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View Full Version : Can lesees sublease?

09-21-2012, 05:52 PM
Can the buyers of the underwater leases in the recent sale sublease some of their lease to other operators? If they can, do the sublesee then have to go get their own permit, or is it covered by the master leaseholder? Does anyone know if any of the people who bought leases intend to sublease any of their land? And if they can, and do, does that conflict with the Alaskan laws regarding royalty payments on gold dredging, or does the royalty payment laws just have to do with the rental of dredges and barges that are used for gold recovery?


09-21-2012, 06:16 PM

Let's say Bob has a mining lease with the State of Alaska. Generally, the State of Alaska doesn't care if Bob subleases to another person or entity. The State requires Bob to obtain an APMA and/or suction dredging permit.

So, along comes Sam. Sam wants to lease Bob's claim. The State of Alaska requires that Sam obtain permission from Bob in writing and provide a copy of that permission as part of Sam's application to dredge or for Sam to obtain his own APMA.

Next, assuming Gold is produced by Bob, Bob must submit a statement and royalty payment for his production to the State of Alaska under the terms of the royalty payment required as prescribed by the Alaska Department of Revenue. Sam must also submit a statement and payment for production royalty to the State of Alaska.

Every lease holder has his/her own philosopy on leasing to others. In general, most lease holders are reluctant to lease to another person because of issues related to transparency and honesty of gold production. So, depending on the terms of transparency, inspection, production audit, and what ever other methods may be required to obtain a sub-lease, it may be something that is within the realm of negotiation.

The first suggestion is to contact the State DNR and ask about limitations on sub-leasing at Nome.

The second suggestion is to advertise your interest in sub-leasing at Nome.

- Geowizard

09-26-2012, 05:02 PM
Geowizard is entirely correct. I will add that the APMA, if you look at it, specifically has a place to specify the operator (Sam), the mineral rights owner (Bob), and the land owner (State of Alaska) in this example. There is an operator authorization form that must be filled out by the lease owner and notarized and submitted along with the operator's APMA, or attached to it later. DNR will not process an APMA unless is specifies a place to work, whether it be a Rec area or lease.

A few people are open to subleasing, but from what I have seen, few people actually find that it's worthwhile, due to both the poor quantities of gold on most of these new leases (new leases were made of rejected areas that former lease holders forfeited) and the same or better quantities of gold on the Rec areas. And on the Rec areas they don't have to pay the leaseholders rate, which is typically 20% to 35% of gross.

All operators, regardless of area, Rec, their own lease, or a sublease must pay from net both the 3% State mining license tax and the 3% State mining royalty.