Reclamation Bond
Surety Bond Guarantees for Mining
A Reclamation Bond is a Surety Bond utilized in the Mining Industry in order to appease environmental obligations to Canadian Mining Authorities. We set out to solve the problem of not tying up your mining venture capital, while keeping the costs of bonds lower than traditional securities like letters of credit. Get in touch with us today to get started.
What is a Reclamation Bond?
Reclamation Surety Bonds are three party guarantees typically issued in favour of Government entities, most frequently used in the mining industry. They are considered an acceptable security from the municipal perspective that a surety company is willing to provide a financial guarantee for environmental hazards and remuneration during and after mining operations.
Surety Bonds are unsecured credit and we strive to develop unique solutions for your mining business in order to produce the bonds you need to continue with your operations as quickly as possible.
Why do I need a Reclamation Bond?
As an important part of the mining industry, Reclamation Bonds provide protection for the Obligee listed on the bond that a third party is guaranteeing a contractor will fully restore any property affected during a project to its original condition or reimburse the Obligee for the cost of restoration.
Additionally, it’s important to note that whether you’re an established mining operation or a junior mining company, it is beneficial to leverage a surety bond in lieu of a letter of credit or other form of security when applicable as bonds do not tie up your capital in the same way these other guarantees do.
There’s a great article to review regarding why a reclamation bond is useful at Canadian Mining Journal that is a very educational read.
Application Requirements for Reclamation Bonds
When applying for a Reclamation Bond for a specific entity or particular project, bonding underwriters will need to review the following information:
- Financial Statements for Applying Entity & Related Companies
- Closure / Reclamation Plan
- Engineering Reports & Plans
- Project Cash Flow Projections
- Permits Obtained
- Terms & Conditions of Any Banking Facilities
- Copy of Applicable Insurance Policies
We always aim for innovative and beneficial underwriting solutions to obtain the lowest collateral requirements at the best rates available. It is important to note that part of underwriting reclamation bonds involves the signing of an indemnity agreement which can be from your entity or associated mining companies willing to financially back the bond company.
What Regions are we able to provide Reclamation Bonds for?
The jurisdictions Reclamation Bonds are available for use in are constantly evolving; however, we’re able to issue bonds in North America, as well as overseas should your business require it.
Canada
- Various Municipalities & Authorities across all provinces are now accepting Reclamation Bonds as a form of security
United States
- Surety Bonds are utilized across virtually all states in the USA and are almost always accepted by Authorities.
If your mining operations require a Reclamation Bond, get started today by chatting with our experts.
How much does a Reclamation Bond Cost?
The cost of a Reclamation Bond will depend on various aspects of your business as well as the specific project in question. In general it is important to allocate 1% to 2% of the required amount of the bond as a premium. Some of the Underwriting information that will affect bonding costs include:
- Financial position of pursuant corporation & affiliates
- Type of mine / project
- History and reputation of the executives
- Duration of the pursuit & mining process
- Whether still in discovery or not
- Amount of the required obligation / bond amount
- Reclamation plan specifics
- Other contract specific details
We’re always working to obtain the best rates available in the industry with the least amount of collateral required from our underwriting partners. Whether it’s for junior mining companies or established operations, we’re here to ensure your optimal option in the market.
What other Mining Bonds are available?
Other than issuing a reclamation bond seeking compensation for environmental damages, there are other types bonds outside of potential land reclamation operations. A surety company can issue mine operator guarantees and the following bond types:
These and other bonding needs for a mining company or other land reclamation operation involved will also need to submit a significant amount of information for an application including financial statements and a reclamation plan. Don’t hesitate to contact us if you’d like to discuss your particular obligation prior to applying.
Unique Underwriting Solutions
Reliable Canadian Underwriters
Capability for US Guarantees
Best Rates Available in the Surety Market
Digital Application Process
How It Works
Step 1
Complete a brief online application about your reclamation / mining bond requirements.
Step 2
Our expert staff will guide you through the process of qualifying for a bond agreement with surety companies.
Step 3
Have the reclamation surety bond you require issued so you can get back to running your business.
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