NSW Department of Industry, Skills and Regional Development

Cooperative Drilling round 2

Invitation to Apply (ITA) for a grant

November 2015

Overview of Cooperative Drilling round 2.

Preamble

Cooperative Drilling round 2 Application Form

Registration and Commercial Criteria

Terms and Conditions

Overview of Cooperative Drilling round 2.

Name of Program / New Frontiers Cooperative Drilling
Government Agency / NSW Department of Industry, Skills and Regional Development (the Department)
Agency Branch / Geological Survey of NSW
Opening Date
Closing Date and Time / 16 November 2015
5pm AEST 29 April 2016
Address for Application submission / Tender Box
NSW Department of Industry, Skills and Regional Development
Attention: Michael Hallett
516 High St
Maitland NSW 2320
Electronic address /
Contact Officer / Michael Hallett
Executive Officer
Geological Survey of NSW
Email:

Preamble

NSW Department of Industry, Skills & Regional Development invites Applicants to submit an Application to receive funding for the New Frontiers Cooperative Drilling program under thisInvitation to Apply (ITA).

The ITA is comprised of the following parts:

Preamble
Application Form
Registration and Commercial Criteria of the Applicant
ITA Terms and Conditions
Declaration
Draft Funding Deed

Applicants should read the Guide for applicants to assist them in completing this application.

This Program, managed by NSW Department of Industry, Skills and Regional Development (the department) is part of a New South Wales government initiative to attract further investment into NSW. The New Frontiers Cooperative Drilling program will provide grants to successful Applicants for exploration drilling programs (Group 1, 2, 6 and 10 minerals only) which demonstrate strong prospectivity, sound financial planning and a proven technical base.

The NSW Government will oversee the investment of up to $2 million to encourage exploration through the program, which is intended to support the long-term sustainability of the NSW resources sector. The anticipated outcomes of the Program are as follows:
To encourage mineral exploration in New South Wales;
To create a working relationship between government and industry to carry out exploration drilling in greenfields areas, drilling that tests new geological ideas and models and/or drilling in regions covered by significant cover;
To stimulate exploration in greenfield areas and build a stronger relationship between government and industry.

The Program will fund 50%, 75% or 100% of drilling metre rate costs for successful Applicants in relation to individual projects, with a cap of $200,000 for each project. The total government allocation for Cooperative Drilling will be $2 million in the 2016 – 2017 financial year. Drilling cost estimates from Applicants should be GST exclusive.

Cooperative Drilling round 2 Application Form

(to be completed and returned by the Applicant. Applicants must complete all sections).

1Company and Project Details

Company and Project Details / Comments
Registered Tenement holder/Exploration Operator (if different):
Name of Applicant:
Address & registered office of Applicant:
Applicant ABN:
Applicant point of contact & position title:
Contact telephone number(s):
Contact email address:
Drilling project or prospect name:
Location (distance and direction from nearest town):
Tenement number on which the drilling is proposed:
Exploration target
Commodity type

Project description

1.1Provide a brief description of the geology and an overview of past exploration in the region of your Application and the tenement (500 word maximum).

1.2Outline the exploration program for the current term and how the proposed cooperative drilling would form part of the program (500 word maximum).

2Details of the proposed drilling program

2.1Please provide awork plan summary of the proposed cooperative drilling program (Maximum 100 words).

2.2Has activity approval for the proposed cooperative program been given or applied for? (give details, provide supporting documentation).

2.3Does the Applicant have a history of compliance with the conditions of the relevant tenement under which the proposed program will take place as well any other exploration tenements held by the Applicant in the last 5 years in NSW (please provide details if necessary).

2.4Has the Applicant been refused the grant or renewal of a title in NSW or been convicted for any non-compliance with title conditions in the past 5 years? (If yes, please provide details).

2.5Provide a project budget for the proposed drilling program. Include cost estimates for drilling and associated on-costs.

2.6What is the percentage of per metre drilling costs requested in this Application? 50%, 75% or 100%?

2.7What is the dollar amount of funding being requested in this Application?

2.8What is the amount of per metre drilling costs required to be funded, for project viability? 50%, 75% or 100%?

NSW Department of Industry, Skills & Regional Development1

2.9.Drillhole details

Hole name / number / Coordinates / Azimuth / Dip / Collar (RL) / Target depth (m) / Open Hole (m) / RC (m) / Diamond (m) / Other (m) / Total (m) / Proposed Sample Size/Weight / Will Core be acquired? / Proposed drilling start date / Proposed drilling end date / Estimated total direct drilling costs / Amount of funding requested

Please include a plan diagram of the proposed drillholes showing location within the exploration licence area.

NSW Department of Industry, Skills & Regional Development1

3Technical assessment criteria

In order to outline how the proposed program targets“new frontiers”, please describe:

3.1How does your proposed program test sound geological models or innovative concepts and ideas? (500 words maximum).

This question has a 30% weighting in the technical assessment.

3.2How does your proposed program advance exploration in previously under-explored areas? For example, does the program test an area previously untested, undrilled, under-drilled or where previous work was ineffective? (500 words maximum).

This question has a 35% weighting in the technical assessment.

3.3How does the work you have undertaken to date to define the drill target(s) to be tested? (500 words maximum).

Attach an exploration rationale, including relevant plans, cross-sections, geophysical and geochemical surveys that have led you to the proposed target.

This question has a 25% weighting in the technical assessment.

3.4Provide details of the proposed work program proposed to be carried out and the anticipated information that will be acquired as part of the exploration program (e.g. Element suite to be assayed, downhole geophysical methods, petrology, geochronology, isotopic analysis etc). (300 words maximum).

This question has a 10% weighting in the technical assessment.

Registration and Commercial Criteria

4Applicant Organisation Type

Please specify which type of organisation the Applicant falls within:

TICK IF RELEVANT / ORGANISATION TYPE
Incorporated Associations (incorporated under State/Territory legislation, commonly have 'Association' or 'Incorporated' or 'Inc' in its legal name)
Incorporated Cooperatives (also incorporated under State/Territory legislation, commonly have "Cooperative” in its legal name)
Companies (incorporated under the Corporations Act 2001 – may be not-for-profit or for-profit proprietary company or public companies limited by shares or by guarantee)
Partnerships
Trustee on behalf of a Trust
Unincorporated Joint Venture
Individual or individuals (jointly and separately)
Other (please specify)

5Business Information

5.1.The Applicant must provide the following information (including in relation to the lead agency and each member of the consortia, if applicable):

(a)a brief outline of the Applicant’s current business including which business lines account for the greatest proportion of the Applicant’s revenue;

(b)details about the Applicant’s operation in Australia including time established locations facilities and resources; and

(c)shareholdings alliances partnerships and similar business relationships relevant to the Application.

6Financial Information

6.1.The Applicant must provide the following information:

(a)most recent annual financial statements (including balance sheet and profit and loss accounts) audited or certified as correct by the Applicant (Annual Report will be sufficient);

(b)particulars of principal banker;

(c)particulars of any material threatened or pending litigation, claims or undischarged judgments or orders;
(d)particulars of major debtors and creditors; and

(e)contingent liabilities; and

The Applicant authorises the Department to conduct a third party audit of financial information provided by the Applicant at the department’s cost.

The Applicant authorises the Department to obtain a bank reference and will provide a formal authority if requested by the department.

7Statement of Non Compliance

If the Applicant proposes to include any departures from or qualifications to the ITA, including commercial or technical requirements and the Funding Agreement, all such departures or qualifications must be fully documented in this Part.

REFERENCE (Section and Clause) / NON COMPLIANCE / REASON FOR NON COMPLIANCE

8Insurances

8.1The Applicant is to:

(a)attach to this section a copy of a certificate of currency from their insurance company, not their broker, for each policy of insurance required under the Funding Deed (see Table below); or

(b)provide an undertaking that the policies specified in the Funding Deed, if not currently held) will be taken out by the Applicant at no cost to the department, if the Applicant is successful in the ITA.

8.2If requested by the department, the Applicant must provide a full copy of each insurance policy required under the Funding Deed.

8.3An Applicant may be set aside by the Department from further evaluation without recourse from the Applicant, if that Applicant is unable to satisfy the Department of its compliance with the insurance requirements.

Types of Insurances required under the Funding Deed / Minimum Sum Insured
Public Liability / $10 million for any single occurrence and unlimited in the aggregate as to the number of occurrences.
Workers Compensation / As required by the law of each relevant State and Territory.
Comprehensive Motor Vehicle / Comprehensive motor vehicle insurance if company vehicles used.

Terms and Conditions

9Background

9.1.This Program, managed by NSW Department of Industry, Skills and Regional Development (the department) is part of a New South Wales government initiative to attract further investment into NSW. The New Frontiers Cooperative Drilling program (the program) will provide grants to successful Applicants for exploration drilling programs (Group 1, 6 and 10 minerals only) which demonstrate strong prospectivity, sound financial planning and a proven technical base.

9.2.The NSW Government will oversee the investment of up to $2 million to encourage exploration through the program, which is intended to support the long-term sustainability of the NSW resources sector. The anticipated outcomes of the Program are as follows:

To encourage mineral exploration in New South Wales;

To create a working relationship between government and industry to carry out exploration drilling in greenfields areas, drilling that tests new geological ideas and models and/or drilling in regions covered by significant cover;

To stimulate exploration in greenfield areas and build a stronger relationship between government and industry.

9.3.The Program will fund 50%, 75% or 100% of drilling metre rate costs for successful Applicants in relation to individual projects, with a cap of $200,000. The total government allocation for Cooperative Drilling will be $2 million in the 2016 – 2017 financial year. Drilling cost estimates from Applicants should be GST exclusive.

Cooperative Drilling round 2 funds will be granted at three levels.

Approximately $300,000–$400,000 will be distributed to projects to cover 100% of per metre drilling costs.
$600,000–$700,000 will be distributed to projects to cover 75% of per metre drilling costs
The remaining funds (approximately $1M) will be granted to projects to cover 50% of per metre drilling costs.
The maximum grant to any individual project will be $200000
Funding will be limited to the direct costs of drill metre rates as charged by the drilling contractor as described in drilling contractor invoices, but excluding indirect costs such as mobilisation, travel costs, assay costs, drilling consumables and personnel costs;
Applications are encouraged from a wide range of companies. Applicants are not required to have had a prior funding relationship established with the Department, but must be a legal entity to be eligible for funding.

10The Application

10.1.Multiple applications from an Applicant will be accepted. The applications may relate to different drilling projects within the same tenement or different drilling projects in other tenements held by the Applicant.

10.2.In submitting an Application or Applications to this ITA, the Applicant must comply with the terms set out in these Conditions and agrees that addressing the assessment criteria, does not guarantee that funding will be provided.

10.3.The Applicant represents and warrants that:

(a)the Applicant submits its Application in good faith;

(b)no information provided by or on behalf of the Applicant to the Department is or will be false or misleading;

(c)it has made all due enquiries in relation to the declaration of any conflicts of interest including in relation any agency involved in a consortia arrangement, if applicable. The Applicant agrees it will immediately inform the Department of it becoming aware of any actual or potential or perceived conflict of interest; and

(d)it has declared any and all conflicts of interest in the Declaration (Section 28 – Registration) and that no conflict of interest (actual, perceived or potential) exists at the date of submitting its Application.

10.4.No agreement exists between the Department and any Applicant until and unless a funding agreement is signed by the department.

11Addenda

11.1.The Department may amend the ITA at any time prior to the Closing Date and Time by issue of an addendum, via the NSW Industry website.

11.2.No explanation or interpretation of the ITA may be relied upon by the Applicant as an amendment to the ITA unless given in the form of addendum, in which case such addendum will become part of the ITA. It is the Applicant’s responsibility to collect addenda from the NSW Industry website. The Department accepts no responsibility if an Applicant fails to become aware of any addendum released.

11.3.Following receipt of an Application form from an Applicant, addenda and responses to requests for clarification issued in response to inquiries from any Applicant will be sent to all Applicants. The Applicant must nominate a contact person for the purpose of providing addenda and requests for clarification.

12Cost

12.1.All costs of responding to the Application, including responding to addenda notices and requests for clarification, will be borne by the Applicant.

12.2.Under no circumstances will the Department be liable to pay any costs, expenses, loss or damage accrued or sustained by an Applicant in connection with this process.

13Indicative Timeframe

13.1.These indicative Application milestones are not binding on the Department and may be subject to amendment by the department:

Applications open / 16 November 2015
ITA Closing Date and Time / 5pm AEST Friday 29 April 2016
Application evaluation / May-June 2016
Recommendationsof Successful Applicant(s) to Minister / 30 June 2016
Funding Agreement signing / July 2016
Grant works to begin after / Date of signing of Funding Deed
Payments to Successful Applicants / Upon completion of milestones set out in the Funding Deed, after receipt of Driller’s invoices, not later than midnight 30 June 2017.
Completion of project / The funding agreement will provide that the work will be completed and the Department may grant an extension at its sole discretion.

14Lodgement

14.1.An Application must be submitted by the Closing Date and Time of 5pm AEST Friday 29 April 2016:

a)By post addressed to Tender Box, NSW Department of Industry, Skills and Regional Development, 516 High Street Maitland NSW 2320 or;

b) via email at

c)The Application is to be clearly marked “Application – New Frontiers Cooperative Drilling”

14.2.The Department will acknowledge successful receipt of applications.

14.3.Applications received through the post after the Closing Date and Time of 5pm AEST Friday 29 April 2016 will be deemed late unless the envelope bears a Postal Authority postmark clearly indicating that the date of posting was prior to the stipulated Closing Date and Time. The imprint of a privately operated franking machine is not an acceptable evidence of time and date of posting.

14.4.Unless expressly requested or permitted by the department, Applications submitted by facsimile, orally or for any other reason not in accordance with this clause will not be considered.

14.5.If an Applicant wishes to lodge a correction or additional information following submission of an Applicant, the correction or additional information must be submitted before the Closing Date and Time. The Department may not consider any correction or additional information received after the Closing Date and Time.

15Funding Agreement

15.1.Successful Applicants will be required to sign a Funding Deed with NSW Industry, Skills and Regional Development, before receiving any funding.

15.2.The Funding Deed will provide a description of the activities to be provided in the project, based on the Application and subsequent negotiation.

15.3.Applicants agree that if they are successful, some details of their project (including the prospect description, their name and the amount of funding awarded) may be posted on NSW Industry website as part of legislative reporting obligations. Prior to any publication, the Department will refer to the Applicant for information that may be company in confidence.

16Insurance

16.1.All Applicants should ensure that they have in place, or if successful are required to obtain, sufficient insurance (the types and amounts of insurance as described in section 8) necessary to cover all obligations in relation to the activity.

17Assessment

17.1.The Department will assess Applications received in order to determine which Applications, if any, will be offered funding. Failure to meet the assessment criteria that are marked as mandatory (sections2,and 4 through 8)will result in excluding the Application from further assessment. Assessment of technical criteria will be carried out using a weighted assessment scheme as part of an Assessment Plan. The Assessment criteria are described in Sections 1 through 3.

17.2.Final scores resulting from the Assessment Committee will be used to determine ranking of Applications.

17.3.The Department will assess Applications in accordance with this clause and based on the technical response to the requirements of the Application, along with commercial risk and compliance. The information used to assess the Application will include, but may not be limited to, the information submitted by the Applicant in the Schedules. Consideration for successful Application may depend on the Applicant’s previous degree of compliance with environmental and reporting conditions.

Table of Contents

Overview of Cooperative Drilling round 2.

Preamble

Cooperative Drilling round 2 Application Form

Project description

1.1Provide a brief description of the geology and an overview of past exploration in the region of your Application and the tenement (500 word maximum).

1.2Outline the exploration program for the current term and how the proposed cooperative drilling would form part of the program (500 word maximum).

2.1Please provide awork plan summary of the proposed cooperative drilling program (Maximum 100 words).

2.2Has activity approval for the proposed cooperative program been given or applied for? (give details, provide supporting documentation).

2.3Does the Applicant have a history of compliance with the conditions of the relevant tenement under which the proposed program will take place as well any other exploration tenements held by the Applicant in the last 5 years in NSW (please provide details if necessary).

2.4Has the Applicant been refused the grant or renewal of a title in NSW or been convicted for any non-compliance with title conditions in the past 5 years? (If yes, please provide details).

2.5Provide a project budget for the proposed drilling program. Include cost estimates for drilling and associated on-costs.

2.6What is the percentage of per metre drilling costs requested in this Application? 50%, 75% or 100%?

2.7What is the dollar amount of funding being requested in this Application?

2.8What is the amount of per metre drilling costs required to be funded, for project viability? 50%, 75% or 100%?

2.9.Drillhole details

3.1How does your proposed program test sound geological models or innovative concepts and ideas? (500 words maximum).

This question has a 30% weighting in the technical assessment.

Registration and Commercial Criteria

(a)a brief outline of the Applicant’s current business including which business lines account for the greatest proportion of the Applicant’s revenue;

(b)details about the Applicant’s operation in Australia including time established locations facilities and resources; and

(c)shareholdings alliances partnerships and similar business relationships relevant to the Application.

(a)most recent annual financial statements (including balance sheet and profit and loss accounts) audited or certified as correct by the Applicant (Annual Report will be sufficient);

(b)particulars of principal banker;

(e)contingent liabilities; and

(a)attach to this section a copy of a certificate of currency from their insurance company, not their broker, for each policy of insurance required under the Funding Deed (see Table below); or

(b)provide an undertaking that the policies specified in the Funding Deed, if not currently held) will be taken out by the Applicant at no cost to the department, if the Applicant is successful in the ITA.

Terms and Conditions

To encourage mineral exploration in New South Wales;

To create a working relationship between government and industry to carry out exploration drilling in greenfields areas, drilling that tests new geological ideas and models and/or drilling in regions covered by significant cover;

To stimulate exploration in greenfield areas and build a stronger relationship between government and industry.

(a)the Applicant submits its Application in good faith;

(b)no information provided by or on behalf of the Applicant to the Department is or will be false or misleading;

(d)it has declared any and all conflicts of interest in the Declaration (Section 28 – Registration) and that no conflict of interest (actual, perceived or potential) exists at the date of submitting its Application.

14.2.The Department will acknowledge successful receipt of applications.