In 1988, American hip hop group Public Enemy released its critically acclaimed single “Don’t Believe The Hype”. Public Enemy’s warning is apt in light of the reaction to the recent Mining Wardens’ decisions in True Fella Pty Ltd v Pantoro South Pty Ltd [2022] WAMW 19 (True Fella) and Azure Minerals v D & G Geraghty [2022] WAMW 27 (Azure Minerals). Mining Wardens considered statements lodged by applicants for exploration licences pursuant to s.58(1)(b) of the Mining Act 1978 (WA). In each case the Mining Wardens found that the statements did not comply, in part because the statements did not provide information about proposed exploration for the full 5 year term of the exploration licence. Some in the WA mining industry were shocked, suggesting that the requirements for a valid exploration licence application had changed dramatically, apparently overnight, and others went so far as to suggest that the decisions had called “into question the validity of granted exploration licences across the State ”: “Minister seeks to reassure WA mining industry over tenure threat”, The West Australian, 25 August 2022 WA Mines Minister Bill Johnston was moved to reassure the industry that he would ensure security of tenure for exploration tenements.
But the industry need not be so concerned. The law in Western Australia has for some time confirmed that applicants for exploration licences do not need to provide statements that specify a plan for the full 5 year term: Re Warden Brown; ex parte Eldorado Resources and Aberfoyle Resources [1989] WASC 160. In fact they do not even need to provide a plan for the full first year of the term (though experience and previous determinations suggest that that has been a widespread practice in the industry).
To comply with s.58(1)(b), an applicant must “specify” (that is, state “with some degree of certainty or detail”: see Golden Pig Enterprises Pty Ltd v O’Sullivan [2021] WASC 396 at [59]) its proposed method of exploration of the area of the licence, its program of work, its estimate of money proposed to be expended on exploration and the technical and financial resources available to it. The method of exploration and program may be sophisticated or unsophisticated; the amount of money may be modest or generous; the available technical resources may be comprehensive or rudimentary. What matters is that the applicant must state its method, program, amount of money and resources. The requirement is subjective in the sense that the focus is wholly on what the applicant intends to do: an applicant is simply required to specify the details of the program it proposes to carry out and the other prescribed information. There are no objective criteria by which to assess the sufficiency of that information for the purposes of complying with s.58(1)(b), other than whether the statement informs the reader what resources are available to the applicant to carry out the proposed method of exploration and the proposed program of works, and to fund the estimated expenditure: Golden Pig at [61].
This has been understood in Western Australia since the leading judgment by Rowland J in the 1989 decision of Aberfoyle Resources (Wallace and Pidgeon JJ agreeing). It is unfortunate that the Mining Wardens in True Fella and in Azure Minerals were apparently not referred to Aberfoyle Resources** . In that case a Mining Warden (Warden Brown) had determined that a statement in support of an exploration licence application was sufficient for the purposes of s.58(1)(b), but a competing applicant challenged the Warden’s decision in the Supreme Court of Western Australia, with the aim of having the first application removed from a ballot. Justice Rowland said (at page 11) in relation to whether the statement complied: “In my view, this is primarily a question of fact; but, apart from that, it does not affect the validity of the application. The relevant statement in accordance with s.58 is simply a statement that is to accompany the application. The warden has found as fact that the statement which accompanied the application was sufficient. Views may differ on what is sufficient for the purpose; but this is for the warden to resolve and, even if he be wrong, then that error would not invoke the supervisory jurisdiction of this Court at this stage, because such an error has nothing to say on the question of whether a proper application has been filed. It does not go to the jurisdiction of the warden to direct a ballot .”
In Aberfoyle Resources the applicant’s statement read in part: “Our budget will depend on the results of our initial work. We have allocated $30,000 for exploration in the first year, and are prepared to make additional funds available if we get encouraging results in that time, to capitalise quickly on the current buoyant prices for gold and the tax free status of same .” It is notable that the relevant statement in Aberfoyle Resources referred to an allocation of funds for exploration for only one year. The Supreme Court did not suggest that that was inadequate or that the Warden must have been wrong to have found that the statement was sufficient, which the Supreme Court would have done if applicants for exploration licences must provide statements that specify their plans for the 5 years of the tenement. Further, in Golden Pig , Allanson J made findings in respect of a two year work program and did not find that the s.58(1)(b) statement was non-compliant due to the proposed work program being for a period less than five years: at [67] - [70]. And in Hot Holdings Pty Ltd , Ex parte v Creasy (1996) 16 WAR 428 at 444-445, Steytler J considered the content of the statement to be filed under s.58(1)(b) and made no mention of any requirement for a s.58(1)(b) statement to specify a program of any particular length of time.
These Supreme Court decisions are instructive as to the requirements of s.58(1)(b) and should give comfort to exploration licence holders that their tenure is not at risk, and to exploration licence applicants that their statements are not “non-compliant” if they have not specified (for example) a method of exploration for the whole 5 years of the licence or estimated money proposed to be expended for the life of the tenement.
So was the decision in True Fella wrong? The statement by the applicant in True Fella was obviously deficient in that it did not specify what technical resources were available to the applicant. So, while comments by the Mining Warden in True Fella suggested, at [49], that an applicant must state planned expenditure “for the life of the licence, and for the full area of the licence ”, the statement in that case was (as a matter of fact) non-compliant for other reasons. The applicant, True Fella Pty Ltd, has apparently recognised that deficiency as it withdrew its application for an exploration licence on 17 October 2022.
It is also significant that the Mining Warden in True Fella conflated the requirements of s.57(3), by which a mining warden (or registrar) “shall not recommend the grant of an exploration licence under this section unless satisfied that the applicant is able to effectively explore the land in respect of which the application has been made ”. The Mining Warden said, at [34], that the s.58(1)(b) statement will be sufficient if it enables the decision-maker to make an assessment under s.57(3) about whether the applicant has the ability to effectively explore the land. But a s.58(1)(b) statement does not fail to comply simply because a Warden considers that it does not allow them to be satisfied under s.57(3) that the applicant is able to effectively explore the land: Golden Pig at [37], [39] - [41], [71] and [72]. And a s.58(1)(b) statement that satisfies a Warden for the purposes of s.57(3) does not necessarily comply with s.58(1)(b). As the Mining Warden in identified correctly, it may be that often information provided under s.58(1)(b) will be sufficient for the Warden to make a determination under s.57(3), but the two considerations are separate and distinct: True Fella at [23], citing generally and Mineralogy P/L v FMG Pilbara P/L [2010] WAMW 20 at [73].
Where does this leave the Azure Minerals decision? The Mining Warden’s interpretation of s.58(1)(b) in Azure Minerals was also, respectfully, erroneous because the Mining Warden conflated the requirements of s.57(3) and s.58(1)(b) (read with s.61(1), which refers to the 5 year term of the licence): see Azure Minerals at [89] - [97] and [114], [128], [151]-[155]. The Azure Minerals decision is inconsistent with the Supreme Court authority of Aberfoyle Resources and Golden Pig and so does not represent the law in relation to s.58(1)(b) in Western Australia.
But the effect of the finding in Azure Minerals is not that the application in that case is invalid. Lodging a compliant s.58(1)(b) statement is an “essential preliminary” to the exercise of the Minister's power to grant exploration licences under s.57 of the Mining Act, in the same way that the High Court explained in Forrest & Forrest Pty Ltd v Wilson [2017] HCA 30; (2017) 262 CLR 510 at [63], that a mining lease must be accompanied by a mineralisation report. A statement lodged with an application for an exploration licence either meets the criteria stipulated in s.58(1)(b) or it does not. If it does not, the application is consequently accompanied by a “non-compliant s.58(1)(b) statement”. Such an application is “null and void”: Onslow Resources Ltd v Hon William Joseph Johnston MLA in his capacity as Minister for Mines and Petroleum [2021] WASCA 151 at [2]. But, as is clear from Aberfoyle Resources , that finding by a mining warden or mining registrar does not have the effect that the application is invalid.
So the decisions in True Fella and Azure Minerals do not call into question the validity of granted exploration licences. If an application has been granted, the Minister must have been satisfied that the s.58(1)(b) statement was (as a matter of fact) compliant, as otherwise an “essential preliminary” to the exercise of the Minister's power to grant the exploration licence would not have been met and the Minister could not have granted the licence. A Mining Warden’s determination sometime later that a different statement was non-compliant can have no bearing on that Minister’s decision.
While a mining warden may form the view for the purposes of s.57(3) that an applicant for an exploration licence is unable to effectively explore the land in respect of which the application has been made, and must therefore recommend that the application be refused, the Minister can nevertheless exercise their discretion to grant the application. Similarly, the mining warden (or mining registrar) might report that in their view a s.58(1)(b) statement is non-compliant, but as Aberfoyle Resources makes clear, that is a question of fact. It is open to the Minister, in their discretion, to form a different view as to whether the statement is compliant. That is, a compliant s 58(1)(b) statement is an essential precondition to the exercise of the Minister’s discretion to grant the licence , but not to the Warden’s obligation to make a recommendation to the Minister . So while the applicant in Azure Minerals might well find that the Mining Warden will recommend that its application be refused, it is at least possible (objectively) that the Minister could form a different view to the Mining Warden on whether the statement complies for the purposes of considering whether to grant or refuse the application: as the precise contents of the applicant’s statement are not apparent from the Mining Warden’s decision in Azure Minerals we make no comment on whether the applicant has complied with s.58(1)(b).
Properly considered, then, neither the True Fella nor Azure Minerals decisions should cause concern for existing tenement holders or for applicants who have lodged s.58(1)(b) statements that are consistent with Western Australian Supreme Court’s (long-standing) interpretation of what that section requires.
**Postscript of 21 February 2023: since publishing this article we have been informed by Azure Minerals’ solicitors that they did bring the decision in Aberfoyle Resources to the attention of the Mining Warden at the hearing of Azure Minerals’ application, notwithstanding that the decision is not mentioned in the Mining Warden’s reasons.