By Jay Leary, Geoff Kerrigan and Annabel Beech

The recent decision coming out of the Warden’s Court of Western Australia – True Fella Pty Ltd v Pantoro South Pty Ltd [2022] WAMW 19 (True Fella) – has attracted attention across the WA mining sector. We consider the decision to be an unhelpful and impractical extension of previous decisions which further demonstrates the need for continued action from the Department of Mines, Industry Regulation and Safety (DMIRS) and the Western Australian Government to ensure that security of title and the integrity of ownership under the Mining Act 1978 (WA) (Mining Act) is maintained.

Helpfully, the Minister for Mines has announced that DMIRS is examining the decision in True Fella and that the Western Australian Government will act to ensure certainty and security of tenure for proponents, following consultation with the Association of Mining and Exploration Companies (AMEC).

The decision of the Mining Warden in True Fella concerned competing applications for an exploration licence. In summary, the Warden held that first applicant’s application was invalid on the basis that (amongst other things) details of expenditure, work programme and financial resources were only provided for a period of 12 months (and not covering the 5 year duration of an exploration licence). The Warden held the failure to include this information resulted in the application being invalid – with reference to the principles in High Court’s decision in Forrest & Forrest v Wilson (Forrest & Forrest).[1]

The case

On 15 October 2021, two graticular blocks in the Dundas mineral field became open for mining. On the same day, True Fella Pty Ltd applied for an exploration licence over the blocks. Minutes later, another application was made over the same blocks. Each party lodged an objection to the other’s application on the basis that the application failed to comply with the Mining Act and regulations. The Warden’s decision relates to the application for an exploration licence filed by True Fella Pty Ltd.

The Mining Act contains particular requirements for what an applicant must file when applying for an exploration licence. Section 58(1)(b) provides that the application must be accompanied by a statement which specifies (i) the proposed method of exploration of the area; (ii) the details of the programme of works; (iii) the estimated amount of money proposed to be expended on the exploration; and (iv) the technical and financial resources available to the applicant.

The application filed by True Fella included a statement which was intended to comply with the section 58(1) requirements described above. However, the Warden held that the statement was non-compliant with section 58(1) on the basis that:

  • the statement contained details of expenditure, work programme and financial resources for a period of 1 year (and no details as to expenditure, work programme or financial resources for the subsequent 4 years of the 5 year licence); and
  • the statement did not contain any statement specifying the target mineral (noting that the statement did specify that the applicant was primarily a gold explorer, and held the goal of “economic mineralisation”).

The Warden held that, given the deficiencies in True Fella’s application, no exploration licence application had in fact been lodged. The consequence of this decision is that True Fella’s purported application for an exploration licence was invalid and would not be accorded the status of first-in-time.

What does this mean?

The True Fella decision suggests that the details of expenditure, work programme and financial resources included in an exploration licence must cover the 5 year duration of the exploration (and in the absence of this information, the application would be invalid).

As noted by AMEC, such a requirement doesn’t align with DMIRS’ previous practice of accepting exploration licence applications which did not contain this information. Nor does such a requirement accord with customary exploration practice (given the intention of initial exploration work is often to determine whether further exploration work is economic).

We consider the two key implications arising out of the True Fella decision are as follows:

  • whether DMIRS will update or amend its guidelines for exploration licence applications to require the inclusion of the additional information referred to in True Fella (and if so, the level of detail required); and
  • creating potential technical queries regarding the validity of exploration licences which, in line with industry practice, did not, in the application, include 5 year work programmes.

It remains to be seen whether the decision in True Fella will be appealed or whether a similar case will be considered by a superior court.

What’s next?

On Friday, 26 August 2022, the Minister for Mines stated in a press release that the McGowan Government is taking the True Fella decision very seriously, and “will act to ensure certainty and security of tenure for proponents. This will include any steps necessary to ensure the validity of granted exploration licences.”

We note that the Western Australian Government previously proposed similar changes to address potential uncertainty arising out of the Forrest & Forrest decision in relation to granted mining leases, but that these changes are yet to be legislated. The True Fella decision indicates that these reforms may now need to be broader in scope than the specific facts considered by the High Court in Forrest & Forrest.

Given the critical importance of the mining industry to the Western Australian economy, undertaking legislative reform to ensure that certainty and security of tenure under the Mining Act is maintained should be a high priority.

[1] [2017] HCA 30. See previous HSF Mining Law blog posts: High Court applies strict compliance test under the Mining Act 1978 (WA) and raises doubts regarding tenement validity – remedial legislative response required.  See also: Forrest & Forrest v Wilson – consequences for mining lease applicants. This decision has also been applied in other cases (e.g. Onslow Resources Ltd v Minister of Mines and Petroleum [2020] WASC 310).

For more information, please contact Jay Leary.

Jay Leary
Jay Leary
Partner, Perth
+61 8 9211 7877