Whether you're a junior explorer acquiring your first tenement or a mid-tier producer expanding your portfolio, due diligence on mining tenements follows a consistent framework. Skip a step and you risk inheriting liabilities, overvalued resources, or permitting nightmares.
1. Title and Tenure Verification
Before anything else, confirm the seller actually owns what they're selling. This sounds basic, but title disputes are more common than most buyers expect.
- Verify the tenement registration with the relevant government mining department
- Check for encumbrances, caveats, or third-party interests
- Confirm the tenement is in good standing (fees paid, reporting up to date)
- Review the tenement conditions, including expenditure commitments
- Check expiry dates and renewal status
2. Geological Data Review
The geological data package is the foundation of any valuation. What to look for:
- Drilling data: Review drillhole logs, assay results, and collar coordinates. Cross-reference with government databases where possible.
- Resource estimates: Are they JORC 2012 or NI 43-101 compliant? Who prepared them? When were they last updated?
- Geological mapping: Has the tenement been properly mapped? What is the geological setting and target model?
- Geophysical surveys: Review any magnetics, gravity, IP, or EM data. This helps assess unexplored potential.
3. Environmental and Social
Environmental liabilities can exceed the value of the resource itself. Check:
- Environmental approvals and conditions
- Rehabilitation obligations and bonds
- Heritage survey clearances (Aboriginal heritage in Australia, First Nations in Canada)
- Water licenses and allocations
- Proximity to environmentally sensitive areas, national parks, or threatened species habitat
Government environmental databases (available through state geological survey APIs) can provide much of this data at no cost.
4. Financial and Legal
- Outstanding royalties or net smelter returns (NSRs)
- Existing agreements (JV, farm-in, option agreements)
- Tax liabilities or transfer duties
- Native title or Indigenous Land Use Agreements (ILUAs)
- Any pending or historical litigation
5. Technical and Operational
- Access roads, power, and water infrastructure
- Processing options (nearby mills, toll treatment capacity)
- Metallurgical test work results
- Historical mining activity and production records
- Geotechnical data for open pit or underground mining
6. Market and Valuation
Finally, benchmark the asking price against comparable transactions:
- What are similar tenements trading at per resource ounce or per hectare?
- What is the implied EV/resource valuation versus listed peers?
- Does the project economics work at conservative commodity prices?
- What is the realistic timeline and cost to advance the project?
Mine Market's AI Insight Reports can help with several of these steps, pulling in government geological data, environmental overlays, and comparable transaction data into a single analysis.