(1) A farm-in
transaction is an agreement, whether conditional or not, to the effect that
—
(a) as
set out in paragraphs (b) to (d), the agreement relates to either or both of
the following —
(i)
the mining tenement, or 1 or more of the mining
tenements, referred to in section 91L(1)(a)(i) (each such mining tenement to
which the agreement relates being a relevant mining tenement );
(ii)
the derivative mining right, or 1 or more of the
derivative mining rights, referred to in section 91L(1)(a)(ii) (each such
derivative mining right to which the agreement relates being a relevant
derivative mining right );
and
(b) the
farmee is to fulfil, or has the option of fulfilling, an exploration
requirement; and
(c) if
paragraph (a)(i) applies — after the farmee fulfils the exploration
requirement, the farmor is to do, or the farmee has the option of requiring
the farmor to do, either or both of the following —
(i)
transfer to the farmee an interest in each relevant
mining tenement;
(ii)
grant the farmee a derivative mining right in relation to
each relevant mining tenement;
and
(d) if
paragraph (a)(ii) applies — after the farmee fulfils the exploration
requirement, the farmor is to arrange, or the farmee has the option of
requiring the farmor to arrange, for the farmee to acquire an interest in each
relevant derivative mining right.
(2) Despite subsection
(1), an agreement is not a farm-in transaction if —
(a)
otherwise than under a purchase agreement, the farmee is to acquire, or has
the option of acquiring, a beneficial interest without fulfilling the
exploration requirement; and
(b) the
beneficial interest corresponds (wholly or partly) to a legal interest that
the farmee is to acquire, or has the option of acquiring, after fulfilling the
exploration requirement as contemplated in subsection (1)(c)(i) or (ii) or
(d).
(3) The requirement of
subsection (1)(c)(i) is met only if —
(a) the
agreement specifies —
(i)
the interest or interests to be transferred; or
(ii)
the way in which the interest or interests are to be
determined;
and
(b) in
relation to each relevant mining tenement, the interest to be transferred is,
or will be, such that, were the transfer to be made, the farmor and farmee
would both be, or would still both be, holders of the relevant mining
tenement.
(4) The requirement of
subsection (1)(c)(ii) is met only if —
(a) the
agreement specifies —
(i)
the mining to be authorised by each derivative mining
right; or
(ii)
the way in which that mining is to be determined;
and
(b) in
relation to each relevant mining tenement, were the derivative mining right to
be granted, the grant would not result in the farmee having, at any time,
substantially the same authority to carry out mining that the farmor has, at
that time, under the relevant mining tenement.
(5) The requirement of
subsection (1)(d) is met only if —
(a) the
agreement specifies —
(i)
the interest or interests to be acquired; or
(ii)
the way in which the interest or interests are to be
determined;
and
(b) in
relation to each relevant derivative mining right, the interest to be acquired
is, or will be, such that, were it to be acquired, the farmor and farmee would
both be, or would still both be, holders of the relevant derivative mining
right.
(6) A replacement
mining tenement , for a relevant mining tenement, is a mining tenement —
(a) that
is granted, after the making of the farm-in transaction concerned, to replace
(wholly or partly) —
(i)
the relevant mining tenement; or
(ii)
an earlier replacement mining tenement for the relevant
mining tenement; or
(iii)
a mining tenement referred to in subparagraph (i) or
(ii), together with 1 or more other mining tenements each of which is also a
relevant mining tenement for the farm-in transaction or a replacement mining
tenement for such a relevant mining tenement;
and
(b) that
relates only to the land, or to a part of the land, the subject of —
(i)
the mining tenement that is replaced; or
(ii)
the mining tenements that are replaced (taken together as
if they were a single mining tenement);
and
(c) of
which the farmor is the holder or 1 of the holders.
(7) A replacement
derivative mining right , for a relevant derivative mining right, is a
derivative mining right —
(a) that
is granted, after the making of the farm-in transaction concerned, to replace
(wholly or partly) —
(i)
the relevant derivative mining right; or
(ii)
an earlier replacement derivative mining right for the
relevant derivative mining right; or
(iii)
a derivative mining right referred to in subparagraph (i)
or (ii), together with 1 or more other derivative mining rights each of which
is also a relevant derivative mining right for the farm-in transaction or a
replacement derivative mining right for such a relevant derivative mining
right;
and
(b) that
relates only to the land, or to a part of the land, the subject of —
(i)
the derivative mining right that is replaced; or
(ii)
the derivative mining rights that are replaced (taken
together as if they were a single derivative mining right);
and
(c)
subject to subsection (8), that does not authorise any mining beyond the
mining authorised by —
(i)
the derivative mining right that is replaced; or
(ii)
the derivative mining rights that are replaced;
and
(d) of
which the farmor is the holder or 1 of the holders.
(8) The requirement of
subsection (7)(c) does not have to be met if —
(a) the
derivative mining right is granted in relation to a mining tenement (the new
mining tenement ) that was granted to replace (wholly or partly) another
mining tenement (the previous mining tenement ); and
(b) the
new mining tenement authorises mining beyond the mining authorised by the
previous mining tenement; and
(c) the
derivative mining right only authorises mining for minerals for which mining
is authorised by —
(i)
the derivative mining right that is replaced; or
(ii)
the derivative mining rights that are replaced.
(9) A purchase
agreement , in relation to a farm-in transaction, is an agreement made between
the farmor and farmee to the effect that —
(a) the
farmee is to provide consideration, or has the option of providing
consideration, to the farmor; and
(b) the
providing of the consideration by the farmee would be in lieu of the farmee
fulfilling a part (but not the whole) of the exploration requirement; and
(c) were
the farmee to provide the consideration — the farm-in transaction would
be varied —
(i)
so as to reduce the exploration requirement by excluding
the part referred to in paragraph (b); and
(ii)
so that, accordingly, the reduced exploration requirement
would become the exploration requirement for the farm-in transaction.
[Section 91M inserted: No. 37 of 2022 s. 8.]