Expenditure condition

If you're a holder of an exploration licence, you must carry out the work program and meet the expenditure conditions, detailed in the conditions on the licence.

For the first 2 years, you must follow the program and expenditure outlined in your original application for a licence.

After this period, you must nominate a realistic work program for each year the licence remains current.

Vary the expenditure condition

If you need to vary your proposed expenditure, you can apply to vary the expenditure condition.

This application is called a variation of condition (VOC).

You must apply for a VOC before the end of the sixth month of the current reporting period.

Get the variation of condition application.

You must pay a fee when you apply for either variation. Read about rents, fees and other costs.

Area reductions

You must surrender half the blocks in an exploration licence area every renewal.

You can apply to defer, waive, or reduce this reduction requirement.

However, if you don't meet the expenditure condition in the same year, the department may refuse to consider this application.

Get the vary reduction requirement application.

Partial cancellation of blocks

Your licence can be partly cancelled if you don't meet the expenditure condition 2 years in a row.

This is known as a loss of block penalty, the department will issue a partial cancellation notice if it imposes this penalty.

If you receive a notice, you can either nominate specific blocks to be cancelled or make a case to the department to waive or reduce the loss of block penalty.

It costs nothing to make a submission, the department will notify you in writing of its decision.

How cancellation is calculated

A formula will be used to assess how many blocks will be cancelled as a result of an underspend over 2 successive years.

The calculation will be based on all of the following figures:

how much was proposed to be spent for the 2 years
how much was to be spent on each block in the second year - proposed expenditure divided by the number of blocks held
actual amount spent in the 2 years
difference between proposed and actual expenditure - underspend.

The number of blocks to be cancelled is equal to half the underspend divided by the amount to be spent per block.

Example

Total proposed 2-year spend Number of blocks held Amount to be spent per block	$145,000 ÷ 125 = $1,160
Total proposed 2-year spend Actual spend Underspend	$145,000 - $ 72,100 = $ 72,900
Total underspend Amount to be spent per block No. of blocks to be cancelled	$72,900 ÷ $ 1160 = 31.42 blocks