CLARIFICATORY GUIDELINES IN THE IMPLEMENTATION OF DENR ADMINISTRATIVE ORDER NO. 96-40 OR “REVISED IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 7942 OTHERWISE KNOWN AS …

In order to achieve a consistent implementation of DENR
Administrative Order No. 96-40 or the Revised Implementing Rules and
Regulations of Republic Act No. 7942, the following clarificatory
guidelines are hereby promulgated:

Section 1.       Area Status and Clearance of Applications
for Exploration Permit, Mineral Agreement and Financial or Technical
Assistance Agreement . Before securing the Area Status and
Clearance from the pertinent DENR Sectors, the Bureau/concerned Regional
Offices(s) shall first check in its control maps if the area is
free/open for mining applications. Only cleared mining applications
shall be forwarded to the pertinent DENR Sectors for Area Status and
Clearance in accordance with DENR Memorandum Order No. 98-03.

Section 2.       “Duly Authorized Representative” of Permittee.
  Under the terms and conditions of an Exploration Permit, the duly
authorized representative of a Permittee refers to entities/service
contractors to whom the Permittee has entered into an operating
agreement or other similar forms of agreement duly approved by the
Secretary.

Section 3.       Renewal of Exploration Permit.  
The failure of a Permittee to apply for a renewal of the Exploration
Permit within the prescribed period shall automatically open the area to
mining applications upon the expiration of the said Permit.

Section 4.       Mandatory Requirements by a Permittee for an Application for MA/FTAA (Section 30).
  The Exploration and Environmental Work Programs are not applicable as
mandatory requirements for an application for a Mineral Agreement or
Financial or Technical Assistance Agreement by a Permittee, hence, these
documents shall not be required in the filing of said application.

Section 5.       Mandatory Requirements for Mineral Agreement Application
.  Mineral Agreement applications going directly into the
development/operating phase shall be required to submit a Three (3)-Year
Development/Utilization Work Program, instead of a Two (2)-Year
Exploration Work Program. The Development/Utilization Work Program shall
be accompanied by an appropriate Mining Project Feasibility Study (MGB
Form No. 5-3) duly prepared, signed and sealed by a licensed Mining
Engineer, Geologist or Metallurgical Engineer and the pertinent
Declaration of Mining Project Feasibility duly signed by the applicant.

Section 6.       Registration of Mineral Agreement
.  In the registration of the Mineral Agreement, it shall be first
forwarded to the Bureau for numbering upon approval of the Secretary,
thence, to the concerned Regional Office for registration, for areas
outside Mineral Reservations. The Director/concerned Regional Director
shall notify the Contractor to cause the registration of its Mineral
Agreement with the Bureau for areas inside Mineral Reservations or with
the concerned Regional Office for areas outside Mineral Reservations
within fifteen (15) working days from receipt of the written notice.

Section 7.       Availment of Multiphase Activities under the FTAA
.  Any two (2) or more of the periods (Exploration, Pre-Feasibility
Study, Feasibility Study) provided in Section 52 of the DENR
Administrative Order No. 96-40 may be simultaneously undertaken in one
approved contract area, as the need of the Contractor may arise, subject
to the pertinent provisions of Section 60 of the same Administrative
Order: Provided, That the Contractor shall file a Notice to the
concerned Regional Office, copy furnished the Bureau of its intention to
avail of the renewal of the Exploration Period or to advance to/avail
of the Pre-Feasibility Study/Feasibility Study/Development and
Construction/Operating Period, as deemed applicable, either in the whole
or a portion of the Contract Area, subject to the approval of the
Director.

Failure of the Contractor to file the Notice to avail of the renewal
of the Exploration Period or to advance to/avail of the Pre-Feasibility
Study/Feasibility Study Period shall mean that the said periods shall
not be availed of by the Contractor.

Section 8.       Three (3) Letters-Notice Policy . 
The Mines and Geosciences Bureau shall adopt the Three (3)
Letters-Notice policy in exalting compliance of mining applicants with
all requirements to support mining applications. Thus, each
Letter-Notice shall give the mining applicant fifteen (15) to thirty
(30) days upon receipt of the Letter-Notice to comply with the pertinent
requirements: Provided, That an interval of no more than thirty (30)
days between deadlines shall be observed in sending the Letters-Notice.

The failure of the mining applicant to fully comply with the
requirement as embodied in the Letters-Notice shall be a ground for
denial of the mining application.

Section 9.       Authorized Capitalization .  The
minimum authorized capital of Ten Million Pesos (P10,000,000.00) and
paid-up capital of Two Million Five Hundred Thousand Pesos
(P2,500,000.00) required for a
corporation/association/cooperative/partnership under DENR Memorandum
Order No. 99-10 shall apply to the principal applicant whether or not
this applicant is supported by an operator or service contractor thru an
operating agreement or other similar forms of agreement: Provided, That
in the case of a mining application with two (2) or more applicants as
co-applicants, the minimum authorized capital of P10 Million and paid-up
capital of P2.5 Million may be required from just one (1) of the
co-applicants.

In the case of a mining application by an individual, the minimum
amount of Two Million Five Hundred Thousand Pesos (P2,500,000.00) shall
be required as proof of financial capability, which shall be in the form
of a bank deposit or credit line.

Consistent with the provisions of DENR Memorandum Order No. 99-10,
the foregoing requirements shall be mandatory in the acceptance of a
mining application.

Section 10.    Prior Approval by the Sanggunian . 
Prior approval or indorsement by any two (2) of the concerned Sanggunian
(Panlalawigan, Bayan and Barangay) shall be required in support of
mining applications intended for development and/or utilization
purposes. In the case of mining applications intended for exploration, a
proof of consultation with/project presentation to any two (2) of the
concerned Sanggunian shall be required.

In either case, the proof of prior approval, indorsement,
consultation and/or project presentation shall be in the form of a
formal Resolution or Certification by the concerned Sanggunian.

Section 11.    Approval of Memorandum of Agreement/Option
Agreement/Operating Agreement and other similar forms of Agreement under
Mining Rights/Applications .  Memorandum of
Agreement(s)/Option Agreement(s)/Operating Agreement(s) and other
similar forms of Agreements under a mining application shall be
registered with the Bureau/concerned Regional Office and shall form part
of the supporting document of a mining application, subject to the
evaluation of the Bureau/Regional Office. Such agreement shall be deemed
approved upon approval of the mining application.

Memorandum of Agreement(s)/Option Agreement(s)/Operation Agreement
or other similar forms of Agreement entered into under a mining
permit/contract shall be registered with the Bureau/concerned Regional
Office and shall be subject to the approval of the Secretary upon
evaluation and recommendation by the Director. Any of such Agreement
that is not duly registered and/or approved by the DENR Secretary shall
be deemed void in so far as the Department is concerned.

Section 12.    Effectivity.   This Order shall take
effect fifteen (15) days after its complete publication in a newspaper
of general circulation and fifteen (15) days after registration with the
Office of the National Administrative Register.

Adopted: 27 Dec. 1999

(SGD.) ANTONIO H. CERILLES
Secretary