# How to Calculate Expenditure Commitment (Covent) (NT)

Bench Mark Covenant – simular as WA covenant calculated by area & age – guideline 6

Expenditure Form 17

**Benchmark Minimum Expenditure for Exploration Licences:**

Year One | $10,000 | plus | $ 150 per block |

Year Two | $10,000 | plus | $ 250 per block |

Year Three | $10,000 | plus | $ 500 per block |

Year Four | $10,000 | plus | $ 750 per block |

Year Five | $10,000 | plus | $1000 per block |

Year Six | $10,000 | plus | $1250 per block |

*The minimum benchmark expenditure per block will escalate at the rate of $250 per block for each year the area is retained beyond the initial six-year grant period*

**The following formula will then be applied:**

- Total Consecutive Two Year Proposed Expenditure ÷ Number of blocks held in second year of non-compliance

= Amount to be spent per block

**$145,000 ÷125 = $1,160** - Total Consecutive Two Year Proposed Expenditure – Actual Consecutive Two Year Expenditure

= Underspend

**$145,000 ‐ $72,100 = $72,900** - Total Consecutive Two Year Proposed Expenditure – Actual Consecutive Two Year Expenditure

= Underspend

**$145,000 ‐ $72,100 = $72,900** - Total Underspend x 50% ÷ Amount to be spent per block

= Number of Blocks subject to cancellation

**$72,900 x 50% = $36,450 ÷ $1,160 = 31.42 Blocks**

**Please note that the above will not come into effect until the 2nd anniversary/report the EL has not met expenditure after November 2011 and only applies to the initial grant period years 1 - 6 only.**

**Expenditure Shortfall 2 Consecutive Years**

Mineral Titles Regulation 82- the Minister taking action under section 105(3) of the Mineral Titles Act. If the title holder does not meet the expenditure condition for two consecutive years, the Minister may take action under section 105(3) of the Act the cancel part of the EL title area.

The number of blocks subject to a cancellation for non-compliance is calculated on:

- the proposed expenditure nominated for each of the two consecutive years;
- the amount to be spent on each block held in the second consecutive year (proposed expenditure divided by the number of blocks held);
- actual expenditure for the two consecutive years; and
- difference between the proposed expenditure and the actual expenditure (underspend).