Natural Resources & Energy Newsletter

Points of Interest in Japanese Onshore Prospecting Right Due Diligence: Managing the Risk of Post-Investment Invalidation

Natural Resources & Energy Newsletter
Authors
Hiroyasu KonnoYoshiaki Otsuki
Date
6/8/2020
Practice Areas
Natural Resources & Energy

Would be investors in mining companies should be aware of certain risks that may not be apparent in cursory level due diligence. This newsletter will help investors identify two such risks concerning Prospecting Rights (Shi-ku-tsu-ken): potential early termination based on breach by the holder of the requirement to commence drill work within the statutory period and issues surrounding the extension process. Accordingly, when investing in a company which holds a Prospecting Right it is important to check the deadline for the commencement of drill work, and whether the holder of the Prospecting Right will be able to commence drill work within the statutory deadline or potential extensions thereof.

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