carrying out an exploration program or the marking-out of a mining lease could
not be undertaken, completed or was subject to impracticable conditions. In exceptional circumstances, the
Minister may extend the term for an additional further period or periods of 1 year. An exploration licence
remains in force pending a decision to extend its term. If an extension of term is granted then the minimum
annual expenditure is increased as follows:
(a)
(b)
to $50,000 during the 6 th and 7 th years; and
to $100,000 during the 8 th , 9 th and any subsequent years.
An exploration licence is subject to statutory relinquishment of not less than half of the blocks at the
expiration of the third year of the five year term. At the end of the fourth year half of the remaining blocks
must also be relinquished.
The holder of an exploration licence has the right under the Mining Act 1978 (WA) to peg and apply for one or
more mining leases over any of the land the subject of the licence prior to the expiry of the licence. That part
of an exploration licence, subject to a conversion application to a mining lease, remains in force pending the
determination of that mining lease.
An exploration licence can only be assigned during the first year of its term with Ministerial approval.
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