Selling Mineral Rights for Profit

What are Mineral Rights?

Mineral rights are basically the rights of the owner to extract, mine, produce minerals from a piece of land. Selling mineral rights to companies (lessee) makes the landowners (lessors) get a chance to earn profit from the minerals found under their land. A land may contain hidden precious metals and minerals like,

•           Gold
•           Gas
•          Oil
•           Coal
•          Ores of metals
•          Gem stones
•          Salt

Leasing and Bonus

•          Instead of purchasing the entire land before mineral extraction, a company firstly may want to explore the potential of that land.
•          The owner of the land will then share with or lease the property to a mining or exploration company for a certain amount of money called bonus.
•         This lease will give the company the right to enter the property during a certain time period and conduct tests to determine the potential of minerals found there.
•          If the company is able to find what it’s looking for then it will buy, rent or lease the property to extract minerals and the owner will be selling mineral rights to that company.

Royalties

Once the minerals are extracted from the leased property, the company will pay royalty to the landowner. This amount can be fixed or based on a percentage of the yield. A contract is drawn to determine the royalty percentage.  

How to Sell Mineral Rights

Selling mineral rights can be a lucrative deal for land owners; however, they must possess the necessary knowledge and expertise related to minerals in order to strike a fair deal with a mining company.  In case you do not happen to have this kind of insight, then consider hiring the expertise of professionals for this purpose. It is beneficial to hire the services of professional companies as they:

•          Have the knowledge about the exploration type to draw minerals (drilling, mining, extracting, etc). 
•          Hold knowledge of state and federal regulations regarding mineral exploration.
•          Settle royalty/ profit percentage between the lease owner and the lessee.
•          Have awareness of implications of mineral extraction on the environment and the land owner’s lifestyle.

Hire the Professionals

•          Owners of land selling mineral rights must bear in mind that the buyer gets the right to explore the property and get the right to access and enter the property and extract the resources any time in the near future.
•          In majority of the contracts, the lessor cannot control when and how the extraction will take place; what kind of machinery and equipment would enter the property; and how the damage to the property will get fixed.
•          Thus, the seller and all future owners have to accept and live with the consequences of entering a legal binding contract. Thus, it is crucial to hire a professional company before you sell your land’s mineral rights.

UniRoyalties, Ltd. is a professional company capable of reviewing your oil and gas investment lease and helping you draw a lucrative contract on your land’s mineral assets. If you are thinking about selling the mineral rights of your land, seek assessment from a professional company like UniRoyalties, Ltd.