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Energy is central to respond to critical stakes on human and industrial development requirements as well as on climate change. The increase of the share of carbon-free energy sources in the global supply mix will help to reduce significantly greenhouse gas emissions (GHG) as power generation accounts currently for 41 per cent of these emissions from the energy sector. In this energetic mix, nuclear and renewable energies are complementary, the first more focused in the baseload power generation whilst the second is well suited for decentralised power generation. In this context, AREVA's goal is to enable everyone to have access to a cleaner, safer and more economical energy. Regarding nuclear energy, AREVA's strategy is to capitalise on its integrated operation model, which groups together fuel cycle and nuclear power plant construction, aiming at building one third of the new nuclear capacities and securing the fuel cycle supply chain for its existing and future customers. Therefore, the front end of the uranium fuel cycle, from mining to the fabrication of fuel assemblies, has a key role in the sustainability of the nuclear industry. The replacement of the current capacity and the entrance of new countries on the nuclear power generation might lead to a significant rise of uranium demand by 2020. In order to be prepared in time, AREVA defined an ambitious industrial program to expand mineral reserves, increase the production of uranium concentrates, replace the conversion capacity, build two new uranium enrichment plants, one in France and one in the United States and upgrade its fuel manufacturing plants. To support the front-end industrial activities in the short and long term, AREVA invests on a portfolio of R&D projects to find out solutions to meet customers' needs, to improve its competitiveness and to develop new concepts and solutions to anticipate future market evolutions. In particular, some important technological challenges in mining must be surmounted to develop cost-effective methods to explore and exploit low grade deposits while creating sustainable solutions for reducing reagent, water and energy consumptions. In this lecture, an overview of the industrial investments of AREVA in the front end of the uranium fuel cycle and some highlights on its R&D major axis will be presented. This is an abstract only. No full paper was prepared for this abstract.  

Sep 13, 2010

By R. A. Wagstaff

SINCE the time of the early Egyptians, the use of copper has been a boon to the life of most of the civilized world. Its use has been varied; in many connections, the art by which it attained its greatest usefulness has been lost. In this paper an endeavor will be made to take into consideration some of the many changes that have occurred during the last 40 years of copper-smelting operations. During that period the copper blast furnace has been almost forced out of existence by new methods of ore concentration-first, gravity concentration, and then flotation. These new methods of concentration introduced many new factors into the metallurgy of copper. The product was wet, it was fine and it was high grade. To overcome all these factors many changes have been necessary throughout the smelting agenda. New equipment has been necessary for transportation, unloading, sampling, bedding and moisturing in all smelting plants, especially the custom smelter. During the early days of "flotation," little was known about filtering or the use of an alkaline circuit; often the concentrate going to the smelter contained 20 to 25 per cent moisture. It is easy to imagine the difficulty arising with a product of this nature when it had to be shoveled by hand labor. To meet these conditions, mechanical unloading and sampling devices were soon developed. In many instances such good progress was made that actual costs for handling this unfavorable product were lower than those formerly incurred on the old product. Today most sampling of copper ores and concentrates is being done by mechanical sampling, pipe or augur sampling, or shovel sampling. Where concentrates are uniform in metal content, a great many of the plants now use pipe or augur sampling. For spotty ores, the old shovel sample with cone and quartering during the final stages is still in use. Where big tonnages are handled, mechanical sampling of concentrates is being done, with satisfactory results. To curtail slow and tedious cutting and mixing procedure, mechanical mixing boxes, splitters and cutters are used to cut down labor costs. MILLING As crude ores become scarcer, the use of milling operations increases. The few crude ores that are still smelted are used as fluxing types. To use these ores finer grinding has been found advantageous. This has made for better bedding and fluxing conditions, which in turn makes for faster smelting, lower fuel consumption and better metal recovery. The degree of fineness is more or less determined by the nature of the product. Most plants have set a standard of through ¾ -in. mesh screen for roaster- reverberatory smelting and through ¾ in. mesh screen for converter fluxes. For some refractory ores; even finer grinding has been found to be advantageous for good reverberatory smelting.

Jan 1, 1944

Data released by the Commerce Department's Bureau of Economic Analysis show continued gradual change in the real GNP's rate of growth in 1984, which has eased from an annual growth rate of 10.1 percent in the first quarter lo 7.1 percent in the second quarter, and then to 2.7 percent in the third quarter. The automobile industry strike in the last half of September had only a small effect, estimated at less than a 0.1 percentage point reduction in the growth rate. Among the components that comprise the GNP, personal consumption and fixed investment grew at lower real rates in the third quarter than in the second quarter, while net exports decreased. Personal consumption expenditures increased $0.4 billion in the third quarter, compared with an increase of $20.1 billion in the second quarter. Nonresidential fixed investment increased $3.9 billion in the third quarter, compared with $9.6 billion in the second quarter. The other component of fixed investment--residential investment--increased from $60.8 billion in the second quarter to $61.2 billion in the third quarter. Real net exports of goods and services decreased $1 1.3 billion in the third quarter, compared with a $3.1 billion decrease in the second quarter. Although exports increased from an annual rate of $144.7 billion to $150.2 billion, imports increased much more, from an annual rate of $1 56.2. billion to $172.8 billion (table 1).

Jan 1, 1984

By Ray E. Harris

New developments have occurred in Wyoming's industrial minerals industry since the 32nd Forum on the Geology of Industrial Minerals in Laramie, Wyoming in 1996. The soda ash trona and bentonite industries have experienced overall growth. Gypsum and limestone production have remained constant, but have the potential for dramatic growth. The mining of zeolite ceased in 1997. The struggling dimension stone industry has increased production, but development has lagged behind the schedule predicted in 1996. The construction of a container glass plant and associated production of glass raw materials, as predicted in 1996 and imminent in 1998, is now on hold due to unforeseen market factors. Increases in railroad and highway construction have, and will, greatly increase the production of construction aggregate for local uses. An iron carbide industry, not foreseen in 1996, is in the planning stages.

Jan 1, 2001

By J. B. Urnfileb

THE function of gas in the development and production of oil has far reaching consequences that should be emphasized. The technical aspects of the subject have recently had a great deal of attention but less thought has been given to fundamental concepts underlying oil and gas law and the many customs and practices that have grown up in the industry. I shall re- view briefly the advance in knowledge of the subject and attempt to relate these concepts to legislative, judicial and operating problems. Early writers on oil and gas in Pennsylvania noted their close association in oil pools and their contemporaneous decline in output; also, that as gas pressure decreases so does production, that new offset wells reduce the output of existing wells, and even that tubing a well lengthens its flowing life. Expanding gas was deduced as the principal expulsive force. These fundamental observations had been made at least as early as 1880.l They were treated, however, as academic considerations and did not greatly influence law or practice for many years except to instil into all operators an urgent desire to hasten offset drilling to obtain as much of the flush as possible.

Jan 1, 1932

By DAVID F. McFARLAND

THE making of courses of study and curricula has long held first place as the favorite pastime of educators. As a game, this activity is as fascinating to some as golf or bridge, 'and the golfer's hope of a low score is matched by the teacher's ambition to some day evolve a sequence of studies that shall prove the ideal preparation for a life of maximum service and, profit. There are few in, this gathering who have not tried their skill at this game and still fewer are those who have been long satisfied by the product of their efforts. A curriculum is hardly printed in the college catalog before conditions arise which seem to make changes desirable, and strong will power is needed to maintain the program long enough to give it a fair trial. Metallurgical curricula are not less subject to change than others, 'and; indeed they have seemed, at times, to change more rapidly than other curricula because of the changing 'needs of the industries and the demand that the graduate be trained to meet the new conditions. Metallurgical practice is constantly proving that "time makes ancient good uncouth," and the graduate metallurgist is required to adapt himself to newer and

Jan 1, 1930

By Randy Sandrik

Sampling has evolved at two large underground limestone mines as conditions and product requirements have grown tougher over 100 years of mine life, requiring innovative techniques to insure delivery of high purity limestone. Sampling insures delivery of consistent product to customers at the lowest possible cost. Statistical considerations have evolved from simple data collection to predictive and process capability analysis. Sample methods include borehole samples, face (using a proprietary face-sampling device), and total plant feed automatic, process, and final product sampling. Lessons learned, while keeping costs at historically low numbers, include the importance of geological models, exploration drilling density, face sampling, and blending of ore.

Jan 1, 2005

By Ryan W. Siggelkow

Mines today use various methods of mining to extract ore. Because of the dangerous nature of many of these processes, remotely controlled LHD machines are being used to extract the ore from the draw point. The remote control system, although being made safer all the time, has remained virtually unchanged for many years. The basic functionality is an operator switching the machine to remote control, getting out of the cab, walking up a stand, operating remotely, returning to the cab, switching to manual, driving manually, switching to remote, and switching to manual. It seems repetitive, and time consuming, does it not? Networking, convergence, video, voice, and data infrastructures, and other technologies are growing by leaps and bounds in virtually every industry and region, except for mining. From the comfort of the living room couch, a Canadian can play hockey online with full voice conversations over the Internet with someone in Russia in real time. Yet, a mine superintendent must jump through hoops to have a private conversation with the front line supervisor underground. "Is Joe around anywhere?" If Joe hears the message, he will respond. If not, who knows? Maybe he's hurt. Maybe he's not. Where is Joe? Nobody really knows, and that is scary. Today, surface knows that the workers disappeared into the cage at 7:00 a.m. They also know that the workers will probably and hopefully return at 3:00 p.m. Is there not a better way to handle this? With such a complex industry, it seems as if, for the most part, the introduction of new technology into mining has either been overlooked or has been met with some resistance. It is time to step back, look at the process, and see how it can be improved. Key areas of focus will be safety, productivity, dependability, and cost-effectiveness.

May 1, 2010

By D. A. Barr

High-grade gold-silver mineralization associated with electrum and argentite was discovered in a quartz vein at the Chappelle property, 273 km north of Smithers, B.C., in 1969 following a regional geochemical reconnaissance program in the Cassiar-Omineca Mountains. Subsequent exploration resulted in the discovery of numerous quartz veins with associated precious-metal values in a belt 17 by 3 km in area centrally located within Toodoggone Group volcanic and sedimentary rocks of Lower to Middle Jurassic age and a window of Takla Group volcanic rocks of Upper Triassic age. More detailed investigations, consisting principally of 5677 m of surface drilling in 57 holes and crosscutting, drifting and raising on Chapelle Vein A, has outlined a high-grade gold-silver-bearing shoot with a strike length of 200 m, an average width of about 3 m and extending to an average depth of about 40 m below surface.

Jan 1, 1978

By Karl J. C. Harries

"1.1. WHAT ARE AGREEMENTS AND HOW ARE THEY FORMED?In order to have an agreement, at common law, there must be an offer, acceptance of that offer, and consideration passing between the parties. In addition, the material terms (i.e. the basics or substance) of the agreement must be discernible, preferably by means of documentation. Although these concepts may appear simple and straightforward, the law relating to them is voluminous and complex. Some brief comments are worthwhile.• Offer/acceptance: Both offer and acceptance should be in writing, but they need not be. The actions, conversations, and/or correspondence of the parties may constitute either or both of them. Notwithstanding, the local law or practice of a jurisdiction will impose some specific requirements for certain types of agreements. If these requirements are not met, the agreement may be unenforceable. For example, Ontario’s Mining Act requires transfers of unpatented mining claims to be evidenced in writing and recorded.1• Consideration: Consideration is usually thought of as being money, but it can be virtually anything, even “the premises” (i.e. the mutual covenants or promises contained in the agreement itself). In addition, if one party, relying upon the offer of another, does something to his detriment, then the doing of the act can be considered to be an acceptance of the offer and, under the legal concept of “detrimental reliance”, can also be consideration. Whether or not detrimental reliance exists will depend upon the circumstances of each case.2• Material terms: The requirement that the material terms of an agreement must be discernible does not mean that all of the terms of an agreement must be documented or even have been considered, just the basic or material ones. In addition, it will be up to a judge to decide what is material – not necessarily the parties. In order to establish the material terms, a Court may look at all relevant documentation and may hear oral evidence. It will resist “writing the agreement”"

Jan 1, 2003

By Karl J. C. Harries

"11.1. INTRODUCTIONA royalty is the most common form of interest retained by an owner who is disposing of his property or by a joint venturer who ceases, voluntarily or otherwise, to participate in the joint venture.1 Rarely does a non-participating party have a direct interest in the property and/or assets of a project, except during the period when a non-participating joint venturer may be having his interest diluted.2 In fact, it is most unwise to permit a non-participating party to have such an interest. It may give rise to significant problems that could prevent or substantially delay the development of an orebody and require a considerable amount of time, effort, and money to correct.3In negotiating a royalty, it is important to be aware that there is no law or convention that says, “You just don’t do that in a royalty agreement.” As with any agreement, inventiveness and flexibility on the part of the negotiator are not just assets, but virtual necessities. It is also for this reason that it is essential to read the royalty provisions, particularly the definitions, fully and carefully, especially if you are the recipient. On the other hand, if your inventiveness and flexibility cause your accountant to question the advisability of one of your ideas, pay close attention to him.4 He will, no doubt, have had experience with many royalties, and no competent professional adviser disparages a client’s ideas without good reason. Besides, he will probably be the person who will be determining the royalty or certifying the determination of it. At the very least, he will be auditing your general financial statements, which must, of course, reflect the royalty determination. Heeding his advice not only may make the determination easier but also will probably save you money in professional fees later on. Nevertheless, do not simply accept his comments or recommendations without understanding what they mean, why they have been made with respect to your royalty agreement (sometimes professionals have comments that they make as a matter of course and, even though they may be valid, you should require them to be justified to you), and how they will affect your royalty determination.It is surprising how many corporate payors insist that their standard royalty provisions5 be used as a matter of policy, thereby effectively tying the negotiator’s hands. It is even more surprising, and to professional advisers frightening, how many of the senior employees who insist that such a policy be adhered to, virtually without variation, do not know what is in the standard provisions and would be hard-pressed to explain them to a property owner. If standard provisions are appropriate, by all means use them, but do allow experienced and sensible negotiators some flexibility and make sure that everyone within the corporation who may have to use such provisions – negotiator and supervisor alike – knows what they contain and why they are as they are. For example, there are often good and convincing reasons to describe a deduction in a certain way or to include a certain specific type of deduction. On the other hand, quite often the answer to the question “why?” is that “it has always been there”; this is, or should be, an unacceptable answer. In any event, if you, as the negotiator, appear to know what you are talking about, are familiar and comfortable with your royalty provisions, and are backed up by your boss with the same words or reasoning, a property owner cannot help but be satisfied that you are knowledgeable, even if he still does not agree with your provisions. Finally, if you do use standard provisions, make sure that they are reviewed and updated regularly."

Jan 1, 2003

By Karl J. C. Harries

"12.1. NO DEPRECIATION/GAAPAll calculations and computations relating to the Royalty shall be carried out in accordance with generally accepted accounting principles consistently applied to the extent that such principles are not inconsistent with the provisions of this Schedule and the agreement attached hereto, it being specifically agreed that nothing herein contained shall permit, or be construed to permit, the Operator to deduct any amount for depletion, depreciation, amortization or any deduction that represents a non-cash outlay.Comment: In cases like net profit royalties where recoupment of prior expenditures is permitted, care should be taken to avoid any implication that depreciation may also be taken. It is only logical and equitable that Property Owners should not be permitted an apparent ability to “double dip” with respect to deductions. A provision like this example should accomplish the task. It will be noted that the example specifically contemplates that the negotiated arrangements will prevail over any requirements of GAAP. Accordingly, if the parties agree to an unusual formula for recoupment, it will not be set aside to accommodate GAAP requirements. Under GAAP, revenues and expenditures are accounted for on an accrual basis. In addition, it specifically prohibits the taking of non-cash deductions, which is in keeping with the concept of recoupment.Although in some ways the example states the obvious and could be considered redundant, its presence, especially in provisions contemplating recoupment, makes it clear to the financial people that there may well be some variations from normal practices dictated by GAAP, while at the same time confirming the availability of GAAP to fill any voids.The accounting profession often makes the caveat that application of GAAP is an “art”, not a “science”. GAAP do not provide a cure-all and can create problems that will have to be addressed. For example, GAAP contemplate that asset costs are to be reduced by investment tax credits, which can cause a problem for a payor with more than one mine."

Jan 1, 2003

By Karl J. C. Harries

13.1. RIGHT TO RECEIVE ROYALTY CONTRACTUAL ONLY1

Jan 1, 2003

By Karl J. C. Harries

"14.1. INTRODUCTION1The boilerplate of an agreement is not a single provision, but a series of provisions that are expected in “every agreement”. They are sometimes also referred to as the “lawyer’s provisions”. Many businessmen consider the boilerplate to be superfluous and, to some extent, window-dressing by the lawyers – even legalese. They will often offer advice to the effect that it can “pretty well be ignored”. Such advice could not be more wrong.Most boilerplate provisions are essential parts of every agreement. Some may be part of a “standard package” and may have little relevance to the agreement at hand, but these are the exception rather than the rule. The exceptions should not be treated as justification for giving all these provisions short shrift. The boilerplate should receive the same review, consideration, and negotiation as the provisions that set forth the business deal. It is often these provisions that make the deal work or that are turned to at the time of disputes. If they are inadequate, as they sometimes are (unfortunately, some draftsmen are also loath to review or update their standard boilerplate provisions or to tailor them to the deal at hand), they can create problems, rather than offer solutions. Such problems can be costly and time-consuming for the parties to address. Inadequate or incomplete provisions may ultimately be one of the reasons for the parties to turn to the courts to settle their differences. On the other hand, good boilerplate provisions can help keep them out of the courts.One of the principal objectives of an agreement should be to provide procedures, or mechanics, for implementing agreed principles and for the parties to follow to settle their differences, real or perceived, without going to the expense and disruption of a lawsuit. An agreement should aim to keep the parties away from the courts, not serve as a springboard to the courts. It must nevertheless be acknowledged that, if there is a major falling-out among the parties to an agreement, the chances are that, however carefully the provisions of that agreement have been negotiated and drafted, the parties will end up before the courts or some other adjudicating body."

Jan 1, 2003

By Karl J. C. Harries

"2.1. INTRODUCTIONNo agreement can be perfect in the sense that it contemplates and provides for all eventualities. Mineral acquisition agreements are usually negotiated and drafted at a time when an orebody is no more than a gleam in a geologist’s eye, so it is hardly possible to provide for development and operation in other than the most general terms. However, an agreement that stops short of contemplating the possibility of an orebody and production is ill-advised. Accordingly, it is important to provide procedures to make decisions that will let the project proceed, even in the face of a fallingout between parties. Whether the parties are shareholders in a corporation or venturers in a contractual common undertaking like a joint venture, differences of opinion and disputes will occur. Unfortunately, more and more are ending up before the courts. Besides greed and the growing tendency in society to fight rather than talk, there are other factors that contribute to the increase of litigation. In some jurisdictions, agreements have tended to become complicated, often defying interpretation, even by a lawyer, and explorationists want their budgets to go into the ground as constructive work rather than into a lawyer’s pocket. All this has led to a growing tendency for corporations to take the attitude that the chances of finding a mine are, at best, marginal and there are lots of earlier agreements in the files to draw from, so why not prepare their own agreements? As discussed in the preceding chapter, this can be folly. All these factors can quickly have parties facing each other in court while a project sits idle. Added to this is the problem that, in some jurisdictions, lawyers may take cases on a contingency-fee basis, sometimes promoting the pursuit of a nebulous claim.When an orebody is discovered, someone will always want some, or more, for himself. There is a breed of “prospectors” who prospect for legal actions, on the somewhat sound grounds that a major corporation will buy off nuisance litigation, rather than incurring the cost and effort of attacking even a poorly founded claim in the courts. They may even find a winner. Besides, it is far more comfortable and relaxing to prospect for problems and legal niceties than to prospect for an orebody.1 In short, it is appropriate to consider briefly some of the factors relating to lawsuits and judgments. Although many of the comments are made in the context of the common law and the Canadian legal system, most of the concepts and suggestions are applicable to any legal system."

Jan 1, 2003

By Karl J. C. Harries

"4.1. INTRODUCTIONThis chapter, although divided into four parts, deals with only two principal topics. The first briefly describes and discusses some common types of property interests and considerations relating to them and the second deals with entering upon privately owned lands and obtaining the consent to do so.It should be noted that the terms “mining rights” and “mineral rights” are used interchangeably. As so used, they include the right to exploit the minerals and dispose of them for the benefit of the owner/lessee. This is relatively common in common law jurisdictions. In some jurisdictions, the two terms have distinct meanings, with “mining rights” referring to the right to work or exploit the minerals and “mineral rights” referring to the minerals themselves.Finally, it must be mentioned that the comments in the Introduction and §§ 4.2., 4.3. and 4.4. are based primarily upon Ontario law and Ontario’s mining and real property systems of registration. They have been included for illustrative purposes.4.2. LICENCES, CLAIMS, AND LEASESIn most jurisdictions, there are several basic types of interests that can be obtained from the state for mining purposes and that are of interest to the explorationist, as opposed to the operator. Different jurisdictions will have variations of these and possibly some extra ones that will address special purposes or local concerns. In virtually every jurisdiction, privately owned property rights are obtained through negotiation between owner and acquiror.Exploration or prospecting licence. This licence grants to the holder the right to prospect over a large tract of land and the exclusive right to acquire mining claims within that tract for the term of the licence. Such licences are usually negotiated documents requiring a minimum expenditure during the first year (often secured by a deposit or surety bond) and minimum annual expenditures thereafter to continue the licence in force up to its full term. The term will rarely exceed four years. The number of claims permitted to be staked will be limited in some way, possibly as to a maximum aggregate area or a maximum number of claims per annum. It is normal for the holder to have to drop part of the licensed area each year, so that the area shrinks annually, although exploration expenditure requirements will usually increase.These types of licences are usually used by governments to encourage exploration of otherwise unattractive or remote areas, such as the far northern parts of some of Canada’s provinces. They do not grant any real property interest in the area for which they are issued, and they will be subject to any claims or property rights that exist in the area. They are contracts with the state that grant certain exclusive rights in return for commitments to carry out work. They may or may not be specifically authorized by statute."

Jan 1, 2003

By Karl J. C. Harries

"5.1. INTRODUCTIONThis chapter is intended as a general overview of the subject of royalties between private parties – royalties extracted by governments are not dealt with. This same subject is covered in detail in Volume II, which critiques many sample provisions taken from agreements, giving both pros and cons. If you find something that interests you in this chapter, check Volume II for extra information. Detailed cross-referencing to Volume II has not been attempted, however, most subjects mentioned in this Chapter will also appear in Volume II, usually in greater detail. Reference should be made to the Index.A Brief History of Royalties1In the early days of mining in Canada, the tendency was to sell a claim for cash and to move on, using the stake to look for and stake more prospects. As prospectors became more sophisticated and Canada’s North opened up, the market for properties and the number of mining properties available increased dramatically. Speculation and the practice of consolidating several small properties into one large holding entity became common. In “hot” areas, the speculators2 could far outnumber the prospectors, many of the former having little or no prospecting expertise but lots of market and promotional savvy. However, to consolidate a number of small parcels into one large project can be expensive, and many of the parcel owners became interested in keeping a share in the project, rather than giving up everything. Speculators who were trying to consolidate small parcels wanted to minimize cash payments to parcel holders (usually they did not have much cash and preferred it flowing in their direction rather than away from them). Accordingly, non-cash transactions were developed to meet the aspirations of both owners and speculators."

Jan 1, 2003

By Karl J. C. Harries

"6.1. INTRODUCTIONThis chapter comments on some of the more common types of agreements related to property examination and acquisition, other than the farm-in/joint venture agreement or common undertaking, which is dealt with in the next two chapters. Many of the comments made in Part IV of Chapter 4 apply equally to any such agreement. In addition, many of the comments in Chapter 8 and the examples in Volume II are most certainly relevant to many other types of agreement.6.2. RIGHTS OF FIRST REFUSAL1A right of first refusal is a right that obligates an owner to offer his property, or an interest therein, to the holder of the first right if the owner intends to sell or otherwise dispose of it. It may be triggered either by the owner wishing to offer his property for sale or by receipt of a bona fide offer to purchase his interest from an “outside” third party. The mechanics and procedures to implement a first right should be set out clearly in the agreement, and their basics are the same, whether the first right is a stand-alone document or is part of an acquisition agreement.2Rights of first refusal are common in agreements to permit some control over the disposition of an interest and there they can be a valuable provision. However, some explorationists feel that they are also a good stand-alone agreement to have while a property is being evaluated to decide whether or not it is worth optioning. The reasoning is that such an arrangement will tie up the property to allow a quick look and, if the property looks interesting, the balance of the term of the first right will give an ample exclusive period of time to negotiate with the owner and settle an acquisition agreement. In addition, the explorationist is protected by the first right if the owner decides to negotiate a deal with another party."

Jan 1, 2003

By Karl J. C. Harries

"7.1. INTRODUCTIONThis chapter addresses the joint venture and examines a number of general concepts of the joint venture relationship. Chapter 8 looks at some specific concepts related to the provisions of a joint venture agreement, which are equally applicable to a shareholders’ agreement or other contractual relationship. The term “joint venture” is used because the author is a common law solicitor (a matter of convenience for which apologies are offered to civil law readers), but it should be noted that, in many aspects, the legal structure of an entity is irrelevant. It is the relationship of the parties, be they venturers or shareholders, that is important, and the areas of concern are surprisingly similar (except for terminology).The details of the joint venture relationship and agreement could fill several books. Accordingly, this chapter and the next focus on selected topics that appear to have caused problems or confusion or to be the basis for disputes. And remember that, although the following discussion is in the context of a joint venture, many of the comments apply, either directly or indirectly, to virtually any common undertaking and the agreement defining it.For interest’s sake, this chapter starts with a summary of some of the earlier types of agreements and arrangements that have evolved into the joint venture agreement of today in Canada, the philosophy of their format, and the reasons for their demise.7.2. EVOLUTION OF THE CANADIAN JOINT VENTUREThe Early DaysMuch of the opening up of Canada’s north is due to exploration for and development of mines. The early discoverers were relatively free to roam and explore at will and, if they were fortunate enough to find something, they dealt with the appropriate government to acquire exploitation rights. The early interests lay in gold or silver. Workings were small, usually worked by the owner alone or with only a couple of helpers to extract the native gold or silver. If the owner wanted to move on, he could sell his property outright and use his stake to look elsewhere.As logging and mining camps were opened, the development of better roads and railways made access easier. Entrepreneurs saw the opportunity to make money by assembling large parcels of land and working them as a single operation. In order to do this, some owners who were not ready to sell out had to be convinced to do so through more attractive offers"

Jan 1, 2003

By Karl J. C. Harries

"8.1. INTRODUCTIONThe purpose of this chapter is not to provide precedents or examples of provisions, but rather to offer some comments that may be worth considering in the negotiation or review of an agreement. These comments are not intended to be exhaustive. It must also be noted that, although the chapter is written in the context of a common law joint venture, the concepts and concerns for the most part apply equally to a corporation that is owned by only a few shareholders for the purpose of participating in the project held by the corporation.The corporation has the advantage of having much of its organization established by local corporate law, but the particular wishes of the shareholders will appear in a shareholders’ agreement. The principal differences will be surprisingly small, save for the acquisition provisions that appear in a farm-in agreement1 and the substantial portion of the joint venture agreement devoted to creating and organizing the joint venture entity. Where the joint venture agreement refers to venturers and committees, the shareholders’ agreement will refer to shareholders and the board of directors, but both will have to deal with such basic matters as decision-making, default, dispute resolution, first refusals, funding, and carrying out work on the project. For convenience, this chapter usually refers to “venturers”, which may be taken to include shareholders.Negotiations give rise to many varying circumstances and concerns, and the main asset of the negotiator is an open and flexible mind. A desired result can often be accomplished indirectly in circumstances where the other side has adopted an inflexible position on a suggested approach. As precedents and standard forms tend to focus a negotiator’s thinking, they can be counterproductive. It is after the deal has been agreed to that a precedent can be of great assistance to the draftsman.The concepts are arranged in alphabetical order for convenience, not to suggest their sequence or position in an agreement or their relative importance. An agreement should adopt a progression of subjects in what the parties consider a logical sequence to read and work with. However, experience has indicated that it is best to set out in a single article the substance of the deal (i.e. the terms relating to the farm-in and what the acquiring party has to do to acquire his interest), preferably near the beginning of an agreement. The acquisition of the interest is, after all, the first order of business. The joint venture provisions will then follow in a reasonable sequence. It is also worthwhile to devote a single article to any special provisions that may apply during the earn-in period. For example, it may be provided that, although all work is to be done by the acquiring party as operator (with the duty of care, liability, and reporting requirements as set out in the joint venture sections of the agreement), but during the acquisition period, the acquiring party, acting as operator, may be at liberty to do such work as he wishes, without the need for any committee or other approvals, and committee meetings may be suspended.2An agreement is divided into paragraphs and articles to make it easier for the parties to read and understand, and to assist a party in finding “that provision” when the need arises. A comprehensive table of contents will also assist the parties who must work under an agreement. An added benefit of a table of contents is that in preparing it, the draftsman sees the overall structure of the agreement and will often catch and correct flaws."

Jan 1, 2003