Due Diligence in Foreign Countries: The Landman's Role
The search for new mineral discoveries is taking the mining industry to areas of the world where little or no recent exploration has occurred. The perception of high cost or limited mineral exploration opportunities in the United States, Canada, Australia, Europe, and South Africa has encouraged mining companies to accept greater political and economic risks by expanding into the global market and exploring lesser developed nations. While many of these countries have long and storied mining histories, they are relatively unexplored by modern prospecting methods. In the past ten years much has changed, and the U.S. mining investment community has recognized these opportunities; and the countries themselves, in acknowledgment of the benefits of mining investment, have revised and modified their laws to encourage such investment.
By electing to conduct mineral exploration in a new host country, a company is doing more than authorizing a budget item. The company is becoming a part of the world community. It is accepting greater risk in return for potentially greater reward. Quantifying and minimizing risk through due diligence and thoughtful negotiations is a valuable role the landman fulfills.
In the United States, the mineral landman performs land status checks, title reviews, and property and company due diligence. He negotiates and documents acquisitions, main
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