Essential Investor Information
Land of Opportunity
Greenland is highly prospective for Au, base metals, Ni, PGEs, specialty metals, diamonds and other gemstones, industrial minerals and Fe ore. W. Greenland shares common geology with northern Scandinavia, where there are currently over 90 active mines, highlighting the discovery potential in Greenland. Current active and advanced projects include industrial minerals, ruby and pink sapphires, zinc-lead, rare earth elements and uranium, orogenic gold, Ni-Cu-Co, and Ti-sands.
Greenland is strategically located between North America and Europe. Although there are no roads outside inhabited areas, there are 77 cities and settlements connected by 16 ports, 14 airports, and ice-free deep-water shipping, year-round, in many parts of west Greenland. Greenland has 3G and 4G roaming with mobile and ship radio VHF coverage for significant parts of west Greenland, and locally in east Greenland.
The Tech College Greenland (Mining School) provides practical training and qualifications relevant to mining. Companies applying for a mining licence are required to make an Impact Benefit Agreement (IBA) with the Government, which includes negotiated minimum requirements for local employment and training. In 2012 the Government enacted the Large-Scale Projects Act, which allows significant employment of foreign workers, where the labour requirements exceed the suitable, local available and accessible workforce.
The first step when applying for a licence in Greenland is to pay a relatively small fee and submit technical and financial information. When a licence is granted there are ongoing reporting and financial commitments including an annual work program and a field and geological report. The yearly exploration commitment is calculated based on age and size of the area. In the first two years the licensee is required to spend at least DKK 161.500 per year on exploration plus DKK 1.620 per km2, with financial commitments increasing with the age of the licence. For an exploitation licence a licensee must submit an environmental impact assessment (EIA) and social impact assessment (SIA). An EIA must describe all project phases, from before project launch until after its completion, and is a comprehensive exercise, including several years’ study of the project area, as well as public consultation.
An SIA report must describe the potential impacts of a proposed action or development on the human environment, and recommend initiatives for direct and indirect sustainable development opportunities and mitigation of negative impacts. This includes business and employment, income, land use and resources, health, education, infrastructure and socio-cultural factors. Before exploitation commences, an exploitation and closure plan must be approved by the Government and a financial security paid for closure of the mine.
Greenland has a competitive mineral tax, royalty, trade and fee system. Greenland was ranked as 8th in 2015 by the Fraser Institute for most attractive mining taxation regime and 2th? on trade barriers. To help exploration companies meet the challenging market conditions the Government adjusted down to zero the exploration expenditure obligation for 2015 and 2016 for licences older than five years.
For mineral activities, it is only a requirement that it is a Greenlandic-registered company which holds all mineral exploitation licences. For all hydrocarbon licences it is a requirement that the government-owned company Nunaoil A/S is a carried partner in the exploration phase. Depending on when the licence was granted, Nunaoil A/S holds an ownership interest of 12.5%, 8% or 6.25% in current licences in Greenland. For all new licences Nunaoil’s ownership interest will be 6.25 %.
All mineral resource activities are subject to the specific political requirement that they shall be carried out properly in terms of health, safety and the environment. These issues are regulated through the SIA, EIA and IBA. To ensure that these criteria are met, the companies must follow regulations in the Mineral Resource Act and the guidelines and standard terms.
North American Nickel Inc has been successful in their continuing extensive exploration over a large area prospective for Ni sulfides in the Maniitsoq region of West Greenland, with the ongoing backing of the Sentient Group and will carry our resource definition drilling in 2017. Other success stories include the recent signing of IBAs by Hudson Resource Inc in 2015 and by Ironbark Zinc Ltd in 2016.