CANADA Law and Practice Contributed by: Darrell Podowski, Brian Dominique, Joel Matson and Christa Alvernaz, Cassels Brock & Blackwell LLP
investment reviews under the ICA from April 2023 through March 2024. The report con - firmed that foreign investment continues to trend toward pre-COVID-19 levels. The report noted a decrease in the number of extended national security reviews, down from the peak number of reviews seen in the 2022–2023 fiscal year. 5.3 International Treaties Related to Exploration and Mining Canada is a party to several multilateral free trade agreements and investment agreements, which give foreign investors, including Cana - dian mining companies, the right to file a claim for damages against the government of the host country for expropriation or unfair or dis - criminatory treatment of their investments and investors. The Canadian government’s Foreign Investment Promotion and Protection Agree - ment Model confirms that Canada intends to continue providing international dispute resolu - tion protections to foreign investors. To date, Canadian investors in the mining, oil and gas industries have been relatively more aggres - sive in asserting arbitration rights to safeguard their offshore interests, with the majority of their complaints targeting Latin America. July 2023 marked the end of the sunset clause in the North American Free Trade Agreement (NAFTA), and the mechanism for arbitration proceedings with the United States and Mexico under NAFTA is no longer available (other than for legacy claims submitted prior to that time); instead, investors must submit claims under the United States- Mexico-Canada Agreement. The Canadian mining sector is subject to Cana - dian economic sanctions legislation as well as foreign anti-corruption legislation, including the Extractive Sector Transparency Measures Act, which requires Canadian mining companies to
implement mandatory reporting standards and report annually on payments to all levels of gov - ernment, domestically and internationally. 5.4 Sources of Finance for Exploration, Development and Mining In Canada, the traditional sources of financing for exploration-stage projects have been capi - tal raises through equity markets (eg, private placements or public offerings) and option/joint venture transactions – eg, a junior company that owns a project grants an option to a more senior company for it to earn a controlling interest in the project in exchange for exploration expenditures (or cash payments) on an agreed schedule. In option/joint venture transactions, the junior com - pany is not required to fund the initial stages of the project and is “carried” until the senior com - pany earns its majority interest, following which both parties contribute to the project in propor - tion to their interests, with a joint venture then being formed between the companies. As a project evolves into the development phase, debt financing becomes more accessible, such as bond or convertible debt offerings, and debt facilities from a bank. Once a production deci - sion is made based on a feasibility study, pro - ject financing is the most common source of financing for the construction of a mine, with the assets of the project being offered as security. Such project financing may be supplemented by offtake agreements, where the producer will sell all or a percentage of the future production from a specific facility to an end user. Other less traditional finance methods, such as royalties and metal streaming, have recently become more common in the financing of all stages of a project, including exploration and development, well before the construction of a mine begins. Stream financings are where a
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