Victoria (VIC): minimum expenditure for exploration licences

How the minimum is calculated

• Minimum expenditure each year = (a × b) + c, where a is the rate for that licence year, b is the number of graticular sections (or km²), and c is a fixed $15,000.
• You also estimate your spend for each year in your application, and the amount written on the licence applies from grant. If the licence came from a tender or competing application, the spend you proposed becomes the requirement. For a competing application, it can't be varied during the term.
• Two or more licences of the same type held by the same person can be treated as one for expenditure purposes (section 35 of the Act).

Reporting and deadlines

What counts as expenditure

• Work directly related to the licence: wages and salaries, plant and equipment, administration and consumables, office-based work, airborne and remote sensing, on-ground and sub-surface work, and rehabilitation
• Community, Traditional Owner and landholder engagement, including compensation and native title payments
• Equipment, claimed in the year it's bought (depreciation can't be claimed)

Doesn't count

• Accounting, tax, bank fees, insurance, legal and ASIC fees
• Superannuation, and directors' and general office staff salaries
• Advertising, donations, rehabilitation bonds, rent, and renewal or transfer fees

Exemptions and variations

• Underspend of more than 20% in a single year, or more than 50% cumulatively, must be explained. This applies to total spend and to the airborne, ground and sub-surface categories.
• Carrying spend over between years doesn't need a formal variation. To vary the expenditure condition itself, apply before the renewal date.
• Where the licence area has been reduced under section 38A, the required expenditure can be varied on the 2nd and 4th anniversaries.

What happens if you fall short

• A holder who has substantially underspent may be asked to show again that they genuinely intend to do the work, intend to comply, and can finance it. If they can't, the licence may be cancelled.
• Underspending counts against renewal and can lead to refusal. The department first issues a Notice of Intent, and the holder has 28 days to respond.
• Other possible actions are infringement notices and prosecution.

Term, renewal and relinquishment

• An exploration licence lasts up to 5 years, covers 1–500 graticular sections, and can be renewed twice for up to 5 years each. The second renewal needs exceptional circumstances.
• Part of the licence area must be given up over time: at least 25% by the 2nd anniversary, a further 35% by the 4th, 20% by the 7th and 10% by the 10th, each measured against the original area. This requirement is waived if you're meeting your obligations.
• Apply to renew before the licence expires (3 months ahead is recommended). The licence stays in force while the renewal is assessed.

Recent changes

• The current expenditure policy, including the 20% and 50% underspend thresholds, took effect for all existing exploration licences on 5 April 2022.
• The Mineral Resources (Sustainable Development) Amendment Act 2023 replaces work plans with a risk-based general duty from 1 July 2027.

Sources

• Guide to reporting and expenditure compliance (Resources Victoria)
• Exploration licence guidelines
• Exploration licence expenditure policy

Tracking this across several tenements

Tenement Track keeps each tenement's commitment, spend to date and anniversary date in one register, so a shortfall shows up while there's still time to act on it.